What changed in this filing

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Item 1A. Risk Factors

2025-02-18 compared with 2024-02-09 · 71 added, 67 removed, 702 unchanged (16% 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 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.

We will need to continue to generate significant additional revenue in order to achieve and sustain profitability.

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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 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.

Barostim delivers BAT 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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Our success depends, in part, upon our ability to establish a competitive position in the market by securing broad market acceptance of Barostim Therapy and Barostim for the treatment of HFrEF.

Any product we develop that achieves regulatory clearance or approval, including Barostim, will have to compete for market acceptance and market share.

Any product we develop that achieves regulatory clearance or approval, including Barostim, will have to compete for market acceptance and market share against other therapies, including both devices and medications.

We believe that the primary competitive factors in the market are demonstrated clinical effectiveness, product safety, reliability and durability, ease of use, product support and service, minimal side effects and salesforce experience.

Many of our current and potential competitors that are addressing other HF indications are publicly traded, or are divisions of publicly-traded, established medical device companies that have substantially greater financial, technical, sales and marketing resources than we do, such as Medtronic plc, Boston Scientific Corporation, Abbott Laboratories and LivaNova PLC.

We may also face competition from other competitors, such as Impulse Dynamics, which is a private company with a medical device indicated for a subset of our target patient population, or companies with active system development programs that may emerge in the future.

Many of the companies developing or marketing competing products enjoy several advantages over us, including, among others:

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• 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;

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

• our suppliers may encounter financial, geopolitical, or other business hardships unrelated to our demand, which could inhibit their ability to fulfill our orders and meet our requirements.

Establishing additional or replacement suppliers for the components or processes used in Barostim, if required, could be time-consuming and expensive.

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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 functions.

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 functions.

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

Vandalism, terrorism or a natural or other disaster, such as a fire or flood, could damage or destroy our manufacturing equipment or our inventory of component supplies or finished goods, cause substantial delays in our operations, result in the loss of key information, and cause us to incur additional expenses.

Our manufacturing facility in Minneapolis, Minnesota is our only manufacturing facility, and if it is damaged or rendered inoperable or inaccessible due to political, social or economic upheaval or due to natural or other disasters, it would be difficult or impossible for us to manufacture our product for a period of time, which may lead to a loss of customers and significant impairment of our financial condition and operating results.

We take precautions to safeguard this facility, including acquiring insurance, employing back-up generators, adopting health and safety protocols and utilizing off-site storage of computer data.

Our insurance may not cover our losses in any particular case.

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

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

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Consolidation in the healthcare industry or group purchasing organizations could lead to demands for price concessions, which may affect our ability to sell Barostim at prices necessary to support our current business strategies.

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.

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 payers.

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.

We expect that market demand, government regulation, third-party coverage and reimbursement policies and societal pressures will continue to change the healthcare industry worldwide, resulting in further business consolidations and alliances among our future customers, which may exert further downward pressure on the prices of Barostim.

We expect that market demand, government regulation, third-party coverage, provider constraints, reimbursement policies and societal pressures will continue to change the healthcare industry worldwide, resulting in further business consolidations and alliances among our future customers, which may exert further downward pressure on the prices of Barostim.

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

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To achieve our revenue goals, we must continue to successfully increase manufacturing output to meet expected customer demand.

We may experience difficulties with manufacturing yields, quality control, component supply and shortages of qualified personnel, among other problems.

We may experience difficulties with manufacturing yields, quality control, component supply and shortages of qualified personnel, such as skilled operators who can assemble our product, among other problems.

Any of these problems could result in delays in product availability and increases in expenses.

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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.

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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In addition, we do not carry any “key person” insurance policies that could offset potential loss of service under applicable circumstances.

Transitions in executive leadership can adversely affect relationships with our customers, suppliers, and employees, make it difficult to attract and retain talent, and disrupt execution of our strategy, sales growth, and our efforts to enhance our operations.

Additionally, such transitions can require significant payments to recruit and attract qualified employees to join our company and may involve severance payments to certain departing employees.

Changes in key management positions may temporarily affect our financial performance and results of operations as the new management becomes familiar with our business and establishes their team dynamic.

For example, in February 2024, we appointed a new Chief Executive Officer who replaced our prior Chief Executive Officer, who had been in the role for 17 years.

We experienced some disruption within the sales organization at the time of the Chief Executive Officer transition, which led to decreased productivity and higher salesforce turnover, as well as the termination of employment of our Senior Vice President of U.S.

Since the beginning of the second quarter of fiscal 2024, we have hired new leaders for sales, medical affairs, clinical, reimbursement and human resources, completing the expansion of the executive team.

Accordingly, our future financial performance will depend on our ability to attract, motivate, integrate, and retain our senior management and employees, and effectively manage this period of transition under our new leadership.

In addition, many of our employees have become vested in a substantial amount of stock or number of stock options.

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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.

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.

Certain of the foregoing have harmed and could in the future harm our business, and we cannot anticipate all of the ways in which the economic climate and financial market conditions may further affect our business.

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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 .

If third-party payors do not provide adequate coverage and reimbursement for the use of Barostim, our revenue will be negatively impacted.

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.

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.

If third-party payers do not provide adequate coverage and reimbursement for the use of Barostim, our revenue will be negatively impacted.

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

On January 1, 2024, Barostim was reassigned to New Technology APC 1580, which carries an average payment amount of $45,000.

The APC payment of approximately $45,000 will continue in 2025, as published in the 2025 OPPS ﬁnal rule.

In August 2024, CMS reassigned the Barostim implant procedure for the inpatient setting as part of the IPPS final rule for CMS’ Fiscal Year 2025, which took effect on October 1, 2024.

On that date, Barostim was reassigned to MS-DRG 276, which carries a national average payment of approximately $44,000 in 2025, a significant increase from the previous payment range of $17,000-$23,000.

Additionally, the American Medical Association's CPT Editorial Panel approved new Category I codes for Barostim therapy, expected to take effect January 1, 2026.

From time to time, physicians and hospitals have in the past experienced, and others may experience, denials in Medicare and commercial 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.

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Our success depends in part on obtaining, maintaining, and enforcing patents and other intellectual property rights and not infringing the patents or violating the other proprietary rights of others.

Intellectual property disputes can be costly to defend and may cause our business, operating results and financial condition to suffer.

Intellectual property disputes can be costly to defend and may cause our business, operating results, and financial condition to

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

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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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If a court determines that we failed to secure necessary patents, competitors may be able to market competing products and make, use or sell products that are substantially the same as ours without incurring the sizeable development costs that we have incurred, which would adversely affect our ability to compete.

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.

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.

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If we cannot obtain all necessary licenses on commercially reasonable terms, our customers may be forced to stop using our products, or our suppliers may be forced to stop providing us with products.

Similarly, interference or derivation proceedings provoked by third parties or brought by the USPTO or any foreign patent authority may be necessary to determine the priority of inventions or other matters of inventorship with respect to our patents or patent applications.

Similarly, interference or derivation proceedings provoked by third parties or brought by the United States Patent and Trademark Office (the “USPTO”) or any foreign patent authority may be necessary to determine the priority of inventions or other matters of inventorship with respect to our patents or patent applications.

We may also become involved in other proceedings, such as re-examination or opposition proceedings, before the USPTO or its foreign counterparts relating to our intellectual property or the intellectual property rights of others.

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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.

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.

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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As a result, disputes may arise regarding the ownership of the proprietary rights to such technology or know-how and any such dispute may not be resolved in our favor.

If any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent them, or those with whom they share it, from using that technology or information to compete with us and our competitive position could be adversely affected.

be adversely affected.

If our intellectual property is not adequately protected to protect our market against competitors’ products and methods, our competitive position and business could be adversely affected.

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Our revenue and results of operations may fluctuate annually or from quarter to quarter due to, among others, the following reasons:

• physician and payor acceptance of Barostim and Barostim Therapy;

• physician and payer acceptance of Barostim and Barostim Therapy;

• the timing, expense and results of research and development activities, clinical trials, and regulatory approvals;

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• changes in our pricing policies or in the pricing policies of our competitors or suppliers;

• changes in coverage amounts or government and third-party payors’ reimbursement policies.

• changes in coverage amounts or government and third-party payers’ reimbursement policies.

Because of these and other factors, it is possible that our operating results will not meet investor expectations or those of public market analysts.

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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 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.

These seasonal variations are difficult to predict accurately, may vary amongst different markets, and at times may be entirely unpredictable.

In addition to the above factors, in the U.S.

it is possible that we may experience seasonality based on patients’ annual deductibility limits under their health insurance coverage.

While historically seasonality has been minimal, we anticipate increased seasonality due to our increased focus on sales within the U.S.

These seasonal variations are difficult to predict accurately, may vary among different markets and at times may be entirely unpredictable, which introduces additional risk into our business as we rely upon forecasts of customer demand to build inventory in advance of anticipated sales.

In addition, we believe our limited history commercializing our products has, in part, made our seasonal patterns more difficult to discern and therefore predict.

We have seen seasonally lower rates of implants in our first fiscal quarter in recent years, which we believe is primarily due to U.S.

patients shifting medical treatments to the later months of the year when they have better information about spending against the annual deductibility limits under their health insurance coverage, and we expect this trend to continue.

Otherwise, mild seasonal variations are difficult to predict accurately and may vary among different markets.

We are subject to risks associated with currency fluctuations, and changes in foreign currency exchange rates could impact our results of operations.

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As a result, changes in the exchange rates between such foreign currencies, particularly the Euro and the U.S.

dollar, could materially impact our reported results of operations and distort period to period comparisons.

dollar, could materially impact our reported results of operations and distort period to period

Fluctuations in foreign currency exchange rates also impact the reporting of our receivables and payables in non-U.S.

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Internal Revenue Code of 1986, as amended (the “Code”), a corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its pre-change NOLs and specified other tax credit carryforwards, such as research and development tax credits, to offset future taxable income and taxes.

We may have previously experienced, and may in the future experience, one or more “ownership changes” for purposes of the rules under Section 382 and 383 of the Code, including in connection with our IPO.

If so, or if we do not generate sufficient taxable income, we may not be able to utilize a material portion of our NOLs and tax credits, even if we achieve profitability.

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In addition, the Internal Revenue Service or other taxing authorities may disagree with our positions.

If the Internal Revenue Service or any other tax authorities were successful in challenging our positions, we may be liable for additional tax and penalties and interest related thereto or other taxes, as applicable, in excess of any reserves established therefor, which may have a significant impact on our results, operations and future cash flow.

If the Internal Revenue Service or any other tax authorities were successful in challenging our positions, we may be liable for additional tax and penalties and interest related

thereto or other taxes, as applicable, in excess of any reserves established therefor, which may have a significant impact on our results, operations and future cash flow.

Changes in U.S.

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federal and state regulations or EEA or other foreign regulations applicable in the countries where we operate could lead to the issuance of warning letters or untitled letters, fines, injunctions, suspensions or loss of regulatory clearance or approvals, recalls or seizures of products, termination of distribution, or civil penalties.

In the most extreme cases, criminal sanctions or closure of our manufacturing facilities are possible.

In the most extreme cases, criminal sanctions or closure of our

manufacturing facilities are possible.

If any of these risks materialize, our business would be adversely affected.

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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.

Additionally, the EU approved an amendment to the MDR that 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.

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and similar agencies in foreign jurisdictions.

These requirements involve lengthy and detailed laboratory and clinical testing procedures, sampling activities, extensive agency review processes and other costly and time-consuming procedures.

These requirements involve lengthy and detailed laboratory and clinical testing

procedures, sampling activities, extensive agency review processes and other costly and time-consuming procedures.

It often takes several years to satisfy these requirements, depending on the complexity and novelty of the product.

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Such government regulation also could delay our marketing of new products for a considerable period of time and impose costly procedures on our activities.

The extended times EU notified bodies are taking to review and approve both the original MDR application and significant changes once approved, may limit or cause delays in our ability to make necessary or desired changes to the design, manufacturing processes, materials, or quality management system.

Our products remain subject to strict regulatory controls on manufacturing, marketing, and use.

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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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• 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 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 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 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;

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The expansion in the government’s role in the U.S.

healthcare industry may result in decreased profits to us, lower reimbursement by payors for Barostim and any future products and/or reduced medical procedure volumes, all of which may have a material adverse effect on our business, financial condition and results of operations.

healthcare industry may result in decreased profits to us, lower reimbursement by payers for Barostim and any future products and/or reduced medical procedure volumes, all of which may have a material adverse effect on our business, financial condition, and results of operations.

We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services.

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The MDR, among other things, is intended to establish a uniform, transparent, predictable, and sustainable regulatory framework across the EEA for medical devices and ensure a high level of safety and health while supporting innovation.

The MDR became effective in May 2021 and, among other things is designed to:

The MDR is set to become effective in January 2028 and, among other things is designed to:

• strengthen the rules on placing devices on the market and reinforce surveillance once they are available;

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• achievement of expected product sales and profitability;

• manufacture, supply or distribution shortages;

• manufacturing, supply or distribution shortages;

• actual or anticipated fluctuations in our operating results;

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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 (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.

Our principal stockholders, management, and directors (one of whom is affiliated with one of 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, 2024, our executive officers, directors, holders of 5% or more of our capital stock and their respective affiliates beneficially owned approximately 43% of our outstanding voting stock.

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

One of our non-employee directors is also affiliated with one 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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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