FZMD Fuse Medical, Inc.

Risks

• We may not be able to obtain waivers of potential defaults in the future from our lender and our borrowing capacity may be further reduced or restricted if we do not meet the covenants associated with our line of credit.
• The COVID-19 outbreak may decrease demand for our products and disrupt our supply chain, and any decrease in demand or supply chain disruption resulting from COVID-19 would adversely affect our revenues and results of operations.
• We have significant concentration in and dependence on a small number of customers.
• We are exposed to risks of obsolete and slow-moving inventory which may adversely impact our cash flow and liquidity.
• Our revenue growth and profitability will depend in large part upon the effectiveness of our marketing strategies and investments.
• Our revenues will depend on our customers’ continued receipt of adequate reimbursement from private insurers and government sponsored healthcare programs.
• Consolidation in the healthcare industry could lead to demands for price concessions or to the exclusion of some suppliers from certain of our markets, which could have an adverse effect on our business, financial condition or results of operations.
• Our operating earnings are dependent on certain significant suppliers.
• Interruption of manufacturing operations could adversely affect our business.
• Future business combinations or acquisitions may be difficult to integrate, which could cause us to shift our attention away from our primary business and its operations.
• U.S. federal and state governmental regulation could restrict our ability to sell the products.
• The FDA regulates the manufacturers and suppliers of the products that we sell, market, manufacture, and distribute, and regulatory compliance is costly and could contribute to delays in the availability of our products.
• Future regulatory action remains uncertain.
• If we fail to obtain, or experience significant delays in obtaining, FDA clearances or approvals for our future products or modifications to our products, our ability to commercially distribute and market our products could suffer.
• Intellectual property litigation and infringement claims could cause us to incur significant expenses or prevent us from selling certain of our products.
• We operate our business in regions subject to natural disasters and other catastrophic events, and any disruption to our business resulting from natural disasters would adversely affect our revenue and results of operations.
• We depend on the knowledge and skills of our executives and other key employees, and if we are unable to retain and motivate them or recruit additional qualified personnel, our business may suffer.
• We may be adversely affected by product liability claims, unfavorable court decisions or legal settlements.
• Uncertainty in future changes to tax legislation, regulatory reform, or policies could have a material adverse effect on our business.
• We do business with companies that are owned or controlled by our Chief Executive Officer and Chairman of the Board and President, which could create actual or potential conflicts of interest.
• Some members of our executive team may dedicate inadequate time and attention to our Company.
• General economic conditions may adversely affect demand for our products and services.
• Because the market for our Common Stock is limited, persons who purchase our Common Stock may not be able to resell their shares at or above the purchase price they paid.
• Our current executive team can exert significant influence over our Company and make decisions that are not in the best interests of all stockholders.
• We cannot be certain that our internal controls over financial reporting and procedures will be sufficient in the future. This uncertainty could have a material adverse effect on our investors’ confidence in our reported financial information. There is no guarantee that our internal controls over financial reporting and procedures will not fail in the future.
• Under our charter documents and Delaware law, we could issue “blank check” preferred stock without stockholder approval, which would dilute our then current stockholders’ interests and impair such stockholders’ voting rights, discouraging a takeover that our stockholders may consider favorable.
• If our Common Stock becomes subject to a “chill” or a “freeze” imposed by the Depository Trust Company (“DTC”) our stockholders’ ability to sell shares may be limited.