Pulse Biosciences (PLSE) risk factors, FY2025 10-K

Risks Relating to Our Business, Industry and Financial Condition

1. 01Because we have had a limited operating history and no significant revenue stream, it is difficult to evaluate the future of our business
2. 02We have not generated significant revenue, and we may never become profitable
3. 03We can give no assurance that our internal and external sources of liquidity will be sufficient for our cash requirements
4. 04If we are unable to obtain sufficient funding, we may be unable to execute our business plan and fund operations. We may not be able to obtain additional financing on commercially reasonable terms, or at all
5. 05Our revenue and future profitability are entirely dependent upon one family of products, the nPulse System, and one platform technology, Nano-pulse Stimulation43% rewritten
6. 06liability risks generally associated with the use of new products and procedures
7. 07We may fail to meet our publicly announced guidance or other expectations about our business and future operating results, which could cause our stock price to decline
8. 08Our operating results may fluctuate significantly, which makes our future operating results difficult to predict and could cause our operating results to fall below expectations; our product revenues are limited and our profit margins are uncertain26% rewritten
9. 09the timing and success or failure of nonclinical studies and clinical trials for our product candidates or competing product candidates, or any other change in the competitive landscape of our industry, including consolidation among our competitors or partners27% rewritten
10. 10Because we operate in highly competitive markets, we can expect to face competition from large well-established manufacturers of medical technologies, devices and similar products; we may not be able to compete effectively against companies with significantly more resources53% rewritten
11. 11greater financial and human resources for product development, sales and marketing100% rewritten
12. 12fully established reimbursement pathways for surgical procedures and thermal ablationNew
13. 13We may rely on third parties for our sales, marketing, manufacturing, and/or distribution activities, and these third parties may not perform satisfactorily
14. 14If we lose key management personnel, our ability to identify, develop and commercialize new or next generation product candidates will be impaired, could result in loss of markets or market share and could make us less competitive
15. 15There is a limited talent pool of experienced professionals in our industry. If we are not able to retain and recruit personnel with the requisite technical skills, we may be unable to successfully execute our business strategy24% rewritten
16. 16We have had limited experience selling the nPulse System69% rewritten
17. 17Rapidly changing technology in life sciences could make the products we are developing obsolete
18. 18If we are unable to manage the anticipated growth of our business, our future revenue and operating results may be harmed29% rewritten
19. 19We must successfully educate and train surgeons and their staff on the proper use of the nPulse System; if our customers do not adopt our technology into their medical practices, or adopt our technology slower than expected, our business could suffer
20. 20We may not become commercially viable if our ultimate commercialized products or related treatments fail to obtain an adequate level of reimbursement by Medicare and other third-party payers
21. 21Our ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited
22. 22We have a substantial amount of goodwill and intangible assets which over time may have to be written down as we make the required periodic assessments as to their value as reflected in our financial statements

Risks Related to Product Development and Product-Related Risks

1. 23Our nPulse System and any future product candidates may cause serious adverse side effects or have other properties that could delay or prevent their regulatory approval, limit their commercial desirability or result in significant negative consequences
2. 24Clinical development involves a lengthy and expensive process with an uncertain outcome, and results of earlier studies and trials may not be predictive of future trial results21% rewritten
3. 25Interim “top-line” and preliminary results from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data
4. 26If we fail to maintain necessary regulatory clearance for our products, or if clearances or approvals for future devices and indications are delayed or not issued, the commercial prospects for our nPulse System and other NPS technologies would be harmed
5. 27post-marketing surveillance, including reporting of deaths and serious injuries and recalls and correction and removals
6. 28The mechanism of action of our NPS technology platform has not been fully determined or validated
7. 29We may find it difficult to enroll patients in our clinical trials. If we cannot enroll a sufficient number of eligible patients to participate in our clinical trials, we may not be able to initiate or continue them, which could delay or prevent development of our product candidates
8. 30Laboratory conditions differ from commercial conditions and field conditions, and the safety and effectiveness of our product candidates may depend on the technique of the user
9. 31Issues with our firmware and software may negatively affect the function of our devices

Risks Related to Intellectual Property, Cybersecurity, Data Privacy, & Litigation

1. 32If we are unable to protect our intellectual property, then our financial condition, results of operations and the value of our technology and products could be adversely affected
2. 33Litigation or third-party claims of intellectual property infringement or challenges to the validity of our patents would require us to use resources to protect our technology and may prevent or delay our development, regulatory approval or commercialization of our product candidates
3. 34Our intellectual property rights will not necessarily provide us with competitive advantages
4. 35If 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. 36If we are unable to protect the intellectual property used in our products, others may be able to copy our innovations which may impair our ability to compete effectively in our markets
6. 37We may not be able to protect our intellectual property rights throughout the world
7. 38Implementation of artificial intelligence and machine learning technologies may result in legal and regulatory risks, reputational harm, or other adverse consequences to our businessNew
8. 39Product liability lawsuits against us could cause us to incur substantial liabilities and limit commercialization of our products or any future products that we may develop
9. 40the inability to commercialize any future products that we may develop

Risks Related to Government Regulation

1. 41We are subject to stringent domestic and foreign regulation. Any unfavorable regulatory action or adverse change in law may materially and adversely affect our future financial condition and business operations and prospects
2. 42If we experience any of these occurrences, our operations may suffer and we might experience harm to our competitive standing, which could adversely affect our financial condition
3. 43All our product development depends upon maintaining strong working relationships with physicians
4. 44We are subject to healthcare and other laws and regulations relating to our business and could face substantial penalties if we are determined not to have fully complied with such laws, which could have an adverse impact on our business25% rewritten
5. 45To obtain the necessary device approvals or clearances from regulatory authorities for our future product candidates, we will have to conduct various preclinical and clinical tests, which may be costly and time consuming, and may not provide results that will allow us to seek regulatory approval or clearance
6. 46may change their approval or clearance policies or adopt new regulations in a manner that is adverse to us
7. 47Even if a potential device or product ultimately is cleared or approved by regulatory authorities, it may be cleared or approved only for narrow indications which may render it commercially less viable
8. 48We will be subject to ongoing requirements and inspections that could lead to the restriction, suspension or revocation of our clearance
9. 49Our employees, collaborators and other personnel may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements and insider trading
10. 50We are subject to environmental regulations and any failure to comply with applicable laws could subject us to significant liabilities and harm our business

Risks Related to Owning Our Common Stock

1. 51The price of our common stock has been, and we expect it to continue to be, highly volatile, and you may be unable to sell your shares at or above the price you paid to acquire them
2. 52general economic and market conditions
3. 53Sales or purchases of shares of our common stock may adversely affect the market for our common stock
4. 54We do not know whether an active, liquid and orderly trading market will exist for our common stock and as a result it may be difficult for you to sell your common stock
5. 55Concentration of ownership by our principal stockholder limits the ability of others to influence the outcome of director elections and other transactions requiring stockholder approval, or create the potential for conflicts of interest28% rewritten
6. 56to control the outcome of any other matter submitted to our stockholders for vote
7. 57Robert W. Duggan’s controlling ownership position may impact our stock price and may deter or prevent efforts by others to acquire us, which could prevent our stockholders from realizing a control premium
8. 58We have incurred and will continue to incur costs as a result of operating as a public company and our management has been and will be required to devote substantial time to public company compliance initiatives
9. 59We are a “smaller reporting company”; we cannot be certain if the applicable reduced disclosure requirements will make our common stock less attractive to investors
10. 60We have not paid dividends in the past and have no plans to pay dividends
11. 61Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management and limit the market price of our common stock
12. 62provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum
13. 63Unfavorable global economic or political conditions could adversely affect our business, financial condition or results of operations
14. 64If the interpretations, estimates or judgments we use to prepare our financial statements prove to be incorrect, investors and others may lose confidence in our financial data, which could cause our stock price to decline
15. 65We may become involved in litigation that may materially adversely affect us
16. 66Our facilities in California are located near known earthquake faults, and the occurrence of an earthquake or other catastrophic disaster could cause damage to our facilities and equipment, which could require us to cease or curtail operations