Revenue and Financial Performance - Revenues are expected to increase due to the expansion of the Deep TMS system marketing for MDD, OCD, and smoking addiction, with a decrease in the gap between operating expenses and revenues compared to 2022 levels [930]. - Net cash used in operating activities was $9.8 million for the year ended December 31, 2022, a decrease of $10.7 million compared to a net cash provided of $0.9 million in 2021, primarily due to higher losses and changes in working capital [931]. - The company anticipates that the trend of increased reimbursement coverage for Deep TMS could positively impact revenues, income from continuing operations, and profitability [955]. Government Grants and Royalties - As of December 31, 2022, the company received approximately $13.4 million in government grants, with $4.4 million paid in royalties, leaving outstanding royalties of up to $11.6 million [932]. - The company has engaged in research and licensing agreements with Yeda, which include royalties ranging from 1.6% to 5% for certain products [950]. Coverage and Market Expansion - Over 90 million covered lives are eligible for reimbursement for Deep TMS treatment of OCD as of March 2023, with positive coverage decisions from several major insurers [955]. - The company is actively working to facilitate increased coverage for OCD treatment by more payors, including both commercial and governmental [955]. Leadership and Organizational Changes - A leadership transition occurred in early 2023, with Mr. Ami Boehm appointed as Chairman and Mr. Hadar Levy as the new CEO [956]. - The company has seen a trend of high workforce volatility, affecting recruitment and retention of sales professionals [954]. Intellectual Property and Technology - The company has a total of 34 issued U.S. patents and 51 issued patents in other jurisdictions related to Deep TMS technology, with various expiration dates ranging from 2021 to 2039 [937]. - The company has acquired additional patents related to multichannel stimulation, which are expected to broaden the capabilities of its developing multichannel stimulator [968]. - The core technology for Deep TMS is exclusively licensed for worldwide commercialization, with rights owned by the DHHS and licensed through the PHS [969]. - The company has achieved all milestones under the PHS license agreement, which is valid until the last licensed patent expires [972]. - The company may rely on trade secrets and know-how to protect its technology, although such protection can be challenging [975]. Supply Chain and Inventory Management - The company has seen a significant rise in the price of electronic components due to supply and demand factors, leading to increased inventory levels to meet future demand [977]. - The lead time for receiving electronic components has increased significantly amid the global supply chain crisis, impacting ongoing supply capabilities [977]. Financial Controls and Ethics - The audit committee is responsible for overseeing the quality and integrity of the company's accounting, auditing, and reporting practices [773]. - The company has adopted a code of ethics applicable to its principal executive and financial officers, which is available on its website [771]. - The company has established internal controls over financial reporting to ensure reliability and compliance with generally accepted accounting principles [769].
Brainsway(BWAY) - 2022 Q4 - Annual Report