SEAE HLDG Item 7.01 Regulation FD Disclosure.
Because of ongoing uncertainty regarding the duration and severity of COVID-19
and/or staffing shortages on spine surgery procedure volumes throughout
The information in this Item 7.01 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any Company filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as shall be expressly set forth by specific reference in such filing.
Item 8.01 Other Events.
The risk factor set forth below supplements the Company's risk factors contained
in Part I, Item 1A of the Company's Annual Report on Form 10-K for the year
ended
Our business, financial condition and results of operations will continue to be materially and adversely impacted in the near-term, and could be materially and adversely impacted in the long-term, by the COVID-19 pandemic.
The COVID-19 pandemic materially and adversely impacted our business and we
expect the impact to continue through at least the duration of the pandemic as
regions respond to local conditions. To date, the impacts include: the
cancellation or postponement of procedures in which our products otherwise could
be used; personnel and other resource shortages at hospitals and other centers
at which spine surgery procedures in which our products otherwise could be used;
disruptions or restrictions on the ability of many of our employees and of third
parties on which we rely to work effectively, including because of adherence to
governmental orders or recommendations or to internal policies intended to
reduce the spread of COVID-19; and temporary closures of our facilities and of
the facilities of our customers and suppliers. For example, throughout the third
quarter of 2021, and most acutely starting in August, spine surgery procedure
volumes have been negatively impacted in many areas of
Because of the pandemic, surgeons and their patients were required, and in certain regions continue to be required, or are choosing, particularly in areas with a high or increasing number of cases of COVID-19, to cancel or postpone procedures in which our products otherwise could be used, and many facilities that specialize in the procedures in which our products
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otherwise could be used temporarily closed or continue to be temporarily closed or operating at reduced hours or are experiencing personnel and other resource constraints and shortages. In addition, even after the pandemic subsides and/or governmental orders no longer prohibit or recommend against performing such procedures, patients may continue to defer such procedures out of concern of being exposed to COVID-19 or for other reasons. Deferrals of elective surgeries could result in delayed product launches if it takes longer than anticipated to collect feedback following an alpha launch. Further, facilities at which our products typically are used may not reopen or, even if they reopen, patients may elect to have procedures performed at facilities that are, or are perceived to be, lower-risk, such as ambulatory surgery centers, and our products may not be approved at such facilities, and we may be unable to have our products approved for use at such facilities on a timely basis, or at all.
The effect of the pandemic on the broader economy could also negatively affect
demand for procedures using our products, both in the near- and long-term. For
example, as a result of the impact of the pandemic, individuals have lost, and
others may lose, access to their private health insurance plan if they have lost
or lose their job. Any prolonged economic downturn or recession as a result of
the pandemic could result in layoffs of employees and a significant increase in
unemployment in
Workforce shortages and limitations and travel restrictions resulting from the
impacts of COVID-19, including actions taken to contain the spread of COVID-19,
have and will continue to adversely affect almost every aspect of our business.
As noted above, spine surgery procedure volumes have recently been negatively
impacted in many areas of
Further, disruptions in the manufacture and/or distribution of our products or in our supply chain may occur as a result of the pandemic, including for the reasons above, or other events that result in staffing shortages, production slowdowns, stoppages, or disruptions in delivery systems, any of which could materially and adversely affect our ability to manufacture and/or distribute our products, or to obtain the raw materials and supplies necessary to manufacture and/or distribute our products, in a timely manner, or at all.
We may also experience other unknown adverse impacts from the pandemic that cannot be predicted. For example, hospitals and other facilities at which we sell our products may renegotiate their purchase prices, including as a result of, or the perception they may be suffering, financial difficulty as a result of the pandemic. Similarly, facilities at which we seek to sell our products in the future may require price reductions relative to the price at which we previously expected to sell our products. Reduction in the prices at which we sell products to existing customers may have a material and adverse
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effect on our future financial results and reductions in the prices at which we expected to sell products to anticipated customers may have a material and adverse effect on our expectations for revenue growth. Further, the global capital markets experienced, and we expect will continue to experience, disruption and volatility due to the pandemic, adversely impacting access to capital not only for us, but also for our customers and suppliers who need access to capital. Their inability to access capital in a timely manner, or at all, could adversely impact demand for our products and/or adversely impact our ability to manufacture and/or supply our products, any of which could have a material and adverse effect on our business.
The full extent to which the pandemic will, directly or indirectly, impact our business, results of operations and financial condition, including our sales, expenses, supply chain integrity, manufacturing capability, research and development activities, and employee-related compensation, is highly uncertain and cannot be predicted with reasonable accuracy at this time and will depend on future developments that are also highly uncertain and cannot be predicted with reasonable accuracy at this time, including, without limitation: (a) new information that may emerge concerning COVID-19, its contagiousness and/or virulence; (b) new variants of the virus that causes COVID-19 that cause more infections, spread faster or cause more severe illness than current or previous variants; (c) resurgences in COVID-19 transmission and infection following the easing or lifting of "stay-at-home" or other restrictions or following resumption of surgical procedures, whether as a result thereof, as a result of reinfection, as a result of a delay in the emergence of symptoms following infection (or reinfection) by COVID-19, or as a result of its ability to lay dormant following infection (or reinfection), and the adverse impact the foregoing may have on our business and financial condition, including because of the adverse impact on patients' willingness to undergo procedures in which our products could be used; (d) actions required or recommended to contain or treat COVID-19, in light of any or all of the foregoing or other as-yet unanticipated developments, whether related to COVID-19 directly or indirectly; and (e) the direct and indirect economic impact, both domestically and abroad, of COVID-19 as a result of any or all of the foregoing, including actions taken by local, state, national and international governmental agencies, whether such impact affects customers, suppliers, or markets generally.
The pandemic also heightens the risks in certain of the other risk factors we face described in the 2020 10-K.
Forward-Looking Statements
The Company cautions you that statements in this report that are not a
description of historical facts are forward-looking statements that are based on
the Company's current expectations and assumptions. Such forward-looking
statements include but are not limited to the Company's expectations for its
total revenue for the third quarter of 2021. Among the factors that could cause
or contribute to material differences between the Company's actual results and
the expectations indicated by the forward-looking statements are risks and
uncertainties that include, but are not limited to: the extent of the impact of
the COVID-19 pandemic on the Company's business and the economy, whether as a
result of the Delta or other variants, including the extent to which spine
surgery procedure volumes are negatively impacted because of the cancellation or
postponement of procedures, staffing shortages or other resource limitations at
hospitals and other surgical centers, patient or surgeon safety concerns,
government-imposed restrictions, or otherwise; surgeons' willingness to continue
to use the Company's existing products and to adopt its newly launched products;
the Company's ability to attract new, high-quality distributors, whether as a
result of perceived deficiencies in the Company's existing product portfolio,
inability to reach agreement on financial or other contractual terms, or
otherwise, as well as disruption associated with restrictive covenants to which
distributors are subject and potential litigation and expense associated
therewith; continued pricing pressure, whether as a result of consolidation in
hospital systems, competitors or others, as well as exclusion from major
healthcare systems; the risk of supply shortages and the associated, potentially
long-term disruption to product sales, including as a result of a limited number
of third-party suppliers for other components and raw materials, or otherwise;
general economic and business conditions in the markets in which the Company
does business, both in the
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