We are dependent on the proper functioning of our critical facilities, our supply chain and distribution
networks and our sales force as well as the financial stability of our customers, all of which could be negatively impacted by the coronavirus in a manner that could materially adversely affect our business, financial condition or results of
operations.Our ability to manufacture products may be materially adversely impacted by the coronavirus.The Novel Coronavirus Disease 2019 (COVID-19) (“coronavirus”) is impacting worldwide economic activity. Estimates for economic growth have
been reduced as a result of the coronavirus, which may have a corresponding effect on our sales activity. The virus continues to spread globally, has been declared a pandemic by the World Health Organization and has spread to over 100
countries, including the United States. The impact of this pandemic has been and will likely continue to be extensive in many aspects of society, which has resulted in and will likely continue to result in significant disruptions to the global
economy, as well as businesses and capital markets around the world. With the spread of the coronavirus to the United States and other countries, it is unclear how economic activity and work flows might be impacted on a worldwide basis. Many
employers in the United States are requiring their employees to work from home or not come into their offices or facilities. We manufacture primarily out of one facility in Queensbury, New York, and partially out of a facility in Glens Falls,
New York. If the manufacturing capabilities of these two sites are impacted as a result of the coronavirus, it may not be possible for us to timely manufacture relevant products at required levels or at all. A reduction or interruption in any
of our manufacturing processes could have a material adverse effect on our business, results of operations, financial condition and cash flows. We also might be unable to obtain products, product components, or sterilized products from our
suppliers and vendors due to the additional constraints on suppliers created by the coronavirus. Any delays in delivery of or shortages in products and components could interrupt and delay manufacturing of our products and result in the
cancellation of orders for our products. Our sales may be materially adversely impacted by the coronavirus.Our sales force functions by meeting in person with physicians and health care providers to discuss our products. The coronavirus may
negatively affect demand for our products by limiting the ability of our sales personnel to maintain their customary contacts with customers for a period of time. We may also find that distributors will have to prioritize their work load and
may be forced to slow their activities as a result of the coronavirus. As a result, we cannot assure you that our sales force or distributors will increase or maintain our current levels of unit sales or increase or maintain our current unit
pricing, which, in turn, could have a material adverse effect on our business, results of operations, financial condition and cash flows. In addition, there is a risk that our international distributors will not be financially viable due to the
impact of coronavirus in their respective countries.We may also experience significant and unpredictable reductions in demand for certain products as our health care customers re-prioritize the treatment of patients and divert resources away
from non-coronavirus areas. For example, elective surgeries are being de-prioritized which will negatively impact the usage of certain products, including, without limitation, our EVLT and core products and certain Oncology products. As a
result of coronavirus, our customers and vendors may experience financial difficulties or be unable to borrow money to fund their operations, which may adversely impact their ability to purchase our products or pay for our products on a timely
basis, if at all. The execution of our clinical studies may be materially adversely impacted by the coronavirus.Our future business prospects are highly dependent on generating, collecting and disseminating data pursuant to clinical trials.
Clinical trials, including, without limitation, our DIRECT Study, studying the use of NanoKnife to treat pancreatic cancer, and our Pathfinder Registry, collecting data on the use of our Atherectomy laser, may be materially impacted by the
coronavirus as hospitals prioritize treating coronavirus patients and creating capacity. Delays in the initiation of sites or enrollment of patients in these and other clinical studies, may have a material adverse effect on our results of
operations and future business prospects.Our ability to raise capital may be materially adversely impacted by the coronavirus.Any sustained disruption in the capital markets from the COVID-19 pandemic could negatively impact our ability to
raise capital. As of the end of our third fiscal quarter we have a strong balance sheet and do not anticipate the need to raise additional capital. However, we cannot predict when the macro-economic disruption stemming from the coronavirus will
ebb or when the economy will return to pre-coronavirus levels, if at all. If the macro-economic disruption continues for pro-longed periods we may need to raise additional capital and capital may not be available on acceptable terms, or at
all.The impact of the coronavirus on economic activity, and its effect on our manufacturing facility, supply chain and distribution networks, our sales force and our customers are uncertain at this time and could have a material adverse effect
on our results, especially to the extent theses effects persist or exacerbate over an extended period of time.Value of our goodwill and other long lived intangible assets may be materially impaired as a result of COVID-19.A significant portion
of our assets consists of goodwill, intangible assets and fixed assets, the carrying value of which may be reduced if we determine that those assets are impaired.Most of our intangible and fixed assets have finite useful lives and are amortized
or depreciated over their useful lives on either a straight-line basis or over the expected period of benefit or as revenues are earned from the sales of the related products. The underlying assumptions regarding the estimated useful lives of
these intangible assets are reviewed quarterly and more often if an event or circumstance occurs making it likely that the carrying value of the assets may not be recoverable and are adjusted through accelerated amortization if necessary.
Whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable we test intangible assets for impairment based on estimates of future cash flows. Based upon the ultimate scope and scale of the
COVID-19 global pandemic, there may be materially negative impacts the assumptions we made with respect to our goodwill and other long lived intangible assets and could result in an impairment of such assets. COVID-19 Risk Factor (included in
the February 29, 2020 10-Q)
