Astrotech (ASTC) risk factors, FY2024 10-K

Risks Related to Our Business and Industry

1. 01We have incurred significant losses since inception and anticipate that we will incur continued losses for the foreseeable future
2. 02Our business units are in the development stage. They have earned limited revenues and it is uncertain whether they will earn any revenues in the future or whether any of them will ultimately be profitable
3. 03We may need to raise additional capital to fund the operations of our business units and commercialize our products
4. 04finance capital expenditures and general and administrative expenses
5. 05the potential cost of and delays in product development as a result of any regulatory oversight that may be applicable to our products
6. 06We may not be able to obtain patents, other intellectual property protection or licenses for the technologies contained in the products we develop
7. 07Their parties may claim we are infringing their intellectual property rights, and we could suffer significant litigation or licensing expenses or be prevented from selling products
8. 08We may not be able to successfully develop the BreathTest-1000 or any other new products or services
9. 09if we fail to comply with applicable FDA regulations, our premarket submissions could be adversely affected, and we could face substantial enforcement actions, including civil and criminal penalties and our business, operations and financial condition could be adversely affected
10. 10Our sales and operations in international markets expose us to operational, financial and regulatory risks
11. 11Our business, financial condition and results of operations may be adversely impacted by the effects of inflation
12. 12We generate substantial revenue from a limited number of customers and the loss of any such customer may harm our business, results of operations and financial results
13. 13Our success depends significantly on the establishment and maintenance of successful relationships with our customers
14. 14Third parties may claim we are infringing their intellectual property rights, and we could suffer significant litigation or licensing expenses or be prevented from selling products
15. 15Our ongoing success is dependent upon the continued availability of certain key employees
16. 16Our operating results may be adversely affected by increased competition
17. 17Our facilities located in Austin are susceptible to damage caused by hurricanes or other natural disasters
18. 18If we are unable to anticipate technological advances and customer requirements in the commercial and governmental markets, our business and financial condition may be adversely affected
19. 19We incur substantial upfront, non-reimbursable costs in preparing proposals to bid on contracts or to receive research and development grants that we may not be awarded
20. 20A failure of a key information technology system, process, or site could have a material adverse impact on our ability to conduct business
21. 21Our manufacturing operations are dependent upon third party suppliers, including single source suppliers, making us vulnerable to external factors such as supply shortages and price fluctuations, which could harm our business
22. 22fluctuation in delivery by our suppliers due to changes in demand from us or their other customers
23. 23Repair or replacement costs due to warranties we provide on our products could have a material adverse effect on our business, financial condition and results of operations

Legal and Regulatory Risks

1. 24Our products and operations are subject to extensive governmental regulation, and failure to comply with applicable requirements could cause our business to suffer
2. 25recalls and field‑safety corrective actions
3. 26the manufacturing process or facilities we use may not meet applicable requirements
4. 27Failure to obtain clearance or authorization for the BreathTest-1000, or other delays in the development of the BreathTest-1000, would adversely affect our ability to grow our business
5. 28We and our suppliers may not meet regulatory quality standards applicable to our device-manufacturing processes, which could have an adverse effect on our business, financial condition, and results of operations
6. 29Legislative or regulatory healthcare reforms may make it more difficult and costly for us to obtain reimbursement for our products or regulatory clearance or approval of our future products, if any, and to produce, market and distribute those products after clearance or approval is obtained
7. 30Our financial performance may be adversely affected by medical device tax provisions in healthcare reform laws
8. 31Although we do not grow, sell or distribute cannabis products, our products are closely tied to the hemp and cannabis industry and could subject us to regulatory, financial, operational and reputational risks and challenges
9. 32Evolving federal and state laws and regulations pertaining to the use or cultivation of hemp and cannabis, as well active enforcement by federal or state authorities of the laws and regulations governing the use and cultivation of hemp and cannabis may indirectly affect our business, our revenues and our profits
10. 33As the possession and use of marijuana is illegal under the CSA, it is possible that our manufacture and sale of equipment that is used to cultivate marijuana or marijuana products may be deemed to be aiding and abetting illegal activities
11. 34We may become subject to FDA or ATF regulation with respect to our AgLab business
12. 35The hemp and cannabis industry could face strong opposition from other industries
13. 36There may be difficulty enforcing certain of our commercial agreements and contracts
14. 37A drop in the retail price of hemp and cannabis products may negatively impact our business
15. 38We may be subject to constraints on and differences in marketing our products under varying state laws
16. 39We are subject to differing tax rates in several jurisdictions in which we operate, which may adversely affect our business, financial condition, results of operations and prospects
17. 40Changes in U.S. trade policy, including changes to existing trade agreements and any resulting changes in international trade relations, may have a material adverse effect on us

Risks Related to Ownership of Our Common Stock

1. 41Our stock price has fluctuated in the past, has recently been volatile and may be volatile in the future, and as a result, investors in our common stock could incur substantial losses
2. 42general economic, industry and market conditions; and
3. 43We can sell additional shares of common stock without consulting shareholders and without offering shares to existing shareholders, which would result in dilution of shareholders’ interests in the Company and could depress our stock price
4. 44Our Certificate of Incorporation provides that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for any disputes between us and our stockholders, which could limit stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors or officers
5. 45A sale of a substantial number of shares of the common stock may cause the price of our common stock to decline
6. 46We are a smaller reporting company and, as a result of the reduced disclosure and governance requirements applicable to such companies, our common stock may be less attractive to investors
7. 47Our failure to maintain compliance with Nasdaq’s continued listing requirements could result in the delisting of our Common Stock
8. 48We face various risks related to health epidemics, pandemics and similar outbreaks, which may have material adverse effects on our business, financial position, results of operations, and/or cash flows
9. 49Increased cybersecurity requirements, vulnerabilities, threats, and more sophisticated and targeted computer crime could pose a risk to our systems, networks, products, services, and data
10. 50Increased costs associated with corporate governance compliance may significantly impact our results of operations
11. 51Our insurance coverage may be inadequate to cover all significant risk exposures