Risk Factors Update Summary

• The company expects to incur substantial expenditures in the foreseeable future, including sales and marketing efforts, manufacturing capacity expansion, R&D activities, and enforcing intellectual property rights. This might result in increased operational and reporting costs and the need for additional capital.
• The ongoing COVID-19 pandemic negatively affected our revenue, particularly in joint replacement procedures, and is expected to continue to do so.
• Changes in regulations or legal action against ethylene oxide sterilization could significantly impact our ability to provide products in a timely manner.
• The company refinanced its existing senior secured indebtedness with a five-year, $21 million secured term loan facility. This change in debt structure might have implications for the company's financial condition and operating results.
• The pandemic increased manufacturing and delivery delays, leading to higher employee turnover.
• Non-compliance with Nasdaq's minimum bid price requirement led to a reverse stock split to regain compliance.
• The company transitioned to its Identity Imprint™ knee system as the primary knee system in the U.S., which may expose them to new operational and regulatory risks.
• Delays in third-party shipping contributed to delays in product availability and satisfaction of regulatory requirements.
• Our information technology systems are critical to our operations and growth plans.
• The company no longer offers the fully personalized iTotal Identity system as its standard knee system, but instead offers an upgrade to the Identity Imprint system. This change might affect market acceptance and sales of their knee products.
• Reliance on third-party services for ethylene oxide sterilization may impact the cost and availability of our products.
• The company implemented a transition to a just-in-time manufacturing model, which could increase complexity and require different talent and experience to manage the manufacturing dynamics and supply chain requirements.
• The company's PSP (Platinum Services Program) model, which offers deluxe services, may face challenges if CMS or insurers disagree with the program's compliance with applicable rules and regulations.
• The company faces competition from larger and more established players in the orthopedic market, which could impact market acceptance and sales of their products and services.