third-party payors. In both the U.S. and
foreign markets health care cost-containment efforts are
prevalent and are expected to continue. These efforts could
reduce levels of reimbursement available for procedures
involving our products and, therefore, reduce overall demand for
our products as well. A failure to generate sufficient sales
could have a material adverse impact on our financial condition,
results of operations and cash flow.
We may lose our key personnel or fail to
attract and retain additional personnel.
We are highly dependent on the principal members
of our management and scientific staff, in particular Bevil J.
Hogg, our President and Chief Executive Officer, Michael P.
Kaminski, our Chief Operating Officer and William M. Kelley, one
of our directors. Mr. Kelley has extensive experience in
the medical device industry, and we believe his industry
contacts enable us to have proposals reviewed by key hospital
decision-makers earlier in the sales process than may otherwise
be the case. In order to pursue our plans and accommodate
planned growth, we may choose to hire additional personnel.
Attracting and retaining qualified personnel will be critical to
our success, and competition for qualified personnel is intense.
We may not be able to attract and retain personnel on acceptable
terms given the competition for qualified personnel among
technology and healthcare companies and universities. The loss
of any of these persons or our inability to attract and retain
other qualified personnel could harm our business and our
ability to compete. In addition, Douglas M. Bruce, our
Senior Vice President, Research & Development,
coordinates our scientific staff and the research and
development projects they undertake; the loss of Mr. Bruce
or other members of our scientific staff may significantly delay
or prevent product development and other business objectives.
Our growth will place a significant strain on
our resources, and if we fail to manage our growth, our ability
to develop, market and sell our products will be
Our business plan contemplates a period of
substantial growth and business activity. This growth and
activity will likely result in new and increased
responsibilities for management personnel and place significant
strain upon our operating and financial systems and resources.
To accommodate our growth and compete effectively, we will be
required to improve our information systems, create additional
procedures and controls and expand, train, motivate and manage
our work force. We cannot be certain that our personnel,
systems, procedures and controls will be adequate to support our
future operations. Any failure to effectively manage our growth
could impede our ability to successfully develop, market and
sell our products.
We face currency and other risks associated
with international sales.
We intend to continue to devote significant
efforts to marketing our systems and products outside of the
U.S. This strategy will expose us to numerous risks
associated with international operations, which could adversely
affect our results of operations and financial condition,
including the following:
currency fluctuations that could impact the
demand for our products or result in currency exchange losses;
export restrictions, tariff and trade regulations
and foreign tax laws;
customs duties, export quotas or other trade
economic and political instability; and
In addition, contracts may be difficult to
enforce and receivables difficult to collect through a foreign
countrys legal system.