InspireMD (NSPR) risk factors, FY2024 10-K

Risks Related to Our Financial Condition

1. 01We have a history of net losses and may experience future losses
2. 02We will need to raise additional capital to meet our business requirements in the future, and such capital raising may be costly or difficult to obtain and could dilute our stockholders’ ownership interests
3. 03Any additional capital raised through the sale of equity or equity-backed securities may dilute our stockholders’ ownership percentages and could also result in a decrease in the market value of our equity securities

Risk Related to Commercialization of Our Products

1. 04Although we met the primary endpoint in our C-GUARDIANS trial of the CGuard Carotid Stent System, the results may not be sufficient to support FDA approval
2. 05Even if we obtain regulatory approvals, our products will be subject to ongoing regulatory review and if we fail to comply with continuing U.S. and applicable foreign regulations, we could lose those approvals and our business would be seriously harmed
3. 06The failure of third parties to meet their contractual, regulatory, and other obligations could adversely affect our business
4. 07We plan on self-commercializing CGuard Prime in the U.S. if we receive FDA approval and historically have no experience selling, marketing or distributing products in the U.S
5. 08If we are unable to establish our own manufacturing, sales, marketing and distribution capabilities or enter into successful arrangements with third parties to perform these services, any future product revenues and our profitability, may be materially adversely affected
6. 09We face manufacturing risks that could adversely affect our ability to manufacture products, reduce our gross margins and negatively affect our business and operating results
7. 10CGuard and Switch Guard are complex medical devices that requires training for qualified personal
8. 11We operate in an intensely competitive and rapidly changing business environment, and there is a substantial risk our products could become obsolete or uncompetitive
9. 12We may become subject to claims by much larger and better capitalized competitors enforcing their intellectual property rights against us or seeking to invalidate our intellectual property or our rights thereto
10. 13We depend on outside suppliers for certain raw materials. These raw materials or components may not always be available at our standards or on acceptable terms, if at all, and we may be unable to locate alternative suppliers or produce necessary materials or components on our own
11. 14In addition, we will be required to obtain prior regulatory approval from the FDA or foreign regulatory authorities to use different suppliers or components that may not be as safe or as effective. As a result, regulatory approval of our products may not be received on a timely basis or at all
12. 15Increasing inflation could adversely affect our business, financial condition, results of operations or cash flows

Risks Related to our Clinical Trials and Regulatory Matters

1. 16The results of our C-GUARDIANS trial as well as any other clinical trials may be insufficient to obtain regulatory approval for our products
2. 17Patients may discontinue their participation in our clinical studies, which may negatively impact the results of these studies and extend the timeline for completion of our development programs
3. 18Our products may in the future be subject to product notifications, recalls, or voluntary market withdrawals that could harm our reputation, business and financial results
4. 19Even if our products are approved by regulatory authorities, if we or our suppliers fail to comply with ongoing regulatory requirements, or if we experience unanticipated problems with our products, these products could be subject to restrictions or withdrawal from the market
5. 20Failure to obtain regulatory approval in foreign jurisdictions will prevent us from marketing our products in such jurisdictions
6. 21We are, or may be, subject to federal, state and foreign healthcare laws and regulations and implementation of or changes to such healthcare laws and regulations could adversely affect our business and results of operations
7. 22We may be exposed to product liability claims and insurance may not be sufficient to cover these claims
8. 23Even if one or more of our products are approved by the FDA, we may fail to obtain an adequate level of reimbursement for our products by third party payors, such that there may be no commercially viable markets for our products, or the markets, may be much smaller than expected
9. 24In the United States and European Union, our business could be significantly and adversely affected by healthcare reform initiatives and/or other legislation or judicial interpretations of existing or future healthcare laws and/or regulations
10. 25If we are unable to obtain and maintain intellectual property protection covering our products, others may be able to make, use or sell our products, which would adversely affect our revenue
11. 26The failure to obtain or maintain patents, licensing agreements and other intellectual property rights that are sufficiently broad and protective could impact our ability to compete effectively
12. 27It is also possible that others may obtain issued patents that could prevent us from commercializing our products or require us to obtain licenses requiring the payment of significant fees or royalties in order to enable us to conduct our business
13. 28Patent policy and rule changes could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of any issued patents
14. 29We may be involved in lawsuits to protect or enforce our intellectual property, which could be expensive, time consuming, and unsuccessful
15. 30A company may attempt to commercialize competing products utilizing our proprietary design, trademarks or tradenames in foreign countries where we do not have sufficient patent protection and where legal recourse may be limited. This may have a significant commercial impact on our foreign business operations

Risks Related to Our Business Operations

1. 31We face risks associated with litigation and claims
2. 32Our business and operations would suffer in the event of computer system failures, cyber-attacks or deficiencies in our cyber-security
3. 33The loss of key members of our senior management team or our inability to attract and retain highly skilled scientists and laboratory and field personnel could adversely affect our business
4. 34We are an international business, and we are exposed to various global and local risks that could have a material adverse effect on our financial condition and results of operations
5. 35Our business, operating results and growth rates may be adversely affected by current or future unfavorable economic and market conditions and adverse developments with respect to financial institutions and associated liquidity risk
6. 36We are subject to financial reporting and other requirements that place significant demands on our resources
7. 37There are inherent limitations in all control systems, and misstatements due to error or fraud may occur and not be detected
8. 38Scrutiny of sustainability and environmental, social, and governance (“ESG”) initiatives could increase our costs or otherwise adversely impact our business

Risks Related to Operating in Israel

1. 39We anticipate being subject to fluctuations in currency exchange rates because we expect a substantial portion of our revenues will be generated in Euros and U.S. dollars, while a significant portion of our expenses will be incurred in New Israeli Shekels (“NIS”)
2. 40If there are significant shifts in the political, economic and military conditions in Israel and its neighbors, it could have a material adverse effect on our business relationships and profitability
3. 41We may become subject to claims for remuneration or royalties for assigned service invention rights by our employees, which could result in litigation and adversely affect our business
4. 42It may be difficult for investors in the United States to enforce any judgments obtained against us or some of our directors or officers

Risks Related to Our Common Stock, Preferred Stock and Warrants

1. 43The market prices of our common stock are subject to fluctuation and have been and may continue to be volatile, which could result in substantial losses for investors
2. 44In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also significantly affect the market prices of our common stock
3. 45Delaware law and our corporate charter and bylaws contain anti-takeover provisions that could delay or discourage takeover attempts that stockholders may consider favorable
4. 46We have a staggered board of directors, which could impede an attempt to acquire us or remove our management
5. 47As a former shell company, resales of shares of our restricted common stock in reliance on Rule 144 of the Securities Act are subject to the requirements of Rule 144(i)
6. 48If securities and/or industry analysts fail to continue publishing research about our business, if they change their recommendations adversely or if our results of operations do not meet their expectations, our stock price and trading volume could decline
7. 49Aspects of the tax treatment of the securities may be uncertain