iRadimed(IRMD) - 2024 Q4 - Annual Report

Regulatory Risks - The company received notice of examination from the U.S. Internal Revenue Service (IRS) for the tax year ended December 31, 2021, which could adversely affect financial results [204]. - The medical device industry is subject to extensive government regulation, primarily by the FDA, which could result in delays or increased costs for product development and marketing [208]. - The company is subject to healthcare fraud and abuse regulations that could result in significant liability and require changes to business practices [224]. - Regulatory changes could restrict the company's ability to manufacture and sell products, leading to higher costs or lower revenues [211]. - The company may face challenges in maintaining compliance with FDA and other regulatory requirements, which could disrupt business operations [230]. - The development and use of Artificial Intelligence (AI) presents risks that could impact operations, including compliance with evolving laws and regulations [207]. Intellectual Property Risks - The company relies on a combination of patents, trademarks, trade secrets, and contractual provisions to protect its intellectual property, but cannot guarantee the adequacy of these measures [232]. - The transition to a "first inventor to file" system in the U.S. may complicate the patent application process, potentially affecting the company's competitive advantage [234]. - The company faces risks related to the enforcement of its intellectual property rights, which could result in substantial expenses and impact its ability to commercialize products [241]. - Patent litigation and other intellectual property proceedings could lead to significant costs and management distraction, adversely affecting the company's competitive position [245]. - The company may need to engage in costly litigation to defend its intellectual property rights, which could divert resources and impact financial performance [246]. Financial Performance and Dividends - The company has declared a regular quarterly cash dividend of $0.17 per share, but future dividends will depend on various factors including cash generation and capital needs [254]. - The company may need to raise additional funds through equity or debt securities, which could dilute existing shareholders and affect stock price [256]. - Compliance with public company regulations increases legal and financial costs, potentially diverting management's attention from core business activities [257]. Market and Currency Risks - Sales to customers outside of the U.S. accounted for approximately 17$489,000 in interest income for a 100 basis point change from levels at December 31, 2024 [343]. Ownership and Influence - The founder, Roger Susi, owns approximately 36% of the company's outstanding common stock, allowing him to exert significant influence over shareholder matters [260]. Product Liability - The company carries third-party product liability insurance with maximum coverage of $5 million, but faces a deductible of$50,000 per occurrence and $150,000 in the aggregate [217]. Negative Publicity - Negative publicity related to product safety issues could materially affect the company's financial position and market value [218].