Profound Medical (PROF) risk factors, FY2025 10-K

Other

1. 01Our business is capital intensive and requires significant investment to increase our commercial capacity for our approved products, and the resources to do so may not be available in amounts or on terms acceptable to us, if at all
2. 02We are exposed to foreign currency risk, which exposure will increase as we commercialize our approved products in the United States; to date, we have not hedged against risk associated with foreign exchange rate exposure

Risks Related to Our Business and Growth Strategy

1. 03We currently rely on our collaborative partners, and we may rely on additional collaborative partnerships, to assist in the sales and marketing and/or distribution of our approved products26% rewritten
2. 04We may not achieve our commercialization and future product development goals in the time frames expected, or at all
3. 05Our products, including the TULSA-PRO system, may not achieve or maintain expected levels of market acceptance27% rewritten
4. 06Successful commercialization of our approved products, including the TULSA-PRO system, and future product development depends upon our maintaining strong working relationships with physicians/clinicians
5. 07Physicians/clinicians misuse could result in negative publications, negative sentiment or adverse events, thereby limiting market acceptance and future sales of our products
6. 08We rely on the compatibility of our products with MRI scanners in the successful commercialization of our products
7. 09Successful commercialization of our authorized products will also depend on the cost of the system and the availability of coverage and adequate reimbursement coverage from third-party payers
8. 10We intend to rely primarily on our in-house sales and marketing capabilities for our commercialization strategy, which will require substantial build-up and commitment of resources
9. 11We may experience manufacturing scaling issues in connection with our commercialization strategy, as we have limited experience assembling and testing our approved products, including the TULSA-PRO system, at a significant scale
10. 12We rely on third parties to manufacture and supply components of our systems
11. 13We depend on single-source suppliers for some of the components in our systems
12. 14We face significant competition in the markets for our products, and in particular, there are numerous devices and procedures that compete with our TULSA-PRO system
13. 15Data from our clinical trials may not support regulatory approvals or clearances and/or reimbursement coverage for our products88% rewritten
14. 16We depend on key managerial personnel for our continued success
15. 17Research and development carries substantial risk and we may not be able to expand our product portfolio
16. 18We may be subject to product liability claims, which can be expensive, difficult to defend and may result in large judgments or settlements, and/or warranty claims on our products
17. 19Rising insurance costs could negatively impact our profitability
18. 20We are increasingly dependent on sophisticated information technology systems to operate our business and if we fail to properly maintain the integrity of our data or we experience a cyber-attack or other breach of these systems, our business could be adversely affected63% rewritten
19. 21A portion of our employees are unionized, and our good labor relations may not continue
20. 22If our facilities are damaged or destroyed, we may experience delays that could negatively impact our revenues
21. 23We face risks associated with acquisition of businesses and technologies

Risks Relating to Regulation of the Company and Our Products

1. 24Our products and operations are subject to extensive government regulation and oversight both in the United States and abroad, and our failure to comply with applicable requirements could harm our business
2. 25We may be unable to obtain, or experience significant delays in obtaining, FDA clearances or other regulatory authorizations for our product candidates and/or enhancements to our approved or cleared products
3. 26Our ability to continue sales of our product in the EU may be materially impaired if we do not take necessary steps to comply with the certification requirements of the new EU Medical Devices Regulation
4. 27Seeking, obtaining and maintaining certification in the EU under the MDR, with the CE-Mark to be re-certified before December 31, 2027, can be an uncertain process and Notified Bodies have limited resources and may experience backlogs
5. 28The overall backlogs experienced by the Notified Bodies having already been re-designated might have a negative impact on the re-certification of our TULSA-PRO and Sonalleve systems. We believe, however, that we are on track to meet the new requirements by the deadlines set forth in the New EU MDR
6. 29If clinical trials are conducted in a manner that fails to meet all FDA requirements, the FDA may delay our clearances or approvals, or the deficiencies may be so great that the FDA could refuse to accept all or part of our data or trigger enforcement action
7. 30Attracting patients to perform clinical trials and meeting clinical trial objectives can be more costly and time-consuming than expected and could be adversely affected by another health crisis24% rewritten
8. 31If we or our suppliers fail to comply with ongoing FDA or other foreign regulatory authority requirements or if we experience unanticipated problems with our authorized products, we could be subject to restrictions or withdrawal from the market33% rewritten
9. 32We 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 or engaged in false or misleading promotion
10. 33Compliance with regulations for quality systems for medical device companies is difficult, time consuming and costly
11. 34Modifications to our cleared or approved products may require new regulatory clearances or approvals or may require us to recall or cease marketing our products until such additional clearances or approvals are obtained
12. 35Our contract manufacturers are subject to regulatory compliance by the FDA, Health Canada and regulatory authorities in the EU and other jurisdictions
13. 36Our products may in the future be subject to product recalls that could harm our reputation, business and financial results
14. 37If 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, and such events can result in voluntary corrective actions or agency enforcement actions
15. 38Legislative or regulatory reform of the healthcare systems in which we intend to operate may affect our ability to sell our products profitably and could adversely affect our business
16. 39Other legislation or regulatory proposals may adversely affect our revenues and profitability
17. 40The GDPR may also impose additional compliance obligations relating to the transfer of data between us and our affiliates, collaborators, or other business partnersNew
18. 41Our employees, independent contractors, principal investigators, contract research organizations, consultants or vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements
19. 42Compliance with environmental laws and regulations could be expensive, and failure to comply with these laws and regulations could subject us to significant liability34% rewritten
20. 43If we breach any of the agreements under which we license rights to our technology from third parties, we could lose license rights that are important to our business. Certain of our license agreements may not provide an adequate remedy for their breach by the licensor
21. 44Our proprietary rights may not adequately protect our technologies
22. 45We may not be able to protect our intellectual property rights throughout the world
23. 46The patent protection for our technologies may expire before we are able to maximize our commercial value which may subject us to increased competition and reduce or eliminate our opportunity to generate product revenue
24. 47We may incur substantial costs as a result of litigation or other proceedings relating to enforcement of our or our licensors’ patent and other intellectual property rights and we may be unable to protect our rights to, or use of, our technology
25. 48We may be subject to lawsuits from, liable for damages to, or be required to enter into license agreements with, a third-party that claims we infringed its patents or otherwise misused its proprietary information

Risks Relating to the International Scope of our Business

1. 49Our business, financial condition, cash flows and results of operations are subject to risks arising from our international operations, including currently imposed and potential future tariffs and trade measuresNew
2. 50Future sales or the issuances of our securities may cause the market price of our Common Shares to decline39% rewritten
3. 51The market price of securities of many companies, particularly development and early commercial stage medical device companies, experience wide fluctuations in price that are not necessarily related to the operating performance, underlying asset values or prospects of such companies
4. 52The rights of our shareholders may differ from the rights typically offered to shareholders of a U.S. corporation
5. 53We are a smaller reporting company, and the reduced reporting requirements applicable to smaller reporting companies may make our common shares less attractive to investors
6. 54If equity research analysts research or reports about our business or if they issue unfavorable commentary or downgrade our Common Shares, the price of our Common Shares could decline
7. 55We may be subject to securities litigation, which is expensive and could divert management attention
8. 56We have never paid dividends on our Common Shares and we do not anticipate paying any dividends in the foreseeable future. Consequently, any gains from an investment in our Common Shares will likely depend on whether the price of our Common Shares increases
9. 57If we are unable to satisfy the requirements of Sarbanes-Oxley, or our internal controls over financial reporting are not effective, the reliability of our financial statements may be questioned68% rewritten
10. 58Any default under our existing debt that is not waived by the applicable lender could materially adversely impact our results of operations and financial results and may have a material adverse effect on the trading price of our Common Shares34% rewritten
11. 59As a foreign private issuer whose shares are listed on Nasdaq, we intend to follow certain home country corporate governance practices instead of certain Nasdaq requirements
12. 60We will incur significantly increased costs and devote substantial management time as a result of operating as a U.S. public company
13. 61We may lose foreign private issuer status in the future, which could result in significant additional costs and expenses
14. 62It may be difficult for United States investors to effect service of process or enforcement of actions against us or certain of our directors and officers under U.S. federal securities laws
15. 63We do not believe that we are an “investment company” under the Investment Company Act, but we can provide no assurance that we will not be deemed an “investment company” in the future