Sanara MedTech (SMTI) risk factors, FY2025 10-K

Risks Related to How We Operate Our Business

1. 01We have had a history of losses, which may continue as we expand our selling efforts32% rewritten
2. 02Our revenue growth for a particular period is difficult to predict, and a shortfall in forecasted revenues may harm our operating results
3. 03Failure to manage our growth strategy could harm our business
4. 04If we are unable to compete within our markets or our products do not gain market acceptance, our financial condition and operating results could suffer40% rewritten
5. 05Security breaches and other disruptions could compromise our information and expose us to liability, which would cause our business and reputation to suffer
6. 06If we fail to maintain an effective system of internal controls over financial reporting, we may not be able to accurately report our financial results or prevent fraud and our business may be harmed and our stock price may be adversely impacted

Risks Related to Our Indebtedness

1. 07Our indebtedness could adversely affect our financial condition and prevent us from fulfilling our obligations
2. 08Our outstanding indebtedness is subject to certain operating and financial covenants that restrict our business and financing activities and may adversely affect our cash flow and our ability to operate our business

Risks Related to Our Products and Our Product Pipeline

1. 09Revenue generated from the sale of certain products is dependent on license agreements with certain manufacturers, and the termination of any of these license agreements could harm our business
2. 10Certain of our product candidates are still under development, and we may not be able to successfully commercialize any of these product candidates32% rewritten
3. 11Our future success will largely depend on our ability to maintain and further grow clinical acceptance and adoption of our products, and we may be unable to adequately educate healthcare practitioners on the use and benefits of our products
4. 12Disruption of, or changes in, our distribution model or customer base could harm our sales and margins
5. 13Interruptions in the supply of our products or inventory loss may adversely affect our business, financial condition and results of operations
6. 14Failure of any third-party clinical study to demonstrate desired outcomes in proposed endpoints could have a negative impact on our business performance
7. 15Increased prices for, or unavailability of, raw materials used in our products could adversely affect our business, financial condition and results of operations

Risks Related to Intellectual Property

1. 16If we are unable to adequately protect our intellectual property rights, we may not be able to compete effectively
2. 17CellerateRX Surgical has no comprehensive patent protection. CellerateRX Surgical may be subject to competition from the sale of substantially equivalent products that could adversely affect our business and operations53% rewritten
3. 18We may be found to infringe on or violate the intellectual property rights of others

Risks Related to Regulations

1. 19Our business is affected by numerous regulations relating to the development, manufacture, distribution, labeling, marketing and sale of our products
2. 20In addition, private consumer and competitor litigation tends to follow FDA enforcement actions and publications, such that a company that is targeted by the FDA or another regulatory body is also at an increased risk of facing civil litigation (often in the form of class action lawsuits)35% rewritten
3. 21We are subject to various governmental regulations relating to the labeling, marketing and sale of our products
4. 22If we fail to obtain or experience significant delays in obtaining regulatory clearances or approvals to market future medical device products, we will be unable to commercialize these products until such clearance or approval is obtained
5. 23Delays in or changes to the FDA clearance and approval processes or ongoing regulatory requirements could make it more difficult for us to obtain FDA clearance or approval of new products or comply with ongoing requirements62% rewritten
6. 24We rely on our research and development partners to comply with applicable laws and regulations relating to product classification and when and what types of FDA marketing authorizations are needed to lawfully commercialize a new or updated medical product in the United States
7. 25We and our employees and contractors are subject, directly or indirectly, to federal, state and foreign healthcare fraud and abuse laws, including false claims laws. If we are unable to comply, or have not fully complied, with such laws, we could face substantial penalties
8. 26Our officers, employees, independent contractors, principal investigators, consultants and commercial partners may engage in misconduct or activities that are improper under other laws and regulations, which would create liability for us
9. 27We could be adversely affected if healthcare reform measures substantially change the market for medical care or healthcare coverage in the United States

Risks Related to Ownership of Our Common Stock

1. 28It is possible that we will require additional capital to meet our financial obligations and support business growth, and this capital might not be available on acceptable terms or at all
2. 29The trading price of the shares of our common stock is highly volatile, and purchasers of our common stock could incur substantial losses
3. 30Our common stock does not have a vigorous trading market, and you may not be able to sell your securities at or near ask prices, or at all
4. 31The potential sale of large amounts of common stock may have a negative effect upon the market value of our shares
5. 32A small number of our existing shareholders own a large percentage of our voting stock and have control over matters requiring shareholder approval and may delay or prevent a change in control or otherwise lead to actual or potential conflicts of interest
6. 33Our Certificate of Formation includes provisions limiting the personal liability of our directors for breaches of fiduciary duties under Texas law
7. 34Texas law, our Certificate of Formation and our Amended and Restated Bylaws contain anti-takeover provisions that could delay or discourage takeover attempts that shareholders may consider favorable
8. 35Our failure to meet the continued listing requirements of The Nasdaq Capital Market could result in a delisting of our common stock