What changed in this filing

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Item 1A. Risk Factors

2024-02-09 compared with 2023-02-10 · 83 added, 93 removed, 686 unchanged (20% of the section changed)

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commercial sales force and expand our marketing efforts to increase adoption of Barostim, add new features to Barostim, obtain regulatory clearances or approvals for our planned or future products and conduct clinical trials on our existing and planned or future products.

Until our IPO, we financed our operations primarily through convertible preferred stock financings and amounts borrowed under our previous loan and security agreement (“Horizon loan agreement”) with Horizon Technology Finance Corporation.

We have devoted substantially all of our financial resources to research and development activities as well as general and administrative expenses associated with our operations, including clinical and regulatory initiatives to obtain marketing approval.

Technology Finance Corporation.

We had devoted substantially all of our financial resources to research and development activities as well as general and administrative expenses associated with our operations, including clinical and regulatory initiatives to obtain marketing approval.

Since our IPO, we have invested substantially in sales and marketing efforts to support commercialization of Barostim.

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We expect substantially all of our revenue to continue to be derived from sales of Barostim for the foreseeable future, the majority of which will be generated in the U.S.

Because of its relatively recent commercial introduction in the U.S., Barostim has limited product and brand recognition.

In addition, demand for Barostim may decline or may not continue to increase as quickly as we

Although increasing as our commercial sales grow, Barostim still has limited product and brand recognition.

In addition, demand for Barostim may decline or may not continue to increase as quickly as we expect.

If we are unable to achieve significant market acceptance in the U.S.

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In order for us to sell Barostim, we must successfully demonstrate to physicians and patients the merits of Barostim Therapy for use in treating patients with HFrEF.

Specifically, Barostim provides symptomatic relief for patients with NYHA Class III or II (with recent history of III), have a LVEF ≤ 35% and a NT-proBNP < 1,600 pg/ml.

Specifically, Barostim is indicated for patients with NYHA Class III or II (with recent history of III) despite treatment with guideline-directed medical therapies (medications and devices), have a LVEF ≤ 35%

and a NT-proBNP < 1,600 pg/ml.

Barostim delivers Baroreflex Activation Therapy to improve patients’ NYHA functional status, 6MHW and quality of life.

Acceptance of Barostim depends on educating physicians as to the distinctive characteristics, perceived benefits, safety, ease of use and cost-effectiveness of Barostim and communicating to physicians the proper application of Barostim Therapy for patients who meet Barostim’s eligibility criteria.

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In such circumstances, our results of operations would be materially adversely affected.

about potential adverse effects of Barostim, or they are unable to obtain adequate third-party coverage or reimbursement.

Patients may not choose or be able to receive Barostim if, among other potential reasons, they are reluctant to receive an implantable device as opposed to an alternative, non-implantable treatment, they are worried about potential adverse effects of Barostim, or they are unable to obtain adequate third-party coverage or reimbursement.

Our industry is highly competitive.

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If our competitors are more successful than us in these matters, our business may be harmed.

In addition, we face a particular challenge overcoming the long-standing practices by some physicians of using the products of our larger, more established competitors.

In addition, we face a particular challenge overcoming the long-standing practices by some physicians of using the products of our larger, more established potential competitors.

Physicians who have completed many successful implants using the products made by these competitors may be reluctant to try new products from a source with which they are less familiar.

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If we fail to receive access to hospitals, our sales may decrease.

In the U.S., in order for physicians to use Barostim, we expect that the hospitals where these physicians treat patients will typically require us to enter into purchasing contracts.

In the U.S., in order for physicians to use Barostim, hospitals where these physicians treat patients typically require us to enter into purchasing contracts.

This process can be lengthy, time-consuming and require extensive negotiations and management time, which could include an approval by a customer’s value analysis committee.

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Our ability to supply Barostim commercially depends, in part, on our ability to obtain a supply of these components that has been manufactured in accordance with regulatory requirements and in sufficient quantities for commercialization and clinical testing.

We have not entered into manufacturing, supply or quality agreements with most of our limited suppliers, some of which supply components critical to our products, such as modules, batteries and electrodes.

We have not entered into manufacturing, supply or quality agreements with some of our limited suppliers, some of which supply components critical to our products, such as modules, batteries and electrodes.

We cannot guarantee that our suppliers will be able to meet our demand for their products and services, either because of the nature of our arrangements with those suppliers, our limited experience with those suppliers, or due to our relative importance as a customer to those suppliers.

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

• our suppliers, especially new suppliers, may make errors in manufacturing that could negatively affect the efficacy or safety of Barostim or cause delays in shipment;

• our suppliers, especially new suppliers, may make errors in manufacturing that could negatively affect the effectiveness or safety of Barostim or cause delays in shipment;

• we may have difficulty locating and qualifying alternative suppliers;

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one or more of our limited source suppliers may be unwilling or unable to supply components of Barostim;

• other customers may use fair or unfair negotiation tactics and/or pressures to impede our use of the

• we do not conduct formal environmental, social or governance due diligence on our supply chain and thus may not be aware if our suppliers pose such risks;

• other customers may use fair or unfair negotiation tactics and/or pressures to impede our use of the supplier;

• we do not conduct rigorous, formal environmental, social or governance due diligence on our supply chain and thus may not be aware if our suppliers pose such risks;

• the occurrence of a fire, natural disaster or other catastrophe impacting one or more of our suppliers may affect their ability to deliver products to us in a timely manner;

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• potential damage to or destruction of our manufacturing equipment or manufacturing facility.

If demand for Barostim increases, we will have to invest additional resources to purchase components, hire and train employees and enhance our manufacturing processes.

As demand for Barostim increases, we have invested, and expect to continue to invest, additional resources to purchase components, hire and train employees and enhance our manufacturing processes.

If we fail to increase our production capacity efficiently, our sales may not increase in line with our forecasts and our operating margins could fluctuate or decline.

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Our principal offices and our only manufacturing facility are located in Minneapolis, Minnesota.

Substantially all of our operations are conducted at this location, including our manufacturing processes, research, development and engineering activities, customer and technical support and management and administrative

In addition, substantially all of our inventory of component supplies and finished goods is held at the manufacturing facility.

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In addition, regardless of the level of insurance coverage, damage to our facility may harm our business, financial condition and operating results.

A pandemic, epidemic or outbreak of an infectious disease in the U.S.

or worldwide, including the outbreak of the novel strain of coronavirus disease, COVID-19, could adversely affect our business.

Pandemics, epidemics or outbreaks of an infectious disease may adversely affect our business.

The COVID-19 pandemic has negatively impacted our business, financial condition and results of operations by decreasing and delaying the number of procedures performed using Barostim and the pandemic may continue to negatively impact our business, financial condition and results of operations.

Similar to the general trend in elective and other surgical procedures, the number of procedures performed using Barostim decreased significantly when healthcare organizations in the U.S.

prioritized the treatment of patients with COVID-19 or altered their operations to prepare for and respond to the pandemic.

By the beginning of the fourth quarter of 2020, implant centers had resumed procedures in the U.S.

however, procedure volumes were again negatively impacted by the Delta and Omicron variants of COVID-19 in the third and fourth quarters of 2021 and continuing into the first quarter of 2022.

By March 2022 and continuing through the date of this Annual Report on Form 10-K, implant centers resumed procedures at more normal levels.

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

Such orders or restrictions previously resulted in reduced operations at our headquarters, slowdowns and delays, travel restrictions and cancellation of events and restricted the ability of our front-line sales representatives to attend procedures in which our products are used, among other effects, thereby negatively impacting our operations.

Other disruptions or potential disruptions include restrictions on the ability of our sales representatives and other personnel to travel and access customers for training and case support;

inability of our suppliers to manufacture components and parts and to deliver these to us on a timely basis, or at all;

disruptions in our production schedule and ability to manufacture and assemble products;

inventory shortages or obsolescence;

delays in actions of regulatory bodies;

and delays in clinical trials and studies, especially if study subjects are reluctant to present themselves at medical facilities.

The extent to which the COVID-19 pandemic impacts our business will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity and spread of COVID-19 and its variants and the durability of immunity offered by vaccines developed to prevent infection, as well as other actions to contain COVID-19 and its variants or treat its impact, among others.

While the potential economic impact brought by and the duration of any pandemic, epidemic or outbreak of an infectious disease, including COVID-19, may be difficult to assess or predict, the widespread COVID-19 pandemic has resulted in and may in the future result in, significant disruption of global financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity.

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

Our international operations subject us to certain operating risks, which could adversely impact our results of operations and financial condition.

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Healthcare costs have risen significantly over the past decade, which has resulted in or led to numerous cost reform initiatives by legislators, regulators and third-party payors.

Cost reform has triggered a consolidation

trend in the healthcare industry to aggregate purchasing power, which may create more requests for price concessions in the future.

Cost reform has triggered a consolidation trend in the healthcare industry to aggregate purchasing power, which may create more requests for price concessions in the future.

Additionally, group purchasing organizations, independent delivery networks and large single accounts may continue to use their market power to consolidate purchasing decisions for hospitals.

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We will likely need to conduct additional clinical studies in the future to support approval for new indications.

For example, we are currently pursuing a morbidity and mortality indication for patients with HFrEF, which, if successful, could significantly expand our addressable patient population.

However, we cannot assure you that the morbidity and mortality data will be sufficient to allow us to achieve FDA approval for including a morbidity and mortality benefit in this indication.

In addition, if the morbidity and mortality data is perceived to be negative, such data may impact the adoption of Barostim, notwithstanding our existing clinical data and FDA approval.

Clinical testing takes many years, is expensive and carries uncertain outcomes.

The initiation and completion of any of these studies, including the post-market stage of our BeAT-HF pivotal trial, may be prevented, delayed, or halted for numerous reasons, including, but not limited to, the following:

The initiation and completion of studies may be prevented, delayed, or halted for numerous reasons, including, but not limited to, the following:

• the FDA, IRBs, ethics committees, EU competent authorities or other regulatory authorities do not approve a clinical study protocol, force us to modify a previously approved protocol, or place a clinical study on hold;

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• patients do not return for post-treatment follow-up at the expected rate;

• patients experience serious or unexpected adverse side effects for a variety of reasons that may or may

not be related to our products, such as the advanced stage of co-morbidities that may exist at the time of treatment, causing a clinical study to be put on hold;

• patients experience serious or unexpected adverse side effects for a variety of reasons that may or may not be related to our products, such as the advanced stage of co-morbidities that may exist at the time of treatment, causing a clinical study to be put on hold;

• sites participating in an ongoing clinical study withdraw, requiring us to engage new sites;

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• changes in federal, state, or foreign governmental statutes, regulations or policies;

• interim results are inconclusive or unfavorable as to immediate and long-term safety or efficacy;

• the study design is inadequate to demonstrate safety and efficacy;

• interim results are inconclusive or unfavorable as to immediate and long-term safety or effectiveness;

• regional or worldwide conditions, like an infectious disease or pandemic, precluding or interfering with execution;

• the study design is inadequate to demonstrate safety and effectiveness;

• the statistical endpoints are not met.

Clinical trials can fail at any stage.

Our clinical studies, including the post-market stage of our BeAT-HF pivotal trial related to the morbidity and mortality indication for patients with HFrEF, may produce negative or inconclusive results and we may decide, or regulators may require us, to conduct additional clinical or non-clinical studies in addition to those we have planned.

The impacts of the COVID-19 pandemic, which may have afflicted certain participants in the post-market pivotal trial, are unknown, but they may exacerbate certain risks described above.

In addition, if the FDA determines for any reason, including safety or their risk-benefit analysis, that the results of the post-market stage of our BeAT-HF pivotal trial or any other future trial are negative, the FDA may decide to modify or revoke our existing approval or such data may impact the adoption of Barostim.

Our clinical studies may produce negative or inconclusive results and we may decide, or regulators may require us, to conduct additional clinical or non-clinical studies in addition to those we have planned.

In addition, if the FDA determines for any reason, including safety or their risk-benefit analysis, that the results of a trial are negative, the FDA may decide to modify or revoke our existing

approval or such data may impact the adoption of Barostim.

Moreover, a negative perception of clinical results for one indication for use could impact the use of Barostim for other FDA approved and clinically supported indications for use.

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Manufacturing and marketing of Barostim and clinical testing of Barostim Therapy may expose us to product liability claims.

The coverage limits of our liability insurance policies may not be adequate and one or more successful claims brought against us may have a material adverse effect on our business and results of

The coverage limits of our liability insurance policies may not be adequate and one or more successful claims brought against us may have a material adverse effect on our business and results of operations.

Further, interpretation of product liability laws may change in the future due to court rulings.

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Our employees may be more likely to leave us if the shares they own or the shares underlying their vested options have significantly appreciated in value relative to the original purchase prices of the shares or the exercise prices of the options, or if the exercise prices of the options that they hold are significantly below the market price of our common stock.

Many executive officers and employees in the medical device industry are subject to strict non-compete or confidentiality agreements with their employers.

Although non-compete agreements are becoming more disfavored and, in some cases, banned, many executive officers and employees in the medical device industry are still subject to strict non-compete or confidentiality agreements with their employers.

In addition, some of our existing and future employees are subject to confidentiality agreements with previous employers.

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Concerns over economic and political stability, inflation levels and related efforts to mitigate inflation, a potential recession, the level of U.S.

national debt, currency fluctuations and volatility, the rate of growth of Japan, China and other Asian economies, unemployment, the availability and cost of credit, trade relations, including the imposition of various sanctions and tariffs, the recovery from the COVID-19 pandemic, energy costs and geopolitical uncertainty and conflict have contributed to increased volatility and diminished expectations for the economy and markets in general.

An economic downturn could result in a variety of risks to our business, including weakened demand for Barostim, a delayed time to meet clinical endpoints and our ability to raise additional capital when needed on acceptable terms, if at all.

national debt, currency fluctuations and volatility, the rate of growth of Japan, China and other Asian economies, unemployment, the availability and cost of credit, trade relations, including the imposition of various sanctions and tariffs, infectious diseases or pandemics, climate-related events, energy costs and geopolitical uncertainty and conflict have contributed to increased volatility and diminished expectations for the economy and markets in general.

An economic downturn could result in a

variety of risks to our business, including weakened demand for Barostim and our ability to raise additional capital when needed on acceptable terms, if at all.

A weak or declining economy could also strain our manufacturers or suppliers, resulting in supply disruption, or causing our customers to delay making payments for our services.

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Disputes between us and our collaborators may result in litigation or arbitration which would increase our expenses and divert the attention of our management.

Further, these transactions and arrangements are contractual in nature and

may be terminated or dissolved under the terms of the applicable agreements and, in such event, we may not continue to have rights to the products relating to such transaction or arrangement or may need to purchase such rights at a premium.

Further, these transactions and arrangements are contractual in nature and may be terminated or dissolved under the terms of the applicable agreements and, in such event, we may not continue to have rights to the products relating to such transaction or arrangement or may need to purchase such rights at a premium.

We may seek to grow our business through acquisitions of complementary products or technologies, and the failure to manage acquisitions, or the failure to integrate them with our existing business, could impair our ability to execute our business strategies.

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We do not know if we will be able to identify acquisitions we deem suitable, whether we will be able to successfully complete any such acquisitions on favorable terms or at all, or whether we will be able to successfully integrate any acquired products or technologies.

Our inability to integrate any acquired products or technologies effectively could impair our ability to execute our business strategies.

Our inability to integrate any acquired products or technologies effectively could impair our

ability to execute our business strategies.

In addition, any amortization or charges resulting from the costs of acquisitions could increase our expenses .

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Medicare reimbursement levels are important to increasing adoption of Barostim because nearly two-thirds of the target patient population for Barostim is over the age of 65.

Effective January 2021, CMS awarded Barostim a TPT payment for outpatient procedures that adds the device cost as a pass-through payment to the calculated procedure payment, which will remain in place through 2023.

The calculated procedure payment depends on many factors, including the location of the hospitals and their billing practices, and may not adequately cover hospital costs associated with the procedure.

While we intend to request that Barostim be reclassified into a higher Medicare reimbursement level, there can be no assurance that such efforts will be successful.

In the 2024 OPPS final rule issued in November 2023, Barostim was reassigned to New Technology APC 1580, which carries an average payment amount of $45,000.

The new payment took effect January 1, 2024.

Any future decline in the amount Medicare is willing to reimburse our customers for procedures using Barostim could make it difficult for new customers to adopt Barostim and could create additional pricing pressure for us, which could adversely affect our ability to invest in and grow our business.

From time to time, physicians and hospitals have in the past experienced, and others may experience, delays in Medicare reimbursement, which have delayed or may delay their willingness to schedule additional Barostim procedures.

A pandemic, epidemic or outbreak of an infectious disease in the U.S.

or worldwide could adversely affect our business.

Pandemics, epidemics or outbreaks of an infectious disease may adversely affect our business.

Numerous state and local jurisdictions have historically imposed, and others in the future may impose, “shelter-in-place” orders, quarantines, executive orders and similar government orders and restrictions for their residents to control the spread of infectious disease.

Such orders or restrictions previously resulted, and may in the future result, in reduced operations at our headquarters, slowdowns and delays, travel restrictions and cancellation of events and restrictions on the ability of our front-line sales representatives to attend procedures in which our products are used, among other effects, thereby negatively impacting our operations.

Other disruptions or potential disruptions include restrictions on the ability of our sales representatives and other personnel to travel and access customers for training and case support;

the ability of hospitals and surgical centers to staff and conduct procedures;

inability of our suppliers to manufacture components and parts and to deliver these to us on a timely basis, or at all;

disruptions in our production schedule and ability to manufacture and assemble products;

inventory shortages or obsolescence;

delays in actions of regulatory bodies;

and delays in clinical trials and studies, especially if study subjects are reluctant to present themselves at medical facilities.

While the potential economic impact brought by and the duration of any pandemic, epidemic or outbreak of an infectious disease may be difficult to assess or predict, it may result in significant disruption of global financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity.

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

Risks related to intellectual property

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Significant litigation regarding patent rights occurs in the medical device industry.

Whether merited or

not, it is possible that third parties controlling U.S.

Whether merited or not, it is possible that third parties controlling U.S.

and foreign patents allege such patents cover our products, or we may decide to initiate infringement claims or litigation to protect our patents or other intellectual property rights.

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Our competitors in both the U.S.

and abroad, many of which have substantially greater resources and have made substantial investments in patent portfolios and competing technologies, may have applied for or obtained or may in the future apply for and obtain, patents that will prevent, limit or otherwise interfere with our ability to make, use, sell, or export our products.

and abroad, many of which

have substantially greater resources and have made substantial investments in patent portfolios and competing technologies, may have applied for or obtained or may in the future apply for and obtain, patents that will prevent, limit or otherwise interfere with our ability to make, use, sell, or export our products.

These competitors may have one or more patents for which they can threaten or initiate patent infringement actions against us or any of our third-party suppliers.

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Even if resolved in our favor, litigation or other legal proceedings relating to intellectual property claims may cause us to incur significant expenses and could distract our technical and management personnel from their normal responsibilities.

In addition, there could be public announcements of the results of hearings, motions

or other interim proceedings or developments, and if securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our common stock.

In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments, and if securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our common stock.

Finally, any uncertainties resulting from the initiation and continuation of any litigation could have a material adverse effect on our ability to raise the funds necessary to continue our operations.

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We could in the future be subject to claims that we or our employees have inadvertently or otherwise used or disclosed alleged trade secrets or other proprietary information about former employers or competitors.

disclosure or confidentiality agreement, or that we or these individuals have, inadvertently or otherwise, used or disclosed the alleged trade secrets or other proprietary information of a former employer or competitor, resulting in litigation.

Even if we are successful in defending against these claims, the litigation could be costly and a distraction to management.

Although we have procedures in place that seek to prevent our employees and consultants from using the intellectual property, proprietary information, know-how or trade secrets of others in their work for us, we may in the future be subject to claims that we caused an employee to breach the terms of his or her non-disclosure or confidentiality agreement, or that we or these individuals have, inadvertently or otherwise, used or disclosed the alleged trade secrets or other proprietary information of a former employer or competitor, resulting in litigation.

Even if we are successful in defending against these claims, the litigation could be costly

and a distraction to management.

If we are unsuccessful in defending against these claims, in addition to paying monetary damages, a court could prohibit us from using technologies or features that are essential to our products, if such technologies or features are found to incorporate or be derived from the trade secrets or other proprietary information of the former employers.

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• our need to implement additional infrastructure and internal systems;

• our ability to hire additional personnel to support our operations as a public company;

• our ability to hire additional personnel to support our operations;

• the emergence of competing technologies or other adverse market developments.

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The seasonality of our business creates variance in our quarterly revenue, which makes it difficult to compare or forecast our financial results.

We expect that any revenue we generate could fluctuate from quarter to quarter as a result of timing and seasonality.

We expect that revenue could fluctuate from quarter to quarter as a result of timing and seasonality.

We anticipate mild seasonality based on national holiday patterns specific to certain nations.

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Except for low-risk medical devices (Class I with no measuring function and which are not sterile), where the manufacturer could issue an EU Declaration of Conformity based on a self-assessment of the conformity of its products with the Essential Requirements, a conformity assessment procedure required the intervention of a Notified Body, which is an organization designated by a competent authority of an EEA country to conduct conformity assessments.

Depending on the relevant conformity assessment procedure, the Notified Body would audit the QMS and examine the Technical File for the manufacture, design and final inspection of our devices.

Depending on the relevant conformity assessment procedure, the Notified Body would audit the Quality Management System and examine the Technical File for the manufacture, design and final inspection of our devices.

The Notified Body would issue a CE Certificate of Conformity following successful completion of this conformity assessment procedure conducted in relation to the medical device and its manufacturer and their conformity with the Essential Requirements.

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In order to continue to sell Barostim in Europe, we must comply with the MDR and its evolving transition requirements.

We have submitted our application for Barostim to comply with the general safety and performance requirements of the EU MDR (which are similar to the Essential Requirements of the AIMDD);

however, there is no guarantee that Barostim will be approved by the end of 2023.

If approved, the proposal to extend the expiration of AIMDD CE certificates until May 31, 2027 would mitigate the risk of compliance with the MDR by the end of 2023.

We have submitted our application for Barostim to comply with the general safety and performance requirements of the EU MDR (which are similar to the Essential Requirements of the AIMDD), and it is currently under review.

Additionally, the EU did approve an amendment to the MDR which allows qualifying AIMDD CE certificates to be accepted through December of 2027.

We have already met the qualifications identified within this amendment to allow continued distribution of Barostim through this time.

Failing to continue to comply with applicable foreign regulatory requirements, including those administered by authorities of the EEA countries, could result in enforcement actions against us, including refusal, suspension or withdrawal of our CE Certificates of Conformity by our Notified Body (the National Standards Authority of Ireland, or NSAI), which could impair our ability to market products in the EEA in the future.

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In addition, if the FDA determines that our promotional materials or training constitute promotion of an off-label use, it could request that we modify our training or promotional materials or subject us to regulatory or enforcement actions, including the issuance of an untitled letter, a warning letter, injunction, seizure, civil fine or criminal penalties.

It is also possible that other federal, state or foreign enforcement authorities might take action if they consider our business activities to constitute inappropriate promotion, including promotion of an off-label

use, which could result in significant penalties, including, but not limited to, criminal, civil and/or administrative penalties, damages, fines, disgorgement, exclusion from participation in government healthcare programs and the curtailment of our operations.

It is also possible that other federal, state or foreign enforcement authorities might take action if

they consider our business activities to constitute inappropriate promotion, including promotion of an off-label use, which could result in significant penalties, including, but not limited to, criminal, civil and/or administrative penalties, damages, fines, disgorgement, exclusion from participation in government healthcare programs and the curtailment of our operations.

Any of these events could significantly harm our business and results of operations and cause our stock price to decline.

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If the FDA disagrees with our determinations, it could require us to report those actions as recalls and we may be subject to enforcement action.

A future recall announcement could harm our reputation with customers, potentially lead to product liability claims against us and negatively affect our sales.

Any corrective action, whether voluntary or involuntary, as well as defending

ourselves in a lawsuit, will require the dedication of our time and capital, distract management from operating our business and may harm our reputation and financial results.

A future recall

announcement could harm our reputation with customers, potentially lead to product liability claims against us and negatively affect our sales.

Any corrective action, whether voluntary or involuntary, as well as defending ourselves in a lawsuit, will require the dedication of our time and capital, distract management from operating our business and may harm our reputation and financial results.

Our products may cause or contribute to adverse medical events or be subject to failures or malfunctions that we are required to report to the FDA and European regulators, and if we fail to do so, we would be subject to sanctions that could harm our reputation, business, financial condition and results of operations.

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If we fail to comply with our reporting obligations, the FDA or European regulators could take action, including warning letters, untitled letters, administrative actions, criminal prosecution, imposition of civil monetary penalties, revocation of our device approval, seizure of our products or delay in clearance or approval of future products.

We are subject to certain federal, state and foreign fraud and abuse laws, health information privacy and security laws and transparency laws and regulations, which, if violated, could subject us to substantial penalties.

We are subject to certain federal, state and foreign fraud and abuse laws, transparency and privacy and security laws and regulations, which, if violated, could subject us to substantial penalties.

Additionally, any challenge to or investigation into our practices under these laws and regulations could cause adverse publicity and be costly to respond to, and thus could harm our business.

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• federal civil and criminal false claims laws and civil monetary penalty laws, including civil whistleblower or qui tam actions, that prohibit, among other things, knowingly presenting, or causing to be presented, claims for payment or approval to the federal government that are false or fraudulent, knowingly making a false statement material to an obligation to pay or transmit money or property to the federal government or knowingly concealing or knowingly and improperly avoiding or decreasing an obligation to pay or transmit money or property to the federal government;

the beneficiary’s decision to order or receive items or services reimbursable by the government from a particular provider or supplier;

• the federal Civil Monetary Penalties Law, which prohibits, among other things, offering or transferring remuneration to a federal healthcare beneficiary that a person knows or should know is likely to influence the beneficiary’s decision to order or receive items or services reimbursable by the government from a particular provider or supplier;

• the federal HIPAA, which created federal criminal laws that prohibit executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters.

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• the federal physician payments sunshine requirements under the Affordable Care Act, which require certain manufacturers of drugs, devices, biologics and medical supplies to report annually to HHS information related to payments and other transfers of value to certain healthcare providers and teaching hospitals;

• state and foreign law equivalents of each of the above federal laws, such as state anti-kickback and false claims laws that may apply to items or services reimbursed by any third-party payor, including commercial insurers;

• state and foreign law analogs of each of the above federal laws, such as state anti-kickback and false claims laws that may apply to items or services reimbursed by any third-party payor, including commercial insurers;

state laws that require device companies to comply with the industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources;

state laws that require device manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures;

and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA.

and state and foreign laws governing the privacy and security of personal and health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA.

These laws and regulations, among other things, constrain our business, marketing and other promotional activities by limiting the kinds of financial arrangements, including sales programs, we may have with hospitals, physicians or other potential purchasers of our products.

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We are an “emerging growth company,” as defined in the JOBS Act, and we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

We cannot predict if investors will find our common stock less attractive because we will rely on these exemptions.

We cannot predict if investors will find our common stock less attractive because we rely on these exemptions.

If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may decline or be more volatile.

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If we are unable to maintain effective internal control over financial reporting in the future, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be adversely affected.

To comply with the requirements of being a public company, we are undertaking and expect to continue to undertake various actions, including implementing new internal controls and procedures and hiring new accounting or internal audit staff.

To comply with the requirements of being a public company, we are undertaking and expect to continue to undertake various actions, including implementing and maintaining new internal controls and procedures and hiring new accounting or internal audit staff.

The Sarbanes-Oxley Act requires that we maintain effective disclosure controls and procedures and internal control over financial reporting.

We have developed and expect to continue to refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file with the SEC is recorded, processed, summarized

and reported within the time periods specified in SEC rules and forms, and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our principal executive and financial officers.

We have developed and expect to continue to refine our disclosure controls and other procedures that are designed to ensure that

information required to be disclosed by us in the reports that we file with the SEC is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our principal executive and financial officers.

Section 404 of the Sarbanes-Oxley Act requires that we evaluate and determine the effectiveness of our internal control over financial reporting and provide a management report on internal control over financial reporting.

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If we identify material weaknesses in our internal control over financial reporting, if we are unable to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner, if we are unable to assert that our internal control over financial reporting is effective, or, when required in the future, if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting, or if our internal control over financial reporting is perceived as inadequate or we are unable to produce timely or accurate financial statements, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could decline and we could become subject to investigations or removal by the stock exchange on which our securities are listed, the SEC, or other regulatory authorities, which could require additional financial and management resources.

Our principal stockholders, management and directors (three of whom are affiliated with our principal stockholders) own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.

Our principal stockholders, management and directors (two of whom are affiliated with our principal stockholders) own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.

As of December 31, 2023, our executive officers, directors, holders of 5% or more of our capital stock and their respective affiliates beneficially owned approximately 52% of our outstanding voting stock.

Three of our non-employee directors are also affiliated with certain of our principal stockholders.

Two of our non-employee directors are also affiliated with certain of our principal stockholders.

Therefore, if they act together, these stockholders will have the ability to influence us through this ownership position and matters requiring stockholder approval.

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Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders' ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our amended and restated certificate of incorporation provides that, to the fullest extent permitted by law, the Court of Chancery of the State of Delaware is the exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a breach of fiduciary duty, any action asserting a claim against us arising pursuant to the Delaware General Corporation Law (the “DGCL”) or any action asserting a claim against us that is governed by the internal affairs doctrine.

The exclusive forum provision does not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the

federal courts have exclusive jurisdiction.

against us that is governed by the internal affairs doctrine.

The exclusive forum provision does not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction.

Our amended and restated certificate of incorporation also provides that the U.S.

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• provide that our amended and restated bylaws may only be altered, amended or repealed by our stockholders upon the affirmative vote of a two-thirds majority of the voting power of all of our outstanding voting stock, voting together as a single class;

• provide that stockholders seeking to present proposals before a meeting of stockholders or to nominate candidates for election as directors at a meeting of stockholders must provide notice in writing in a timely manner and also specify requirements as to the form and content of a stockholder’s notice, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror’s own slate of directors or otherwise attempting to obtain control of our company;

acquiror’s own slate of directors or otherwise attempting to obtain control of our company;

• prohibit cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;

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There is no guarantee that our common stock will appreciate or even maintain the price at which our holders have purchased it.

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