REPRO-MED Systems (KRMD) Risk Analysis

Since our common stock was listed on the Nasdaq Capital Market on October 17, 2019, it has traded between $1.82 per share to $12.84 per share.  Our stock price is subject to wide fluctuations in response to a variety of factors, including: - quarterly variations in operating results; - announcement of new products or customers by our competitors; - changes in financial estimates by securities analysts; - trading volume on the Nasdaq Capital Market; - announcements related to litigation; - general economic conditions; or - other events or factors that are beyond our control. In addition, the stock market has experienced significant price and volume fluctuations that have particularly affected the trading prices of equity securities of many biotechnology companies.  These fluctuations have often been unrelated or disproportionate to the operating performance of these companies.  Any negative change in the public's perception of the prospects of medical device companies could further depress our stock price regardless of our results.  Sales of substantial amounts of our common stock, particularly by our two most significant stockholders, or the perception that such sales might occur, could adversely affect prevailing market prices of our common stock and our stock price may decline substantially in a short time and our stockholders could suffer losses or be unable to liquidate their holdings.

The Nasdaq Capital Market on which our common stock trades has continued listing standards that we must maintain on an ongoing basis in order to continue the listing of our common stock.  If we fail to meet these continued listing requirements, our common stock may be subject to delisting.  If our common stock is delisted and we are not able to list our common stock on another national securities exchange, we expect our securities would be quoted on an over-the-counter market.  If this were to occur, our stockholders could face significant material adverse consequences, including limited availability of market quotations for our common stock and reduced liquidity for the trading of our common stock.  In addition, we could experience a decreased ability to issue additional securities and obtain additional financing in the future, if or when needed.

We are currently a "smaller reporting company" and a "non-accelerated filer", as those terms are defined in the Securities Act. Accordingly, we take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "smaller reporting companies" and "non-accelerated filers," including, but not limited to, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the provisions of Section 404(b) of the Sarbanes-Oxley Act of 2002 requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting.  Decreased disclosures in our SEC filings due to our status as a "smaller reporting company" and "non-accelerated filer" may make it harder for investors to analyze our results of operations and financial prospects. We cannot predict if investors will find our common stock less attractive if we rely on these exemptions.  If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our share price may be more volatile.

We cannot predict the size of future issuances or sales of our common stock or other equity securities future acquisitions or capital raising activities, or the effect, if any, that such issuances or sales may have on the market price of our common stock. The issuance and sale of substantial amounts of common stock or other equity securities or announcement that such issuances and sales may occur, could adversely affect the market price of our common stock. Any decline in the price of our common stock may encourage short sales, which could place further downward pressure on the price of our common stock and may impair our ability to raise additional capital through the sale of equity securities.

Only recently has there been any active trading market in our common stock.  We cannot assure you that such an active trading market for our common stock will be sustained.  Regardless of whether an active and liquid public market exists, negative fluctuations in our actual or anticipated operating results will likely cause the market price of our common stock to fall, making it more difficult for you to sell our common stock at a favorable price, or at all.

From time to time, we may be subject to proposals by stockholders urging us to take certain corporate actions.  If activist stockholder activities ensue, our business could be adversely affected because responding to proxy contests and reacting to other actions by activist stockholders can be costly and time-consuming, disrupt our operations and divert the attention of management and our employees. For example, we may be required to retain the services of various professionals to advise us on activist stockholder matters, including legal, financial and communications advisors, the costs of which may negatively impact our future financial results.  In addition, perceived uncertainties as to our future direction, strategy or leadership created as a consequence of activist stockholder initiatives may result in the loss of potential business opportunities, harm our ability to attract new investors, customers, employees, and joint venture partners, and cause our stock price to experience periods of volatility or stagnation.