Stereotaxis (STXS) risk factors, FY2025 10-K

Risks Related to Our Business and Business Operations

1. 01We may not generate cash from operations or be able to raise the necessary capital to continue operations
2. 02Macroeconomic and geopolitical factors, as well as pandemics, epidemics or outbreaks of infectious disease could have an adverse effect on our supply chain, our hospital customers buying patterns, and our ability to raise capital and could otherwise disrupt our normal business operations52% rewritten
3. 03We may not be able to fund our business operations in the same manner as we have done historically if we do not improve the operating performance of the Company or raise additional capital
4. 04Hospital decision-makers may not purchase our robotic magnetic navigation systems or related products or may think that such systems and products are too expensive
5. 05If we are unable to fulfill our current purchase orders and other commitments on a timely basis or at all, we may not be able to achieve future sales growth
6. 06We will likely experience long and variable sales and installation cycles, which could result in substantial fluctuations in our quarterly results of operations
7. 07Physicians may not use our products if they do not believe they are safe, efficient and effective
8. 08Our collaborations with fluoroscopy system manufacturers and providers of catheters and electrophysiology mapping systems or other parties may fail, or we may not be able to enter into additional collaborations in the future30% rewritten
9. 09The complexity associated with selling, marketing, and distributing products could impair our ability to increase revenue
10. 10Our marketing strategy is dependent on collaboration with physician “thought leaders.”
11. 11Physicians may not commit enough time to sufficiently learn our system
12. 12Customers may choose to purchase competing products and not ours
13. 13If the magnetic fields generated by our system are not compatible with, or interfere with, other widely used equipment in the interventional labs, sales of our products would be negatively affected
14. 14The use of our products could result in product liability claims that could be expensive, divert management’s attention and harm our reputation and business
15. 15We have incurred substantial losses in the past and may not be profitable in the future
16. 16Our reliance on contract manufacturers and on suppliers, and in some cases, a single supplier, could harm our ability to meet demand for our products in a timely manner or within budget
17. 17If any of these risks materialize, it could significantly increase our costs and impair product delivery45% rewritten
18. 18Risks associated with international manufacturing and trade could negatively impact the availability and cost of our products because materials used to manufacture our magnets, one of our key system components, are sourced from overseas
19. 19We may encounter problems at our manufacturing facilities or those of our subcontractors or otherwise experience manufacturing delays that could result in lost revenue25% rewritten
20. 20Our growth may place a significant strain on our resources, and if we fail to manage our growth, our ability to develop, market, and sell our products will be harmed

Risks Related to our Recently Completed Acquisition of APT

1. 21We may be unable to successfully integrate APT into our business and may fail to realize any or all of the anticipated benefits of the acquisition, or those benefits may take longer to realize than expected
2. 22Our future results may be adversely impacted if we do not effectively manage APT’s catheter manufacturing business following the completion of the acquisition47% rewritten
3. 23The issuance of the Earnout Consideration will result in dilution to our stockholders and may adversely affect us, including the market price of our securities27% rewritten
4. 24Under certain circumstances, we may take certain actions to achieve the milestones under the Purchase Agreement that we would not have undertaken if we had not completed the acquisition, which may have an adverse effect on the historical business of Stereotaxis

Risks Relating to Technology and Intellectual Property Matters

1. 25The rate of technological innovation of our products might not keep pace with the rest of the market
2. 26Security breaches and other disruptions to our information technology infrastructure could interfere with our operations, compromise confidential information, and expose us to liability which could materially adversely impact our business and reputation
3. 27We may be unable to protect our technology from use by third parties, which may allow them to compete with us and harm our business
4. 28Third parties may assert that we are infringing their intellectual property rights, and any defense of such assertions may be unsuccessful and expensive, even if we are successful
5. 29Expensive intellectual property litigation is frequent in the medical device industry and may cause us to incur substantial expenses to defend
6. 30We may not be able to maintain all the licenses or rights from third parties necessary for the development, manufacture, or marketing of new and existing products
7. 31Our products and related technologies can be applied in different medical applications, and we may fail to focus on the most profitable areas
8. 32We may be subject to damages resulting from claims that our employees or we have wrongfully used or disclosed alleged trade secrets of their former employers
9. 33Software errors or other defects may be discovered in our products and the resulting performance issues may damage our business and our reputation in the industry in which we operate

Risks Related to Regulatory and Legal Matters

1. 34If we or the parties in our strategic collaborations fail to obtain or maintain necessary FDA clearances or approvals for our medical device products, or if such clearances or approvals are delayed, we will be unable to continue to commercially distribute and market our products
2. 35If our strategic collaborations elect not to or we fail to obtain regulatory approvals in other countries for products under development, we will not be able to commercialize these products in those countries
3. 36We may fail to comply with continuing regulatory requirements of the FDA and other authorities and become subject to enforcement action, which may include substantial penalties
4. 37Our suppliers, subcontractors, or we may fail to comply with the FDA, EU and other state and foreign government authorities quality system regulation or other quality standards
5. 38If we fail to comply with health care regulations, we could face substantial penalties and our business, operations and financial condition could be adversely affected
6. 39Decisions by both the federal and state governments on funding priorities for various healthcare programs impact the finances of our customers on an ongoing and recurring basis. Such decisions may impact purchasing decisions of a customer
7. 40The application of state certificate of need regulations and compliance by our customers with federal and state licensing or other international requirements could substantially limit our ability to sell our products and grow our business
8. 41Hospitals or physicians may be unable to obtain reimbursement from third-party payors for procedures using our products, or reimbursement for procedures may be insufficient to recoup the costs of purchasing our products
9. 42Our costs could substantially increase if we receive a significant number of warranty claims or have other significant, uninsured liabilities

Risks Related to Our Common Stock

1. 43Our principal stockholders continue to own a large percentage of our voting stock, and they could substantially influence matters requiring stockholder approval
2. 44Future issuances of our securities could dilute current stockholders’ ownership
3. 45We have paid no cash dividends on any of our classes of common stock to date and we currently intend to retain our future earnings to fund the development and growth of our business. As a result, capital appreciation, if any, of our common stock will be an investor’s sole source of gain for the foreseeable future
4. 46Our certificate of incorporation and bylaws, the Company’s Performance Share Unit Agreement with Our CEO, and Delaware law, contain provisions that could discourage a takeover
5. 47Evolving regulation of corporate governance and public disclosure may result in additional expenses and continuing uncertainty
6. 48Our future operating results may be below securities analysts’ or investors’ expectations, which could cause our stock price to decline
7. 49We expect that the price of our common stock could fluctuate substantially, possibly resulting in class action securities litigation

Risks Related to the February 2021 CEO Performance Stock Unit Grant

1. 50We will incur significant additional stock-based compensation expense over the term of the CEO Performance Award regardless of whether any of the milestones are achieved20% rewritten
2. 51Our stockholders may experience substantial dilution upon payout of shares under the CEO Performance Award
3. 52Certain provisions in the PSU Agreement may discourage a change in control of the Company even if such a transaction would otherwise be beneficial to our stockholders
4. 53We are highly dependent on the services of Mr. Fischel, and our compensation package, including the CEO Performance Award, may fail to retain him
5. 54General economic conditions could materially adversely impact us
6. 55We maintain our cash at financial institutions, often in balances that exceed federally insured limits
7. 56We may lose key personnel or fail to attract and retain replacement or additional personnel
8. 57We face currency and other risks associated with international operations