Tenon Medical (TNON) risk factors, FY2025 10-K

Risks Related to Our Business and Operations

1. 01We have incurred losses in the past, our financial statements have been prepared on a going concern basis and we may be unable to achieve or sustain profitability in the future
2. 02If hospitals, clinicians, and other healthcare providers are unable to obtain coverage and reimbursement from third-party payors for procedures performed using our products, adoption of our products may be delayed, and it is unlikely that they will gain further acceptance
3. 03If the reimbursement provided by third-party payors to hospitals, clinicians, and other healthcare providers for procedures performed using our products is insufficient, adoption and use of our products and the prices paid for our implants may decline77% rewritten
4. 04We may not be able to convince physicians that The Catamaran System and The SImmetry + System are attractive alternatives to our competitors’ products and that our procedures are an attractive alternative to existing surgical and non-surgical treatments of the SI Joint
5. 05Clinicians and payors may not find our clinical evidence to be compelling, which could limit our sales, and on-going and future research may prove our products to be less safe and effective than initially anticipated26% rewritten
6. 06Pricing pressure from our competitors, changes in third-party coverage and reimbursement, healthcare provider consolidation, payor consolidation and the proliferation of “physician-owned distributorships” may impact our ability to sell our products at prices necessary to support our current business strategies
7. 07We operate in a very competitive business environment and if we are unable to compete successfully against our existing or potential competitors, our sales and operating results may be negatively affected and we may not grow
8. 08We currently manufacture (through third parties) and sell products used in a single procedure, which could negatively affect our operations and financial condition51% rewritten
9. 09We have a limited operating history and may face difficulties encountered by early-stage companies in new and rapidly evolving markets
10. 10Our sales volumes and our operating results may fluctuate over the course of the year
11. 11If we do not successfully implement our business strategy, our business and results of operations will be adversely affected
12. 12Our business could suffer if we lose the services of key members of our senior management, key advisors or personnel
13. 13Various factors outside our direct control may adversely affect manufacturing and distribution of our product
14. 14If any of these risks were to materialize, our ability to provide our products to customers on a timely basis would be adversely impacted
15. 15In addition, our anticipated growth could strain the ability of our contract manufacturers to deliver an increasingly large supply of product. Contract manufacturers often experience difficulties in scaling up production, including financial issues, or problems with production yields and quality control and assurance
16. 16As our sales grow, our contract manufacturers may encounter problems or delays in the manufacturing of our products or fail to meet certain regulatory requirements which could result in an adverse effect on our business and financial results21% rewritten
17. 17In the future our products may become obsolete, which would negatively affect operations and financial condition
18. 18If we experience significant disruptions in our information technology systems , our business, results of operations, and financial condition could be adversely affected
19. 19We may seek to grow our business through acquisitions of or investments in new or complementary businesses, products or technologies, and the failure to manage acquisitions or investments, or the failure to integrate them with our existing business, could have a material adverse effect on us
20. 20We may enter into collaborations, in-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 revenue
21. 21We are increasingly dependent on information technology, and our systems and infrastructure face certain risks, including cybersecurity and data leakage risks
22. 22Geopolitical conditions, including trade disputes and direct or indirect acts of war or terrorism, could have an adverse effect on our operations and financial results37% rewritten
23. 23Inflation may adversely affect our operations and financial results30% rewritten

Risks Related to Our Legal and Regulatory Environment

1. 24We and our contract manufacturers are subject to extensive governmental regulation both in the United States and abroad, and failure to comply with applicable requirements could cause our business to suffer
2. 25The regulations to which we are subject are complex and have tended to become more stringent over time. Regulatory changes could result in restrictions on our ability to carry on or expand our operations, difficulties achieving new product clearances, higher than anticipated costs or lower than anticipated sales
3. 26Any delay in, or failure to receive or maintain, clearance or approval for our products under development could prevent us from generating revenue from these products or achieving profitability
4. 27The FDA and other regulatory authorities have broad enforcement powers. Regulatory enforcement or inquiries, or other increased scrutiny on us, could dissuade some clinicians from using our products and adversely affect our reputation and the perceived safety and effectiveness of our product
5. 28We and our independent sales representatives must comply with U.S. federal and state fraud and abuse laws, including those relating to physician kickbacks and false claims for reimbursement
6. 29Significant developments or changes in national laws or policies to protect or promote domestic interests and/or address foreign competition can have an adverse effect on our business and financial statementsNew
7. 30Our failure to adequately protect personal information in compliance with evolving legal requirements could harm our business
8. 31Even though our products are approved by regulatory authorities, if our contract manufacturers fail to comply with ongoing FDA requirements, or if we experience unanticipated problems with our products, these products could be subject to restrictions or withdrawal from the market
9. 32Our employees, independent contractors, consultants, contract manufacturers, and our independent sales representatives may engage in misconduct or other improper activities, relating to regulatory standards and requirements
10. 33We may be subject to enforcement action, including fines, penalties or injunctions, if we are determined to be engaging in the off-label promotion of our product25% rewritten
11. 34We are required to report certain malfunctions, deaths, and serious injuries associated with our products, which can result in voluntary corrective actions or agency enforcement actions
12. 35A recall of our products, either voluntarily or at the direction of the FDA or the discovery of serious safety issues or malfunctions with our products, can result in voluntary corrective actions or agency enforcement actions, which could have a significant adverse impact on us61% rewritten
13. 36Modifications to our products may require new 510(k) clearances or premarket approvals may require us to cease marketing or recall the products until clearances are receivedNew
14. 37The results of our clinical trials may not support our product candidate claims or may result in the discovery of adverse side effects22% rewritten
15. 38We may incur product liability losses, and insurance coverage may be inadequate or unavailable to cover these losses
16. 39We are subject to environmental laws and regulations that can impose significant costs and expose us to potential financial liabilities
17. 40U.S. tax legislation may materially affect our financial condition, results of operations and cash flows
18. 41The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) modifies certain provisions of the Tax Act, including increasing the amount of interest expense that may be deducted

Risks Related to Our Intellectual Property

1. 42Our ability to protect our intellectual property and proprietary technology is uncertain
2. 43We may be subject to damages resulting from claims that we, our employees, or independent distributors along with their independent sales representatives have wrongfully used or disclosed alleged trade secrets of our competitors or are in breach of non-competition or non-solicitation agreements with our competitors
3. 44The medical device industry is characterized by patent litigation, and we could become subject to litigation that could be costly, result in the diversion of management’s time and efforts, require us to pay damages, and/or prevent us from developing or marketing our existing or future products
4. 45Patent terms are limited, and we may not be able to effectively protect our products and business
5. 46Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our product
6. 47We may not be able to protect our intellectual property rights throughout the world
7. 48If we are unable to protect the confidentiality of our trade secrets, our business and competitive position could be harmed
8. 49Third parties may assert that our employees or consultants have wrongfully used or disclosed confidential information or misappropriated trade secrets

Risks Related to the Ownership of our Common Stock and Warrants

1. 50An active trading market for our shares may not be sustained
2. 51Future sales of substantial amounts of our common stock could adversely affect the market price of our common stock92% rewritten
3. 52The perception among investors that we are at heightened risk of delisting could also negatively affect the market price of our securities and trading volume of our common stockNew
4. 53The trading price of our common stock has been and is likely to continue to be highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control35% rewritten
5. 54Our Series A Preferred Stock and Series B Preferred Stock rank senior to our common stock88% rewritten
6. 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
7. 56The price of our common stock may be volatile, and you may be unable to resell your shares at or above the price paid
8. 57Our failure to maintain effective internal control over financial reporting could have an adverse impact on us 52% rewritten
9. 58We have put in place policies and procedures to ensure that proper documentation is established and maintained for transactions that we enter intoNew
10. 59Our financial controls and procedures may not be sufficient to ensure timely and reliable reporting of financial information, which, as a public company, could materially harm our stock price
11. 60We must implement additional and expensive procedures and controls in order to grow our business and organization and to satisfy reporting requirements, which will increase our costs and require additional management resources
12. 61We may be subject to securities litigation, which is expensive and could divert our management’s attention
13. 62We are an “emerging growth company” under the JOBS Act of 2012 and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors
14. 63Our status as an “emerging growth company” under the JOBS Act may make it more difficult to raise capital as and when we need it
15. 64We have not paid dividends in the past and do not expect to pay dividends in the future, and any return on investment may be limited to the value of our stock
16. 65The elimination of personal liability against our directors and officers under Delaware law and the existence of indemnification rights held by our directors, officers and employees may result in substantial expenses
17. 66Our Certificate of Incorporation designates the Court of Chancery of the State of Delaware as the exclusive forum for certain litigation that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us