Item 1A. Risk Factors
Item 1A: Risk Factors
The following
items update the risk factors previously reported in PART 1, ITEM 1A, “Risk Factors” of our Annual Report on Form 10-K
for the year ended December 31, 2021
Developments in the rapidly changing healthcare
industry could adversely affect our business.
Most of
our revenue is derived from pharmaceutical manufacturers and could be affected by changes affecting the broader healthcare industry, including
decreased spending in the industry overall. General reductions in expenditures by healthcare industry participants could result from,
among other things:
General reductions in expenditures by healthcare
industry participants could result from, among other things:
– Government regulation or private initiatives that affect the manner in which healthcare industry participants
interact with consumers and the general public;
– Government regulation prohibiting the use of coupons by patients covered by federally funded health insurance
programs;
– Consolidation of healthcare industry participants;
– Reductions in governmental funding for healthcare; and
– Adverse changes in general business or economic conditions affecting healthcare industry participants.
Even if general expenditures by industry participants
remain the same or increase, developments in the healthcare industry may result in reduced spending in some or all of the specific market
segments that we serve now or may serve in the future. For example, use of our solutions and services could be affected
by:
– A decrease in the number of new drugs or medical devices coming to market; and
– A decrease in marketing expenditures by pharmaceutical or medical device
companies.
The healthcare industry has changed significantly in recent years,
and we expect that significant changes will continue to occur. However, the timing and impact of developments in the healthcare industry
are difficult to predict. We cannot assure you that the demand for our solutions and services will continue to exist at current levels
or that we will have adequate technical, financial and marketing resources to react to changes in the healthcare industry.
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If we are unable to maintain our contracts
with electronic prescription platforms, our business will suffer.
We are reliant upon our contracts with leading
electronic prescribing (“ERx”) platforms and electronic health record (“EHR”) systems to generate our revenues
received from customers. Such arrangements subject us to a number of risks, including the following:
– Our ERx and EHR partners may experience financial, regulatory or operational difficulties, which may impair
their ability to focus on and fulfill their contract obligations to us;
– Legal disputes or disagreements, including the ownership of intellectual property, may occur with one
or more of our ERx or EHR partners and may lead to lengthy and expensive litigation or arbitration;
– Significant changes in an ERx or EHR partner’s business strategy may adversely affect a partner’s
willingness or ability to satisfy obligations under any such arrangement; and
– The failure of an ERx or EHR partner to provide accurate and complete financial information to us or to
maintain adequate and effective internal control over its financial reporting may negatively affect our ability to meet our financial
reporting obligations as required by the SEC; and
– An ERx or EHR partner could terminate the partnership arrangement, which could negatively impact our ability
to sell our solutions and achieve revenues.
We will need to maintain these relationships as
well as diversify them. The inability to do so could adversely impact our business. We generated 53.9% and 52.7% of our revenue through
our largest partner in 2021 and 2020, respectively.
You should carefully consider the factors discussed
in PART I, ITEM 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021 and the above
risk factors, each of which could materially affect our business, financial condition or future results. Such risks are not the only risks
we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely
affect our business, financial condition and/or operating results.
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