FUSE MEDICAL, INC. – 10-Q – MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Explanatory Note
As used in this report on Form 10-Q, "we", "us", "our", and the "Company" refer
to
This discussion and analysis should be read in conjunction with the interim
unaudited condensed consolidated financial statements of our Company and the
related notes included in this report for the periods presented (our "Financial
Statements"), the audited consolidated financial statements of our Company and
the related notes thereto and the Management's Discussion and Analysis of
Financial Condition and Results of Operations in our Company's Annual Report on
Form 10-K for the fiscal year ended
Report"), filed with the
to Section 13 or 15(d) under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), on
Overview
We are a manufacturer and national distributor of medical devices. We provide a
broad portfolio of orthopedic implants including:
• Foot and Ankle: internal and external fixation products;
• Orthopedics: upper and lower extremity plating and total joint
reconstruction implants;
• Sports Medicine: soft tissue fixation and augmentation for sports medicine
procedures;
• Spine: spinal implants for trauma, degenerative disc disease, and deformity
indications (collectively, we refer to these bulleted products as
Orthopedic Implants).
We also provide a wide array of osteo-biologics and regenerative products, which
include human allografts, tendons, synthetic skin and bone substitute materials,
and regenerative tissues, which we refer to as ("Biologics").
All of our medical devices are cleared by the
("FDA") for sale in
licensed tissue banks accredited by the
Additionally, we are licensed by the FDA for storage and distribution of human
cells, tissues and cellular and bone-based products (HCT/Ps), and we are an
FDA-registered medical device specification developer and repackager/relabeler,
and manufacturer of record, (a "Manufacturer"). We are seeking to grow our
manufacturing operations, both by internal product development and by acquiring
existing FDA approved devices and related intellectual property.
Third Quarter 2022 Update
Fuse Branded Portfolio
As an emerging manufacturer of medical device implants, we have continued to
expand our Fuse branded portfolio of orthopedic implants and biologics, with
three new product launches in 2022. In the second quarter of 2022, we launched
the Sterizo Tibial Revision System, which includes a modular baseplate design,
with stem and augment options for primary applications. In the third quarter, we
launched the Fuse PSS Pedicle Screw System with Minimally Invasive Surgery
("MIS") features, and the Fuse PSS Pedicle Screw System for open surgeries with
both low and mid top reduction options. We anticipate a continued emphasis on
the commercialization of these products through our Retail Model, as we continue
to expand our national distribution footprint.
Research and Development
During the first quarter of 2022, we established a new
Board
efforts to manufacture Fuse branded products. This new
internal design and development of new products utilizing novel materials with
osseointegration capabilities and anti-bacterial properties. Our projects
continue to move through the development process towards FDA clearance and
commercialization, with anticipated "first to market" designations on these new
and differentiated technologies.
This new
instrumental in our design and launch of multiple Fuse product lines within our
portfolio.
Impact of Coronavirus
Currently, the future trajectory of the COVID-19 pandemic remains uncertain,
both in the
treatments and the development and distribution of vaccines, though the
efficacy, timing, and adoption of various treatments and vaccines is uncertain,
particularly with respect to new variants of COVID-19 which have emerged and
will likely continue to emerge.
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Given these various uncertainties, it is unclear the extent to which lingering
slowdowns in elective procedures will affect our business during 2022 and
beyond. We expect that the effects of COVID-19 on our business will depend on
various factors including (i) the magnitude and length of increased case waves
in markets we serve, including from new variants of COVID-19, (ii) the comfort
level of patients returning to clinics and hospitals, (iii) the extent to which
localized elective surgery shutdowns occur, (iv) the unemployment rate's effect
on potential patients lacking medical insurance coverage, and (v) general
hospital capacity constraints occurring because of the need to treat COVID-19
patients.
COVID-19 has also continued to present uncertainties and delays in our local and
national supply chain, for both raw materials and finished goods. This
disruption in our supply chain has adversely impacted lead times to; manufacture
products, launch product lines, and commercialize our products in the
marketplace. As a result, we are continuing to source alternate suppliers to
help mitigate the impact to our supply chain.
Current Trends and Outlook
Seasonality
We are subject to seasonal fluctuations in sales, which cause fluctuations in
quarterly results of operations. Because of the seasonality of our business,
results for any quarter are not necessarily indicative of results that may be
achieved in other quarters or for a full fiscal year.
Historically, we have experienced greater revenue and greater sales volume, as a
percentage of revenue, during the last two calendar quarters of our fiscal year
compared to the first two calendar quarters of the year. We believe this revenue
trend is primarily due to the increase in elective surgeries during the last two
quarters of the calendar year, which are partially satisfied by patient annual
healthcare deductibles being met in those two quarters. We use this seasonality
trend to assist us in enterprise-wide resource planning, such as purchasing,
product inventory logistics, and human capital demands.
Retail and Wholesale Cases
We believe our comprehensive selection of Orthopedic Implants and Biologics
products is pivotal to our ability to acquire new customers, increase sales to
existing customers and increase overall sales volume, revenues, and
profitability. We continue to review and evaluate our product lines, ensuring we
maintain a high-quality and cost-effective selection of Orthopedic Implants and
Biologics.
We measure sales volume based on medical procedures in which our products were
sold and used (each a Case). We consider Cases resulting from direct sales to
hospitals and medical facilities to be Retail Cases and Cases resulting from
sales to third-parties, such as distributors, or sub-distributors, to be
Wholesale Cases. Some of our sales for Wholesale Cases are on a consignment
basis with the third-party.
Retail. Under our retail distribution model, ("Retail Model"), we sell directly
to our end customers, which consist of hospitals and medical facilities,
utilizing (i) our full-time sales representatives whom we employ or engage as
independent contractors and (ii) independent sales representatives who work on a
non-exclusive basis. In both instances, we pay the sales representative a
commission with respect to sales made by the representative. We refer to sales
through our Retail Model as Retail Cases.
Wholesale. Under our wholesale distribution model, ("Wholesale Model"), we sell
our products directly to independent distributors rather than to hospitals and
medical facilities who are the ultimate end customer. We do not pay or receive
commissions from any sales by the independent distributor to the end customer.
We refer to sales through our Wholesale Model as Wholesale Cases.
Retail Cases in our industry command higher revenue price points than Wholesale
Cases. Because Retail Cases involve direct sales to our end customers, we
typically receive a higher gross profit margin due to the absence of any third
party in the sales process. However, we may pay commissions to our full time or
independent sales representatives with respect to Retail Sales increasing our
commission expenses. Retail Cases generally generate substantially more gross
profit than Wholesale Case transactions but are subject to commission expenses,
which we do not incur with respect to Wholesale Cases.
Wholesale Cases in our industry command lower revenue price-points than Retail
Cases as the third-party reseller must build in its own profit margin. Because
Wholesale Cases involve sales to third parties who sell our products to end
customers, our profit margins are reduced for these Cases due to the lower sales
price. Consequently, our Wholesale Cases generate substantially lower gross
profit than our Retail Cases, which is offset in part by the fact that we do not
incur any commission costs on Wholesale Cases.
Pricing Pressures
Pricing pressures have increased in our industry due to (i) continuous
consolidation among healthcare providers, (ii) trends toward managed care, (iii)
increased government oversight of healthcare costs, and (iv) new laws and
regulations that address healthcare reimbursement and pricing. Pricing
pressures, reductions in reimbursement levels or coverage, or other cost
containment measures can significantly impact our business, future operating
results and financial condition. For the three months ended
and
3
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2021, our average revenues per Case was
nine months ended
To offset pricing pressures, we employ strategies which include locating and
retaining new customers, increasing volume with existing customers, and
continued emphasis on promoting sales through our Retail Model. Our strategy to
emphasize our Retail Model proved successful as Retail Cases represented
approximately 96% of revenue for the third quarter of 2022, which is an
approximate 3% increase over the same quarter of 2021.
To further offset the impact of pricing pressures, the Company employs
strategies to reduce the cost of revenues by increasing Fuse branded product
lines. For the three months ended
of revenues per Case was
ended
proved successful as the revenues produced by these products increased to
approximately 50% of revenue for the nine months ended
is an approximate 24% increase over the same period of 2021.
Critical Accounting Policies
The preparation of our Financial Statements and the related disclosures in
conformity with GAAP, requires our management to make judgments, assumptions,
and estimates that affect the amounts of revenue, expenses, income, assets, and
liabilities, reported in our Financial Statements and accompanying notes.
Understanding our accounting policies and the extent to which our management
uses judgment, assumptions, and estimates in applying these policies is integral
to understanding our Financial Statements.
We describe our most significant accounting policies in Note 2, "Significant
Accounting Policies" of our accompanying interim unaudited condensed
consolidated notes to our Financial Statements beginning on page F-1 and found
elsewhere in this report and in our 2021 Annual Report. These policies are
considered critical because they may result in fluctuations in our reported
results from period to period due to the significant judgments, estimates, and
assumptions about highly complex and inherently uncertain matters. In addition,
the use of different judgments, assumptions, or estimates could have a material
impact on our financial condition or results of operations. We evaluate our
critical accounting estimates and judgments required by our policies on an
ongoing basis and update them as appropriate based on changing conditions.
There have been no material changes to our critical accounting policies during
the period covered by this report.
Recent Accounting Pronouncements
We describe recent accounting pronouncements in Note 2, "Significant Accounting
Policies" of our accompanying interim unaudited condensed consolidated notes to
our Financial Statements beginning on page F-1.
Results of Operations
The following table sets forth certain financial information from our interim
unaudited condensed consolidated statements of operations along with a
percentage of net revenue and should be read in conjunction with our Financial
Statements and related notes included in this report.
For the Three Months Ended
September 30, September 30,
2022 (% Rev) 2021 (% Rev)
Net revenues $ 4,536,595 100% $ 4,250,554 100%
Cost of revenues 1,481,648 33% 1,861,620 44%
Gross profit 3,054,947 67% 2,388,934 56%
Operating expenses:
Selling, general, administrative and other
expenses 1,708,543 38% 1,559,708 37%
Commissions 1,219,311 27% 1,495,720 35%
Depreciation and amortization 82,199 1% 14,493 0%
Total operating expenses 3,010,053 66% 3,069,921 72%
Operating (loss) profit 44,894 1% (680,987 ) -16%
Other expense
Interest expense 46,992 1% 12,512 0%
Gain on Payroll Protection Program Loan
extinguishment - 0% - 0%
Total other expense 46,992 1% 12,512 0%
Net (loss) income before income tax (2,098 ) 0% (693,499 ) -16%
Income tax expense 7,278 0% 3,537 0%
Net (loss) income $ (9,376 ) 0% $ (697,036 ) -16%
4
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Three Months Ended
30, 2021
Net Revenues
For the three months ended
compared to
an increase of
attributable to the diminishing economic impacts of COVID-19.
For the three months ended
increased 1% compared to the three months ended
from Retail Cases as a percent of revenues for the three months ended
30, 2022
revenues for the three months ended
percent of revenues increased, it was an insufficient increase in volume to
offset the reduction in revenue per case.
As discussed above in "Current Trends and Outlook," we believe that as our
industry faces increased pricing pressures, we will need to focus on increased
volume of Cases to maintain revenue and gross profit levels. For the remaining
quarter of 2022, we will seek to increase our Retail Cases with our existing
retail customer base and continue to add additional retail customers.
Cost of Revenues
For the three months ended
2021
As a percentage of revenues, cost of revenues decreased by 11% to 33% for the
three months ended
three months ended
a percentage of revenues, is due to the difference of methodology on how medical
instruments are expensed.
Gross Profit
For the three months ended
2021
in gross profit is due to the increase in net revenues and the reduction in cost
of revenues as discussed above.
As a percentage of revenues, gross profit increased by 11% to 67% for the three
months ended
months ended
of revenues was primarily caused by the decrease in cost of revenues as a
percentage of net revenues, as discussed above.
Selling, General, Administrative, and Other Expenses
For the three months ended
and other expenses increased to
ended
10%.
As a percentage of net revenues, selling, general, administrative, and other
expenses accounted for approximately 38% and 37% for the three months ended
revenue, the increase of approximately 1% primarily resulted from (a)(i) an
approximate 1% increase in provision for bad debt, (ii) an approximate 3%
increase in professional expenses, offset, in part, by (b)(i) an approximate 1%
decline in stock-based compensation (ii) an approximate 1% decrease in leased
staffing costs, and (iii) an approximate 1% decline in selling expenses,
comprised of marketing and travel and entertainment expenses.
Commissions
For the three months ended
expense was
As a percentage of net revenues, commission expense accounted for approximately
27% for the three months ended
ended
directly due to the reduction of average commission rates associated with total
revenues.
Depreciation and amortization
For the three months ended
expense increased to
30, 2021
to the depreciation of medical instruments, as detailed below, and the
amortization of the fees associated with obtaining the Credit Agreement.
Beginning in 2022, we changed our estimated useful life for its investment
in medical instruments from 0 to 3 years based upon an analysis of our inventory
and actual utilization of non-sterile medical instruments. For the three months
ended
5
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our management increased property and equipment by
depreciation expense of
unaudited condensed consolidated balance sheet and statements of operations.
Interest
For the three months ended
increase of
primarily driven by (a)(i) an approximate
caused by an increase in LIBOR market interest rates, (ii) an approximate
Agreement in comparison to our RLOC, and (iii) an approximate
related to accrued interest on our EIDL Loan.
Income tax
For the three months ended
of approximately
Taxes," of our accompanying Financial Statements, beginning on page F-1.
Net Loss
For the three months ended
compared to
respectively, representing a decrease in net loss of
99%. The drivers for our decrease in net loss for the three months ended
increase of
offset, in part, by (b)(i) an increase of
(ii) an increase of
increase in interest expense, and (iv) an increase in tax expense of
Nine Months Ended
30, 2021
Results of Operations
The following table sets forth certain financial information from our unaudited
condensed consolidated statements of operations along with a percentage of net
revenue and should be read in conjunction with our Financial Statements and
related notes included in this report.
For the Nine Months Ended
September 30, September 30,
2022 (% Rev) 2021 (% Rev)
Net revenues $ 13,759,223 100% $ 14,356,328 100%
Cost of revenues 4,830,480 35% 5,935,093 41%
Gross profit 8,928,743 65% 8,421,235 59%
Operating expenses: - 0%
Selling, general, administrative and other
expenses 4,840,852 35% 5,016,594 35%
Commissions 4,188,841 30% 4,894,845 34%
Depreciation and amortization 226,243 2% 46,751 0%
Total operating expenses 9,255,936 67% 9,958,190 69%
Operating loss (327,193 ) -2% (1,536,955 ) -11%
Other expense
Interest expense 116,477 1% 47,561 0%
Gain on Payroll Protection Program Loan
extinguishment - 0% (361,400 ) 0%
Total other expense 116,477 1% (313,839 ) -2%
Net loss before income tax (443,670 ) -3% (1,223,116 ) -9%
Income tax expense 17,305 0% 12,723 0%
Net loss $ (460,975 ) -3% $ (1,235,839 ) -9%
Net Revenues
For the nine months ended
compared to
of
impact of pricing pressures within certain facilities, as well as the mix of
products used in Cases.
For the nine months ended
increased 7% compared to the nine months ended
Retail Cases as a percent of revenues for the nine months ended
2022
6
--------------------------------------------------------------------------------
by 4% compared to revenues from Retail Cases as a percent of revenues for the
nine months ended
revenues increased, it was an insufficient increase in volume to offset the
reduction in revenue per case.
As discussed above in "Current Trends and Outlook," we believe that as our
industry faces increased pricing pressures, we will need to focus on increased
volume of Cases to maintain revenue and gross profit levels. For the remaining
quarter of 2022, we will seek to increase our Retail Cases with our existing
retail customer base and continue to add additional retail customers.
Cost of Revenues
For the nine months ended
representing a decrease of
As a percentage of revenues, cost of revenues decreased approximately 6% to
approximately 35% for the nine months ended
approximately 41% for the nine months ended
as a percentage of net revenues resulted from (a)(i) an approximate 14% decrease
in medical instrument expense, and (ii) 1% reduction in cost of revenues product
mix offset, in part, by (b)(i) an approximate 9% increase in inventory shrink
and inventory loss provision.
Gross Profit
For the nine months ended
representing an increase of
profit is due to the reduction in cost of revenues as a percentage of net
revenues as discussed above.
As a percentage of net revenue, gross profit increased by approximately 6% to
65% for the nine months ended
months ended
of revenues was primarily caused by the decrease in cost of revenues as a
percentage of net revenues, as discussed above.
Selling, General, Administrative, and Other Expenses
For the nine months ended
and other expenses decreased to
ended
4%.
As a percentage of net revenues, selling, general, administrative and other
expenses accounted for approximately 35% for the nine months ended
2022
percentage of net revenues included (a)(i) an approximate 2% increase in leased
staffing costs, (ii) an approximate 1% increase in professional expense, (iii) a
1% increase for employee expense reimbursements related to business development
and travel costs offset, in part, by (b)(i) an approximate 2% decline in the
provision for bad debt and (ii) an approximate 2% decline in stock based
compensation.
Commissions
For the nine months ended
expense was
As a percentage of net revenues, commissions expenses accounted for
approximately 30% for the nine months ended
nine months ended
expense is directly due to the reduction of average commission rates associated
with 4% reduction in total revenues as discussed above.
Depreciation and amortization
For the nine months ended
to
representing an increase of
depreciation of medical instruments, as detailed below, and the amortization of
the fees associated with obtaining the Credit Agreement.
Beginning in 2022, we changed our estimated useful life for its investment
in medical instruments from 0 to 3 years based upon an analysis of our inventory
and actual utilization of non-sterile medical instruments. For the nine months
ended
our
statements of operations.
Interest
For the nine months ended
increase of
primarily driven by (a)(i) an approximate
to increased borrowings on our Credit Agreement in comparison to our RLOC, (ii)
an approximate
LIBOR market interest rates, (iii) an approximate
7
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approximate
Income tax
For the nine months ended
of approximately
Taxes," of our accompanying interim unaudited condensed consolidated notes to
our Financial Statements, beginning on page F-1.
Payroll Protection Program Loan Forgiveness
For the nine months ended
Protection Program Loan extinguishment of zero, compared to
nine months ended
Note 7, "Payroll Protection Program," of our accompanying interim unaudited
condensed consolidated notes to our Financial Statements, beginning on page F-1.
Net Loss
For the nine months ended
compared to a net loss
respectively, representing a decrease in net loss of
63%. The drivers for our reduction in net loss for the nine months ended
decrease of
commissions, offset, in part, by (b)(i) a decrease of
(ii) a decrease of
extinguishment, (iii) an increase of
(iv) a
of
Liquidity and Capital Resources
Cash Flows
A summary of our cash flows is as follows:
Nine Months Ended September 30,
2022 2021
Net cash provided by operating activities $ 866,257 $ 231,479
Net cash used in investing activities (520,794 ) -
Net cash provided by (used in) financing activities (392,664 ) 346,345
Net increase (decrease) in cash and cash equivalents $ (47,201 )
Net Cash Provided by Operating Activities
During the nine months ended
activities was
30, 2021
The increase provided by operating activities of
from: (a)(i) a
non-cash items; (ii) a
(iii) a
increase in cash used for prepaid expenses and other current assets; and (v) a
part, by (b)(i) a
(ii) a
During the nine months ended
activities was
2021
The increase of
medical instruments. Beginning in 2022, we changed our estimated useful life
for its investment in medical instruments from 0 to 3 years based upon an
analysis of our inventory and actual utilization of non-sterile medical
instruments.
For the nine months ended
activities was
for the nine months ended
8
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The decrease of
on our credit facility.
Liquidity
Our primary sources of liquidity are cash from our operations and the Credit and
Security Agreement (the "Credit Agreement") with
current assets exceeded our current liabilities by
Capital"), which included
from our operations and net borrowings on our Credit Agreement supports our
Working Capital needs for 2022. Beyond 2022, we believe that we will be able to
support itself through our Credit Agreement until the we are able to support
ourselves solely from the cash provided by operations.
On
Agreement provides for a secured revolving credit facility maturing on
1, 2025
forth in the Credit Agreement.
We used borrowings under the Facility to repay in full (i) our Amended and
Restated Business Loan Agreement, dated
Administration Loan Authorization and Agreement, dated
Agreement may be used for working capital and payment of fees, costs and
expenses incurred in connection with the Credit Agreement.
Borrowings under the Facility bear interest at a floating rate, which will be at
the Prime Rate plus 1.75%. Under the Facility, we must pay certain fees as set
forth in the Credit Agreement. Our obligations with respect to the Credit
Agreement are secured by a pledge of substantially all of our assets, including
accounts receivables, deposit accounts, intellectual property, investment
property, inventory, equipment and equity interests in our subsidiaries.
The Credit Agreement contains customary affirmative and negative covenants,
including limitations on our ability to incur additional debt, grant or permit
additional liens, make investments and acquisitions, merge or consolidate with
others, dispose of assets, pay dividends and distributions, pay subordinated
indebtedness and enter into affiliate transactions. In addition, the Credit
Agreement contains financial covenants requiring us on a consolidated basis to
maintain, as of the last day of each calendar month (i) a current ratio of not
less than 1.0 to 1.0, (ii) a fixed charge coverage ratio of not less than 1.0 to
1.0, (iii) a loan turnover rate of not greater than 60, and (iv) minimum
liquidity of not less than
charge coverage ratio for twelve consecutive months, the minimum liquidity
covenant shall cease to be effective. The Credit Agreement also includes events
of default customary for facilities of this type and upon the occurrence of any
such event of default, all outstanding loans under the Facility may be
accelerated and/or the lenders' commitments terminated.
The foregoing description does not constitute a complete summary of the terms of
the Credit Agreement and is qualified in its entirety by reference to the full
text of the Credit Agreement, which is filed as Exhibit 10.45 to our 2021 Annual
Report.
We rely on the Credit Agreement for capital expenditures and day-to-day Working
Capital needs. As of
available cash, and had reached the borrowing limit based on our borrowing base
limitations. Borrowings on our Credit Agreement are repaid from cash generated
from our operations.
Payroll Protection Program
On
loan under the Payroll Protection Program created as part of the recently
enacted CARES Act administered by the SBA. In connection with the PPP Loan, we
entered into a promissory note in the principal amount of
accordance with the requirements of the CARES Act, we used the proceeds from the
PPP Loan primarily for payroll costs. The PPP Loan was scheduled to mature on
conditions applicable to all loans made pursuant to the PPP. We applied for and
received forgiveness for the total amount of the PPP Loan during the second
quarter of 2021.
EIDL Loan
On
an EIDL Loan from the SBA in light of the impact of the COVID-19 pandemic on our
business. Pursuant to that certain Loan Authorization and Agreement (the "SBA
Loan Agreement"), the principal amount of the EIDL Loan was
proceeds to be used for working capital purposes. In connection therewith, we
received a
an offset in Selling, General, Administrative and Other Expenses in our
accompanying consolidated statements of operations in 2020. (See Note 8,
"Economic Injury Disaster Loan" of our accompanying consolidated notes to our
Financial Statements, beginning on page F-1).
On
SBA for an amended and restated loan and authorization and agreement ("A&R SBA
Loan Agreement") required for securing an increase in the Company's Original
Note from the SBA EIDL Loan. Pursuant to the A&R SBA Loan Agreement, the
principal amount for the EIDL Loan was increased by
9
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to
accrued at the rate of 3.75% per annum. Installment payments, including
principal and interest, were due monthly beginning
months from the date of the Original Note) in the amount of
of principal and interest was payable thirty years from the date of the A&R SBA
Loan Agreement.
The A&R SBA Loan Agreement was paid in full in conjunction with entering into
the Credit Agreement.
Strategic Growth Initiative
Our strategic growth plan provides for capital investment for new product
launches, private label branding, and the upgrade of our financial systems which
support our infrastructure. We deem these investments essential to support our
growth and expansion objectives. We estimate the range of this type of
investment to be approximately
investments to occur primarily during the calendar year 2022. We expect sources
of capital for these investments to be derived from cash from operations and
utilizing the maximum limit with our new credit facility.
Capital Expenditures
For the nine months ended
capital expenditures.
Off-Balance Sheet Arrangements
For the nine months ended
arrangements.
Cautionary Note Regarding Forward-Looking Statements
This report includes forward-looking statements including statements regarding
liquidity.
The words "believe," "may," "estimate," "continue," "anticipate," "intend,"
"should," "plan," "could," "target," "potential," "is likely," "will," "expect",
and similar expressions, as they relate to us, are intended to identify
forward-looking statements. We have based these forward-looking statements
largely on our current expectations and projections about future events and
financial trends that we believe may affect our financial condition, results of
operations, business strategy, and financial needs.
The results anticipated by any of these forward-looking statements might not
occur. Important factors that could cause actual results to differ from those in
the forward-looking statements include; the conditions of the capital markets,
particularly for smaller companies; the willingness of doctors and facilities to
purchase the products that we sell; certain regulatory issues adversely
affecting our margins; insurance companies denying reimbursement to facilities
who use the products that we sell; and our ability to sell products. We
undertake no obligation to publicly update or revise any forward-looking
statements, whether as the result of new information, future events, or
otherwise.
Note 2 – Financial Condition, Going Concern and Management Plans
Management Change – Form 8-K
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