What changed in this filing

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Item 1A. Risk Factors

2024-02-16 compared with 2023-02-22 · 55 added, 99 removed, 465 unchanged (25% of the section changed)

11 unchanged sentences

• 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 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.

• Reliance on independent distributors to sell our products in some international markets could adversely impact our sales.

1 unchanged sentence

• 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.

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

2 unchanged sentences

• 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.

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

• If we fail to properly manage our anticipated growth, our business could suffer.

5 unchanged sentences

• We may be subject to fines, injunctions and penalties if we fail to comply with extensive FDA regulations.

• Unless and until we obtain additional FDA approval for our products, we will not be able to promote most of them to prevent stroke and our inability to maintain or grow our business could be harmed.

• Unless and until we obtain additional FDA approval for our products, we will not be able to promote them for treatment of Afib and/or to prevent stroke, and our inability to maintain or grow our business could be harmed.

We may be subject to fines, injunctions and penalties if we are found to be promoting our products for unapproved or off-label uses.

12 unchanged sentences

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

• Our income tax expense could increase and adversely impact cash flows if our federal tax net operating loss and general business credit carryforwards expire or are limited.

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

28 unchanged sentences

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

Companies also compete with us to attract qualified scientific and technical personnel as well as funding.

Companies also compete with us to attract qualified scientific, technical and commercial personnel as well as funding.

Most of our competitors and potential competitors have greater financial, manufacturing, marketing and research and development capabilities than we have, and may obtain FDA approval or clearance for their products.

The introduction of new products, procedures or clinical solutions, or our competitors obtaining FDA approvals or clearances, may result in price reductions, reduced margins, loss of market share, or may render our products obsolete, which could adversely affect our revenue and future profitability.

In 2023, Medtronic announced the FDA clearance of the Penditure TM Left Atrial Appendage Exclusion System.

The introduction of new products, procedures or clinical solutions, or our competitors obtaining FDA approvals or clearances, such as Medtronic's Penditure device, may result in price reductions, reduced margins, loss of market share, or may render our products obsolete, which could adversely affect our revenue and future profitability.

Any clinical data that is generated regarding our products may not be positive, and our current and planned clinical trials may not satisfy the requirements of the FDA or other regulatory authorities.

7 unchanged sentences

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, 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.

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.

compared against data from alternative procedures and products.

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

11 unchanged sentences

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 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.

In addition, acceptance of products for the treatment of Afib is dependent upon, among other factors, the level of awareness and education of the medical community about the surgical treatment of Afib and the existence, effectiveness and safety of our products.

Market acceptance and adoption of our products or procedures for the treatment of Afib, including but not limited to the EPi-Sense System, also depends on the level of health insurer (including Medicare) reimbursement to physicians and hospitals for procedures using our products.

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 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.

Our success is dependent on our ability to train surgeons in the safe and effective use of our products.

Restrictions on our ability to train surgeons, or unwillingness of surgeons to participate in such training, could reduce the market acceptance of our products.

Our research and development efforts and our marketing strategy depend heavily on obtaining support, physician training assistance and collaboration from experienced physicians at leading commercial and research hospitals, particularly in the U.S.

We deliver training on the safe and effective use of our products consistent with their FDA (or equivalent regulatory body) approved or cleared indications.

While we train providers in the safe and effective use of our products, we do not train them to use any of our products specifically to treat Afib unless the product is FDA-approved specifically for the treatment of Afib.

In order for surgeons to learn to use our products, they must attend training sessions to familiarize themselves with the products, and they must be committed to learning the technology.

Further, surgeons must utilize the technology on a regular basis to ensure they maintain the skill set necessary to use the products.

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 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.

We rely on independent distributors to market and sell our products in certain markets outside of the United States, and a failure of our independent distributors to successfully market our products or any disruption in their ability to do so may adversely impact our sales.

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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.

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 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.

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.

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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.

This publicity could have a negative impact on our sales, our ability to attract and retain customers, 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, 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 believe that such publicity would potentially have a negative

impact on our business, results of operations and financial condition and our clinical studies, 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 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.

For example, we rely on one vendor to manufacture several of our RF generators, as well as separate vendors to manufacture our EPi-Sense System and related RF generator.

For example, we rely on one vendor to manufacture our RF generator, as well as separate vendors to manufacture our EPi-Sense System and related RF generator.

It would be a time consuming and lengthy process to secure these products from an alternative supplier.

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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.

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

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

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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.

Our manufacturing operations are highly centralized, and disruption at our manufacturing facilities could increase our expenses and decrease our revenue.

Our manufacturing operations are highly centralized to our corporate headquarters.

While we take precautions, such as qualifying a second building for manufacturing, we do not maintain a backup manufacturing facility outside of our Ohio campus, making us dependent on the current facilities 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.

The insurance we maintain may not be adequate to cover our losses.

With or without insurance, damage to our facility or our other property due to a natural disaster or casualty event could have a material adverse effect on our business, financial condition and results of operations.

We may enter into significant acquisitions in the future.

Acquisitions have inherent uncertainties and involve risks and difficulties in integrating that may adversely affect our business, results of operations and financial condition.

All acquisitions involve inherent uncertainties, which may include, among other things, our ability to:

• successfully identify targets for acquisition;

• negotiate reasonable terms;

• properly perform due diligence and determine significant risks associated with a particular acquisition;

• properly evaluate target company management capabilities;

• successfully transition and integrate the acquired company into our business and achieve the desired performance.

We may acquire businesses with unknown liabilities, contingent liabilities or internal control deficiencies.

We have plans and procedures in place to conduct reviews of potential acquisition candidates for compliance with applicable regulations and laws prior to acquisition.

Despite these efforts, realization of any of these liabilities or deficiencies may increase our expenses, adversely affect our financial position through the initiation, pendency or outcome of litigation or otherwise, or cause us to fail to meet our public financial reporting obligations.

We have consummated three significant acquisitions since 2013 and in the future may continue to invest a substantial amount of capital in acquisitions.

We continue to evaluate potential acquisition opportunities to support, strengthen and grow our business.

There can be no assurance that we will be able to locate suitable acquisition candidates, acquire possible acquisition candidates, acquire such candidates on commercially reasonable terms, or integrate acquired businesses successfully in the future.

In addition, any governmental review or investigation of our proposed acquisitions, such as by the Federal Trade Commission, may impede, limit or prevent us from proceeding with an acquisition.

Future acquisitions may require us to incur additional debt and contingent liabilities, which may adversely affect our business, results of operations and financial condition.

The process of integrating acquired businesses into our existing operations may result in operating, contract and supply chain difficulties, such as the failure to retain customers or management personnel.

Such difficulties may divert significant financial, operational and managerial resources from our existing operations and make it more difficult to achieve our operating and strategic objectives.

With or without insurance, damage to our facilities or our other property due to a natural disaster or casualty event could have a material adverse effect on our business, financial condition and results of operations.

If we fail to properly manage our anticipated growth, our business could suffer.

24 unchanged sentences

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.

Our business could be negatively impacted if any of these physicians end their relationship with us.

We cannot assure you that we will be able to attract and retain the personnel and physician relationships necessary to grow and expand our business and operations.

3 unchanged sentences

The secure processing, maintenance and transmission of this information is critical to our operations and business strategy.

Like other companies, we experience attempts to gain unauthorized access to our systems and information on a regular basis.

Like many other companies, we experience attempts to gain unauthorized access to our systems and information on a regular basis, and a number of our employees work remotely, which may create additional opportunities for cybercriminals to exploit vulnerabilities.

Despite our security measures, including employee training, our information technology and infrastructure are vulnerable to cyber-attacks, malicious intrusions, breakdowns, destruction, loss of data privacy, breaches due to employee error, malfeasance or other disruptions.

1 unchanged sentence

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.

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

We can 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.

and we could sustain damage to our reputation and customer and employee relationships, suffer disruptions to our business and incur increased operating costs including costs to mitigate any damage caused and protect against future damage, and be exposed to additional regulatory scrutiny or penalties and to civil litigation and possible financial liability, any of which could have a material adverse effect on our business, operating margins, revenues and competitive position.

We have cyber-insurance coverage that may not cover all possible events, and this insurance is subject to deductibles and coverage limitations.

We could sustain damage to our reputation and customer and employee relationships, suffer disruptions to our business and incur increased operating costs including costs to mitigate any damage caused and protect against future damage, and be exposed to

additional regulatory scrutiny or penalties and to civil litigation and possible financial liability, any of which could have a material adverse effect on our business, operating margins, revenues and competitive position.

We also rely in part on information technology to store information, interface with customers, maintain financial accuracy, secure our data and accurately produce our financial statements.

In addition, some of our software systems are cloud-based data management applications, hosted by third-party service providers whose security and information technology systems are subject to similar risks.

The failure to protect either our or our service providers’ information technology infrastructure could disrupt our operations.

If our information technology systems do not effectively and securely collect, store, process and report relevant data for the operation of our business, whether due to equipment malfunction or constraints, software deficiencies, human error or cyber incident, our ability to effectively plan, forecast and execute our business plan and comply with applicable laws and regulations could be materially impaired.

27 unchanged sentences

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.

If our 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.

If we are required to obtain permits or licensure under these laws that we do not already possess, we may become subject to substantial additional regulation or incur significant expense.

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In addition, the number of medical device reports we make, or the magnitude of the problems reported, could cause us or FDA to terminate or modify our clinical trials or recall or cease the sale of our products, and could hurt commercial acceptance of our products and harm our reputation with customers.

Unless and until we obtain additional FDA approval for our products, we will not be able to promote most of them to prevent stroke, and our ability to maintain and grow our business could be harmed.

Unless and until we obtain additional FDA approval for our products, we will not be able to promote them for the treatment of Afib and/or to prevent stroke, and our ability to maintain and grow our business could be harmed.

We may be subject to fines, penalties, injunctions and other sanctions if we are deemed to be promoting the use of our products for unapproved, or off-label, uses.

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Modifications to our products may require new clearances or approvals or may require us to cease promoting or to recall the modified products until such clearances or approvals are obtained and FDA may not agree with our conclusions regarding whether new clearances or approvals were required.

Any modification to a 510(k)-cleared device that would constitute a change in its intended use, design or manufacture could require a new or supplemental 510(k) clearance or, possibly, submission and FDA approval of a PMA application.

Any modification to a 510(k)-cleared device or PMA-approved device that would constitute a change in its intended use, design or manufacture could require a new or supplemental 510(k) clearance or, possibly, submission and FDA approval of a PMA application or PMA supplement.

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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Delays in receipt or failure to receive clearances or approvals, the loss of previously received clearances or approvals or the failure to comply with existing or future regulatory requirements could reduce our sales, profitability and future growth prospects.

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.

If we or our third-party vendors fail to comply with extensive FDA regulations relating to the manufacturing of our products or component parts, 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 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.

10 unchanged sentences

The manufacture of our product also subjects us to risks that could harm our business, including problems relating to the sterilization of our products or facilities and errors in manufacturing components that could negatively affect the efficacy or safety of our products or cause delays in shipment of our products.

Any interruption or delay in the manufacture of the product or any of its components 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.

Interruption or delay in the manufacture of the product or any of its components 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.

We are currently defending against a lawsuit brought under the False Claims Act, and any adverse finding, judgement, or enforcement action could materially and adversely affect our business, financial condition or results of operations.

As previously disclosed, on December 11, 2017, the Company received a Civil Investigative Demand (CID) from the USDOJ stating that it was investigating the Company to determine whether the Company has violated the False Claims Act, relating to the promotion of certain medical devices related to the treatment of atrial fibrillation for off-label use and submitted or caused to be submitted false claims to certain federal and state health care programs for medically unnecessary healthcare services related to the treatment of Afib.

As previously disclosed, on December 11, 2017, the Company received a Civil Investigative Demand (CID) from the US Department of Justice (USDOJ) stating that it was investigating the Company to determine whether the Company has violated the False Claims Act, relating to the promotion of certain medical devices related to the treatment of atrial fibrillation for off-label use and submitted or caused to be submitted false claims to certain federal and state health care programs for medically unnecessary healthcare services related to the treatment of Afib.

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

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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 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.

81 unchanged sentences

The MDR also envisages greater control over notified bodies and their standards, increased transparency, more robust device vigilance requirements and clarification of the rules for clinical investigations.

Under transitional provisions, medical devices with notified body certificates issued under the MDD prior to May 26, 2021 may continue to be placed on the market for the remaining validity of the certificate, until May 26, 2024 at the latest.

Under transitional provisions, medical devices with notified body certificates issued under the MDD prior to May 26, 2021, may continue to be placed on the market until 2027 or 2028, depending on device classification, as long as those devices meet the requirements of 2017/745 as amended by EU 2023/607.

After the expiry of any applicable transitional period, only devices that have been CE marked under the MDR may be placed on the market in the EU.

1 unchanged sentence

Financial Risks

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

Our quarterly financial results are likely to fluctuate significantly because the pace of adoption of our products by clinicians are uncertain.

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.

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.

7 unchanged sentences

Our losses have had, and are expected to continue to have, an adverse impact on our working capital, total assets and accumulated deficit.

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.

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 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 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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If our goodwill becomes impaired, it 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 occurs.

As of December 31, 2022, we had $234,781 in goodwill related to acquisitions, which represents the purchase price we paid in excess of the fair value of the net assets we acquired.

As of December 31, 2023, we had $234,781 in goodwill, which represents purchase price we paid in excess of the fair value of the net assets we acquired.

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).

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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As we grow and expand our product offerings, managing our inventory levels becomes more difficult, particularly as we expand into new product areas and bring product enhancements to market.

While we rely on our personnel and information technology systems for inventory management, our personnel and information technology systems may fail to adequately perform these functions or may experience an interruption.

While we rely on our personnel and information technology systems for inventory management, our personnel and

information technology systems may fail to adequately perform these functions or may experience an interruption.

An excessive amount of inventory reduces our cash available for operations and may result in excess or obsolete materials.

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Adverse financial conditions in these countries may negatively affect the length of time that it will take us to collect associated accounts receivable or impact the likelihood of ultimate collection.

We may be unable to comply with the covenants of our Loan Agreement.

Our Loan Agreement with Silicon Valley Bank (“SVB”) contains a minimum liquidity covenant, dividend restrictions and other customary terms and conditions.

The occurrence of an event of default could result in an increase to the applicable interest rate by 3.0%, an acceleration of all obligations, an obligation to repay all obligations in full and a right by SVB to exercise all remedies available to them.

If we are unable to pay those amounts, SVB could proceed against the collateral granted to it pursuant to the Loan Agreement, and we may in turn lose access to our current source of borrowing availability.

We may be unable to comply with the covenants of our Credit Agreement.

The Credit Agreement entered into on January 5, 2024, contains specific financial covenants and a minimum liquidity requirement, along with other terms restricting indebtedness, liens, investments and acquisitions, asset dispositions, certain payments and other customary representations and warranties.

The Credit Agreement contains mandatory prepayment provisions which require prepayment of amounts outstanding (i) upon the receipt of proceeds from the issuance of any non-permitted indebtedness and (ii) when there is an Availability shortfall, as defined.

The occurrence of an event of default could result in an obligation to repay all obligations in full and a right by our lenders to exercise all remedies available to them.

If we are unable to pay those amounts, our lenders could proceed against the collateral granted to it pursuant to the Credit Agreement, and we may in turn lose access to both our collateral and our current source of borrowing availability.

Common Stock Risks

3 unchanged sentences

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

Our business results may vary significantly from such guidance or that consensus due to a number of factors, many of which are outside of our control, and which could adversely affect our operations and operating results.

Our business results may vary significantly from such guidance or that consensus due to a number of factors, many of which are outside of our control and could adversely affect our operations and operating results.

Furthermore, if we make downward revisions of our previously announced guidance, or if our publicly announced guidance of future operating results fails to meet expectations of securities analysts, investors, or other interested parties, the market price of our common stock could decline.

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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.

It may be difficult for companies such as ours, with a smaller market capitalization, to attract and maintain sufficient independent financial analysts that will cover our common stock.

It may be difficult for companies such as ours, with a smaller market capitalization, to attract and

maintain sufficient independent financial analysts that will cover our common stock.

This could have a negative effect on the market price of our stock.

1 unchanged sentence

Because we operate within the medical device segment of the healthcare industry, our stock price is likely to be volatile.

The market price of our common stock may have and has had a history of substantial fluctuation due to a variety of factors, including, but not limited to those risk factors described in the “Risk Factors” section herein.

The market price of our common stock has had and may continue to have substantial fluctuation due to a variety of factors, including, but not limited to those risk factors described in the “Risk Factors” section herein.

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

33 unchanged sentences

Furthermore, pursuant to our credit facility, we are currently subject to restrictions on our ability to pay dividends and we may in the future become subject to other contractual restrictions on, or prohibitions against, the payment of dividends.

UNRESOLVED STAFF COMMENTS

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