Streamex (STEX) risk factors, FY2024 10-K

Risks Related to Our Business and Industry

1. 01There is substantial doubt about our ability to continue as a going concern
2. 02Because we have reverted to a development stage company, we expect to incur operating losses
3. 03Our PURE EP and other product candidates are in continued development and may not be successfully developed or commercialized
4. 04We expect to derive our revenue from sales of our PURE EP and other products we may develop. If we fail to generate revenue from these sources, our results of operations and the value of our business will be materially and adversely affected
5. 05We may need to finance our future cash needs through public or private equity offerings, debt financings or corporate collaboration and licensing arrangements. Any additional funds that we obtain may not be on terms favorable to us or our stockholders and may require us to relinquish valuable rights
6. 06We may be unable to develop our existing or future technology
7. 07We may experience delays in any phase of the preclinical or clinical development of a product, including during its research and development
8. 08We have completed one clinical trial of our product. The results of additional clinical studies may not support the usefulness of our technology
9. 09The medical device industry is subject to stringent regulation and failure to obtain regulatory approval will prevent commercialization of our products
10. 10We, and our third-party manufacturer(s), are, and will be, subject to extensive regulation by the FDA
11. 11Regulations are constantly changing, and in the future our business may be subject to additional regulations that increase our compliance costs
12. 12The market for our technology and revenue generation avenues for our products may be slow to develop, if at all
13. 13Our estimate of the size of our addressable market may prove to be inaccurate
14. 14If we seek to market our products in foreign jurisdictions, we may need to obtain regulatory approval in these jurisdictions
15. 15The EP market is highly competitive
16. 16We rely on key officers, consultants and scientific and medical advisors, and their knowledge of our business and technical expertise would be difficult to replace
17. 17We may fail to attract and retain qualified personnel
18. 18If we do not effectively manage changes in our business, these changes could place a significant strain on our management and operations
19. 19Our strategic business plan may not produce the intended growth in revenue and operating income
20. 20We currently have limited sales, marketing or distribution operations and will need to expand our expertise in these areas
21. 21Our product development program depends upon third-party researchers, including Mayo Clinic, who are outside our control and whose negative performance could materially hinder or delay our pre-clinical testing or clinical trials
22. 22If healthcare providers are unable to obtain sufficient reimbursement or other financial incentives from third-party healthcare payers related to the use of our products, their adoption and our future product sales will be materially adversely affected
23. 23We may face risks associated with future litigation and claims
24. 24Our business is subject to cybersecurity risks
25. 25We could be adversely affected if healthcare legislation or reform measures substantially change the market for medical care or healthcare coverage in the U.S., negatively affecting our business or revenue for PURE EP or future products
26. 26As a smaller reporting company, we are subject to scaled disclosure requirements that may make it more challenging for investors to analyze our results of operations and financial prospects
27. 27Global economic uncertainty and financial market volatility caused by political instability, changes in international trade relationships and conflicts could make it more difficult for us to access financing and could adversely affect our business and operations
28. 28The U.S. Congress, the Trump administration, or any new administration may make substantial changes to fiscal, tax, and other federal policies that may adversely affect our business
29. 29There are inherent limitations in all control systems, and misstatements due to error or fraud may occur and not be detected

Risks Related to Our Intellectual Property

1. 30If we do not obtain protection for our intellectual property rights, our competitors may be able to take advantage of our research and development efforts to develop competing products
2. 31If we infringe upon the rights of third parties, we could be prevented from selling products and forced to pay damages and defend against litigation
3. 32We depend on our collaboration with Mayo Clinic for the research and development of additional advanced features of PURE EP. If this collaboration is not successful, we may not be able to realize the market potential of such features and may not have rights to use any such developed advanced features
4. 33If we fail to comply with our obligations under our license agreements, we could lose the rights to intellectual property that is important to our business
5. 34We may be subject to damages resulting from claims that we or our employees have wrongfully used or disclosed alleged trade secrets of their former employers
6. 35Obtaining and maintaining patent protection depends on compliance with various procedures and other requirements, and our patent protection could be reduced or eliminated in case of non-compliance with these requirements

Risks Related to our Common Stock

1. 36The market price for our common stock may fluctuate significantly, which could result in substantial losses by our investors
2. 37Further, the stock market in general, and the market for technology companies in particular, has experienced extreme price and volume fluctuations in the past. Continued market fluctuations could result in extreme volatility in the price of our common stock, which could cause a decline in the value of our common stock
3. 38Although our shares of common stock are now listed on the Nasdaq Capital Market, we currently have a limited trading volume, which results in higher price volatility for, and reduced liquidity of, our common stock
4. 39Our failure to meet the continued listing requirements of Nasdaq could result in a delisting of our common stock, which could negatively impact the market price and liquidity of our common stock and our ability to access the capital markets
5. 40On July 23, 2024, the Company commenced trading of its common stock on the OTCQB, operated by OTC Markets Group, Inc
6. 41On October 23, 2024, the Company’s common stock resumed trading on the Nasdaq Capital Market
7. 42Delisting from the Nasdaq Capital Market could negatively impact the Company’s ability to raise additional financing to fund future operations
8. 43Future sales of our common stock in the public market or other financings could cause our stock price to fall
9. 44If we sell additional equity or debt securities to fund our operations, it may impose restrictions on our business
10. 45Our stockholders may experience substantial dilution as a result of the exercise of outstanding options or warrants to purchase shares of our common stock, or upon conversion of our Series C preferred stock into shares of our common stock
11. 46The interests of our controlling stockholders may not coincide with yours and such controlling stockholders may make decisions with which you may disagree
12. 47Delaware law and our Amended and Restated Certificate of Incorporation and By-laws contain anti-takeover provisions that could delay or discourage takeover attempts that stockholders may consider favorable

Risks Related to our Series C Preferred Stock

1. 48Our Series C Preferred Stock contains covenants that could limit our financing options and liquidity position, which would limit our ability to grow our business
2. 49As of April 14, 2025, we were in compliance with all covenants of the Series C Preferred Stock
3. 50The holders of our Series C Preferred Stock are entitled to receive a dividend, which may be increased if we do not comply with certain covenants
4. 51The terms of our Series C Preferred Stock contain anti-dilution provisions that may result in the reduction of the conversion prices in the future
5. 52The terms of our Series C Preferred Stock prohibit us from paying dividends in the future on our common stock. As a result, any return on investment may be limited to the value of our common stock
6. 53The liability of our directors and officers is limited
7. 54Negative publicity or unfavorable media coverage could damage our reputation and harm our operations
8. 55If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline
9. 56We are subject to financial reporting and other requirements that place significant demands on our resources