Tandem Diabetes Care (TNDM) risk factors, FY2024 10-K

Risks Related to Our Business and Our Industry

1. 01We have incurred significant operating losses since inception and cannot assure you that we will achieve sustained profitability
2. 02We currently rely on sales of insulin pump products to generate a significant portion of our revenue, and any factors that negatively impact sales of these products may adversely affect our business, financial condition and operating results
3. 03Our ability to maintain and grow our revenue depends in part on retaining a high percentage of our customer base
4. 04Failure to secure or retain adequate coverage or reimbursement for our current and future products by third-party payors could adversely affect our business, financial condition and operating results
5. 05We operate in a very competitive industry and if we fail to compete successfully against our existing or future competitors, or if the competitive environment harms our business partners, our financial condition and operating results may be negatively affected
6. 06Competing products, therapeutic techniques or other technological developments and breakthroughs for the monitoring, treatment or prevention of diabetes may render our products obsolete or less desirable or reduce the size of our potential market
7. 07We may face unexpected challenges in marketing and selling our products, and training new customers on the use of our products, which could harm our ability to achieve our sales forecasts
8. 08Our sales and marketing efforts in the United States are largely dependent on independent distributors who are free to market products that compete with our products. If we are unable to maintain or expand our network of independent distributors, our sales may be negatively affected
9. 09If the third parties on which we increasingly rely to assist us with our current and anticipated pre-clinical development or clinical trials do not perform as expected, we may not be able to obtain regulatory clearance, certification, or approval or commercialize our products
10. 10If important assumptions about the potential market for our products are inaccurate, or if we have failed to understand what people with insulin-dependent diabetes are seeking in an insulin pump, our business and operating results may be adversely affected
11. 11Any concerns regarding the safety and efficacy of our products could limit sales and cause unforeseen negative effects to our business prospects and financial results
12. 12Our ability to achieve profitability will depend, in part, on our ability to reduce the per-unit cost of our products while also increasing production volume
13. 13Manufacturing risks may adversely affect our ability to manufacture products, which could negatively impact our sales and operating margins
14. 14We depend on a limited number of third-party suppliers for certain components and products, and the loss of any of these suppliers, their inability to provide us with an adequate supply of components or products, or our inability to adequately forecast customer demand, could harm our business
15. 15Any disruption at one of our facilities could adversely affect our business and operating results
16. 16We may not experience the anticipated operating efficiencies of our manufacturing and warehousing operations
17. 17We may enter into collaborations, 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 revenues
18. 18Modifications to our business strategy or restructuring of our operations could lead to higher costs or otherwise impact the profitability of our business or the value of our assets

Risks Related to Our International Operations

1. 19Commercializing our products outside of the United States may result in a variety of risks associated with international operations that could materially adversely affect our business
2. 20Failure to obtain any required regulatory authorization, clearance or certification in foreign jurisdictions will prevent us from marketing our products in international markets
3. 21Failure to comply with the U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery laws could materially adversely affect our business and result in civil and/or criminal sanctions

Risks Related to Our Indebtedness

1. 22We have incurred a significant amount of indebtedness, and the agreements governing such indebtedness subject us to required debt service payments, as well as financial and operational covenants, any of which may restrict our financial flexibility and affect our ability to operate our business
2. 23Servicing the Notes will require a significant amount of cash, and we may not have sufficient cash flow from our business to repay the Notes
3. 24We may not have sufficient cash or be able to obtain financing to repurchase the Notes upon a fundamental change, or to settle conversions of the Notes
4. 25Conversion of the Notes will, to the extent we deliver shares upon conversion of such Notes, dilute the ownership interest of existing stockholders and may otherwise have a negative impact on the trading price of our common stock
5. 26Certain provisions in the indentures governing the Notes may delay or prevent an otherwise beneficial takeover attempt
6. 27The Capped Call Transactions may affect the value of the Notes and our common stock
7. 28We are subject to counterparty risk with respect to the Capped Call Transactions

Risks Related to Our Future Financings and Financial Results

1. 29We may need or otherwise determine to raise additional funds in the future and if we are unable to raise additional funds when necessary or desirable, we may not be able to achieve our strategic objectives
2. 30Our operating results may fluctuate significantly from quarter to quarter

Risks Related to Macroeconomic Conditions and External Factors

1. 31Uncertainty in current global economic and political conditions could adversely affect our ability to predict product demand and impact our financial results and makes it more likely that our actual results could differ materially from expectations
2. 32Changes in U.S. trade policy, including the imposition of tariffs and the resulting consequences, could adversely affect our business, financial condition, and operating results
3. 33Public health threats, epidemics, or pandemics could have a material adverse effect on our operations, the operations of our business partners, and the global economy as a whole
4. 34Because our business is global our sales and profits may fluctuate or decline in response to changes in foreign currency exchange rates or other international risks
5. 35The effects of inflation could adversely affect our business

Risks Related to Privacy and Security

1. 36In the ordinary course of business, we process personal data. Our data processing activities may subject us to numerous data privacy and security obligations, such as various laws, regulations, guidance, industry standards, external and internal data privacy and security policies, and contractual requirements
2. 37As another example, the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (CAN-SPAM) and the Telephone Consumer Protection Act of 1991 (TCPA) impose specific requirements on communications with customers
3. 38Cyberattacks aimed at our devices, products, services, or related systems, with the intent to alter or misuse them in ways that are inconsistent with our FDA clearances and approvals, could pose risks to users

Risks Related to Legal and Intellectual Property

1. 39Our ability to comprehensively protect our intellectual property and proprietary technology is uncertain
2. 40Patent litigation in the medical device industry is common, and we may be subject to litigation that could cause us to incur substantial costs and divert the attention of management from our business
3. 41As the UPC is a new court system that came into effect in 2023, enforcement and litigation under the UPC is new and we cannot accurately predict the outcome of such proceedings
4. 42We may be subject to damages resulting from claims that we, or our employees, have wrongfully used or disclosed trade secrets or other proprietary information of our competitors
5. 43We may incur product liability losses, and insurance coverage may be inadequate or unavailable to cover these losses
6. 44Adhering to regulations concerning public company corporate governance and reporting requirements may place a strain on our resources and distract management from other priorities

Risks Related to Our Regulatory Environment

1. 45Our products and operations are subject to extensive governmental regulation, and failure to comply with applicable requirements could cause our business to suffer
2. 46New products or modifications to our existing products may require new 510(k) clearances, PMAs or certifications, or may require us to cease marketing or recall the modified products until clearances, certifications or approvals are obtained
3. 47A recall or suspension of our products, or the discovery of serious safety issues with our products, could have a significant negative impact on us
4. 48The United States has numerous federal and state laws pertaining to healthcare fraud and abuse. Violations of these laws are punishable by criminal and civil sanctions, including, imprisonment, significant monetary penalties and exclusion from participation in federal funded programs such as Medicare and Medicaid
5. 49Legislative or regulatory healthcare reforms, or other regulatory reforms, may result in downward pressure on the price of and decrease reimbursement for our products, and uncertainty regarding the healthcare regulatory environment could have a material adverse effect on our business
6. 50Governments outside the United States tend to impose strict price controls, reimbursement approval and rebate policies, which may adversely affect our ability to generate revenue
7. 51Our advertising and promotion may include claims about our product in comparison to competing products, which could expose us to heightened regulatory scrutiny, enforcement risks, and the potential for litigation
8. 52Direct-to-consumer marketing and social media initiatives may subject us to increased regulatory scrutiny

Risks Related to Environmental, Social and Governance Matters

1. 53Environmental, social, and governance (ESG) regulations, initiatives, directives, policies, and requirements could expose us to various risks
2. 54Our business could be adversely affected by changing expectations and challenges associated with implementing ESG initiatives, establishing ESG-related goals, gathering ESG data, and disclosing ESG-related information
3. 55Climate change or other extreme weather conditions and related regulations may have a long-term impact on our business

Other Risks

1. 56The price of our common stock may continue to fluctuate significantly
2. 57We depend on the knowledge and skills of our senior management and other key employees, and if we are unable to retain and motivate them or recruit additional qualified personnel, our business may suffer
3. 58Anti-takeover provisions in our organizational documents and Delaware law may delay or prevent a change of control, which could reduce our stock price and prevent our stockholders from removing our current board of directors
4. 59Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited
5. 60Uncertainties in the interpretation and application of existing, new and proposed tax laws and regulations could materially affect our tax obligations and effective tax rate
6. 61If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud, which could harm our business and result in a decline in the trading price of our common stock