Solana (HSDT) risk factors, FY2024 10-K

Risks Related to Our Financial Position and Need for Capital

1. 01We have incurred substantial net losses since our inception and anticipate that we will continue to incur substantial net losses for the foreseeable future. We may never achieve or sustain profitability
2. 02We will require additional financing to carry out our plan of operations and if we are unable to obtain such financing, our business may fail
3. 03Raising additional capital by issuing securities or through debt financings or licensing arrangements may cause significant dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our technologies or product on terms unfavorable to us
4. 04Our independent registered public accounting firm has included an explanatory paragraph relating to our ability to continue as a going concern in its report on our audited financial statements. We may be unable to continue to operate without the threat of liquidation for the foreseeable future
5. 05Global macroeconomic instability could adversely affect our ability to raise additional financing

Risks Related to the Development and Commercialization of our Product

1. 06We currently only have one product which is approved in the U.S. only for treatment of gait deficit, for MS and otherwise only in Canada and Australia
2. 07Our PoNS technology is a novel form of neurostimulation therapy, and the medical community tends not to adopt new therapies very rapidly. If physicians elect not to prescribe the PoNS Therapy, we will be unable to generate significant revenue
3. 08There is limited market awareness of our product, and the neuromodulation market is new and uncertain
4. 09We face significant competition in an environment of rapid technological change, and our competitors may develop devices or products that are more advanced or more effective than ours are which may adversely affect our financial condition and our ability to successfully market the PoNS device
5. 10Our product is currently made available to authorized users of the Department of Veterans Affairs Federal Supply Schedule and if we were no longer eligible to sell our products through such channel, our business may be adversely affected

Risks Related to our Reliance on Third Parties

1. 11We are, and will continue to be, dependent in significant part on outside scientists and third-party research institutions for our research and development in order to be able to commercialize our product
2. 12We depend on third parties for the manufacture and distribution of our product and the loss of our third-party manufacturer and distributor could harm our business
3. 13product to meet market demand or lead to significant delays in the availability of materials for our product and/or FDA enforcement actions against them and/or us

Risks Related to Intellectual Property

1. 14If our intellectual property protection is inadequate, competitors may gain access to our technology and undermine our competitive position
2. 15We may be subject to various litigation claims and legal proceedings, including intellectual property litigation, such as patent infringement claims, which could adversely affect our business
3. 16There are risks to our intellectual property based on our international business operations

Risks Related to Government Regulation

1. 17Obtaining and maintaining FDA marketing authorization will be costly, may result in time-consuming delays and will subject us to ongoing compliance costs and regulatory risk for non-compliance
2. 18Once commercialized, modifications to our marketed products may require new 510(k) clearances or approval of PMA supplements or may require us to cease marketing or recall the modified products until clearances or regulatory approvals are obtained
3. 19The transition to the new presidential administration could hinder the FDA’s ability to perform normal business functions on which our business may rely, which could negatively impact our business
4. 20We have in the past and may be required to conduct clinical trials to support a de novo submission or PMA application for the PoNS device with respect to one or more indications and we expect to be required to conduct clinical trials to support regulatory marketing authorization for future product candidates
5. 21We have and may continue to encounter substantial delays in planned clinical trials, or our planned clinical trials for other indications using the PoNS device may fail to demonstrate the safety and efficacy of the PoNS device to the satisfaction of applicable regulatory authorities
6. 22We may be required to suspend or discontinue clinical trials due to side effects or other safety risks that could preclude approval of our products
7. 23If we are unable to obtain coverage or adequate reimbursement for our products, use of our products may decline and our ability to generate revenue may be decreased
8. 24decisions by government programs or private payers underscore the uncertainty that our products face in the market and could have a material adverse effect on our business
9. 25If we fail to comply with healthcare laws, we could face substantial penalties and financial exposure, and our business, operations and financial condition could be adversely affected
10. 26The FDA enforces these requirements via periodic announced and unannounced inspections of manufacturing facilities. In addition, in the future, regulatory authorities and/or customers may require specific packaging of sterile products, which could increase our costs and the price of our products
11. 27U.S. legislative or FDA regulatory reforms may make it more difficult and costly for us to obtain regulatory approval of our product and to manufacture, market and distribute our products after marketing authorization is obtained

Risks Related to our Business Operations

1. 28Worldwide economic and social instability could adversely affect our revenue, financial condition, or results of operations
2. 29If our expenses are greater than anticipated, then we will have fewer funds with which to pursue our plan of operations and our financing requirements will be greater than anticipated
3. 30Our ability to use net operating losses to offset future taxable income may be subject to certain limitations
4. 31As a result of the use of our product in clinical trials, and through the sale of our products, we may be liable for product liability claims and we may not carry sufficient product liability insurance
5. 32We are a “smaller reporting company” under federal securities laws and we cannot be certain whether the reduced reporting requirements applicable to such companies will make our common stock less attractive to investors
6. 33Investors could lose confidence in our financial reports, and the value of our common stock may be adversely affected, if our internal controls over financial reporting are found not to be effective by management or by our independent registered public accounting firm
7. 34Several people who work for us on a part-time consulting basis may be subject to conflicts of interest
8. 35Our business and operations would suffer in the event of computer system failures, cyber-attacks or a deficiency in our cyber-security

Risks Related to Our Common Stock

1. 36We could be delisted from The Nasdaq Capital Market, which could seriously harm the liquidity of our stock and our ability to raise capital or complete a strategic transaction
2. 37An active trading market for our common stock on The Nasdaq Capital Market may not continue to develop or be sustained
3. 38Trading of our common stock could be sporadic, and the price of our common stock may be volatile; we caution you as to the highly illiquid nature of an investment in our shares
4. 39Provisions in our corporate charter documents and under Delaware law may prevent or frustrate attempts by our stockholders to change our management and hinder efforts to acquire a controlling interest in us, and the market price of our common stock may be lower as a result
5. 40If securities or industry analysts do not publish or cease publishing research or reports about us, our business or our market, or if they change their recommendations regarding our stock adversely, our stock price and trading volume could decline

General Risks

1. 41We have not paid any dividends and do not foresee paying dividends in the future
2. 42A decline in the price of our common stock could affect our ability to raise any required working capital and adversely affect our operations
3. 43We are heavily dependent upon the ability and expertise of our management team and a very limited number of employees and the loss of such individuals could have a material adverse effect on our business, operating results or financial condition