Design Therapeutics(DSGN) - 2024 Q4 - Annual Report

Financial Reporting and Compliance Risks - Future changes in financial accounting standards may lead to unexpected revenue fluctuations and affect reported financial results [434]. - Changes in tax laws could materially impact the company's business operations and financial performance, potentially increasing future U.S. tax expenses [435]. - The company's disclosure controls may not prevent all errors or fraud, leading to potential misstatements [465]. - Non-compliance with environmental, health, and safety laws could result in substantial fines and penalties, adversely affecting business success [450]. - The company does not maintain insurance for environmental liability, which may expose it to significant risks [451]. Cybersecurity and Technology Risks - The company is increasingly dependent on information technology systems, which may be vulnerable to security incidents and data breaches [436]. - Cyberattacks and online fraud are on the rise, posing significant risks to the company's operations and data security [437]. - The company faces challenges in monitoring third-party contractors' cybersecurity practices, which could lead to adverse consequences if security incidents occur [441]. Operational and Market Risks - Natural disasters could disrupt operations, as the company lacks comprehensive disaster recovery and business continuity plans [447]. - Unstable market conditions, including high inflation and rising interest rates, may adversely affect the company's financial performance and stock price [462]. - Geopolitical tensions, such as the U.S.-China conflict and the Russia/Ukraine war, could materially impact global trade and the company's operations [463]. Governance and Shareholder Risks - Anti-takeover provisions in Delaware law may hinder potential mergers or acquisitions, potentially depressing the stock price [453]. - The company's bylaws include provisions that could delay stockholder actions, impacting governance and control [454]. - The company has not opted out of Section 203 of the DGCL, which may prohibit large stockholders owning 15% or more from merging or combining with the company for a certain period [455]. - The exclusive forum provisions in the amended and restated certificate of incorporation may limit stockholders' ability to bring claims in favorable judicial forums, potentially increasing litigation costs [460]. - The company faces risks of securities class action litigation, particularly following declines in stock price, which could divert management's attention and resources [461]. - Substantial sales of common stock by directors or significant stockholders could lead to a decline in the stock price [464]. Analyst and Market Perception Risks - Inaccurate or unfavorable research from analysts could negatively affect the company's stock price and trading volume [467]. - The company is classified as a "smaller reporting company" and is not required to provide certain market risk disclosures [545].