Tactile Systems Technology (TCMD) risk factors, FY2025 10-K

Risks Related to Our Business, Operations and Strategy

1. 01Changes to the level of Medicare coverage or coverage criteria for our products could have an adverse effect on our business and results of operations26% rewritten
2. 02If we are unable to achieve and maintain adequate levels of coverage or reimbursement for our products, our business and results of operations will be adversely affected44% rewritten
3. 03Our operating results are directly dependent upon the sales and marketing efforts of our employees and upon our relationships with our distributors and their sales and marketing efforts. If our direct sales force or our distributors fail to adequately promote, market and sell our products, our sales may suffer
4. 04We utilize third-party, single-source suppliers for some components and materials used in our products, and the loss of any of these suppliers could have an adverse impact on our business
5. 05We are increasingly dependent on sophisticated information technology and if we fail to effectively maintain or protect our information systems or data, including from cyber-attacks or data breaches, our business could be adversely affected
6. 06We cannot assure you that cyber-attacks or data breaches will not occur or that systems issues will not arise in the future. Any significant breakdown, intrusion, breach, interruption, corruption or destruction of these systems could have a material adverse effect on our business and reputation
7. 07Our long-term growth depends on awareness and adoption of our products
8. 08Our revenue is primarily generated from our lymphedema products and we are therefore highly dependent on these products20% rewritten
9. 09Current or worsening economic conditions, including inflation, rising interest rates or a recession, could adversely affect our business and financial condition
10. 10Our business, financial condition and results of operations may be negatively impacted by health epidemics or other outbreaks
11. 11Consolidation in the healthcare industry could lead to demands for price concessions, which may impact our ability to sell our products at prices necessary to support our current business strategies
12. 12Changes in government trade policies, including additional tariffs and the resulting consequences, may have a material adverse impact on our business and results of operations
13. 13Increases in our operating costs could have an adverse effect on our financial condition and results of operations
14. 14We compete and may compete in the future against other companies, some of which have longer operating histories, more established products or greater resources than we do, which may harm our business
15. 15Our long-term growth depends on our ability to develop and commercialize additional products74% rewritten
16. 16Failure to effectively implement technology initiatives or anticipate future technology needs or demands could adversely affect our business or financial resultsNew
17. 17The legal and regulatory environment for AI is uncertain and rapidly evolving, both in the United States and internationally, potentially increasing compliance costs and risk of non-complianceNew
18. 18It is difficult to forecast future performance and our financial results may vary from forecasts and may fluctuate from quarter to quarter
19. 19If physicians fail to properly document medical records for patients using our products, our business could be adversely impacted
20. 20The size of the market for our products is an estimate, and may be smaller than we believe
21. 21We may be unable to manage our growth effectively
22. 22Our ability to maintain our competitive position depends on our ability to attract, integrate and retain key executives and highly qualified personnel
23. 23Changes in reimbursement coding could impair our ability to receive reimbursement for our products
24. 24If the quality of our products does not meet the expectations of physicians or patients, then our brand and reputation could suffer and our business could be adversely impacted
25. 25If our facilities are damaged or become inoperable, we will be unable to continue to research, develop, manufacture and commercialize our products and, as a result, there will be an adverse impact on our business until we are able to secure a new facility
26. 26We may be adversely affected by natural disasters and other catastrophic events, and by man-made problems such as terrorism or violence, that could disrupt our business operations
27. 27Acquisition activity involves substantial risks, and we may not be able to successfully integrate newly acquired companies or businesses
28. 28If we commercialize any products outside of the United States, a variety of risks associated with international operations could impact our strategy and adversely affect our future growth
29. 29Government Regulation, Compliance and Legal Risks
30. 30Violations of federal and state regulations can result in severe criminal, civil and administrative penalties and sanctions, including debarment, suspension or exclusion from Medicare, Medicaid and other government reimbursement programs, any of which would have a material adverse effect on our business58% rewritten
31. 31We are subject to significant regulation by numerous government agencies, including the FDA. We cannot market or commercially distribute our products without obtaining and maintaining necessary regulatory clearances or approvals
32. 32If we fail to obtain and maintain regulatory clearances or approvals our ability to sell our products and generate revenue will be materially harmed
33. 33Legislative or regulatory reforms may make it more difficult and costly for us to obtain regulatory clearances, approvals or certification for our products or to manufacture, market or distribute our products after clearance, approval or certification is obtainedNew
34. 34Our products are currently made available to authorized users of the Department of Veterans Affairs Federal Supply Schedule and if we were no longer eligible to sell our products through such channel, our business may be adversely affected
35. 35If clinical studies of our future products do not produce results necessary to support regulatory clearance or approval in the United States or, with respect to our current or future products, elsewhere, we will be unable to expand the indications for or commercialize these products76% rewritten
36. 36If the third parties on which we rely to conduct our clinical trials and to assist us with pre-clinical development do not perform as contractually required or expected, we may not be able to obtain regulatory clearance or approval for or commercialize our products
37. 37If we fail to comply with state and federal fraud and abuse laws, including anti-kickback, false claims and anti-inducement laws, we could face substantial penalties and our business, operations and financial condition could be adversely affected
38. 38Failure to maintain the licenses and accreditations necessary to operate under our direct-to-patient and -provider model would adversely affect our business
39. 39If we modify our FDA cleared devices, we may need to seek additional clearances or approvals, which, if not granted, would prevent us from selling our modified products
40. 40Our products may cause or contribute to adverse medical events that we are required to report to the FDA, and if we fail to do so, we would be subject to sanctions that would materially harm our business
41. 41Our products may in the future be subject to product recalls. A recall of our products, either voluntarily or at the direction of the FDA or another governmental authority, or the discovery of serious safety issues with our products, could have a significant adverse impact on us
42. 42If we or our component manufacturers fail to comply with the FDA's Quality Management System Regulation, our manufacturing operations could be interrupted or our business otherwise may be negatively impacted, and our product sales and operating results could suffer79% rewritten
43. 43marketplace, and/or manufacturing quality issues with respect to our products could lead to product recalls or related field actions, withdrawals, and/or declining salesNew
44. 44Any of these sanctions could adversely affect our business, financial condition and results of operations
45. 45Future regulatory actions may adversely affect our ability to sell our products profitably
46. 46In the United States, the legislative landscape, particularly as it relates to healthcare regulation and reimbursement coverage, continues to evolve. In March 2010 the ACA was passed and substantially changed healthcare financing by both governmental and private insurers
47. 47While our products are not currently subject to the competitive bidding process under Medicare, if our products were to become subject to such process in the future, it could negatively affect our business and financial condition
48. 48We are subject to additional federal, state and foreign laws and regulations relating to our healthcare business; our failure to comply with those laws could have an adverse impact on our business
49. 49Failure to comply with regulations affecting the transmission, security and privacy of health information could result in significant penalties
50. 50In addition, the FDA has issued guidance to which we may be subject concerning data security for medical devices
51. 51Failure to comply with privacy and data security laws and regulations could subject us to substantial penalties and our business, operations and financial condition could be adversely affected
52. 52We face the risk of product liability claims that could be expensive, divert management's attention and harm our reputation and business. We may not be able to maintain adequate product liability insurance
53. 53Our employees, distributors, independent contractors, consultants, collaborators and suppliers may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements and insider trading
54. 54We may be unable to obtain or maintain international regulatory registrations or approvals for our current or future products and indications, which could adversely impact our business
55. 55Our operations involve the use of hazardous and toxic materials, and we must comply with environmental, health and safety laws and regulations, which can be expensive, and could have an adverse impact on our business

Financial Condition, Credit and Tax Risks

1. 56If we fail to maintain proper and effective internal control over financial reporting, our ability to produce accurate and timely financial statements could be impaired, which could harm our operating results, investors' views of us and, as a result, the value of our common stock68% rewritten
2. 57Our credit facility contains covenants that restrict our business and financing activities, and the property that secures our obligations under the credit facility may be subject to foreclosure
3. 58We may need substantial additional funding and may be unable to raise capital when needed, which could force us to delay or reduce our commercialization efforts or product development programs
4. 59We may be subject to liabilities related to state income, sales and use taxes, which could adversely affect our financial condition and results of operations and could decrease demand for our products

Risks Related to Our Intellectual Property

1. 60We may not be able to protect our intellectual property rights throughout the world55% rewritten
2. 61The patent protection for our products may expire before we are able to maximize their commercial value, which may subject us to increased competition and reduce or eliminate our opportunity to generate product revenue
3. 62We may not identify relevant patents or may incorrectly interpret the relevance, scope or expiration of a patent, which may adversely affect our ability to develop and market our products57% rewritten
4. 63or a pending application may be incorrect, which may negatively impact our ability to market our products. We may incorrectly determine that our products are not covered by a third-party patentNew
5. 64Obtaining and maintaining our patent protection depends on compliance with various procedural, documentary, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements
6. 65We may become involved in lawsuits to protect our patents or other intellectual property rights, which could be expensive, time-consuming and ultimately unsuccessful
7. 66Third-party claims of intellectual property infringement or misappropriation may adversely affect our business and could prevent us from developing or commercializing our products
8. 67Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our products48% rewritten
9. 68Because of the expense and uncertainty of litigation, we may not be in a position to enforce our intellectual property rights against third parties
10. 69Intellectual property rights do not address all potential threats to our competitive advantage
11. 70Confidentiality agreements with employees and others may not adequately prevent disclosure of trade secrets and protect other proprietary information
12. 71We may need to license certain intellectual property from third parties, and such licenses may not be available or may not be available on commercially reasonable terms
13. 72We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties
14. 73We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property
15. 74Our reliance on third parties requires us to share our trade secrets, which increases the possibility that a competitor will discover them or that our trade secrets will be misappropriated or disclosed
16. 75If our trademarks and trade names are not adequately protected, then we may not be able to build and maintain name recognition in our markets of interest and our business may be adversely affected

Risks Related to Ownership of Our Common Stock

1. 76The trading price of the shares of our common stock has been and could continue to be highly volatile, and purchasers of our common stock may not be able to resell their shares of our common stock at or above the price at which they purchased their shares and could incur substantial losses
2. 77Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management
3. 78The trading market for our common stock depends in part on the research and reports that securities or industry analysts publish about us or our business. If too few securities or industry analysts commence or maintain coverage of our company, the trading price for our common stock would likely be negatively affectedNew
4. 79Our amended and restated certificate of incorporation and amended and restated bylaws provide that we will indemnify our directors and officers, in each case to the fullest extent permitted by Delaware law