AVITA Medical (RCEL) risk factors, FY2025 10-K

Risks Related to Our Business Operations

1. 01We have experienced significant losses, expect losses to continue for the foreseeable future and may never achieve or maintain profitability49% rewritten
2. 02Servicing our debt requires a significant amount of cash and we are subject to a number of restrictive covenants relating to our indebtedness, which may restrict our business and financing activities97% rewritten
3. 03This level of debt could have significant consequences on future operations, including increasing our vulnerability to adverse economic and industry conditions and limiting our flexibility in planning for, or reacting to, changes in our business and the markets in which we competeNew
4. 04[1]Additional details concerning the Perceptive Credit Agreement, the Security Agreement, and the Refinancing Transaction are provided in Item 7, infraNew
5. 05We may require additional financing in the future to continue the development and commercialization of our current and future products, which may cause dilution to our existing stockholders. If additional financing is not available, we may have to postpone, reduce or cease operations
6. 06The markets in which we operate are highly competitive and innovative. Our competitors may develop products that render our products less attractive or obsolete and our business may deteriorate
7. 07Our success depends, in part, on our relationships with, and the efforts of, third-party distributors
8. 08Certain of our products are dependent on specialized sources of supply potentially subject to disruption which could have a material, adverse impact on our business
9. 09We may encounter substantial delays in further clinical studies necessary to support regulatory applications for additional commercial applications of our technology29% rewritten
10. 10A failure in a clinical study or regulatory application can occur at any stage. Events that may prevent successful or timely
11. 11disagreements with regulatory agencies in the interpretation of the data from our clinical trials21% rewritten
12. 12Product development is an expensive, uncertain and lengthy process
13. 13Development and commercialization of our products require successful completion of the regulatory approval process and may suffer delays or fail
14. 14We are highly dependent on our regulatory approval in the United States and failure to maintain that approval would materially impact our business and prospects
15. 15Obtaining and maintaining regulatory approval for a product in one jurisdiction does not mean that we will be successful in obtaining regulatory approval for that product in other jurisdictions
16. 16Product recalls or inventory losses caused by unforeseen events may adversely affect our operating results and financial condition
17. 17We face manufacturing risks that may adversely affect our ability to manufacture products and could reduce our gross margins and negatively affect our business and operating results
18. 18inability to increase production capacity or volumes to meet demand
19. 19Compliance with environmental, health and safety requirements is costly and, if not achieved, could result in material financial fines, costly litigation, and a material adverse impact on the business
20. 20We may be subject to civil fines and/or criminal penalties if the FDA determines that we have marketed or promoted our products for off-label usage
21. 21We rely on information technology systems for critical business functions and the operations of our business
22. 22A cyber security incident could be disruptive to our business, compromise confidential data, cause reputation harm, and subject us to litigation and federal and state governmental inquiries22% rewritten
23. 23Tariffs and Changes in Trade Policy Could Adversely Affect Our Business, Financial Condition, and Results of OperationsNew

Risks Relating to our Industry and Technology

1. 24We face competition from the existing standard of care and any future potential changes in medical practice and technology and the possibility that our competitors may develop products, treatments or procedures that are similar, more advanced, safer or more effective than ours
2. 25If we are unable to effectively protect our intellectual property, we may not be able to operate our business and third parties may be able to use and profit from our technology, both of which would impair our ability to be competitive25% rewritten
3. 26We may find it difficult to protect our intellectual property rights throughout the world24% rewritten
4. 27If third parties make claims of intellectual property infringement against us, or otherwise seek to establish their intellectual property rights equal or superior to ours, we may have to spend time and money in response and potentially discontinue certain of our operations66% rewritten
5. 28We may incur substantial costs as a result of litigation or other proceedings relating to patent and other intellectual property rights and we may be unable to protect our rights to, or use of, our technology45% rewritten
6. 29We could be subject to product liability lawsuits, which could result in costly and time-consuming litigation and significant liabilities
7. 30The continued successful commercialization of our products for FDA approved and pending indications, will depend in part on the extent to which government authorities and healthcare insurers establish adequate reimbursement levels and pricing policies81% rewritten
8. 31The One Big Beautiful Bill Act, which was enacted in July 2025, imposes significant reductions in the funding of the Medicaid program. Such reductions are expected to decrease the number of persons enrolled in Medicaid and reduce the services covered by Medicaid, which could adversely affect our sales of our productsNew
9. 32We may be unsuccessful in commercializing our current products or other future products due to unfavorable pricing regulations or third-party coverage or reimbursement policies20% rewritten
10. 33Specific International Classification of Disease, 10th revision, Procedure Classification System (“ICD-10-PCS”) code series describing our “cell suspension technique” for the use of RECELLNew
11. 34Our current and future relationships with regulators, HCPs, third-party payors, customers, and consultants will be subject to applicable healthcare laws and regulations, as well as to other laws and regulations addressing fraud and abuse, and failure to comply with such laws could expose us to penalties
12. 35Data/Privacy Protection: a number of federal, state and foreign laws, regulations, guidance and standards that impose requirements regarding the protection of consumer information that are applicable to or affect our operations63% rewritten
13. 36State and Foreign Laws: Each of the laws and categories of laws identified above may have analogues in state law or the laws of other jurisdictions in which we conduct business. These analogous laws may contain additional or different compliance requirements than listed aboveNew

Macroeconomic and Social Risks

1. 37Adverse changes in general economic conditions or uncertainty about future economic conditions, could adversely affect us

Risks Relating to Our Common Stock and CDIs

1. 38We have never paid a dividend on our common stock and CDIs and do not intend to do so in the foreseeable future, and consequently, investors’ only opportunity to realize a return on their investment in the Company is through the appreciation in the price of our common stock and CDIs
2. 39Our equity issuances will be limited by ASX Listing Rule 7.1 so long as we continue to be listed on the ASX and this constraint may prevent us from raising the full amount of equity capital needed for operations without prior stockholder approval
3. 40There has been relatively limited trading volume in the markets for our common stock and CDIs, and more active, liquid trading markets for such securities may never develop
4. 41The market price and trading volume of our common stock and CDIs may be volatile and may be affected by variability in our performance from period to period and economic conditions beyond management’s control
5. 42If research analysts publish unfavorable commentary or downgrade our common stock or CDIs, it could adversely affect our share price and trading volume
6. 43The requirements of being a public company in the United States and listed on the ASX may strain our resources and divert management’s attention
7. 44We are a “smaller reporting company”, under federal securities laws, and the reduced disclosure requirements applicable to such companies may make our common stock less attractive to investors93% rewritten
8. 45The Company's cash, cash equivalents and marketable securities could be adversely affected by bank failures or other events affecting financial institutions and could adversely affect our liquidity and financial performance
9. 46If we fail to manage our growth effectively, our business could be disrupted25% rewritten
10. 47Our growth and success depend on our ability to attract and retain additional highly qualified and skilled sales and marketing, research and development, operational, managerial, legal, and finance personnel55% rewritten