| | - Our
pending patent applications may not be granted for various reasons, including
overbreadth or conflict with an existing patent; and
- Other
persons may independently develop, or have developed, similar or superior technologies.
We may be unable to successfully manage growth, particularly
if accomplished through acquisitions. Successful
implementation of our business strategy will require that we effectively manage
any associated growth. To manage growth effectively, our management will need
to continue to implement changes in certain aspects of our business, to improve
our information systems and operations to respond to increased demand, to attract
and retain qualified personnel and to develop, train and manage an increasing
number of management-level and other employees. Growth could place an increasing
strain on our management, financial, product design, marketing, distribution and
other resources, and we could experience operating difficulties. Any failure to
manage growth effectively could have a material adverse effect on our results
of operations and financial condition. To the extent
that we grow through acquisition, we will face the additional challenges of integrating
our current operations, culture, informational management systems and other characteristics
with that of the acquired entity. We may incur significant expenses in connection
with negotiating and consummating one or more transactions, and we may inherit
certain liabilities in connection with the acquisition as a result of our failure
or inability to conduct adequate due diligence or otherwise. In addition, we may
not realize competitive advantages, synergies or other benefits anticipated in
connection with such acquisition(s). If we do not adequately identify targets
for, or manage issues related to its future acquisitions, such acquisitions may
have a negative adverse effect on our business and financial results. A
significant adverse change in, or failure to comply with, governing regulations
could adversely affect our business. Substantially
all of our products are “devices,” as defined in the Federal Food, Drug and Cosmetic
Act, (“FDA”) and the manufacture, distribution, record keeping, labeling and advertisement
of our products are subject to regulation by the FDA in the United States and
its equivalent regulatory agencies in various foreign countries in which our products
are manufactured, distributed, labeled, offered and sold. Further, we are subject
to continual review and periodic inspections at our current facilities with respect
to the FDA’s Quality System Regulations and similar requirements of foreign countries.
In addition, we are subject to certain export control restrictions governed by
the U.S. Department of the Treasury and may be governed by other regulatory agencies
in various foreign countries in which products are exported. Our business, operations
or financial condition could be adversely affected if we are found to be out of
compliance with governing regulations. If such regulations are amended to become
more restrictive and costly to comply with, the costs of compliance could adversely
affect our business, operations or financial condition. A
significant portion of our revenues are derived from a few products and procedures.
A significant portion of our revenues are attributable
to sales of our inflation devices. During the year ended December 31, 2005, sales
of our inflation devices (including inflation devices sold in custom kits and
through OEM channels) accounted for approximately 33% our total revenues. Any
material decline in market demand for our inflation devices could have an adverse
effect on our business, operations or financial condition. In
addition, the products that have accounted for a majority of our historical revenues
are designed for use in connection with a few related medical procedures, including
angioplasty, stent placement procedures, and spinal procedures. If subsequent
developments in medical technology or drug therapy make such procedures obsolete,
or alter the methodology of such procedures so as to eliminate the usefulness
of our products, we may experience a material decrease in demand for our products
and experience deteriorating financial performance. We
may be unable to compete in our markets, particularly if there is a significant
change in relevant practices and technology. The
market for each of our products is highly competitive. We face competition from
many companies, many of which are larger, better established and have greater
financial, technical and other resources and greater market presence than we do.
Such resources and market presence may enable our competition to more effectively
market competing products or to market competing products at reduced prices in
order to gain market share. | |
