Neuroone Medical Technologies (NMTC) risk factors, FY2024 10-K

Risks Related to Our Business

1. 01We have incurred significant operating losses since inception and cannot assure you that we will ever achieve or sustain profitability
2. 02NeuroOne Medical Technologies Corporation
3. 03We have a limited operating history, making it difficult for you to evaluate our business and your investment
4. 04Even if we successfully develop and market such technology, we may not generate sufficient or sustainable revenue to achieve or sustain profitability, which could cause us to cease operations and cause you to lose all of your investment
5. 05Our ability to continue our operations requires that we raise additional capital and our operations could be curtailed if we are unable to obtain the additional funding as or when needed
6. 06We may be adversely affected by the effects of inflation
7. 07We will need to raise substantial additional funds in the future, and these funds may not be available on acceptable terms or at all. A failure to obtain this necessary capital when needed could force us to delay, limit, scale back or cease some or all operations
8. 08As a result of these and other factors, we do not know whether and the extent to which we may be required to raise additional capital. We may in the future seek additional capital from public or private offerings of our capital stock, borrowings under credit lines or other sources
9. 09An inability to obtain a supply of components and raw material products could have a material adverse effect on our business, financial condition and results of operations
10. 10We depend on a limited number of third-party suppliers for the components of our cortical strip, grid electrode and depth electrode technology, and the loss of any of these suppliers, or their inability to provide us with an adequate supply of materials, could harm our business
11. 11We may not procure volumes sufficient to receive favorable pricing, which could impact our gross margins if we are unable to pass along price differences to our customers. Recent global economic cost inflation trends could unfavorably impact pricing from our suppliers
12. 12Changes in the configuration of our cortical strip, grid electrode and depth electrode technology under development may result in additional costs or delay
13. 13We have three products which have each received 510(k) clearance from the FDA. If we are unable to successfully develop, and receive regulatory clearance/approval for our other products under development, or if we experience significant delays in doing so, our business will be harmed
14. 14Even if we obtain regulatory clearance and/or approval for all of our products, we will remain subject to extensive regulatory scrutiny and compliance obligations
15. 15Moreover, we expect the revenue opportunity for additional uses of our technology to be greater than the technology and uses that have currently been cleared by the FDA, and so we believe our ability to generate significant revenue in the future will be dependent upon the receipt of additional FDA clearances
16. 16The continuing development and commercialization of our products depends upon us maintaining strong relationships with academic and healthcare institutions and professionals
17. 17Our success depends on our ability to continue to develop, commercialize and gain market acceptance for our products and technology
18. 18Failure to secure or retain coverage or adequate reimbursement for our cortical strip, grid electrode and depth electrode technology or future versions thereof, including the implantation procedures, by third-party payors could adversely affect our business, financial condition and operating results
19. 19Reimbursement by Medicare is highly regulated and subject to change
20. 20In addition to facing competition from major competitors and potentially our development partner, we may also face competition from other emerging competitors or smaller companies with active development programs that may emerge in the future
21. 21WARF has granted us the WARF License, to make, use and sell, in the United States only, products that employ certain licensed patents for a neural probe array or thin-film micro electrode array and method. See “Business - WARF License” for additional information regarding our license agreement with WARF
22. 22We depend on our partnership with Mayo to license certain know how for the development and commercialization of our technology. Termination of this partnership would harm our business, and even if this partnership continues, it may not be successful
23. 23Potential complications from our cortical strip, grid electrode and depth electrode technology that are currently unknown may come to light
24. 24We depend on sophisticated information technology systems, and any breach or disruption affecting these systems could adversely affect our business, financial condition and operating results
25. 25We have entered into, and may enter into additional 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
26. 26We have been the victim of a cyber-related crime and our controls may not be successful in avoiding further cyber-related crimes in the future

Risks Related to our Intellectual Property

1. 27Our ability to protect our intellectual property and proprietary technology is uncertain
2. 28There is limited market awareness of our technology, and we may not be able to establish or strengthen our brand
3. 29We could become subject to patent litigation that could be costly, result in the diversion of management’s time and efforts, stop our development and commercialization measures or require us to pay damages
4. 30We 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-competition or non-solicitation agreements with our competitors
5. 31Intellectual property rights do not necessarily address all potential threats to our competitive advantage

Risks Related to our Legal and Regulatory Environment

1. 32Our products and operations are subject to extensive governmental regulation, and any adverse regulatory action may materially adversely affect our financial condition and business operations
2. 33The regulations to which we are subject are complex and have tended to become more stringent over time. Regulatory changes could result in restrictions on our ability to carry on or expand our operations, higher than anticipated costs or lower than anticipated revenues
3. 34A recall of our products, or the discovery of serious safety issues with our products, could have a significant negative impact on us
4. 35We are subject to additional federal, state and foreign laws and regulations relating to our healthcare business; our failure to comply with those laws could have an adverse impact on our business
5. 36We may be liable if the FDA or another regulatory agency concludes that we have engaged in the off-label promotion of our products
6. 37Legislative or regulatory healthcare reforms may have a material adverse effect on our business, financial condition, results or operations and cash flows

Risks Related to our Common Stock

1. 38The price of our Common Stock might fluctuate significantly, and you could lose all or part of your investment
2. 39If we fail to comply with the continued listing standards of the Nasdaq Capital Market, our Common Stock could be delisted. If it is delisted, our Common Stock and the liquidity of our Common Stock would be impacted
3. 40We intend to issue more shares to raise capital, which will result in substantial dilution
4. 41Anti-takeover provisions in the Company’s certificate of incorporation and bylaws may prevent or frustrate attempts by stockholders to change the Board or current management and could make a third-party acquisition of the Company difficult
5. 42We are a smaller reporting company, and the reduced reporting requirements applicable to smaller reporting companies may make our Common Stock less attractive to investors
6. 43We 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 stock
7. 44If securities or industry analysts do not publish research or reports, or publish unfavorable research or reports, about us, our business or our market, our stock price and trading volume could decline
8. 45Our Common Stock has been, and may in the future be subject to the “penny stock” rules of the SEC, which makes transactions in our stock cumbersome and may reduce the value of an investment in our stock
9. 46There can be no assurance that we will be able to comply with Nasdaq’s continued listing standards, a failure of which could result in a de-listing of our Common Stock
10. 47Adverse global economic conditions could have a negative effect on our business, results of operations and financial condition and liquidity
11. 48Worldwide economic and social instability could adversely affect our revenue, financial condition, or results of operations
12. 49Changes in tax laws or exposure to additional income tax liabilities could have a material impact on our business, results of operations, financial condition and cash flows
13. 50We urge investors to consult with their legal and tax advisers regarding the implications of potential changes in tax laws on an investment in our Common Stock
14. 51We may seek to grow our business through acquisitions of complementary products or technologies, and the failure to complete acquisitions, or the failure to integrate them with our existing business, could harm our business, financial condition and operating results
15. 52Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel
16. 53Prolonged negative economic conditions could adversely affect us, our customers and third-party partners, manufactures or suppliers, if any, which could harm our financial condition
17. 54We have incurred, and may continue to incur increased costs and demands upon management as a result of being a public company