CVRx (CVRX) risk factors, FY2024 10-K

Risks related to our business

1. 01We have a history of significant losses, which we expect to continue, and we may not be able to achieve or sustain profitability. If we do not achieve and sustain profitability, our financial condition could suffer
2. 02We have limited commercial sales experience marketing and selling Barostim, and if we are unable to continue to maintain and grow sales and marketing capabilities, we will be unable to generate sustained and increasing product revenue
3. 03We must demonstrate to physicians and patients the merits of Barostim
4. 04If we fail to receive access to hospitals, our sales may decrease
5. 05We are dependent upon third-party manufacturers and suppliers, and in some cases a limited number of suppliers, making us vulnerable to supply shortages, loss or degradation in performance of the suppliers, price fluctuations, and ongoing supply chain disruptions, which could harm our business
6. 06Manufacturing risks may adversely affect our ability to manufacture our product and could reduce our gross margin and profitability
7. 07We operate at a facility in one location and any disruption at this facility could harm our business
8. 08The sale and shipment of Barostim across international borders, as well as the purchase of components from international sources, subjects us to U.S. and foreign governmental trade, import and export and customs regulations and laws
9. 09Consolidation in the healthcare industry or group purchasing organizations could lead to demands for price concessions, which may affect our ability to sell Barostim at prices necessary to support our current business strategies
10. 10If we fail to properly manage our growth effectively, our business could suffer
11. 11Future growth will continue to impose significant added responsibilities on management, including the need to identify, recruit, train and integrate additional employees. In addition, rapid and significant growth will place a strain on our administrative and operational infrastructure
12. 12If clinical studies for future indications do not produce results necessary to support regulatory clearance or approval in the U.S. or elsewhere, we will be unable to commercialize our products for these indications
13. 13We may face product liability claims that could be costly, divert management’s attention and harm our reputation
14. 14If we fail to retain our key executives or recruit and hire new employees, our operations and financial results may be adversely affected while we attract other highly qualified personnel
15. 15Failure to protect our information technology infrastructure against cyber-based attacks, network security breaches, service interruptions, or data corruption could significantly disrupt our operations and adversely affect our business and operating results
16. 16If important assumptions about the potential market for our product are inaccurate, or if we have failed to understand what people with HF are seeking in a treatment, we may not be able to increase our revenue or achieve profitability
17. 17Unfavorable economic conditions could adversely affect our business, financial condition, or results of operations
18. 18We may enter into strategic collaborations, in-licensing arrangements, or alliances with third parties that may not result in the development of commercially viable products or the generation of significant future revenue
19. 19We may seek to grow our business through acquisitions of complementary products or technologies, and the failure to manage acquisitions, or the failure to integrate them with our existing business, could impair our ability to execute our business strategies
20. 20If third-party payers do not provide adequate coverage and reimbursement for the use of Barostim, our revenue will be negatively impacted
21. 21A pandemic, epidemic or outbreak of an infectious disease in the U.S. or worldwide could adversely affect our business

Risks related to intellectual property

1. 22Finally, any uncertainties resulting from the initiation and continuation of any litigation could have a material adverse effect on our ability to raise the funds necessary to continue our operations
2. 23Changes in patent law could diminish the value of patents in general, thereby impairing our ability to protect our existing and future products
3. 24In addition, patent reform legislation may pass in the future that could lead to additional uncertainties and increased costs surrounding the prosecution, enforcement and defense of our patents and applications
4. 25Obtaining and maintaining patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements
5. 26We may not be able to adequately protect our intellectual property rights throughout the world
6. 27We may be subject to damages resulting from claims that we or our employees have wrongfully used or disclosed alleged trade secrets of our competitors or are in breach of non-disclosure or confidentiality agreements with our competitors
7. 28If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected
8. 29If we are unable to protect the confidentiality of our trade secrets, our business and competitive position may be harmed

Risks related to our financial and operating results

1. 30We may be required to obtain additional funds in the future, and these funds may not be available on acceptable terms or at all
2. 31To finance certain of these activities, we may seek funds through borrowings or through additional rounds of financing, including private or public equity or debt offerings and collaborative arrangements with corporate partners. We may be unable to raise funds on favorable terms, or at all
3. 32Our operating results may vary significantly annually or from quarter to quarter, which may negatively impact our stock price in the future
4. 33Because of these and other factors, it is possible that our operating results will not meet investor expectations or those of public market analysts
5. 34We are required to maintain high levels of inventory, which could consume a significant amount of our resources, reduce our cash flows and lead to inventory impairment charges
6. 35The seasonality of our business creates variance in our quarterly revenue, which makes it difficult to compare or forecast our financial results
7. 36We are subject to risks associated with currency fluctuations, and changes in foreign currency exchange rates could impact our results of operations
8. 37Our ability to use our net operating losses and tax credits to offset future taxable income and taxes may be subject to certain limitations, and we may not be able to utilize a significant portion of our net operating loss and tax credit carryforwards prior to their expiration
9. 38We are subject to complex tax rules, and any audits, investigations or tax proceedings could have a material adverse effect on our business, results of operations, and financial condition

Risks related to regulation of our industry

1. 39Barostim is subject to extensive governmental regulation, and our failure to comply with applicable requirements could cause our business to suffer
2. 40The laws and regulations to which we are subject are complex and have tended to become more stringent over time. Legislative or regulatory changes could result in restrictions on our ability to carry on or expand our operations, higher than anticipated costs or lower than anticipated sales
3. 41Barostim is also subject to extensive governmental regulation in foreign jurisdictions, such as Europe, and our failure to comply with applicable requirements could cause our business to suffer
4. 42Our business is subject to extensive governmental regulation that could make it more expensive and time consuming for us to market Barostim in the U.S. and introduce new or improved products
5. 43penalties, damages, fines, disgorgement, exclusion from participation in government healthcare programs and the curtailment of our operations. Any of these events could significantly harm our business and results of operations and cause our stock price to decline
6. 44The discovery of serious safety issues with Barostim, or a recall of Barostim either voluntarily or at the direction of the FDA or another governmental authority, could harm our reputation, business, and financial results
7. 45Our products may cause or contribute to adverse medical events or be subject to failures or malfunctions that we are required to report to the FDA and European regulators, and if we fail to do so, we would be subject to sanctions that could harm our reputation, business, financial condition, and results of operations
8. 46Healthcare legislative reform measures may have a material adverse effect on us
9. 47We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services

Risks related to our common stock

1. 48We expect that the price of our common stock will fluctuate substantially, and you may not be able to resell shares of our common stock at or above the price you paid
2. 49Securities analysts may not publish favorable research or reports about our business or may publish no information at all, which could cause our stock price and trading volume to decline
3. 50We are an “emerging growth company,” and as a result of the reduced disclosure and governance requirements applicable to emerging growth companies, our common stock may be less attractive to investors
4. 51Because we have opted to take advantage of the JOBS Act provision which allows us to delay implementing new accounting standards, our financial statements may not be directly comparable to other public companies
5. 52If we are unable to maintain effective internal control over financial reporting in the future, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be adversely affected
6. 53Our principal stockholders, management, and directors (one of whom is affiliated with one of our principal stockholders) own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval
7. 54Anti-takeover provisions included in our amended and restated certificate of incorporation and amended and restated bylaws, as well as under Delaware law, could discourage a takeover
8. 55We do not currently intend to pay dividends on our common stock, and, consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock