Neuraxis (NRXS) risk factors, FY2024 10-K

Risks Relating to Our Business and Our Product

1. 01To date, we have not generated any operating profits, and due to our long-term research and development efforts, we have a history of incurring substantial operating losses
2. 02Our clinical studies could be delayed or otherwise adversely affected by many factors, including difficulties in enrolling patients
3. 03If we are unable to develop an adequate sales and marketing organization or contract with third parties to assist us, we may not be able to successfully commercialize our products for current and future indications
4. 04The success of our business may be dependent on the actions of our collaborative partners
5. 05We may not be successful in achieving market acceptance of our products by healthcare professionals, patients and/or third-party payers in the timeframes we anticipate, or at all, which could have a material adverse effect on our business, prospects, financial condition and results of operations
6. 06In addition, even if we are successful in achieving market acceptance of our products for IBS or other indications, we may be unsuccessful in achieving market acceptance of our products for other indications
7. 07Failure to secure and maintain adequate coverage and reimbursement from third-party payers could adversely affect acceptance of our products and reduce our revenues
8. 08We may not be successful in maintaining reimbursement codes necessary to facilitate accurate and timely billing for our products or physician services attendant to our products
9. 09We may depend on single-source suppliers for some of our components. The loss of these suppliers could prevent or delay shipments of our products, delay our clinical studies or otherwise adversely affect our business
10. 10We currently do not own a manufacturing facility and rely on a sole manufacturer for the production of our product. Any significant disruption to the sole manufacturer’s operations or facilities could have a material adverse effect on our business, financial condition and results of operations
11. 11Continued testing of our products may not yield successful results and could reveal currently unknown aspects or safety hazards associated with our products
12. 12As we expand, we may experience difficulties managing our growth
13. 13The size and expected growth of our available market has not been established with precision and may be smaller than we estimate
14. 14If physicians and patients do not accept our current and future products or if the market for indications for which any product candidate is approved is smaller than expected, we may be unable to generate significant revenue, if any
15. 15If any of our product candidates is approved but fails to achieve market acceptance or such market is smaller than anticipated, we may not be able to generate significant revenue and our business would suffer
16. 16Customer or third-party complaints or negative reviews or publicity about our company or our products could harm our reputation and brand
17. 17Adverse global economic conditions could have a negative effect on our business, results of operations and financial condition and liquidity
18. 18A pandemic could materially adversely impact our business
19. 19Developing medical technology entails significant technical, regulatory and business risks
20. 20Our Company has an evolving business strategy and investors must be willing to accept a substantial degree of uncertainty
21. 21We may not be able to compete with treatments now being marketed and developed, or which may be developed and marketed in the future by other companies
22. 22Due in part to our limited financial resources, we may fail to select or capitalize on the most scientifically, clinically or commercially promising or profitable indications or therapeutic areas for our product candidates, and/or we may be unable to pursue the clinical trials that we would like to pursue

Risks Related to Legal and Regulatory Matters

1. 23Product liability suits, whether or not meritorious, could be brought against us due to alleged defective devices or for the misuse of our products, which could result in expensive and time-consuming litigation, payment of substantial damages and/or expenses and an increase in our insurance rates
2. 24Other future litigation and regulatory actions could have a material adverse impact on the Company
3. 25We are increasingly dependent on information technology systems and are subject to privacy and security laws. Our products and our systems and infrastructure face certain risks, including cyber security breaches and data leakage
4. 26We may choose to, or may be required to, suspend, repeat or terminate our clinical studies if they are not conducted in accordance with regulatory requirements, the results are negative or inconclusive or the studies are not well designed
5. 27Legislative and regulatory changes in the U.S. and in other countries regarding healthcare insurance and government-sponsored reimbursement programs (such as Medicare in the United States) may adversely affect our business and financial results
6. 28The occurrence of any of these events could have a material adverse effect on our business, prospects, financial condition and results of operations and cause our stock price to decline
7. 29In addition to FDA requirements, we will spend considerable time and money complying with other federal, state, local and foreign rules, regulations and guidance and, if we are unable to fully comply with such rules, regulations and guidance, we could face substantial penalties
8. 30Similar laws exist in the EU, individual EU member states and other countries. These laws are complemented by EU or national professional codes of practices
9. 31If we, our collaborative partners, our contract manufacturers or our component suppliers fail to comply with the FDA’s QSR or equivalent regulations established in other countries, the manufacturing and distribution of our products could be interrupted, and our product sales and results of operations could suffer
10. 32Our products may in the future be subject to recalls that could harm our reputation, business and financial results
11. 33If our products cause or contribute to a death or a serious injury, or malfunction in certain ways, we will be subject to medical device reporting regulations, which can result in voluntary corrective actions or agency enforcement actions
12. 34We may be subject to fines, penalties or injunctions if we are determined to be promoting the use of our products for unapproved or off-label uses
13. 35We are affected by and subject to environmental laws and regulations that could be costly to comply with or that may result in costly liabilities
14. 36In addition, we cannot predict the effect that additional or modified environmental laws and regulations may have on us, our third-party suppliers of equipment and our products or our customers
15. 37Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our devices
16. 38Future regulatory action remains uncertain
17. 39Our product candidates will remain subject to ongoing regulatory review even after they receive marketing clearances, and if we fail to comply with continuing regulations, we could lose these clearances and the sale of any of our approved commercial products could be suspended
18. 40Intellectual property litigation and infringement claims could cause us to incur significant expenses or prevent us from selling certain of our products
19. 41We depend extensively on our patents and proprietary technology and the patents, and we must protect those assets in order to preserve our business
20. 42Due to legal and factual uncertainties regarding the scope and protection afforded by patents and other proprietary rights, we may not have meaningful protection from competition
21. 43We may use independent clinical investigators and other third-party service providers to conduct and/or oversee the clinical trials of our product candidates for the foreseeable future

Risks Related to Our Common Stock

1. 44We may not be able to maintain a listing of our common stock on NYSE American
2. 45We do not expect to declare or pay dividends in the foreseeable future
3. 46If securities industry analysts do not publish research reports on us, or publish unfavorable reports on us, then the market price and market trading volume of our common stock could be negatively affected
4. 47If our shares of common stock become subject to the penny stock rules, it would become more difficult to trade our shares
5. 48We are subject to ongoing public reporting requirements that are less rigorous than Exchange Act rules for companies that are not emerging growth companies, and our stockholders could receive less information than they might expect to receive from more mature public companies
6. 49Because the Company is a “smaller reporting company,” we may take advantage of certain scaled disclosures available to us, resulting in holders of our securities receiving less Company information than they would receive from a public company that is not a smaller reporting company
7. 50As a “smaller reporting company,” we may at some time in the future choose to exempt our Company from certain corporate governance requirements that could have an adverse effect on our public shareholders