Si-Bone (SIBN) risk factors, FY2024 10-K

Risks Related to Our Business and Our Industry

1. 01We have incurred significant operating losses since inception, we may continue to incur operating losses in the future, and we may not be able to achieve or sustain future profitability
2. 02We may not be able to convince physicians that our products are attractive alternatives to our competitors’ products and that our procedures are attractive alternatives to existing surgical and non-surgical treatments for their respective indications
3. 03include a sacroiliac joint evaluation as part of their diagnosis and, as a result, those patients may continue to receive unnecessary surgical procedures or only non-surgical treatment
4. 04(e.g., office-based lab) setting. Minimally invasive sacroiliac fusion performed with a transfixing device is not eligible for payment in the office-based lab site-of-service and there is therefore no corresponding value for office-based reimbursement for CPT Code 27279
5. 05Uncertainty in the coverage and reimbursement environment may decrease demand for our products and adversely affect our business
6. 06competitors’ products or choose not to perform sacroiliac joint procedures altogether, which would adversely affect demand for our products
7. 07Healthcare reforms may have a material adverse effect on our operations
8. 08Pricing pressure from our competitors, healthcare provider consolidation, the presence of physician-owned distributorships, and payor consolidation may impact our ability to sell our product at prices necessary to support our current business strategies
9. 09Practice trends, market dynamics, and other factors, have caused, and may continue to cause, procedures to shift from the hospital environment to ambulatory surgical centers ("ASCs") or office-based labs ("OBLs") where pressure on the prices of our products is generally more acute
10. 10We operate in a very competitive business environment and if we are unable to compete successfully against our existing or potential competitors, our sales and operating results may be adversely affected
11. 11control and assurance. For example, from time to time, we have experienced certain delays and may experience delays from our suppliers in the future
12. 12to generate revenue would be impaired, market acceptance of our products could be adversely affected, and customers may instead purchase or use our competitors’ products. Additionally, we could be forced to seek alternative sources of supply
13. 13Prolonged inflation and supply chain disruptions could result in delayed product launches, lost revenue, higher costs and decreased profit margins
14. 14Disruptions in the supply of the materials and components used in manufacturing our products or the sterilization of our products by third-party suppliers could adversely affect our business, financial condition and results of operations
15. 15Physicians and payors may not find the clinical evidence supporting our more recent products to be compelling, which could limit our sales and revenue, and on-going and future research may prove our products to be less safe and effective than currently thought
16. 16If we are not able to manage growth successfully, it could adversely affect our business, financial condition, and results of operations
17. 17If we are unable to maintain our network of direct sales representatives, third-party sales agents, and resellers, we may not be able to generate anticipated sales
18. 18Our business could suffer if we lose the services of key members of our senior management, key advisors or personnel
19. 19If use of our products results in adverse events, this may require them to be taken off the market, require them to include safety warnings or otherwise limit their sales
20. 20Unfavorable media reports or other negative publicity concerning both alleged improper methods of tissue recovery from donors and disease transmission from donated tissue could limit widespread acceptance of some of our products
21. 21Natural disasters and man-made business disruptions such as war and terrorism could seriously harm our future revenue and financial condition and increase our costs and expenses
22. 22Various factors outside our direct control may adversely affect manufacturing, sterilization, and distribution of our products
23. 23We may encounter problems or delays in the assembly of our products or fail to meet certain regulatory requirements which could result in an adverse effect on our business and financial results
24. 24If we do not enhance and broaden our product offerings through our research and development efforts, we may be unable to compete effectively
25. 25We are required to maintain adequate levels of inventory, the failure of which could consume our resources and reduce our cash flows
26. 26estimates and projections overestimate the size of this market or these benefits and cost savings, our sales growth may be adversely affected
27. 27Our results of operations could suffer if we are unable to manage our international business effectively
28. 28activities. Also, the failure to comply with applicable legal and regulatory obligations could result in the disruption of our distribution and sales activities
29. 29These risks may limit or disrupt our expansion, restrict the movement of funds or result in the deprivation of contractual rights or the taking of property by nationalization or expropriation without fair compensation
30. 30In the future our products may become obsolete, which would negatively affect operations and financial condition
31. 31development involves a high degree of risk and there can be no assurance that our new product development efforts will result in any commercially successful products
32. 32our reputation, business, results of operations, and financial condition. In addition, the cost and operational consequences of implementing further data protection or data restoration measures could be significant
33. 33We have incorporated and continue to work to further incorporate artificial intelligence into our operations. Implementation of artificial intelligence and machine learning technologies may result in legal and regulatory risks, reputational harm, or other adverse consequences to our business
34. 34We may seek to grow our business through acquisitions of or investments in new or complementary businesses, products or technologies, and the failure to manage acquisitions or investments, or the failure to integrate them with our existing business, could have a material adverse effect on us
35. 35We may enter into collaborations, in-licensing arrangements, joint ventures, strategic alliances, or partnerships with third-parties that may not result in the development of commercially viable products or the generation of significant future revenue
36. 36Epidemic diseases, or the perception of their effects, may continue to adversely affect our business, financial condition, results of operations, or cash flows

Risks Related to Our Legal and Regulatory Environment

1. 37We, our suppliers, and our third-party manufacturers are subject to extensive governmental regulation both in the United States. and abroad, and failure to comply with applicable requirements could cause our business to suffer
2. 38Before we can market or sell a new regulated medical device or make a significant modification to an existing product in the United States, with limited exceptions, we must obtain either clearance under Section 510(k) of the FDCA for Class II devices or approval of a PMA application from the FDA for a Class III device
3. 39Any delay in, or failure to receive or maintain, clearance or approval for our products under development could prevent us from generating revenue from these products or achieving profitability
4. 40unable to fulfil these obligations, or our Notified Body may consider that we have not adequately demonstrated compliance with our related obligations to merit a CE Certificate of Conformity on the basis of the Medical Device Regulation
5. 41federal Physician Payment Sunshine Act, each of which is described in detail in "Item 1. Business - Healthcare Fraud and Abuse” and “-Data Privacy and Security Laws”
6. 42or state regulatory authorities might challenge our current or future activities under these laws. Additionally, we cannot predict the impact of any changes in these laws, whether or not retroactive
7. 43We depend on a number of third parties in relation to the provision of our services, a number of which process personal data on our behalf. These third party service providers may breach their contractual or legal obligations, which could negatively affect our business and/or our reputation
8. 44imposition of integrity obligations and agency oversight, damage to our reputation, and loss of goodwill, any of which could harm our operations, financial performance, and business. Moreover, despite our efforts, our personnel or third parties with whom we work may fail to comply with such obligations
9. 45We are subject to risks associated with our non-U.S. operations
10. 46Our employees, independent contractors, consultants, manufacturers, and third-party sales agents and resellers may engage in misconduct or other improper activities, relating to regulatory standards and requirements
11. 47We may be subject to enforcement action, including fines, penalties or injunctions, if we are determined to be engaging in the off-label promotion of our products
12. 48We are required to report certain malfunctions, deaths, and serious injuries associated with our products, which can result in voluntary corrective actions or agency enforcement actions
13. 49Modifications to our products may require new 510(k) clearances or premarket approvals and new conformity assessment by our Notified Body, or may require us to cease marketing or recall the modified products until clearances, approvals, or CE Certificates of Conformity are obtained
14. 50There is no guarantee that the FDA will grant 510(k) clearance or premarket approval of our future products or that our Notified Body will issue the required CE Certificate of Conformity, and failure to obtain necessary clearances or approvals for our future products would adversely affect our business prospects
15. 51We may fail to obtain or maintain foreign regulatory approvals to market our products in other countries
16. 52vary among countries and may involve requirements for substantial additional testing, and the time required to obtain approval may differ from country to country and from that required to obtain FDA clearance or approval or to obtain CE Certificates of Conformity
17. 53The results of our clinical trials may not support our product candidate claims or may result in the occurrence of adverse events
18. 54We may incur product liability losses, and insurance coverage may be inadequate or unavailable to cover these losses
19. 55insurance policy, these policies typically have substantial retentions or deductibles that we are responsible for. Product liability claims in excess of applicable insurance coverage could have a material adverse effect on our business, results of operations, and financial condition
20. 56We are subject to environmental laws and regulations that can impose significant costs and expose us to potential financial liabilities
21. 57Certain of our products are derived from human tissue and are or could be subject to additional regulations and requirements

Risks Related to Our Intellectual Property

1. 58If we or our licensors fail to adequately protect or enforce our intellectual property rights or secure rights to patents of others, the value of our intellectual property rights would diminish and our ability to successfully commercialize our products may be impaired
2. 59As of December 31, 2024, we have 22 registered trademarks in the United States and have filed for three more. We have sought protection for at least fourteen of these trademarks in 60 countries including the 27 European member countries of the Madrid Protocol
3. 60We may be subject to damages resulting from claims that we, our employees, or our third-party sales agents or resellers have wrongfully used or disclosed alleged trade secrets of our competitors or are in breach of non-competition or non-solicitation agreements with our competitors
4. 61The medical device industry is characterized by patent litigation and we could become subject to litigation that could be costly, result in the diversion of management’s time and efforts, require us to pay damages, and/or prevent us from developing or marketing our existing or future products

Risks Related to Ownership of Our Common Stock

1. 62The price of our common stock may be volatile, and the value of an investment in our common stock could decline
2. 63Our sales volumes and our operating results may fluctuate over the course of the year, which could affect the price of our common stock
3. 64We may be unable to utilize our federal and state net operating loss carryforwards to reduce our income taxes
4. 65Our charter documents and Delaware law could discourage takeover attempts and lead to management entrenchment
5. 66A Delaware corporation may opt out of this provision by express provision in its original certificate of incorporation or by amendment to its certificate of incorporation or bylaws approved by its stockholders. However, we have not opted out of, and do not currently intend to opt out of, this provision
6. 67Adverse developments affecting the banking industry or the broader financial services industry, such as actual events or concerns involving liquidity, defaults or non-performance, could adversely affect our operations and liquidity
7. 68our ability to access our cash and cash equivalents could adversely impact our ability to meet our operating expenses, result in breaches of our contractual obligations or result in violations of federal or state wage and hour laws, any of which could have material adverse impacts on our operations and liquidity
8. 69Our loan and security agreement contains covenants that may restrict our business and financing activities
9. 70Our ability to access credit on favorable terms, if necessary, for the funding of our operations and capital projects may be limited due to changes in credit markets