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If Ascensia fails to perform satisfactorily under this agreement, including among other things if they are delayed or unsuccessful in growing the adoption of our product, our commercialization efforts and financial results would be directly and adversely affected.
+Added: ● The markets in which we participate are highly competitive, and our primary competitors, as well as a number of other companies, medical researcher and existing medical device companies, are pursuing new delivery devices, delivery technologies, sensing technologies, procedures, drugs and other therapies for the monitoring, treatment and prevention of diabetes.
+Added: Any technological breakthroughs in diabetes monitoring, treatment or prevention could reduce the potential market for Eversense or render Eversense less competitive or obsolete, which would significantly reduce our potential sales.
+Added: ● We have limited operating history as a commercial-stage company and may face difficulties encountered by companies early in their commercialization in competitive and rapidly evolving markets.
● Our actual operating results may differ significantly from any guidance provided.
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In particular, the FDA and other foreign regulatory clearance, certification, or approval processes are expensive, time-consuming and uncertain, and the failure to maintain required regulatory clearances, certifications and approvals could prevent us from commercializing Eversense and future versions of Eversense.
−Removed: ● The COVID-19 pandemic has, and may continue to materially affect our operations, including at our headquarters in Maryland and at our clinical trial sites, as well as the business and operations of our manufacturers, distributors or other third parties with whom we conduct business.
−Removed: We are unable to predict the extent to which the pandemic and related restrictions will continue to impact our business, operations, financial performance and the achievement of our strategic objectives.
−Removed: ● The ongoing military action by Russia in Ukraine could have negative impact on the global economy which could materially adversely affect our business, operations, operating results and financial condition.
+Added: ● The ongoing military action by Russia in Ukraine and Israel in Gaza could have negative impact on the global economy which could materially adversely affect our business, operations, operating results and financial condition.
There is uncertainty regarding the ultimate impact the conflict, including any escalation or further expansion of the conflict’s current scope, will have on our customers, the global economy, supply chains, logistics, fuel prices, raw material pricing and our business.
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● Failure to secure or retain coverage or adequate reimbursement for Eversense or future versions of Eversense systems, including the related insertion and removal procedures, by third-party payors could adversely affect our business, financial condition and operating results.
−Removed: ● The markets in which we participate are highly competitive, and our primary competitors, as well as a number of other companies, medical researcher and existing medical device companies, are pursuing new delivery devices, delivery technologies, sensing technologies, procedures, drugs and other therapies for the monitoring, treatment and prevention of diabetes.
−Removed: Any technological breakthroughs in diabetes monitoring, treatment or prevention could reduce the potential market for Eversense or render Eversense less competitive or obsolete, which would significantly reduce our potential sales.
−Removed: ● We have limited operating history as a commercial-stage company and may face difficulties encountered by companies early in their commercialization in competitive and rapidly evolving markets.
+Added: ● We have partnerships with companies such as NPG to establish broad inserter networks and as the number of insertions increase so does our reliance on these companies.
+Added: If NPG or other partners fail to perform satisfactorily under these agreements our commercialization efforts and financial results would be directly and adversely affected.
● Our stock price has been highly volatile and may continue to be highly volatile.
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● We operate in a regulated industry and our business, operations and the business and operations of our third-party manufacturers are subject to various foreign, U.S.
−Removed: federal, state and local laws and regulations, including those promulgated by the FDA and equivalent foreign regulatory agencies, among others.
+Added: federal, state and local laws and regulations, including those promulgated by the FDA and equivalent foreign regulatory authorities, among others.
Failure to comply with applicable laws and regulations should harm our business and we may incur significant expenditures related to compliance efforts.
−Removed: ● Holders of convertible notes may exert substantial influence over us and may exercise their control in a manner adverse to the interests of our common stockholders.
+Added: ● Failure or perceived failure to comply with existing or future laws, regulations, contracts, self-regulatory schemes, standards, and other obligations related to data privacy and security (including security incidents) could harm our business.
+Added: Compliance or the actual or perceived failure to comply with such obligations could increase the costs to our products, limit their use or adoption, and otherwise negatively affect our operating results and business .
+Added: ● Holders of debt instruments may exert substantial influence over us and may exercise their control in a manner adverse to the interests of our common stockholders.
Risks Relating to our Business and our Industry
We have incurred significant operating losses since inception and cannot assure you that we will ever achieve or sustain profitability .
−Removed: Since our inception, we have incurred significant net losses from operations and expect to incur additional losses in the near future.
−Removed: Our positive income in the current year is substantially the result of fair value gains due to embedded derivatives in our convertible notes.
−Removed: We incurred total net income (loss) of $142.1 million, ($302.5) million, and ($175.2) million for the years ended December 31, 2022, 2021 and 2020, respectively.
+Added: Since our inception, we have incurred significant net losses and expect to incur additional losses in the near future.
+Added: We incurred total net (loss) income of ($60.4) million and $142.1 million for the years ended December 31, 2023, and 2022, respectively.
+Added: Positive net income during 2022 was substantially the result of fair value gains due to embedded derivatives in our convertible notes.
As of December 31, 2023, we had an accumulated deficit of $869.3 million.
To date, we have financed our operations primarily through sales of our equity securities and debt financings.
−Removed: We have devoted substantially all of our resources to the research and development of our products, including conducting clinical trials, and the commercial launch of Eversense 90-day and Eversense E3 in the United States and Eversense 90-day, Eversense XL and Eversense E3 in EEA markets, the Middle East, and Africa (EMEA).
+Added: We have devoted substantially all of our resources to the research and development of our products, including conducting clinical trials, and the commercial launch of Eversense in the United States, select markets in Europe, the Middle East, and Africa (EMEA).
To implement our business strategy we need to, among other things, gain regulatory approval or certification in other regions where we intend to sell our products, expand our commercial launch in the United States and Europe, and develop future generations of Eversense.
−Removed: We have never been profitable in past years and positive net income in the current year is largely driven by changes in fair value of derivatives.
−Removed: Excluding changes to the fair value of our derivative and option agreements, we do not expect to be profitable for at least the next several years.
+Added: We have never been profitable from operations and do not expect to be profitable for at least the next several years.
We expect our expenses to increase significantly as we pursue these objectives.
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Pursuant to this agreement, our future success will be dependent on Ascensia effectively marketing and selling Eversense.
−Removed: We expect that the substantial majority of our future revenue will come pursuant to this agreement in future years.
+Added: We expect that the substantial majority of our future revenue will come
+Added: pursuant to this agreement in future years.
+Added: Prior to our Commercialization Agreement with Ascensia, Ascensia had limited experience with marketing durable medical equipment and no experience marketing CGM systems.
+Added: In order to strengthen commercial execution, Ascensia has recently established an independent dedicated business unit responsible for commercializing Eversense, which reports directly to Ascensia’s parent company, PHC Holdings Corporation (“PHC”), and Ascensia has engaged a new president of CGM to lead that business unit.
+Added: However, there can be no assurance that these efforts will be successful.
If Ascensia fails to perform satisfactorily under this agreement, including among other things if they are delayed or unsuccessful in growing the adoption of our product, our commercialization efforts and financial results would be directly and adversely affected.
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For example, because of the exclusivity of the distribution arrangements with Ascensia and the minimum five-year term of that exclusivity (which may be extended under certain circumstances), prospective strategic acquirors may be unwilling to undertake an acquisition of our company.
−Removed: In addition, under the terms of the PHC Notes, we may be required to make significant payments to redeem these notes upon a change of control.
We have limited operating history as a commercial-stage company and may face difficulties encountered by companies early in their commercialization in competitive and rapidly evolving markets.
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and EU regulations.
−Removed: We will also be subject to periodic inspections by the FDA, the Notified Bodies in the EEA and comparable foreign authorities to determine compliance with regulatory requirements, such as the Quality System Regulation (“QSR”), of the FDA, medical device reporting regulations, vigilance in reporting of adverse events and regulations regarding notification, corrections, and recalls.
+Added: We will also be subject to periodic inspections by the FDA, the Notified Bodies in the EEA and comparable foreign authorities to determine compliance with regulatory requirements, such as the QSR, of the FDA, medical device reporting regulations, vigilance in reporting of adverse events and regulations regarding notification, corrections, and recalls.
These inspections can result in observations or reports, warning letters or other similar notices or forms of enforcement action.
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Adverse regulatory action may restrict us from effectively marketing and selling our products.
−Removed: In addition, negative publicity and product liability
−Removed: claims resulting from any adverse regulatory action could have a material adverse effect on our business, financial condition, and operating results.
+Added: In addition, negative publicity and product liability claims resulting from any adverse regulatory action could have a material adverse effect on our business, financial condition, and operating results.
Foreign governmental regulations have become increasingly stringent and more extensive, and we may become subject to even more rigorous regulation by foreign governmental authorities in the future.
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If we are not successful in educating people with diabetes of the benefits of Eversense, or if we are unable to achieve the support of caregivers and healthcare providers or widespread market acceptance for Eversense, then our sales potential, strategic objectives and profitability could be negatively impacted, which would adversely affect our business, financial condition and operating results.
+Added: We contract with third parties for the manufacture of Eversense.
+Added: Risks associated with the manufacturing of our products could reduce our gross margins and negatively affect our operating results.
+Added: We do not have any manufacturing facilities or direct manufacturing personnel.
+Added: We currently rely, and expect to continue to rely, on third parties for the manufacture of Eversense for commercial sale and development of future CGM products.
+Added: Our business strategy depends on our third-party manufacturers' ability to manufacture Eversense in sufficient quantities and on a timely basis so as to meet consumer demand, while adhering to product quality standards, complying with regulatory requirements and managing manufacturing costs.
+Added: We are subject to numerous risks relating to our reliance on the manufacturing capabilities of our third-party manufacturers, including:
+Added: ● quality or reliability defects in Eversense;
+Added: ● inability to secure product components in a timely manner, in sufficient quantities or on commercially reasonable terms;
+Added: ● failure to increase production of Eversense to meet demand;
+Added: ● inability to modify production lines to enable us to efficiently produce future products or implement changes in current products in response to regulatory requirements;
+Added: ● difficulty identifying and qualifying alternative manufacturers in a timely manner;
+Added: ● inability to establish agreements with current or future third-party manufacturers or to do so on acceptable terms;
+Added: ● potential damage to or destruction of our manufacturers' equipment or facilities.
+Added: These risks are likely to be exacerbated by our limited experience with Eversense and its manufacturing process.
+Added: As demand for our products increases, our third-party suppliers will need to invest additional resources to purchase components, hire and train employees, and enhance their manufacturing processes.
+Added: If our manufacturers fail to increase production capacity efficiently, our sales may not increase in line with our expectations and our operating margins could fluctuate or decline.
+Added: Further, we may be required to fund capital investments at our third-party suppliers to support increased production capacity.
+Added: In addition, although we expect some of our future versions of Eversense to share product features and components with our current Eversense E3 product, manufacturing future versions of Eversense may require the modification of production lines, the identification of new manufacturers for specific components, or the development of new manufacturing technologies.
+Added: It may not be possible for us to manufacture these products at a cost or in quantities sufficient to make these future versions of Eversense commercially viable.
+Added: We depend on a limited number of third-party suppliers for the components of Eversense and the loss of any of these suppliers, or their inability to provide us with an adequate supply of materials, could harm our business.
+Added: We rely on third-party suppliers to supply and manufacture the components of our Eversense system.
+Added: For our business strategy to be successful, our suppliers must be able to provide us with components and Eversense systems in sufficient quantities, in compliance with regulatory requirements and quality control standards, in accordance with agreed upon specifications, at acceptable costs and on a timely basis.
+Added: Future increases in sales of Eversense, whether
+Added: expected or unanticipated, could strain the ability of our suppliers to deliver an increasingly large supply of components and Eversense systems in a manner that meets these various requirements.
+Added: We generally use a small number of suppliers of components for our products.
+Added: Depending on a limited number of suppliers exposes us to risks, including limited control over pricing, availability, quality and delivery schedules.
+Added: Generally, we do not have long-term supply agreements with our suppliers, and, in many cases, we make our purchases on a purchase order basis.
+Added: Under most of our supply and manufacturing agreements, we have no obligation to buy any given quantity of products, and our suppliers have no obligation to sell us or to manufacture for us any given quantity of components or products.
+Added: As a result, our ability to purchase adequate quantities of components or our products may be limited, and we may not be able to convince suppliers to make components and products available to us.
+Added: Additionally, our suppliers may encounter problems that limit their ability to supply components or manufacture products for us, including financial difficulties, damage to their manufacturing equipment or facilities, or product discontinuations.
+Added: As a result, there is a risk that certain components could be discontinued and no longer available to us.
+Added: We may be required to make significant "last time" purchases of component inventory that is being discontinued by the supplier to ensure supply continuity.
+Added: If we fail to obtain sufficient quantities of high-quality components to meet demand for our products in a timely manner or on terms acceptable to us, we would have to seek alternative sources of supply.
+Added: Because of factors such as the proprietary nature of our products, our quality control standards and regulatory requirements, we may not be able to quickly engage additional or replacement suppliers for some of our critical components.
+Added: Failure of any of our suppliers to deliver components at the level our business requires could disrupt the manufacturing of our products and limit our ability to meet our sales commitments, which could harm our reputation and adversely affect our business.
+Added: We may also have difficulty obtaining similar components from other suppliers that are acceptable to the FDA or other foreign regulatory authorities, and the failure of our suppliers to comply with strictly enforced regulatory requirements could expose us to regulatory action including warning letters, product recalls, and termination of distribution, product seizures or civil penalties.
+Added: It could also require us to cease using the components, seek alternative components or technologies and modify our products to incorporate alternative components or technologies, which could result in a requirement to seek additional regulatory approvals or certifications.
+Added: Any disruption of this nature or increased expenses could harm our commercialization efforts and adversely affect our operating results.
+Added: Our third-party suppliers operate primarily at facilities in a single location, and any disruption to these facilities could adversely affect our business and operating results.
+Added: Each of our third-party suppliers operates at a facility in a single location and substantially all of our inventory of component supplies and finished goods is held at these locations.
+Added: We, and our suppliers, take precautions to safeguard facilities, including acquiring insurance, employing back-up generators, adopting health and safety protocols and utilizing off-site storage of computer data.
+Added: However, vandalism, terrorism or a natural or other disaster, such as an earthquake, health epidemic, such as the coronavirus, fire or flood, could damage or destroy equipment or our inventory of component supplies or finished products, cause substantial delays in our operations, result in the loss of key information, or cause us to incur additional expenses.
+Added: Our insurance may not cover our losses in any particular case.
+Added: In addition, regardless of the level of insurance coverage, damage to our or our suppliers' facilities could harm our business, financial condition and operating results.
If we do not enhance our product offerings through our research and development efforts, we may fail to effectively compete or become profitable.
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For example, payment rates may vary according to the use of the product and the clinical setting in which it is used, may be based on payments allowed for lower cost products that are already reimbursed, and may be incorporated into existing payments for other services.
−Removed: Net prices for products may be reduced by mandatory discounts or rebates required by government healthcare programs or third-party payors and by any future relaxation of laws that presently restrict imports of products from countries where they may be sold at lower prices.
+Added: Net prices for products may be
+Added: reduced by mandatory discounts or rebates required by government healthcare programs or third-party payors and by any future relaxation of laws that presently restrict imports of products from countries where they may be sold at lower prices.
Private insurance companies and other private, third-party payors set payor-specific reimbursement policies.
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This Health Technology Assessment, or HTA process, which is currently governed by the national laws of the individual EU Member States, is the procedure according to which the assessment of the public health impact, therapeutic impact and the economic and societal impact of use of a given medical device in the national healthcare systems of the individual country is conducted.
−Removed: The outcome of HTA regarding specific medical device will often influence the pricing and reimbursement
−Removed: status granted to these products by the competent authorities of individual EU Member States.
+Added: The outcome of HTA regarding specific medical device will often influence the pricing and reimbursement status granted to these products by the competent authorities of individual EU Member States.
On January 31, 2018, the European Commission adopted a proposal for a regulation on health technologies assessment.
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It will apply from 2025.
−Removed: In March 2019, we launched a patient access program, the Eversense Bridge Program, to assist those patients who do not have insurance coverage for Eversense, or whose insurance is denied or insufficient.
−Removed: Pursuant to this program, we provided financial assistance to eligible patients purchasing Eversense, which may have been substantial depending on a patient’s insurance coverage.
−Removed: We also assisted patients in their appeal of adverse coverage decisions made by insurance providers.
−Removed: In December 2020, we terminated the Eversense Bridge Program.
−Removed: We expect our partner Ascensia to implement patient assistance programs and related programs as part of its commercialization efforts.
−Removed: The lack of a patient assistance program, or a program’s design being ineffective, could adversely impact the sales of Eversense and, consequently our net revenues.
+Added: In April 2022, as a part of commercialization efforts, our partner Ascensia implemented the PASS program designed to enhance affordability and access to Eversense for patients who do not have insurance coverage for Eversense, or whose insurance is denied or is insufficient.
+Added: The program’s design being ineffective, or a lack of a patient assistance program could adversely impact the sales of Eversense and, consequently our net revenues.
In addition, we may not be able to recognize a substantial portion of the revenue related to Eversense insertions for the patients participating in these access programs.
−Removed: The amount of time required to obtain favorable coverage and reimbursement decisions, including navigating the appeals process with third-party payors, is uncertain, and we may see increased product utilization without corresponding recognized revenue.
+Added: The amount of time required to obtain favorable coverage and reimbursement
+Added: decisions, including navigating the appeals process with third-party payors, is uncertain, and we may see increased product utilization without corresponding recognized revenue.
Our operating results may be adversely impacted if we are unable to obtain successful appeals or favorable coverage decisions by insurance providers, or if there are not effective patient access programs in place.
If important assumptions we have made about what people with intensively managed diabetes are seeking in a CGM system are inaccurate, our business and operating results may be adversely affected.
−Removed: Our business strategy was developed based on a number of important assumptions about the diabetes industry in general, and the intensively managed diabetes market in particular, any one or more of which may prove to be inaccurate.
+Added: Our business strategy was developed based on a number of important assumptions about the diabetes industry in general, and the diabetes market for CGM in particular, any one or more of which may prove to be inaccurate.
For example, we believe that the benefits of CGM will continue to drive increased rates of market acceptance for products in this space.
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This strategy underlies our entire product design, marketing and customer support approach and is the basis on which we developed Eversense.
−Removed: However, our market research is based on interviews, focus groups and online surveys involving people with intensively managed diabetes, their caregivers and healthcare providers that represent only a small percentage of the overall intensively managed diabetes market.
+Added: However, our market research is based on interviews, focus groups and online surveys involving people with diabetes on insulin, their caregivers and healthcare providers that represent only a small percentage of the overall diabetes market.
As a result, the attributes we incorporated into the Eversense system may not be reflective of what is desired by the various constituents in the diabetes market.
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As the industry evolves, we anticipate encountering increasing competition from companies that integrate CGM with insulin pumps.
−Removed: Abbott also received an iCGM indication for their Freestyle Libre 2 product and we expect all other CGM companies to pursue an iCGM indication including Medtronic.
+Added: Abbott also received an iCGM indication for their Freestyle Libre 2 and 3 products and we expect all other CGM companies to pursue an iCGM indication including Medtronic.
In addition to CGM providers, we also compete with providers of SMBG systems.
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As a result, our estimates of the size and future growth in the market for our CGM systems may prove to be incorrect.
−Removed: If the actual number of people with diabetes who would benefit from Eversense and the size and future growth in the market for Eversense is smaller than we have estimated, it may impair our projected sales growth and have an adverse impact on our business.
+Added: If the actual number of people with diabetes who would benefit from Eversense
+Added: and the size and future growth in the market for Eversense is smaller than we have estimated, it may impair our projected sales growth and have an adverse impact on our business.
Our ability to maintain and grow our revenue will depend on establishing a customer base and retaining a high percentage of our customer base.
3 unchanged sentences
The failure to retain a high percentage of our customers would negatively impact our business, financial condition and operating results.
−Removed: We contract with third parties for the manufacture of Eversense.
−Removed: Risks associated with the manufacturing of our products could reduce our gross margins and negatively affect our operating results.
−Removed: We do not have any manufacturing facilities or direct manufacturing personnel.
−Removed: We currently rely, and expect to continue to rely, on third parties for the manufacture of Eversense for commercial sale and development of future CGM products.
−Removed: Our business strategy depends on our third-party manufacturers' ability to manufacture Eversense in sufficient quantities and on a timely basis so as to meet consumer demand, while adhering to product quality standards, complying with regulatory requirements and managing manufacturing costs.
−Removed: We are subject to numerous risks relating to our reliance on the manufacturing capabilities of our third-party manufacturers, including:
−Removed: ● quality or reliability defects in Eversense;
−Removed: ● inability to secure product components in a timely manner, in sufficient quantities or on commercially reasonable terms;
−Removed: ● failure to increase production of Eversense to meet demand;
−Removed: ● inability to modify production lines to enable us to efficiently produce future products or implement changes in current products in response to regulatory requirements;
−Removed: ● difficulty identifying and qualifying alternative manufacturers in a timely manner;
−Removed: ● inability to establish agreements with current or future third-party manufacturers or to do so on acceptable terms;
−Removed: ● potential damage to or destruction of our manufacturers' equipment or facilities.
−Removed: These risks are likely to be exacerbated by our limited experience with Eversense and its manufacturing process.
−Removed: As demand for our products increases, our third-party suppliers will need to invest additional resources to purchase components, hire and train employees, and enhance their manufacturing processes.
−Removed: If our manufacturers fail to increase production capacity efficiently, our sales may not increase in line with our expectations and our operating margins could fluctuate or decline.
−Removed: Further, we may be required to fund capital investments at our third-party suppliers to support increased production capacity.
−Removed: In addition, although we expect some of our future versions of Eversense to share product features and components with our current Eversense E3 product, manufacturing future versions of Eversense may require the modification of production lines, the identification of new manufacturers for specific components, or the development of new manufacturing technologies.
−Removed: It may not be possible for us to manufacture these products at a cost or in quantities sufficient to make these future versions of Eversense commercially viable.
−Removed: We depend on a limited number of third-party suppliers for the components of Eversense and the loss of any of these suppliers, or their inability to provide us with an adequate supply of materials, could harm our business.
−Removed: We rely on third-party suppliers to supply and manufacture the components of our Eversense system.
−Removed: For our business strategy to be successful, our suppliers must be able to provide us with components and Eversense systems in sufficient quantities, in compliance with regulatory requirements and quality control standards, in accordance with agreed upon specifications, at acceptable costs and on a timely basis.
−Removed: Future increases in sales of Eversense, whether expected or unanticipated, could strain the ability of our suppliers to deliver an increasingly large supply of components and Eversense systems in a manner that meets these various requirements.
−Removed: We generally use a small number of suppliers of components for our products.
−Removed: Depending on a limited number of suppliers exposes us to risks, including limited control over pricing, availability, quality and delivery schedules.
−Removed: Generally, we do not have long-term supply agreements with our suppliers, and, in many cases, we make our purchases on a purchase order basis.
−Removed: Under most of our supply and manufacturing agreements, we have no obligation to buy any given quantity of products, and our suppliers have no obligation to sell us or to manufacture for us any given quantity of components or products.
−Removed: As a result, our ability to purchase adequate quantities of components or our products may be limited, and we may not be able to convince suppliers to make components and products available to us.
−Removed: Additionally, our suppliers may encounter problems that limit their ability to supply components or manufacture products for us, including financial difficulties, damage to their manufacturing equipment or facilities, or product discontinuations.
−Removed: As a result, there is a risk that certain components could be discontinued and no longer available to us.
−Removed: We may be required to make significant "last time" purchases of component inventory that is being discontinued by the supplier to ensure supply continuity.
−Removed: If we fail to obtain sufficient quantities of high-quality components to meet demand for our products in a timely manner or on terms acceptable to us, we would have to seek alternative sources of supply.
−Removed: Because of factors such as the proprietary nature of our products, our quality control standards and regulatory requirements, we may not be able to quickly engage additional or replacement suppliers for some of our critical components.
−Removed: Failure of any of our suppliers to deliver components at the level our business requires could disrupt the manufacturing of our products and limit our ability to meet our sales commitments, which could harm our reputation and adversely affect our business.
−Removed: We may also have difficulty obtaining similar components from other suppliers that are acceptable to the FDA or other foreign regulatory agencies, and the failure of our suppliers to comply with strictly enforced regulatory requirements could expose us to regulatory action including warning letters, product recalls, and termination of distribution, product seizures or civil penalties.
−Removed: It could also require us to cease using the components, seek alternative components or technologies and modify our products to incorporate alternative components or technologies, which could result in a requirement to seek additional regulatory approvals or certifications.
−Removed: Any disruption of this nature or increased expenses could harm our commercialization efforts and adversely affect our operating results.
−Removed: Our third-party suppliers operate primarily at facilities in a single location, and any disruption to these facilities could adversely affect our business and operating results.
−Removed: Each of our third-party suppliers operates at a facility in a single location and substantially all of our inventory of component supplies and finished goods is held at these locations.
−Removed: We, and our suppliers, take precautions to safeguard facilities, including acquiring insurance, employing back-up generators, adopting health and safety protocols and utilizing off-site storage of computer data.
−Removed: However, vandalism, terrorism or a natural or other disaster, such as an
−Removed: earthquake, health epidemic, such as the coronavirus, fire or flood, could damage or destroy equipment or our inventory of component supplies or finished products, cause substantial delays in our operations, result in the loss of key information, or cause us to incur additional expenses.
−Removed: Our insurance may not cover our losses in any particular case.
−Removed: In addition, regardless of the level of insurance coverage, damage to our or our suppliers' facilities could harm our business, financial condition and operating results.
Various factors outside our direct control may adversely affect manufacturing, sterilization and distribution of our products.
6 unchanged sentences
● delays in analytical results or failure of analytical techniques that we will depend on for quality control and release of products;
−Removed: ● natural disasters, labor disputes, financial distress, raw material availability, issues with facilities and equipment or other forms of disruption to business operations affecting our manufacturers or suppliers;
+Added: ● natural disasters, labor disputes, financial distress, raw material availability, issues with facilities and equipment (including through cyberattacks or other security incidents) or other forms of disruption to business operations affecting our manufacturers or suppliers;
● latent defects that may become apparent after products have been released and that may result in a recall of such products.
29 unchanged sentences
● loss of revenue.
−Removed: While we currently maintain product liability insurance covering claims up to $10.0 million per incident, we cannot assure you that such insurance would adequately protect our assets from the financial impact of defending a product liability claim.
+Added: While we currently maintain product liability insurance covering claims up to $10.0 million per occurrence, we cannot assure you that such insurance would adequately protect our assets from the financial impact of defending a product liability claim.
Any product liability claim brought against us, with or without merit, could increase our product liability insurance rates or prevent us from securing such insurance coverage in the future.
−Removed: If there are significant disruptions in our information technology systems, our business, financial condition and operating results could be adversely affected.
−Removed: The efficient operation of our business depends on our information technology systems.
−Removed: We rely on our information technology systems to effectively manage patient requisitions and data, customer service cases and replacement obligations, marketing data, accounting and financial functions, inventory and order management, product quality records, research and development data, and technical support functions.
−Removed: Despite our security measures, our information technology systems are vulnerable to damage or interruption from earthquakes, fires, floods and other natural disasters, terrorist attacks, attacks by computer viruses or hackers, power losses, and computer system or data network failures.
−Removed: In addition, our data management application and a variety of our software systems, including the software in our smart transmitter, are hosted by third-party service providers whose security and information technology systems are subject to similar risks, which could be subject to computer viruses or hacker attacks or other failures.
−Removed: If our or our third-party service provider's security systems are breached or fail, unauthorized persons may be able to obtain access to sensitive data.
−Removed: If we or our third-party service providers were to experience a breach compromising sensitive data, our brand and reputation could be adversely affected, and the use of our products could decrease.
−Removed: The failure of our or our service providers' information technology systems or our transmitter's software to perform as we anticipate or our failure to effectively implement new information technology systems could disrupt our entire operation or adversely affect our products and could result in decreased sales, increased overhead costs, and product shortages, all of which could negatively affect our reputation, business, financial condition and operating results.
We may enter into collaborations, in-licensing arrangements, joint ventures, strategic alliances or partnerships with third parties that may not result in the development of commercially viable products or the generation of significant future revenues.
2 unchanged sentences
Other companies, including those with substantially greater financial, marketing, sales, technology or other business resources, may compete with us for these opportunities or arrangements.
−Removed: We may not identify, secure, or complete any such transactions or arrangements in a timely manner, on a
−Removed: cost-effective basis, on acceptable terms or at all.
+Added: We may not identify, secure, or complete any such transactions or arrangements in a timely manner, on a cost-effective basis, on acceptable terms or at all.
We have limited institutional knowledge and experience with respect to these business development activities, and we may also not realize the anticipated benefits of any such transaction or arrangement.
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Our potential inability to integrate any acquired products or technologies effectively may adversely affect our business, operating results and financial condition.
−Removed: The ongoing military action by Russia in Ukraine could have negative impact on the global economy which could materially adversely affect our business, operations, operating results and financial condition.
+Added: The ongoing military action by Russia in Ukraine and by Hamas in Gaza could have negative impact on the global economy which could materially adversely affect our business, operations, operating results and financial condition.
On February 24, 2022, Russian forces launched significant military action against Ukraine, and sustained conflict and disruption in the region is possible.
−Removed: The impact to Ukraine as well as actions taken by other countries, including new and stricter sanctions imposed by Canada, the United Kingdom, the European Union, the U.S.
+Added: The impact to Ukraine as well as actions taken by other countries,
+Added: including new and stricter sanctions imposed by Canada, the United Kingdom, the European Union, the U.S.
and other countries and companies and organizations against officials, individuals, regions, and industries in Russia and Ukraine, and actions taken by Russia in response to such sanctions, and each country’s potential response to such sanctions, tensions, and military actions could adversely affect the global economy and financial markets and thus could affect our business, operations, operating results and financial condition as well as the price of our common stock and our ability to raise additional capital when needed on acceptable terms.
+Added: Separately, in early October 2023, Hamas, a militant group in control of Gaza, and Israel began an armed conflict in Israel, the Gaza Strip, and surrounding areas, which threatens to spread to other Middle Eastern countries including Lebanon, Syria, and Iran.
+Added: The Hamas-Israel military conflict is ongoing, and its length and outcome are highly unpredictable.
The extent and duration of the military action, sanctions and resulting market disruptions are impossible to predict, but could be substantial.
−Removed: While our suppliers may source certain raw materials from Russia and Ukraine, to date we have not been notified that the supply of these materials has been significantly impacted by the conflict.
−Removed: We continue to monitor the situation closely and are proactively assessing and evaluating alternative sources to bolster supply of these materials moving forward, in addition to working closely with our suppliers in any product re-qualification that may be required.
−Removed: Revenue relating to products manufactured from raw materials sourced from this region does not constitute a material portion of our business.
−Removed: Further, there is uncertainty regarding the ultimate impact the conflict, including any escalation or further expansion of the conflict’s current scope, will have on our customers, the global economy, supply chains, logistics, fuel prices, raw material pricing and our business.
+Added: While our suppliers may source certain raw materials from areas with ongoing military conflict, to date we have not been notified that the supply of these materials has been significantly impacted by these conflicts.
+Added: We continue to monitor potential disruptions closely and are proactively assessing and evaluating alternative sources to bolster supply of these materials moving forward, in addition to working closely with our suppliers in any product re-qualification that may be required.
+Added: Revenue relating to products manufactured from raw materials sourced from regions with current ongoing international conflict does not constitute a material portion of our business.
+Added: Further, there is uncertainty regarding the ultimate impact these conflicts, including any escalation or further expansion of the conflict’s current scope, will have on our customers, the global economy, supply chains, logistics, fuel prices, raw material pricing and our business.
Surging natural gas and electricity costs in Europe poses a threat to our contract manufacturers ability to maintain operations in Europe which can adversely affect or business supply chain
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If the energy crisis or other supply chain challenges impact our ability to obtain raw materials on a timely basis or without significant increases in costs, our financial results and business operations may be adversely affected.
−Removed: Our business could be adversely affected by economic downturns, inflation, increases in interest rates, natural disasters, public health crises such as the COVID-19 pandemic, political crises, geopolitical events, such as the crisis in Ukraine, or other macroeconomic conditions, which have in the past and may in the future negatively impact our business and financial performance.
+Added: Our business could be adversely affected by economic downturns, inflation, increases in interest rates, natural disasters, public health crises such as pandemics, political crises, geopolitical events, such as the crisis in Ukraine, or other macroeconomic conditions, which have in the past and may in the future negatively impact our business and financial performance.
The global economy, including credit and financial markets, has experienced extreme volatility and disruptions,
including, among other things, severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, supply chain shortages, increases in inflation rates, higher interest rates and uncertainty about economic stability.
−Removed: For example, the COVID-19 pandemic resulted in widespread unemployment, economic slowdown and extreme volatility in the capital markets.
−Removed: While the potential economic impact brought by, and the duration of, COVID-19 may be difficult to assess or predict, a widespread pandemic could result in significant disruption of global financial markets, reducing our ability to access capital, which could negatively affect our liquidity.
−Removed: In addition, a recession or market correction resulting from the spread of COVID-19 could materially affect our business and the value of our
−Removed: common stock.
−Removed: The COVID-19 pandemic has had and could continue to have negative impacts, such as (a) a global or U.S.
+Added: A widespread public health crisis such as a pandemic could result in significant disruption of global financial markets, reducing our ability to access capital, which could negatively affect our liquidity.
+Added: In addition, a recession or market correction resulting from the effects of public health crises could materially affect our business and the value of our common stock.
+Added: It may have further negative impacts, such as (a) a global or U.S.
recession or other economic crisis;
(b) credit and capital markets volatility (and access to these markets, including by our suppliers and customers);
−Removed: (c) manufacturing supply disruption due to “stay at home orders” travel restrictions or other government actions;
−Removed: (d) disruptions in raw material supply, our manufacturing operations, or in our distribution and supply chain;
+Added: (c) manufacturing supply disruption due to travel restrictions or other government actions;
+Added: (d) disruptions in raw material
+Added: supply, our manufacturing operations, or in our distribution and supply chain;
and (e) our ability to conduct planned clinical trials and commercialization activities.
−Removed: The ultimate impact of the COVID-19 pandemic or a similar health epidemic is highly uncertain and subject to change.
−Removed: We will continue to monitor the COVID-19 situation closely.
+Added: The ultimate impact of a public health crisis is highly uncertain.
The Federal Reserve recently raised interest rates multiple times in response to concerns about inflation and it may raise them again.
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We will need to generate significant sales to achieve profitable operations.
−Removed: We intend to increase our operating expenses in connection with the commercialization of Eversense with our collaboration partner Ascensia, our ongoing research and development activities including the development of next generation products and the clinical trials for those products, and the commensurate development of our management and administrative functions.
+Added: We intend to continue to increase our operating expenses in connection with the commercialization of Eversense with our collaboration partner Ascensia, our ongoing research and development activities including the development of next generation products and the clinical trials for those products, and the commensurate development of our management and administrative functions.
We will need to generate significant sales to achieve profitability, and we might not be able to do so.
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As a result of our lack of operating history as a commercial-stage company and Ascensia’s lack of experience selling CGM systems, and Eversense in particular, and due to the complexities of the industry and regulatory framework in which we operate, it will be difficult for us to forecast demand for our future products and to forecast our sales with any degree of certainty.
−Removed: For example, many of the products we will seek to develop and introduce in the future will require regulatory approval, certification or clearance and import licenses before we can sell such products and given that the timing of such approvals, certification, clearances or licenses may be uncertain, it will be difficult for us to predict sales projections for these products with any degree of certainty before such approvals, certifications, clearances or licenses are obtained.
+Added: For example, many of the products we will seek to develop and introduce in the future will require regulatory approval, certification or clearance and import licenses before we can sell such products and given that
+Added: the timing of such approvals, certification, clearances or licenses may be uncertain, it will be difficult for us to predict sales projections for these products with any degree of certainty before such approvals, certifications, clearances or licenses are obtained.
In addition, we will be increasing our operating expenses as we expand our business.
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We believe that quarterly comparisons of our financial results are not necessarily meaningful and should not be relied upon as an indication of our future performance.
−Removed: Covenants under the PHC Note Purchase Agreement and the indentures related to the 2023 Notes and the 2025 Notes may result in the acceleration of outstanding indebtedness and limit the manner in which we operate.
−Removed: The PHC Note Purchase Agreement contains customary terms and covenants, including financial covenants, such as operating within an approved budget and achieving minimum revenue and liquidity targets, and negative covenants, such as limitations on indebtedness, liens, mergers, asset transfers, certain investing activities and other matters customarily restricted in such agreements.
+Added: Covenants under the Loan and Security Agreement and the 2025 Notes may result in the acceleration of outstanding indebtedness and limit the manner in which we operate.
+Added: In September 2023, we entered into a loan agreement (the “Loan and Security Agreement”) with several institutions (collectively, the “Lenders") and Hercules Capital, Inc.
+Added: (“Hercules”), as administrative agent.
+Added: The Loan and Security Agreement contains customary terms and covenants, including financial covenants, such as operating within an approved budget and achieving minimum revenue and liquidity targets, and negative covenants, such as limitations on indebtedness, liens, mergers, asset transfers, certain investing activities and other matters customarily restricted in such agreements.
Most of these restrictions are subject to certain minimum thresholds and exceptions.
−Removed: The Note Purchase Agreement also contains customary events of default, after which the PHC Notes be due and payable immediately, including defaults related to payment compliance, material inaccuracy of representations and warranties, covenant compliance, material adverse changes, bankruptcy and insolvency proceedings, cross defaults to certain other agreements, judgments against the Company, change of control or delisting events, termination of any guaranty, governmental approvals, and lien priority.
−Removed: In addition, the indentures related to the 2023 Notes and the 2025 Notes contain, and any future indebtedness we incur may contain, various negative covenants that restrict, among other things, our ability to:
+Added: The Loan and Security Agreement also contains customary events of default, after which borrowings under the Loan and Security Agreement will be due and payable immediately, including defaults related to payment compliance, material inaccuracy of representations and warranties, covenant compliance, material adverse changes, bankruptcy and insolvency proceedings, cross defaults to certain other agreements, judgments against the Company, change of control or delisting events, termination of any guaranty, governmental approvals, and lien priority.
+Added: In addition, the indentures related to the 2025 Notes contain, and any future indebtedness we incur may contain, various negative covenants that restrict, among other things, our ability to:
● incur additional indebtedness, guarantee indebtedness or issue disqualified stock or, in the case of such subsidiaries, preferred stock;
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If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional equity capital on terms that may be onerous or highly dilutive.
−Removed: Our ability to refinance our indebtedness will depend on the capital markets and our financial condition at such time.
+Added: Our ability to refinance our indebtedness will depend on the capital markets and our financial
+Added: condition at such time.
We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations.
Despite our current debt levels, subject to certain conditions and limitations, we may still incur substantially more debt or take other actions which would intensify the risks discussed above.
−Removed: Despite our current consolidated debt levels, subject to certain conditions and limitations in the indentures related to the 2023 Notes and the 2025 Notes and PHC Notes, we may be able to incur substantial additional debt in the future, some of which may be secured debt.
+Added: Despite our current consolidated debt levels, subject to certain conditions and limitations in the indentures related to the 2025 Notes and the Loan and Security Agreement, we may be able to incur substantial additional debt in the future, some of which may be secured debt.
We may not be subject to any restrictions on incurrence of additional indebtedness under the terms of any future indebtedness.
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We may not be able to obtain additional regulatory approvals or certifications for new products or for modifications to, or additional indications for, our existing products in a timely fashion, or at all.
−Removed: Delays in obtaining future approvals or certification, including
−Removed: potential delays in obtaining approval of our currently pending applications, would adversely affect our ability to introduce new or enhanced products in a timely manner, which in turn would harm our revenue and potential future profitability.
+Added: Delays in obtaining future approvals or certification, including potential delays in obtaining approval of our currently pending applications, would adversely affect our ability to introduce new or enhanced products in a timely manner, which in turn would harm our revenue and potential future profitability.
Any modifications to the Eversense that could significantly affect its safety or effectiveness, including significant design and manufacturing changes, or that would constitute a major change in its intended use, manufacture, design, components, or technology requires approval of a new PMA, or PMA supplement or similar modifications in other jurisdictions.
−Removed: However, certain changes to a PMA-approved device do not require submission and approval of a new PMA or PMA supplement, or appropriate modifications in other jurisdictions, and may only require notice to FDA in a PMA Annual Report, or similar notifications in other jurisdictions.
+Added: However, certain changes to a PMA-approved device do not require submission and approval of a
+Added: new PMA or PMA supplement, or appropriate modifications in other jurisdictions, and may only require notice to FDA in a PMA Annual Report, or similar notifications in other jurisdictions.
In the U.S., the FDA requires every manufacturer to make this determination in the first instance, but the FDA may review any such decision.
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While we have completed pivotal trials in Europe and the United States, we are and may need to conduct future clinical trials in order to develop new versions of our system or to comply with requirements for post-approval studies.
−Removed: For example, we currently have a pivotal trial underway to support a future PMA supplement for a 365-day sensor.
Clinical testing is expensive, difficult to design and implement, can take many years to complete and is inherently uncertain as to outcome.
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Recruiting and retaining qualified scientific and clinical personnel and, as we progress the development of our product pipeline toward scaling up for commercialization, manufacturing and sales and marketing personnel, will also be critical to our success.
−Removed: The loss of the services of our executive officers or other key employees could impede the achievement of our research, development and commercialization objectives and seriously harm our ability to successfully implement our business strategy.
+Added: The loss of the services of our executive officers or other key employees could impede the
+Added: achievement of our research, development and commercialization objectives and seriously harm our ability to successfully implement our business strategy.
Furthermore, replacing executive officers and key employees may be difficult and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required to successfully develop, gain regulatory approval of and commercialize our products.
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We expect to expand our development and regulatory capabilities and our marketing and distribution capabilities, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations.
−Removed: As of December 31, 2022, we had 128 employees.
+Added: As of December 31, 2023, we had 132 full-time employees.
As our commercialization progresses, we expect to experience significant growth in the number of our employees and the scope of our operations, particularly in the areas of research, product development, clinical sciences, regulatory affairs, supply chain, and marketing.
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We have adopted a code of business conduct and ethics, but it is not always possible to identify and deter misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations.
−Removed: If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant civil, criminal and administrative penalties, including, without limitation, damages, fines, disgorgement of profits, individual imprisonment, exclusion from participation in government healthcare programs, such as Medicare and Medicaid, integrity oversight and reporting obligations, and the curtailment or restructuring of our operations.
+Added: If any such actions are instituted against us, and we are
+Added: not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant civil, criminal and administrative penalties, including, without limitation, damages, fines, disgorgement of profits, individual imprisonment, exclusion from participation in government healthcare programs, such as Medicare and Medicaid, integrity oversight and reporting obligations, and the curtailment or restructuring of our operations.
We may incur product liability losses, and insurance coverage may be inadequate or unavailable to cover these losses.
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Our patents expire between 2024 and 2042, subject to any patent extensions that may be available for such patents.
−Removed: If patents are issued on our pending patent applications, the resulting patents are projected to expire on dates ranging from 2032 to 2042, subject to any patent term extensions or adjustments that may be available
−Removed: for such patents.
+Added: If patents are issued on our pending patent applications, the resulting patents are projected to expire on dates ranging from 2032 to 2043, subject to any patent term extensions or adjustments that may be available for such patents.
We are also seeking patent protection for our proprietary technology in Europe, Japan, China, Canada, India, Australia and other countries and regions throughout the world.
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Even if we are successful in receiving patent protection for certain products and processes, our competitors may be able to design around our patents or develop products that provide outcomes which are comparable to ours without infringing on our intellectual property rights.
−Removed: Due to differences between foreign and U.S.
+Added: Due to differences between foreign and
patent laws, our patented intellectual property rights may not receive the same degree of protection in foreign countries as they would in the United States.
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Failure to comply with applicable regulations could jeopardize our ability to sell our products and result in enforcement actions such as fines, civil penalties, injunctions, warning letters, recalls of products, delays in the introduction of products into the market, refusal of the regulatory agency or other regulators or Notified Bodies to grant future clearances, CE Certificates of Conformity or approvals, and the suspension, variation or withdrawal of existing approvals or CE Certificates of Conformity by such regulatory bodies.
−Removed: For example, in September 2019 we voluntarily initiated a recall of Eversense sensors that had not yet been implanted, due to premature loss of function due to inadequate hydration of the sensor’s glucose-sensing surface.
+Added: in September 2019 we voluntarily initiated a recall of Eversense sensors that had not yet been implanted, due to premature loss of function due to inadequate hydration of the sensor’s glucose-sensing surface.
This recall, as well as any of the above sanctions, could result in higher than anticipated costs or lower than anticipated sales and harm our reputation, business, financial condition and operating results.
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A government-mandated or voluntary recall by us or one of our third-party distributors could occur as a result of an unacceptable risk to health, component failures, manufacturing errors, design or labeling defects or other deficiencies and issues.
−Removed: For example, in September 2019 we voluntarily initiated a recall of Eversense sensors that had not yet been implanted, due to premature loss of function due to inadequate hydration of the sensor’s glucose-sensing surface.
+Added: example, in September 2019 we voluntarily initiated a recall of Eversense sensors that had not yet been implanted, due to premature loss of function due to inadequate hydration of the sensor’s glucose-sensing surface.
Recalls of any of our products would divert managerial and financial resources and have an adverse effect on our reputation, financial condition and operating results, which could impair our ability to produce our products in a cost-effective and timely manner.
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We will implement and maintain policies and procedures designed to ensure compliance by us, and our directors, officers, employees, representatives, third-party distributors, consultants and agents with the FCPA, OFAC restrictions, the Bribery Act and other export control, anticorruption, anti-money-laundering and anti-terrorism laws and regulations, including in foreign jurisdictions.
−Removed: We cannot assure you, however, that our policies and procedures will be sufficient or that directors, officers, employees, representatives, third-party distributors, consultants and agents have not engaged and will not engage in conduct for which we may be held responsible, nor can we assure you that our business partners have not engaged and will not engage in conduct that could materially affect their ability to perform their contractual obligations to us or even result in our being held liable for such conduct.
+Added: We cannot assure you, however, that our policies and procedures will be
+Added: sufficient or that directors, officers, employees, representatives, third-party distributors, consultants and agents have not engaged and will not engage in conduct for which we may be held responsible, nor can we assure you that our business partners have not engaged and will not engage in conduct that could materially affect their ability to perform their contractual obligations to us or even result in our being held liable for such conduct.
Violations of the FCPA, OFAC restrictions, the Bribery Act or other export control, anti-corruption, anti-money-laundering and anti-terrorism laws or regulations, including in foreign jurisdictions, may result in severe criminal or civil sanctions, and we may be subject to other liabilities, which could have a material adverse effect on our business, financial condition, cash flows and results of operations.
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A person or entity does not need to have actual knowledge of this statute or specific intent to violate it to have committed a violation;
−Removed: ● federal civil and criminal false claims laws and civil monetary penalty laws, including the False Claims Act, which is enforceable through civil whistleblower or qui tam actions, 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
−Removed: 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.
+Added: ● federal civil and criminal false claims laws and civil monetary penalty laws, including the False Claims Act, which is enforceable through civil whistleblower or qui tam actions, 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 government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the false claims statutes;
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● HIPAA, as amended by HITECH, and their implementing regulations, which also imposes obligations on “covered entities,” including certain healthcare providers, health plans, and healthcare clearinghouses, as well as their respective “business associates” that create, receive, maintain or transmit individually identifiable health information for or on behalf of a covered entity and their subcontractors, regarding the privacy, security and transmission of such individually identifiable health information;
−Removed: ● federal "sunshine" requirements imposed by the PPACA, on device manufacturers regarding the annual reporting to CMS, of any "transfer of value" made or distributed to physicians (defined to include doctors, dentists, optometrists, podiatrists, and chiropractors), other healthcare professionals (such as physician assistants and nurse practitioners, and teaching hospitals, and ownership and investment interests held by physicians.
+Added: ● federal "sunshine" requirements imposed by the PPACA, on device manufacturers regarding the annual reporting to CMS, of any "transfer of value" made or distributed to physicians (defined to include doctors, dentists, optometrists, podiatrists, and chiropractors), other healthcare professionals (such as physician assistants and nurse practitioners, and teaching hospitals, and ownership and investment interests held by physicians and their immediate family members.
Failure to timely submit required information may result in significant civil monetary penalties;
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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;
−Removed: and state laws governing the privacy and security of certain health information, many of which differ from each other in significant ways and often are not preempted by HIPAA;
−Removed: ● the California Consumer Privacy Act (“CCPA”) that creates new individual privacy rights for consumers (which is broadly defined) and places increased privacy and security obligations on entities handling certain personal data;
+Added: laws governing the privacy and security of certain health information, many of which differ from each other in significant ways and often are not preempted by HIPAA;
● equivalent foreign legislation and requirements including in relation to interactions between medical devices companies and healthcare professionals, such as national anti-bribery laws of European countries, national sunshine rules, regulations, industry self-regulation codes of conduct and physicians’ codes of professional conduct.
Failure to comply with these requirements could result in reputational risk, public reprimands, administrative penalties, fines or imprisonment
−Removed: ● foreign data privacy regulations, such as the GDPR, which impose strict obligations and restrictions on the ability to collect, analyze and transfer personal data, including health data from clinical trials and adverse event reporting, and may be stricter than U.S.
The risk of our being found in violation of these laws and regulations is increased by the fact that the scope and enforcement of these laws is uncertain, many of them have not been fully interpreted by the regulatory authorities or the courts, their provisions are open to a variety of interpretations, or they vary country by country.
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Any of these challenges could impact our reputation, business, financial condition and operating results.
−Removed: The collection and use of personal health data in the EEA and UK is governed by the GDPR.
+Added: Our activities, including our research, sales and marketing, and patient reimbursement support activities, may be subject to scrutiny under these laws.
+Added: If our operations are found to be in violation of any of the laws described above or any other governmental regulations that apply to us now or in the future, we may be subject to penalties, including significant civil, criminal, and administrative penalties, damages, fines, disgorgement of profits, imprisonment, exclusion from governmental health care programs, such as Medicare and Medicaid, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our financial results.
+Added: Any federal, state or foreign regulatory review to which we may become subject, regardless of the outcome, would be costly and time-consuming.
+Added: For example, to enforce compliance with the federal laws, the U.S.
+Added: Department of Justice has recently increased its scrutiny of interactions between healthcare companies and healthcare providers, which has led to a number of investigations, prosecutions, convictions and settlements in the healthcare industry.
+Added: Dealing with investigations can be time and resource consuming and can divert management's attention from our core business.
+Added: Additionally, if we settle an investigation with law enforcement or other regulatory agencies, we may be forced to agree to additional onerous compliance and reporting requirements as part of a consent decree or corporate integrity agreement.
+Added: Any such investigation or settlement could increase our costs or otherwise have an adverse effect on our business.
+Added: We are subject to stringent and evolving U.S.
+Added: and foreign laws, regulations, and rules, contractual obligations, industry standards, policies and other obligations related to data privacy and security.
+Added: Our actual or perceived failure to comply with such obligations could lead to regulatory investigations or actions;
+Added: litigation (including class claims) and mass arbitration demands;
+Added: fines and penalties;
+Added: disruptions of our business operations;
+Added: reputational harm;
+Added: loss of revenue or profits;
+Added: loss of customers or sales;
+Added: and other adverse business consequences.
+Added: In the ordinary course of business, we collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share (collectively, process) personal data and other sensitive information, including proprietary and confidential business data, trade secrets, intellectual property, data we collect about trial participants in connection with clinical trials, and sensitive third-party data.
+Added: Our data processing activities subject us to numerous data privacy and security obligations, such as various laws, regulations, guidance, industry standards, external and internal privacy and security policies, contractual requirements, and other obligations relating to data privacy and security.
+Added: In the United States, federal, state, and local governments have enacted numerous data privacy and security laws, including data breach notification laws, personal data privacy laws, consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act), and other similar laws (e.g., wiretapping laws).
+Added: In the past few years, numerous U.S.
+Added: states have enacted comprehensive privacy laws that impose certain obligations on covered businesses, including providing specific disclosures in privacy notices and affording residents
+Added: with certain rights concerning their personal data.
+Added: As applicable, such rights may include the right to access, correct, or delete certain personal data, and to opt-out of certain data processing activities, such as targeted advertising, profiling, and automated decision-making.
+Added: The exercise of these rights may impact our business and ability to provide our products and services.
+Added: Certain states also impose stricter requirements for processing certain personal data, including sensitive information, such as conducting data privacy impact assessments.
+Added: These state laws allow for statutory fines for noncompliance.
+Added: The collection and use of personal health data in the EEA and UK is governed by the EU and UK GDPR (collectively, GDPR).
The GDPR applies to the processing of personal data by any company established in the EEA or UK and to companies established outside the EEA to the extent they process personal data in connection with the offering of goods or services to data subjects in the EEA or the monitoring of the behavior of data subjects in the EEA or UK.
−Removed: Under the EU GDPR, companies may face temporary or definitive bans on data processing and other corrective actions;
−Removed: fines of up to 20
−Removed: million Euros or 4% of annual global revenue, whichever is greater;
+Added: Under the GDPR, companies may face temporary or definitive bans on data processing and other corrective actions;
+Added: fines of up to 20 million Euros under the EU GDPR / 17.5 million pounds sterling under the UK GDPR, or 4% of annual global revenue, whichever is greater;
or private litigation related to processing of personal data brought by classes of data subjects or consumer protection organizations authorized at law to represent their interests.
The GDPR enhances data protection obligations for data controllers of personal data, including stringent requirements relating to the consent of data subjects, expanded disclosures about how personal data is used, requirements to conduct privacy impact assessments for “high risk” processing, limitations on retention of personal data, mandatory data breach notification and “privacy by design” requirements, and creates direct obligations on service providers acting as processors.
+Added: The Swiss Federal Act on Data Protection, or the FADP, also applies to the collection and processing of personal data, including health-related information, by companies located in Switzerland, or in certain circumstances, by companies located outside of Switzerland.
The GDPR also imposes strict rules on the transfer of personal data outside of the EEA and UK to countries that do not ensure an adequate level of protection, like the United States.
In the ordinary course of business, we may transfer personal data from the EEA and UK or other jurisdictions to the United States or other countries.
−Removed: Although there are currently various mechanisms that may be used to transfer personal data from the EEA and UK or other jurisdictions to the United States in compliance with law, such as the EEA and UK’s standard contractual clauses, these mechanisms are subject to legal challenges, and there is no assurance that we can satisfy or rely on these measures to lawfully transfer personal data to the United States.
+Added: Although there are currently various mechanisms that may be used to transfer personal data from the EEA and UK or other jurisdictions to the United States in compliance with law, such as the EEA standard contractual clauses, the UK’s International Data Transfer Agreement / Addendum, and the EU-U.S.
+Added: Data Privacy Framework and the UK extension thereto (which allows for transfers to relevant U.S.-based organizations who self-certify compliance and participate in the Framework, these mechanisms are subject to legal challenges, and there is no assurance that we can satisfy or rely on these measures to lawfully transfer personal data to the United States.
If there is no lawful manner for us to transfer personal data from the EEA or UK or other jurisdictions to the United States, or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against our processing or transferring of personal data necessary to operate our business.
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Some European regulators have ordered certain companies to suspend or permanently cease certain transfers out of Europe for allegedly violating the GDPR’s cross-border data transfer limitations.
+Added: In addition to data privacy and security laws, we are contractually subject to industry standards adopted by industry groups and, we are, or may become subject to such obligations in the future.
We are also bound by contractual obligations related to data privacy and security, and our efforts to comply with such obligations may not be successful.
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If these policies or statements are found to be deficient, lacking in transparency, deceptive, unfair, or misrepresentative of our practices, we may be subject to investigation, enforcement actions by regulators or other adverse consequences.
−Removed: Obligations related to data privacy and security are quickly changing, becoming increasingly stringent, and creating regulatory uncertainty.
+Added: Our employees and personnel use generative artificial intelligence (“AI”) technologies to perform their work, and the disclosure and use of personal data in generative AI technologies is subject to various privacy laws and other privacy obligations.
+Added: Governments have passed and are likely to pass additional laws regulating generative AI.
+Added: this technology could result in additional compliance costs, regulatory investigations and actions, and lawsuits.
+Added: If we are unable to use generative AI, it could make our business less efficient and result in competitive disadvantages.
+Added: Additionally, under various privacy laws and other obligations, we may be required to obtain certain consents to process personal data.
+Added: For example, some of our data processing practices may be challenged under wiretapping laws, if we obtain consumer information from third parties through various methods, including chatbot providers.
+Added: These practices may be subject to increased challenges by class action plaintiffs.
+Added: Our inability or failure to obtain consent for these practices could result in adverse consequences, including class action litigation and mass arbitration demands.
+Added: Obligations related to data privacy and security (and consumers’ expectations) are quickly changing, becoming increasingly stringent, and creating uncertainty.
Additionally, these obligations may be subject to differing applications and interpretations, which may be inconsistent or conflict among jurisdictions.
Preparing for and complying with these obligations requires us to devote significant resources, which may necessitate changes to our services, information technologies, systems, and practices and to those of any third parties that process personal data on our behalf.
+Added: If we or our parties on which we rely fail to comply or are alleged to have failed to comply with applicable data privacy obligations, we could face significant consequences, including but not limited to;
+Added: government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar);
+Added: litigation (including class-action claims) and mass arbitration demands;
+Added: additional reporting requirements and/or oversight;
+Added: bans on processing personal data;
+Added: orders to destroy or not use personal data and imprisonment of company officials.
+Added: In particular, plaintiffs have become increasingly more active in bringing privacy-related claims against companies, including class claims and mass arbitration demands.
+Added: Some of these claims allow for the recovery of statutory damages on a per violation basis, and, if viable, carry the potential for monumental statutory damages, depending on the volume of data and the number of violations.
+Added: Any associated claims, inquiries, or investigations or other government actions could lead to unfavorable outcomes that have a material impact on our business including through significant penalties or fines, monetary judgments or settlements including criminal and civil liability for us and our officers and directors, increased compliance costs, delays or impediments in the development of new products, inability to process personal data or to operate in certain jurisdictions;
+Added: negative publicity, increased operating costs, diversion of management time and attention, or other remedies that harm our business, including orders that we modify or cease existing business practices.
+Added: Moreover, governments and regulators in certain jurisdictions, including Europe, are increasingly seeking to regulate the use, transfer and other processing of non-personal information (for example, under the European Union’s Data Act).
+Added: This means that, if and to the extent such regulations are relevant to our operations or those of our customers, certain of the above risks and considerations may apply equally to our processing of both personal and non-personal information.
+Added: If our information technology systems or those third parties upon which we rely or our data, are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions;
+Added: fines and penalties;
+Added: disruptions of our business operations;
+Added: reputational harm;
+Added: loss of revenue or profits;
+Added: loss of customers or sales;
+Added: and other adverse consequences .
In the ordinary course of our business, we and the third parties upon which we rely, process proprietary, confidential, and sensitive data, including personal data (such as health-related data), intellectual property and trade secrets (collectively, sensitive information).
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Such threats are prevalent and continue to rise, are increasingly difficult to detect, and come from a variety of sources, including traditional computer “hackers,” threat actors, “hacktivists,” organized criminal threat actors, personnel (such as through theft or misuse), sophisticated nation states, and nation-state-supported actors.
−Removed: We and the third parties upon which we rely are subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks (such as credential stuffing), credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, and other similar threats.
+Added: We and the third parties upon which we rely are subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential
+Added: stuffing attacks, credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, attacks enhanced or facilitated by AI, and other similar threats.
In particular, severe ransomware attacks are becoming increasingly prevalent and can lead to significant interruptions in our operations, loss of sensitive data and income, reputational harm, and diversion of funds.
Extortion payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting such payments.
−Removed: Because of the remote work policies, we implemented due to the COVID-19 pandemic, sensitive information that is normally protected, including company confidential information, may be less secure.
−Removed: Cybersecurity and data security threats continue to evolve and raise the risk of an incident that could affect our operations or compromise our sensitive information.
−Removed: We may also need to collect more extensive health-related information from our employees to manage our workforce.
−Removed: We rely on third-party service providers and technologies to operate critical business systems to process sensitive information in a variety of contexts.
+Added: Because of our hybrid work policies, sensitive information that is normally protected may be less secure as more of our employees utilize network connections, computers and devices outside our premises or network, including working at home, while in transit and in public locations.
+Added: Future or past business transactions (such as acquisitions or integrations) could expose us to additional cybersecurity risks and vulnerabilities, as our systems could be negatively affected by vulnerabilities present in acquired or integrated entities’ systems and technologies.
+Added: Furthermore, we may discover security issues that were not found during due diligence of such acquired or integrated entities, and it may be difficult to integrate companies into our information technology environment and security program.
+Added: We rely on third-parties and technologies to operate critical business systems to process sensitive information in a variety of contexts.
Our ability to monitor these third parties’ information security practices is limited, and these third parties may not have adequate information security measures in place.
−Removed: If our third-party service providers experience a security incident or other interruption, we could experience adverse consequences.
+Added: If the third-parties upon whom we rely on experience a security incident or other interruption, we could experience adverse consequences.
While we may be entitled to damages if our third-party service providers fail to satisfy their privacy or security-related obligations to us, any award may be insufficient to cover our damages, or we may be unable to recover such award.
+Added: In addition, supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties’ infrastructure in our supply chain or our third-party partners’ supply chains have not been compromised.
+Added: While we have implemented security measures designed to protect against security incidents, there can be no assurance that these measures will be effective.
+Added: We take steps designed to detect, mitigate, and remediate vulnerabilities in our information systems (such as our hardware and/or software, including that of third parties upon which we rely).
+Added: We may not, however, detect and remediate all such vulnerabilities including on a timely basis.
+Added: Further, we may experience delays in developing and deploying remedial measures and patches designed to address identified vulnerabilities.
+Added: Vulnerabilities could be exploited and result in a security incident.
Any of the previously identified or similar threats could cause a security incident or other interruption that could result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our sensitive information or our information technology systems, or those of the third parties upon whom we rely.
A security incident or other interruption could disrupt our ability (and that of third parties upon whom we rely) to provide our products and services.
−Removed: If we or our parties on which we rely fail to comply or are alleged to have failed to comply with applicable data privacy and security regulations, or if we were to experience a security incident involving personal data, we could face significant consequences, including but not limited to;
−Removed: government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar);
−Removed: litigation (including class-action claims);
+Added: We may expend significant resources or modify our business activities to try to protect against security incidents.
+Added: Certain data privacy and security obligations may require us to implement and maintain specific security measures or industry-standard or reasonable security measures to protect our information technology systems and sensitive information.
+Added: Applicable data privacy and security obligations may require us to notify relevant stakeholders, including affected individuals, customers, regulators, and investors, of security incidents.
+Added: Such disclosures are costly, and the disclosure or the failure to comply with such requirements could lead to adverse consequences.
+Added: If we (or a third party upon whom we rely) experience a security incident or are perceived to have experienced a security incident, we may experience adverse consequences, such as government enforcement actions (for example, investigations, fines, penalties, audits, and inspections);
additional reporting requirements and/or oversight;
−Removed: bans on processing personal data;
−Removed: orders to destroy or not use personal data.
−Removed: Any associated claims, inquiries, or investigations or other government actions could lead to unfavorable outcomes that have a material impact on our business including through significant penalties or fines, monetary judgments or settlements including criminal and civil liability for us and our officers and directors, increased compliance costs, delays or impediments in the development of new products, negative publicity, increased operating costs, diversion of management time and attention, or other remedies that harm our business, including orders that we modify or cease existing business practices.
−Removed: In February 2021, in compliance with the security incident notification obligations laid out in the GDPR, we notified the Italian Data Protection Authority (“Garante”), of an unintended disclosure of certain user e-mail addresses to other users in Italy.
−Removed: Subsequent to this notification, we were able to settle the matter with the Garante.
−Removed: It is possible that the Garante may, in the future, follow up regarding our corrective measures and overall GDPR compliance.
−Removed: Further investigations of the Garante could cause an adverse reaction by users of our product, negative publicity, financial penalties or negative regulatory implications under the GDPR, any of which could have a material adverse effect on our business.
−Removed: Moreover, governments and regulators in certain jurisdictions, including Europe, are increasingly seeking to regulate the use, transfer and other processing of non-personal information (for example, under the European Union’s Data Act), an area which has typically been the subject of very limited or no specific regulation.
−Removed: This means that, if and to the extent such regulations are relevant to our operations or those of our customers, certain of the above risks and considerations may apply equally to our processing of both personal and non-personal information.
−Removed: Our activities, including our research, sales and marketing, and patient reimbursement support activities, may be subject to scrutiny under these laws.
−Removed: If our operations are found to be in violation of any of the laws described above or any other governmental regulations that apply to us now or in the future, we may be subject to penalties, including significant civil, criminal, and administrative penalties, damages, fines, disgorgement of profits, imprisonment, exclusion from governmental health care programs, such as Medicare and Medicaid, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our financial results.
−Removed: Any federal, state or foreign regulatory review to which we may become subject, regardless of the outcome, would be costly and time-consuming.
−Removed: For example, to enforce compliance with the federal laws, the U.S.
−Removed: Department of Justice has recently increased its scrutiny of interactions between healthcare companies and healthcare providers, which has led to a number of investigations, prosecutions, convictions and settlements in the healthcare industry.
−Removed: Dealing with investigations can be
−Removed: time and resource consuming and can divert management's attention from our core business.
−Removed: Additionally, if we settle an investigation with law enforcement or other regulatory agencies, we may be forced to agree to additional onerous compliance and reporting requirements as part of a consent decree or corporate integrity agreement.
−Removed: Any such investigation or settlement could increase our costs or otherwise have an adverse effect on our business.
+Added: restrictions on processing sensitive information (including personal data);
+Added: litigation (including class claims);
+Added: indemnification obligations;
+Added: negative publicity;
+Added: reputational harm;
+Added: monetary fund diversions;
+Added: diversion of management attention;
+Added: interruptions in our operations (including availability of data);
+Added: financial loss;
+Added: and other similar harms.
+Added: Security incidents and attendant consequences
+Added: may prevent or cause customers to stop using our products, deter new customers from using our prodcuts, and negatively impact our ability to grow and operate our business.
+Added: Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our data privacy and security obligations.
+Added: We cannot be sure that our insurance coverage will be adequate or sufficient to protect us from or to mitigate liabilities arising out of our privacy and security practices, that such coverage will continue to be available on commercially reasonable terms or at all, or that such coverage will pay future claims.
+Added: In addition to experiencing a security incident, third parties may gather, collect, or infer sensitive information about us from public sources, data brokers, or other means that reveals competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position.
+Added: Additionally, sensitive information of the Company or our customers could be leaked, disclosed, or revealed as a result of or in connection with our employees’, personnel’s, or vendors’ use of generative AI technologies.
We may be liable if the FDA, competent authorities of the EEA countries, or another regulatory agency concludes that we have engaged in the off-label promotion of our products.
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While we do not believe that, as a general matter, such a claim would have merit, the possibility of an adverse result to the manufacturer cannot be dismissed, and in any event, we could incur significant defense costs.
−Removed: Also, if there should be widespread off-label use of our system by patients, and resulting adverse medical events, the FDA, competent authorities of the EEA countries or other foreign regulatory bodies might require us, to implement additional measures to reduce off-label use, which could be costly or reduce adoption of Eversense.
+Added: Also, if there should be widespread off-label use of our system by patients, and resulting adverse medical events, the
+Added: FDA, competent authorities of the EEA countries or other foreign regulatory bodies might require us, to implement additional measures to reduce off-label use, which could be costly or reduce adoption of Eversense.
Legislative or regulatory healthcare reforms may make it more difficult and costly for us to obtain regulatory clearance, certification or approval of our products.
Recent political, economic and regulatory influences are subjecting the healthcare industry to fundamental changes.
−Removed: The sales of our products depend in part on the availability of coverage and reimbursement from third-party payors such as government health administration authorities, private health insurers, health maintenance organizations
−Removed: and other healthcare-related organizations.
+Added: The sales of our products depend in part on the availability of coverage and reimbursement from third-party payors such as government health administration authorities, private health insurers, health maintenance organizations and other healthcare-related organizations.
Both the federal and state governments in the United States continue to propose and pass new legislation and regulations designed to contain or reduce the cost of healthcare.
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These agencies review our design and manufacturing practices, labeling, record keeping, manufacturers’ required reports of adverse experiences and other information to identify potential problems with marketed medical devices.
−Removed: We are subject to unannounced device inspections by Notified Bodies, as well as other regulatory agencies overseeing the implementation and adherence of applicable regulations.
+Added: We are subject to unannounced device inspections by Notified Bodies, as well as other regulatory authorities overseeing the implementation and adherence of applicable regulations.
These inspections may include our suppliers’ facilities.
−Removed: In addition, the competent authorities of individual EEA countries have powers to suspend the marketing and use, or demand the recall, of unsafe or non-compliant devices.
+Added: In addition, the competent
+Added: authorities of individual EEA countries have powers to suspend the marketing and use, or demand the recall, of unsafe or non-compliant devices.
They also have the power to bring enforcement action against companies or individuals for breaches of the device rules.
2 unchanged sentences
Any new regulations or revisions or reinterpretations of existing regulations may impose additional costs or lengthen review times of our products.
−Removed: Delays in receipt of or failure to
−Removed: receive regulatory clearances or approvals for our products would harm our business, financial condition and operating results.
+Added: Delays in receipt of or failure to receive regulatory clearances or approvals for our products would harm our business, financial condition and operating results.
While a goal of healthcare reform is to expand coverage to more individuals, it also involves increased government price controls, additional regulatory mandates and other measures designed to constrain medical costs.
15 unchanged sentences
On August 2, 2011, the Budget Control Act of 2011 was signed into law, which, among other things, includes reductions to Medicare payments to providers of 2% per fiscal year, which went into effect on April 1, 2013 and, due to subsequent legislative amendments to the statute, will remain in effect through 2032 unless additional Congressional action is taken.
−Removed: Under current legislation, the actual reduction in Medicare payments will vary from 1% in 2022 to up to 4% in the final fiscal year of this sequester.
On January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, reduced Medicare payments to several providers, including hospitals, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.
4 unchanged sentences
The stock market in general and the market for innovative, emerging medtech and biotechnology companies in particular have experienced extreme volatility that has often been unrelated to the operating performance of particular companies.
−Removed: From January 1, 2021 through March 10, 2023, the trading price of our common stock has been as low as $0.85 per share and as high as $5.27 per share.
−Removed: This extreme stock price volatility
−Removed: has been accompanied by extremely high trading volume in our common stock in comparison to historical experience.
−Removed: During this period, the average daily trading volume of our common stock has been approximately 15 million shares and on January 19, 2021, our trading volume exceeded 409 million shares, whereas the average daily trading volume from January 1, 2022 to December 31, 2022 was 6.5 million shares.
+Added: From January 1, 2022 through February 23, 2024, the trading price of our common stock has been as low as $0.48 per share and as high as $3.71 per share.
+Added: This extreme stock price volatility has been accompanied by extremely high trading volume in our common stock in comparison to historical experience.
+Added: During this period, the average daily trading volume of our common stock has been approximately 5.2 million shares and on February 11, 2022, our trading volume exceeded 106.3 million shares, whereas the average daily trading volume from January 1, 2023 to December 31, 2023 was 4.3 million shares.
The extreme increase in trading volume and volatility has not necessarily correlated to the company’s announcement of material developments and often appears unrelated to changes in actual or expected operating performance.
14 unchanged sentences
● developments in our relationships with our collaboration partners;
−Removed: ● global market or financial developments, whether due to the global COVID-19 pandemic or otherwise;
+Added: ● global market or financial developments;
● announcements relating to health care reform, legislation and reimbursement levels, including third-party payor coverage decisions;
11 unchanged sentences
Any such issuance could result in substantial dilution to our existing stockholders and cause the trading price of our common stock to decline.
−Removed: Holders of our Series B convertible preferred stock and our convertible notes may convert their note into common stock and, upon conversion, will dilute your percentage of ownership.
−Removed: Our note holders have the ability exert substantial influence over us in a manner adverse to your interests.
−Removed: The Series B convertible preferred stock, PHC Notes, and 2025 Notes are convertible into our common stock at the option of the holder.
−Removed: Accordingly, any conversion of convertible preferred stock would dilute the ownership of our holders of common stock.
+Added: Holders of our Series B convertible preferred stock and our 2025 notes may convert their securities into common stock and, upon conversion, will dilute your percentage of ownership.
+Added: The Series B convertible preferred stock and 2025 Notes are convertible into our common stock at the option of the holders thereof.
+Added: Accordingly, any conversion of convertible preferred stock or 2025 Notes would dilute the ownership of our holders of common stock.
The potential dilutive effect of the conversion of shares of convertible preferred stock or convertible notes may also adversely affect our ability to obtain additional financing on favorable terms or at all.
−Removed: Subject to maintaining specified ownership thresholds, the holders of the PHC Notes have a right to designate two individuals to serve on our board of directors.
−Removed: As a result, the holders of the PHC Notes are able to influence our decisions, including the election and removal of directors, any merger, consolidation, sale of all or substantially all of our assets, or other significant corporate transactions.
−Removed: The holders of the PHC notes may have interests different the interests of the holders of our common stock.
+Added: Certain shareholders may have the ability exert substantial influence over us in a manner adverse to your interests.
+Added: Subject to maintaining specified ownership thresholds, PHC continues to hold the right to designate up to two individuals to serve on our board of directors as outlined in their Investor Rights Agreement.
+Added: As a result, PHC may be able to significantly influence our decisions, including the election and removal of directors, any merger, consolidation, sale of all or substantially all of our assets, or other significant corporate transactions.
+Added: PHC may have interests different the interests of the other holders of our common stock.
Our GAAP operating results could fluctuate substantially due to changes in fair value of the derivatives related to the embedded conversion option, interest make-whole provision and make-whole fundamental change provision features of the notes.
−Removed: Our convertible senior subordinated notes contain certain embedded features that require bifurcation of the embedded conversion option along with the fundamental change make-whole provision, interest make-whole provision, and the cash settled fundamental make-whole shares provision, and recorded the fair value of these embedded features as a derivative liability in the Company’s consolidated balance sheets in accordance with Accounting Standards Codification (“ASC”) Topic 815, Derivatives and Hedging .
+Added: Our 2025 Notes contain certain embedded features that require bifurcation of the embedded conversion option along with the fundamental change make-whole provision and the cash settled fundamental make-whole shares provision, and recorded the fair value of these embedded features as a derivative liability in the Company’s consolidated balance sheets in accordance with Accounting Standards Codification (“ASC”) Topic 815, Derivatives and Hedging.
ASC 815 requires companies to bifurcate certain embedded derivatives from their host instruments and account for them as free-standing derivative financial instruments according to certain criteria.
6 unchanged sentences
GAAP requires our management to make estimates, assumptions and judgments that affect the amounts reported in the consolidated financial statements and accompanying notes.
−Removed: We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets, liabilities, equity, revenue and expenses that are not readily apparent from other sources.
+Added: We base our estimates on historical experience and on various other assumptions that we believe to
+Added: be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets, liabilities, equity, revenue and expenses that are not readily apparent from other sources.
Our operating results may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our operating results to fall below the expectations of financial analysts and investors, resulting in a decline in our stock price.
−Removed: Significant assumptions and estimates used in preparing our consolidated financial statements include those related to revenue recognition and variable consideration, reserves for inventory
−Removed: obsolescence and warranties, stock-based compensation, embedded features of our senior convertible notes and income taxes.
+Added: Significant assumptions and estimates used in preparing our consolidated financial statements include those related to revenue recognition and variable consideration, reserves for inventory obsolescence and warranties, stock-based compensation, embedded features of our senior convertible notes and income taxes.
We do not intend to pay cash dividends in the foreseeable future.
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If a court were to find these types of provisions to be inapplicable or unenforceable, and if a court were to find the exclusive forum provision in our amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the dispute in other jurisdictions, which could materially adversely affect our business.
−Removed: I f we fail to maintain proper and effective internal controls, our ability to produce accurate financial statements on a timely basis could be impaired.
+Added: If we fail to maintain proper and effective internal controls, our ability to produce accurate financial statements on a timely basis could be impaired .
We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, the Sarbanes-Oxley Act of 2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the rules and regulations of the NYSE American.
7 unchanged sentences
Any failure to maintain effective internal control over financial reporting could severely inhibit our ability to accurately report our financial condition or results of operations.
−Removed: If we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines we have a material weakness or significant deficiency in our internal control over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, the market price of our common stock could decline, and we could be subject to sanctions or investigations by the NYSE American, the SEC or other regulatory authorities.
+Added: If we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines we have a material weakness or significant deficiency in our internal control over financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, the market price of our common stock could
+Added: decline, and we could be subject to sanctions or investigations by the NYSE American, the SEC or other regulatory authorities.
Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.
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In preparing our financial statements, we estimate the amount of tax that will become payable in each of such jurisdictions.
−Removed: Nevertheless, our effective income tax rate may be different than experienced in the past due to numerous factors, including passage of the newly enacted federal income tax law, changes in the mix of our profitability from state to state, the results of examinations and audits of our tax filings, our inability to secure or sustain acceptable agreements with tax authorities, changes in accounting for income taxes and changes in tax laws.
+Added: Nevertheless, our effective income tax rate may be different than experienced in the past due to numerous factors, including passage of the newly enacted federal or state income tax laws, changes in the mix of our profitability from state to state, the results of examinations and audits of our tax filings, our inability to secure or sustain acceptable agreements with tax authorities, changes in accounting for income taxes and changes in tax laws.
Any of these factors could cause us to experience an effective tax rate significantly different from previous periods or our current expectations and may result in tax obligations in excess of amounts accrued in our financial statements.
−Removed: We may be unable to utilize our federal net operating loss carryforwards to reduce our income taxes.
+Added: We may be unable to utilize our tax attribute carryforwards to reduce our income taxes.
At December 31, 2023, we had federal and state net operating loss, or NOL, carryforwards of $656.9 million and had research and experimental credit carryforwards of $15.3 million.
NOL carryforwards in the amount of $196.4 million will expire in varying amounts between 2024 and 2037 and tax credits of $15.3 million will expire in varying amounts between 2024 and 2043.
−Removed: These net operating loss carryforwards could expire unused and be unavailable to offset future income tax liabilities.
−Removed: Under the Tax Cuts and Jobs Act of 2017, as modified by the CARES Act, federal NOL carryforwards generated in tax years beginning after December 31, 2017 may be carried forward indefinitely, but in the case of tax years beginning after 2020, may only be used to offset 80% of our taxable income annually.
−Removed: Federal NOL carryforwards generated in taxable years beginning in 2018 will similarly carry forward indefinitely but will not be subject to such 80% of annual taxable income limitation.
+Added: These net operating loss carryforwards and credits could expire unused and be unavailable to offset future income tax liabilities.
+Added: Under the Tax Cuts and Jobs Act of 2017 (“TCJA”), as modified by the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, federal NOL carryforwards generated in tax years beginning after December 31, 2017 may be carried forward indefinitely, but limited to offset 80% of our taxable income annually.
In addition, under Section 382/383 of the Internal Revenue Code of 1986, as amended, or the Code, and corresponding provisions of state law, if a corporation undergoes an "ownership change," which generally occurs if the percentage of the corporation's stock owned by 5% stockholders increases by more than 50% over a three-year period, the corporation's ability to use its pre-change NOL carryforwards and other pre-change tax attributes to offset its post-change income may be limited.
−Removed: We have not determined if we have experienced Section 382/383 ownership changes in the past and if a portion of our NOL and tax credit carryforwards are subject to an annual limitation under Section 382/383.
−Removed: In addition, we may experience ownership changes in the future as a result of subsequent shifts in our stock ownership, some of which may be outside of our control.
+Added: We have not determined if we have experienced Section 382/383 ownership changes and if a portion of our NOL and tax credit carryforwards are subject to an annual limitation under Section 382/383.
+Added: In addition, we may experience ownership changes in the future as a result of subsequent shifts in our stock ownership, which may be outside of our control.
If we determine that an ownership change has occurred and our ability to use our historical NOL and tax credit carryforwards is materially limited, it would harm our future operating results by effectively increasing our future tax obligations.
3 unchanged sentences
Any such enactment, interpretation, change, repeal, or modification could adversely affect us, possibly with retroactive effect.
−Removed: For instance, the recently enacted IRA imposes, among other rules, a 15% minimum tax on the book income of certain large corporations and a 1% excise tax on certain corporate stock repurchases.
−Removed: The Tax Cuts and Jobs Act of
−Removed: 2017 (“TCJA”) as amended by the Coronavirus Aid, Relief, and Economic Security Act significantly reformed the Code by lowering U.S.
+Added: For instance, the Inflation Reduction Act (“IRA”) imposes, among other rules, a 15% minimum tax on the book income of certain large corporations and a 1% excise tax on certain corporate stock repurchases.
+Added: The TCJA as amended by the CARES Act significantly reformed the Code by lowering U.S.
federal corporate income tax rates, changing the utilization of future net operating loss carryforwards, permitting for the expensing of certain capital expenditures, eliminating the option to currently deduct research and development expenditures and requiring taxpayers to capitalize and amortize U.S.-based and non-U.S.-based research and development expenditures over five and fifteen years, respectively and putting into effect significant changes to U.S.
2 unchanged sentences
Our bank deposits in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limits could be impacted if the underlying financial institutions fail.
−Removed: Our cash and cash equivalents are held in accounts at US Bank Corp, Truist Bank, and Silicon Valley Bridge Bank (formerly Silicon Valley Bank) and consist of cash in our operating accounts and cash invested in money market funds.
+Added: Our cash and cash equivalents are held in accounts at US Bank Corp, JPMorgan Chase Bank, Truist Bank, and Silicon Valley Bank and consist of cash in our operating accounts and cash invested in money market funds.
At any point in time, the funds in our operating accounts may exceed the FDIC insurance limits.
2 unchanged sentences
however, we can provide no assurances that access to our operating cash or invested cash and cash equivalents will not be impacted by adverse conditions in the financial markets.
−Removed: 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.