Vyome Holdings (HIND) risk factors, FY2024 10-K

Risks Related to Our Business and Industry

1. 01If we are unable to either substantially improve our operating results or obtain additional financing, we may be unable to continue as a going concern
2. 02If the warrants issued in our February 2025 offering are exercised by way of a “zero exercise price” alternative, especially after the reset date stockholders may suffer substantial dilution
3. 03We have recently undertaken a cost reduction plan and reorganization, and may do so again in the future. The assumptions underlying these activities may prove to be inaccurate, or we may fail to achieve the expected benefits therefrom
4. 04We may be unable to attract and retain management and other personnel we need to succeed, particularly in light of the 2024 cost reduction plan
5. 05We cannot assure you that we will ever generate substantial revenue or be profitable
6. 06Previously, we recorded a non-cash indefinite-lived intangible and definite-lived assets impairment loss, which significantly impacted our results of operations, and we may be exposed to additional impairment losses that could be material
7. 07We incur significant costs as a result of operating as a public company, and our management is required to devote substantial time to compliance initiatives
8. 08We have identified material weaknesses in our internal control over financial reporting and any failure to maintain effective internal control over financial reporting, may have a material and adverse effect on our business, operating results, financial condition and prospects
9. 09General economic and political conditions could have a material adverse effect on our business
10. 10We face significant uncertainty in the industry due to government healthcare reform
11. 11Our operations are directly, or indirectly through customers, subject to various state and federal fraud and abuse laws, including, without limitation, the federal Anti-Kickback Statute and federal False Claims Act. These laws may impact, among other things, our sales, marketing and education programs
12. 12Failure to protect our information technology infrastructure against cyber-based attacks, network security breaches, service interruptions or data corruption could materially disrupt our operations and adversely affect our business
13. 13We operate in a highly competitive industry that is subject to rapid change. If our competitors are able to develop and market products that are safer or more effective than our products, our commercial opportunities will be reduced or eliminated
14. 14We face external competition from other technologies such as GLP-1’s, and alternative medical procedures and we may not be able to compete effectively
15. 15Our ability to use net operating losses (“NOL”) carryforwards may be limited
16. 16Adverse developments affecting the financial services industry could adversely affect our current and projected business operations and our financial condition and results of operations

Risks Related to the Pending Merger

1. 17Fluctuations in the market price of our common stock will affect the value of the Merger Consideration
2. 18The Exchange Ratio in the Merger Agreement is subject to adjustment based on ReShape’s net cash as of a determination date prior to completion of the Merger, which could dilute further the ownership of either the ReShape or Vyome stockholders in the Combined Company
3. 19The ownership percentages of the ReShape and Vyome stockholders, respectively, that will result from the Exchange Ratio in the Merger Agreement are calculated prior to the completion of the Concurrent Financing, which could dilute further the ownership of the ReShape stockholders in the Combined Company
4. 20The Merger may not be consummated unless important conditions are satisfied or waived and there can be no assurance that the Merger will be consummated
5. 21Although an application has been filed to list the ReShape Shares on The Nasdaq Capital Market, there can be no assurance that the common stock will be so listed or, if listed, that the Combined Company will be able to comply with the continued listing standards
6. 22The Merger Agreement contains provisions that could discourage a potential competing acquirer of either ReShape or Vyome
7. 23The pendency of the Merger could materially adversely affect the business, financial condition, results of operations or cash flows of ReShape or Vyome
8. 24ReShape directors and executive officers and Vyome directors and executive officers have interests in the Merger and Asset Sale that may be different from, or in addition to, the interests of ReShape stockholders and Vyome stockholders
9. 25With respect to the Asset Sale, certain of the executive officers of ReShape may become employees or consultants to Biorad after the closing of the Asset Sale, though no offers for such positions have been made and no terms of such positions have been discussed or negotiated
10. 26The members of the Vyome Board were aware of and considered these interests relating to Vyome, among other matters, in evaluating the Merger Agreement and the Merger, and in recommending that Vyome stockholders approve the Merger Agreement and the Merger
11. 27The opinion of ReShape’s financial advisor does not reflect changes in circumstances that may have occurred or that may occur between the signing of the Merger Agreement and the consummation of the Merger
12. 28Failure to consummate the Merger could negatively impact respective future operations and financial results of ReShape and Vyome and the future stock price of ReShape
13. 29The Merger may disrupt attention of ReShape management and Vyome management from ongoing business operations
14. 30The market price for ReShape Shares following completion of the Merger will continue to fluctuate and may be affected by factors different from those that historically have affected ReShape Shares

Risks Related to the Business of the Combined Company After the Merger

1. 31Combining the two companies may be more difficult, costly or time consuming than expected, and the Combined Company may not realize all of the anticipated benefits of the Merger
2. 32ReShape and Vyome will incur substantial direct and indirect costs as a result of the Merger and the Combined Company will incur substantial direct and indirect costs following the Merger
3. 33Both ReShape and Vyome have operated with a loss and negative cash flows for the entirety of their existence and it is expected the Combined Company will have to raise significant capital in the future that could be dilutive to stockholders of the Combined Company
4. 34If the perceived benefits of the Merger do not meet the expectations of investors or securities analysts, the market price of ReShape’s securities or, following the Merger, the Combined Company’s securities, may decline
5. 35You may not have the same benefits as an investor in an underwritten public offering
6. 36The Combined Company does not expect to pay cash dividends in the foreseeable future. Any return on investment may be limited to the capital appreciation, if any, of shares of common stock of the Combined Company
7. 37An active trading market for the Combined Company’s common stock may not develop and its stockholders may not be able to resell their shares of common stock for a profit, if at all
8. 38Future sales of a substantial number of shares of common stock of the Combined Company may cause the price of its common stock to decline
9. 39You may experience future dilution as a result of future equity offerings by the Combined Company
10. 40Post consummation of the Merger, the Combined Company may have outstanding warrants, which may cause dilution to its stockholders, have a material adverse impact on the market price of its common stock and make it more difficult for it to raise funds through future equity offerings
11. 41The Combined Company’s operating results may fluctuate significantly
12. 42If securities or industry analysts do not publish research or reports about the Combined Company’s business, or if they issue an adverse opinion regarding its share, its share price and trading volume could decline
13. 43Raising additional capital may cause dilution to the Combined Company’s existing shareholders, restrict its operations or require it to relinquish rights to Vyome’s assets or its product candidates
14. 44The Combined Company’s principal shareholders, directors and executive officers will own a significant percentage of its capital shares, and also have significant influence over the Combined Company’s management
15. 45The Combined Company’s ability to use net operating losses (“NOL”) carryforwards may be limited
16. 46If financial institutions in which the Combined Company holds funds for working capital and operating expenses were to fail, there can be no assurance that such governmental agencies would take action to protect the Combined Company’s uninsured deposits in a similar manner
17. 47Any critical vendor bankruptcy or insolvency, or any breach or default by a critical vendor, or the loss of any significant vendor relationships, may have a material adverse impact on the Combined Company’s business
18. 48A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Combined Company’s annual or interim financial statements will not be prevented or detected and corrected on a timely basis
19. 49The Combined Company will incur increased costs as a result of operating as a public company, and its management will devote substantial time to related compliance initiatives
20. 50Certain of the Combined Company’s proposed directors and executive officers also work with other companies and organizations and such other positions may create conflicts of interest in the future
21. 51General economic and political conditions could have a material adverse effect on the Combined Company
22. 52If the Combined Company’s competitors are able to develop and market products that are safer or more effective than the Combined Company’s products, its commercial opportunities will be reduced or eliminated
23. 53The Combined Company may face significant uncertainty in the industry due to government healthcare reform
24. 54Failure to protect the Combined Company’s information technology infrastructure against cyber-based attacks, network security breaches, service interruptions or data corruption could materially disrupt its operations and adversely affect its business
25. 55The Combined Company may in the future become involved in lawsuits, to protect or enforce its intellectual property, which can be expensive and time consuming and could result in the diversion of significant resources
26. 56The Combined Company may lose important patents or patent rights if it does not timely pay required patent fees or annuities
27. 57Many of the Combined Company’s competitors may have significant resources and incentives to apply for and obtain intellectual property rights that could limit or prevent its ability to commercialize our current or future products in the United States or abroad
28. 58If the Combined Company is unable to protect the confidentiality of our proprietary information and know-how, the value of its technology and products could be adversely affected
29. 59Intellectual property litigation is a common tactic in the biotech industry to gain competitive advantage. If the Combined Company becomes subject to a lawsuit, it may be required to expend significant financial and other resources and our management’s attention may be diverted from its business

Risks Related to the Asset Sale

1. 60While the Asset Sale is pending, it creates unknown impacts on our future which could materially and adversely affect its business, financial condition and results of operations
2. 61The failure to consummate the Asset Sale may materially and adversely affect our business, financial condition and results of operations
3. 62The Merger may be consummated despite the Asset Sale not closing under certain circumstances
4. 63Our efforts to increase revenue from our Lap-Band System, Lap-Band 2.0 System, and commercialize our DBSN device and expanded line of bariatric surgical accessories, including ReShape Calibration Tubes, may not succeed or may encounter delays which could significantly harm our ability to generate revenue
5. 64We may not be able to obtain required regulatory approvals for our DBSN device in a cost-effective manner or at all, which could adversely affect our business and operating results
6. 65We depend on clinical investigators and clinical sites to enroll patients in our clinical trials, and on other third parties to manage the trials and to perform related data collection and analysis, and, as a result, we may face costs and delays that are outside of our control
7. 66Modifications to the Lap-Band and Lap-Band 2.0 system may require additional approval from regulatory authorities, which may not be obtained or may delay our commercialization efforts
8. 67If we or our suppliers fail to comply with ongoing regulatory requirements, or if we experience unanticipated product problems, our Lap-Band system could be subject to restrictions or withdrawal from the market
9. 68We face the risk of product liability claims that could be expensive, divert management’s attention and harm our reputation and business. We may not be able to obtain adequate product liability insurance

Risks Related to our Intellectual Property

1. 69If we are unable to obtain or maintain intellectual property rights relating to our technology and neuroblocking therapy, the commercial value of our technology and any future products will be adversely affected and our competitive position will be harmed
2. 70We may lose important patents or patent rights if we do not timely pay required patent fees or annuities
3. 71Many of our competitors have significant resources and incentives to apply for and obtain intellectual property rights that could limit or prevent our ability to commercialize our current or future products in the United States or abroad
4. 72If we are unable to protect the confidentiality of our proprietary information and know-how, the value of our technology and products could be adversely affected
5. 73Intellectual property litigation is a common tactic in the medical device industry to gain competitive advantage. If we become subject to a lawsuit, we may be required to expend significant financial and other resources and our management’s attention may be diverted from our business
6. 74We may in the future become involved in lawsuits, to protect or enforce our intellectual property, which can be expensive and time consuming and could result in the diversion of significant resources

Risks Related to Equity Line of Credit

1. 75The sale or issuance of our common stock to Ascent may cause dilution and the sale of the shares of common stock acquired by Ascent, or the perception that such sales may occur, could cause the price of our common stock to fall
2. 76The purchase price for the shares that we may sell to Ascent under the Equity Purchase Agreement will fluctuate based on the price of our common stock. Depending on market liquidity at the time, sales of such shares may cause the trading price of our common stock to fall
3. 77Ascent will pay less than the then-prevailing market price for our common stock, which could cause the price of our common stock to decline
4. 78Our management will have broad discretion over the use of the net proceeds from our sale of shares of common stock to Ascent, and you may not agree with how we use the proceeds, and the proceeds may not be invested successfully
5. 79It is not possible to predict the actual number of shares we will sell under the Equity Purchase Agreement to Ascent, or the actual gross proceeds resulting from those sales
6. 80Investors who buy shares at different times will likely pay different prices
7. 81Our commitment to issue shares of common stock pursuant to the terms of the Equity Purchase Agreement could encourage short sales by third parties, which could contribute to the future decline of our stock price

Risks Relating to Ownership of our Common Stock

1. 82The trading price of our common stock has been volatile and is likely to be volatile in the future
2. 83Sales of a substantial number of shares of our common stock in the public market by us or by our existing stockholders, or the perception that they may occur, could cause our stock price to decline
3. 84If we fail to meet all applicable Nasdaq Capital Market requirements, Nasdaq could delist our common stock, which could adversely affect the market liquidity of our common stock and the market price of our common stock could decrease
4. 85You may experience future dilution as a result of future equity offerings
5. 86Our organizational documents and Delaware law make a takeover of our company more difficult, which may prevent certain changes in control and limit the market price of our common stock
6. 87We have not paid dividends in the past and do not expect to pay dividends in the future, and any return on investment may be limited to the value of our common stock