What changed in this filing

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Item 1A. Risk Factors

2026-03-31 compared with 2025-03-14 · 122 added, 126 removed, 869 unchanged (22% of the section changed)

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• We may fail to open and operate new centers in a timely and cost-effective manner.

• We may not be able to successfully continue to expand in markets outside of North America.

• We may not be able to successfully expand in markets outside of North America.

• If our competitors are able to develop and market solutions that are safer, more effective, easier to use or more

readily adopted by patients and healthcare providers, our commercial opportunities may be reduced or eliminated.

• Our business, financial condition and results of operations could be adversely affected by disruptions in the global economy resulting from the ongoing military conflict between Russia and Ukraine.

• Our business, financial condition and results of operations could be adversely affected by disruptions in the global economy resulting from several instances of geopolitical instability, including the ongoing military conflict between Russia and Ukraine, the ongoing conflict in the Middle East, and tensions between the U.S.

• Disruptions at the FDA, the SEC and other government agencies caused by funding shortages or government shutdowns could negatively impact our business operations and regulatory interactions.

• Use of social media may materially and adversely affect our reputation or subject us to fines or other penalties.

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• We face competition for surgeons and other workers that provide our medspa and cosmetic services.

• Changes in tariffs and other governmental trade policies could negatively affect our business and results of operations.

• We outsource the manufacturing of key elements of the tools we use for AirSculpt® procedures to a single third-party manufacturer, Euromi, who is dependent upon third-party suppliers.

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• If we are unable to protect the confidentiality of our other proprietary information, our business and competitive position may be harmed.

• We may not be able to protect our intellectual property rights throughout the world to the same extent as in the United States.

• Our proprietary Airsculpt® method could become obsolete or less competitive due to the introduction of new, more effective, or less invasive competitor technologies

Risks Related to Government Regulations

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Risks Related to Ownership of Our Common Stock

• We are an “emerging growth company,” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.

• After December 31, 2025, we will no longer qualify as an “emerging growth company” as defined in the JOBS Act and the reduced disclosure requirements applicable to emerging growth companies will no longer apply to us.

• Our stock price could be extremely volatile, and, as a result, you may not be able to resell your shares at or above the price you paid for them.

• There may be sales of a substantial amount of our common stock by our current stockholders, and these sales could cause the price of our common stock to fall.

• Certain of our directors and executive officers hold a substantial portion of our common stock, which may lead to conflicts of interest with other stockholders over corporate transactions and other corporate matters.

• Certain of our directors hold a substantial portion of our common stock, which may lead to conflicts of interest with other stockholders over corporate transactions and other corporate matters.

• Provisions in our charter documents and Delaware law may deter takeover efforts that could be beneficial to stockholder value.

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Our operating results could be adversely affected if we are unable to successfully implement certain cost savings initiatives and revenue growth strategies.

In response to the decline in revenue we experienced during the 2024 fiscal year, we are in the process of implementing certain cost-savings initiatives and revenue growth strategies, which are discussed in further detail under the captions “Our Company,” “National and International Footprint Fueled by Attractive Unit Economics,” “Our Growth Strategies,” and “Our Marketing and Sales Efforts and Third-Party Financing” included in Item 1 of this Annual Report on Form 10-K.

In response to the declines in revenue we experienced during the 2024 and 2025 fiscal years, we are in the process of implementing certain cost-savings initiatives and revenue growth strategies, which are discussed in further detail under the captions “Our Company,” “National and International Footprint Fueled by Attractive Unit Economics,” “Our Growth Strategies,” and “Our Marketing and Sales Efforts and Third-Party Financing” included in Item 1 of this Annual Report on Form 10-K.

We may not realize in full or in part, or within the time periods expected, the anticipated savings or benefits from one or more of the various strategies and cost-savings initiatives undertaken as part of these efforts.

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We have a limited operating history and our past results may not be indicative of our future performance.

Further, our revenue growth rate is likely to slow as our business and our market matures.

We began operations in 2012.

We have a limited history of generating revenue.

As a result, our historical revenue growth should not be considered indicative of our future performance.

In particular, we have experienced periods of high revenue growth, including during the global pandemic, that we do not expect to continue as the business, and the body contouring market, mature.

Our historical revenue growth should not be considered indicative of our future performance.

In particular, we have experienced periods of high revenue growth and periods of revenue decline during the history of the company.

Estimates of future revenue trends are subject to many risks and uncertainties and our future revenue may differ materially from our projections.

We have encountered, and will continue to encounter, risks and difficulties frequently experienced by growing companies in rapidly changing industries, including market acceptance of our procedures, attracting new patients, hiring surgeons and responding to increasing competition and expenses as we expand our business.

We have encountered, and will continue to encounter, risks and difficulties frequently experienced by companies in rapidly changing industries, including market acceptance of our procedures, attracting new patients, hiring surgeons and responding to increasing competition and expenses as we expand our business.

We cannot be sure that we will be successful in addressing these and other challenges we may face in the future, and our business may be adversely affected if we do not manage these risks.

Our success depends on our ability to maintain the value and reputation of the AirSculpt ® brand.

Our success depends on our ability to maintain the value and reputation of the AirSculpt ® brand, , which may be harmed by changing consumer preferences and negative publicity, including social media reviews.

We believe that our brand is important to attracting patients and high-quality surgeons.

Maintaining, protecting, and enhancing our brand depends largely on our ability to deliver results for our patients and the success of our marketing efforts.

Maintaining, protecting, and enhancing our brand depends largely on our ability to deliver consistent and beneficial results for our patients, and the success of our marketing efforts, and our ability to manage our public image.

We believe that the importance of our brand will increase as competition further intensifies.

Our brand could be harmed if we fail to achieve these objectives, or if our public image were to be tarnished by negative publicity.

Unfavorable publicity about us, including our procedures and technology, could diminish confidence in the AirSculpt ® brand.

Such negative publicity also could have an adverse effect on our business, financial condition, and operating results.

In the aesthetic market, consumer preferences can shift rapidly, and any failure to adapt our service offerings, centers, or pricing strategies to these changing preferences could result in a material decrease in demand.

Furthermore, we are highly susceptible to negative media and social media exposure.Unfavorable publicity about us, including our procedures and technology, which may include viral content could diminish confidence in the AirSculpt® brand.

Such as negative patient testimonials, reviews, or other content disseminated on platforms like Instagram, TikTok, and other digital channels, could diminish confidence in AirSculpt®publicity also could have an adverse effect on our business, financial condition, and operating results.

We have grown rapidly in recent years and have limited operating experience at our current scale of operations.

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To effectively manage and capitalize on our scale, we must focus on innovation and upgrade our management information systems and other processes.

Future growth could strain our existing resources and we could experience ongoing operating difficulties in managing our

business across numerous jurisdictions, including difficulties in hiring, training, and managing surgeons and other staff in our centers through the Professional Associations.

Future growth could strain our existing resources and we could experience ongoing operating difficulties in managing our business across numerous jurisdictions, including difficulties in hiring, training, and managing surgeons and other staff in our centers through the Professional Associations.

Failure to scale and preserve our high-performance, client-focused culture could delay or prevent future success.

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While we do not expect to open new centers in the next year, our long-term growth strategy contemplates expanding our footprint opportunistically by opening new centers.

Many of our centers are relatively new and we cannot assure you that these centers or that future centers will generate revenue comparable with those generated by our more mature locations, especially as we move to new geographic markets.

Further, many of our centers are leased pursuant to multi-year leases, and our ability to negotiate favorable terms on an expiring lease or for a lease renewal option may depend on factors that are not within our control.

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Further, market acceptance and success of the AirSculpt ® procedure can be affected by adverse publicity or negative public perception about us, our competitors, our patients, our services, or our industry generally.

Adverse publicity may include publicity about the cosmetic treatment industry generally, the efficacy, safety and quality of body fat reduction procedures in general, and liability claims or other litigation, regardless of whether such litigation involves us or the business practices or services of our competitors.

Adverse publicity may include

publicity about the cosmetic treatment industry generally, the efficacy, safety and quality of body fat reduction procedures in general, and liability claims or other litigation, regardless of whether such litigation involves us or the business practices or services of our competitors.

Our business, financial condition and results of operations could be adversely affected if the AirSculpt ® procedure or any body fat reduction services provided by our competitors are alleged to be or are proved to be harmful to patients or to have unanticipated and unwanted health consequences.

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If we fail to operate new centers in a cost-effective manner, our financial performance could be materially and adversely affected.

Our long-term growth strategy depends, in large part, on growing and operating our new centers, including five opened in 2024, both in existing and new geographic regions, particularly in densely populated and affluent metropolitan and suburban regions.

While we do not expect to open new centers in the next year, our long-term growth strategy depends, in large part, on growing and operating our new centers both in existing and new geographic regions, particularly in densely populated and affluent metropolitan and suburban regions.

Our ability to successfully operate new centers depends on many factors, including, among others, our ability to:

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Any failure to preserve our culture could negatively affect our future success, including our ability to retain and recruit surgeons and other personnel on behalf of our affiliated Professional Associations and to effectively focus on and pursue our corporate objectives.

To successfully continue to grow in markets outside of North America, we must address many issues with which we have limited experience.

To successfully grow in markets outside of North America, we must address many issues with which we have limited experience.

Continued international operation is subject to a number of risks, including:

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• foreign tax laws;

• foreign tariffs;

• fluctuations in currency exchange rates;

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• difficulties in developing effective marketing campaigns in unfamiliar foreign countries;

• geopolitical events (such as Russian invasion of Ukraine), social and economic instability abroad, terrorist attacks, and security concerns in general;

• geopolitical events (such as the Russian invasion of Ukraine and the conflict in the Middle East), social and economic instability abroad, terrorist attacks, and security concerns in general;

• potentially adverse tax consequences, including the complexities of foreign value-added tax systems, tax inefficiencies related to our corporate structure, and restrictions on the repatriation of earnings;

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There are also fewer limitations on the claims our competitors in international markets can make about the effectiveness of their products and the manner in which they can market them.

As a result, we face even greater competition in these markets than in the United States.

As a result, we face even greater competition in these markets than in the

United States.

Further, our patent protection of AirSculpt® is limited to the United States, and therefore we may face increased competition from competitors using procedures similar to the AirSculpt® procedure in other countries.

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We have significant exposure to the weight loss and obesity solutions market, which is highly competitive, subject to rapid change and significantly affected by new product introductions, results of clinical research, corporate combinations, and other factors relating to the weight loss industry.

Because of the market opportunity and the high growth potential of the market for weight loss and obesity solutions, existing and potential competitors have historically dedicated, and will

continue to dedicate, significant resources to aggressively develop and commercialize their products.

For example, in 2023, certain drugs initially approved for use in diabetes patients gained market acceptance for use in weight loss treatment following FDA approvals for weight loss indications.

Because of the market opportunity and the high growth potential of the market for weight loss and obesity solutions, existing and potential competitors have historically dedicated, and will continue to dedicate, significant resources to aggressively develop and commercialize their products.

As of the date of this report, it is difficult to predict the long-term market impact of weight-loss drugs, including their long-term efficacy as weight loss drugs and potential drawbacks.

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Competing in the body contouring market and the spread of non-surgical weight loss and obesity solutions could result in price-cutting, reduced profit margins, and reduced market share, any of which would harm our business, financial condition, and results of operations.

Our business, financial condition and results of operations could be adversely affected by disruptions in the global economy resulting from the ongoing military conflict between Russia and Ukraine.

Our business, financial condition and results of operations could be adversely affected by disruptions in the global economy resulting from several instances of geopolitical instability, including the ongoing military conflict between Russia and Ukraine, the ongoing conflict in the Middle East, and tensions between the U.S.

The global economy has been negatively impacted by increasing tension, uncertainty and tragedy resulting from ongoing military conflict between Russia and Ukraine.

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Furthermore, governments in the United States, the European Union, the United Kingdom, Canada and others have imposed financial and economic sanctions on certain industry segments and various parties in Russia and Belarus.

We are monitoring the conflict including the potential impact of financial and economic sanctions on the global economy.

Additionally, in the Middle East, the Israel-Hamas war has transitioned from active combat to a fragile ceasefire, but regional volatility persists, recently drawing in Iran and other actors.

Meanwhile, emerging flashpoints, notable the strategic rivalry between the U.S.

and China, contribute to trade fragmentation and technological decoupling, posing longer-term supply chain and market risks.

Increased trade barriers, sanctions and other restrictions on global or regional trade could adversely affect our business, financial condition and results of operations.

The length and impact of the ongoing military conflict is highly unpredictable, and resulted in market disruptions, including significant volatility in commodity prices, credit and capital markets, an increase in cyber security incidents as well as supply chain disruptions.

Further escalation of geopolitical tensions related to this military conflict and/or its expansion could result in increased volatility and disruption to the global economy and the markets in which we operate adversely impacting our business, financial condition or results of operations.

The length and impact of each ongoing conflict is highly unpredictable, and may result in market disruptions, including significant volatility in commodity prices, credit and capital markets, and increases in cybersecurity incidents as well as supply chain disruptions.

Further escalation of geopolitical tensions related to these conflicts and/or their expansion could result in increased volatility and disruption to the global economy and the markets in which we operate adversely impacting our business, financial condition or results of operations.

Disruptions at the FDA, the SEC and other government agencies caused by funding shortages or government shutdowns could negatively impact our business operations and regulatory interactions.

Significant disruptions to the operations of government agencies, including from prolonged or repeated shutdown of the federal government, could adversely affect our business, financial condition and results of operations.

Recently, from January 31, 2026 to February 3, 2026, the U.S.

government partially shut down.

Prior to that, the U.S.

government shut down from October 1, 2025 to November 12, 2025, during which time certain regulatory agencies, such as the FDA and the SEC, furloughed certain employees and stopped critical activities.

Additionally, on October 10, 2025, the U.S.

government implemented substantial layoffs and workforce reductions in connection with the ongoing federal government shutdown, which resulted in the suspension or delay of various government-funded programs.

Government shutdowns, if prolonged, can significantly impact the ability of government agencies upon which we rely, such as the FDA and SEC, to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

For example, the SEC announced that during the prior U.S.

federal government shutdown, it would not declare registration statements effective.

In the event of an extended shutdown, the SEC may operate with limited staff or suspend certain functions altogether, which could delay the review or effectiveness of our filings, including registration statements or other

financing-related disclosures.

Such delays could adversely affect our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue to fund our operations.

Use of social media may materially and adversely affect our reputation or subject us to fines or other penalties.

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If we are unable to successfully deliver emails or other messages to potential customers, or if potential customers decline to open or read our messages, our business, financial condition and results of operations may be materially adversely affected.

Changes in how web and mail services block, organize and prioritize email may reduce the number of subscribers who receive or open our

Changes in how web and mail services block, organize and prioritize email may reduce the number of subscribers who receive or open our emails.

For example, Google’s Gmail service has a feature that organizes incoming emails into categories (for example, primary, social and promotions).

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The public’s increasing concerns about data privacy and security and the use of social media may negatively affect the use or popularity of social media networks, and, in turn, adversely affect our business.

Similarly, enhanced scrutiny may lead to an increase in regulation of social media, which could limit our ability to use social media to drive our brand awareness and increase consumer acceptance for our procedures.

Similarly, enhanced scrutiny may lead to

an increase in regulation of social media, which could limit our ability to use social media to drive our brand awareness and increase consumer acceptance for our procedures.

In addition, the use of the internet as a business tool could be adversely affected due to delays in the development or adoption of new standards and protocols to handle increased demands of internet activity, security, reliability, cost, ease-of-use, accessibility and quality of service.

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Misconduct by our personnel could also involve the improper use of information obtained in the course of the associate’s prior or current employment, which could result in legal or regulatory action and harm to our reputation.

Changes in tariffs and other governmental trade policies could negatively affect our business and results of operations.

Recent governmental actions and proposals relating to tariffs and other trade policies have created uncertainty about future trading arrangements and the possibility of imposing or increasing tariffs on certain goods.

For example, certain governments have imposed or may impose tariffs on a wide range of products, raw materials, and intermediate goods.

Additional tariffs, or retaliatory measures by other countries in response, may be implemented at any time.

Should these or similar tariffs remain in place (or be re-imposed or increased), or if additional tariffs or trade restrictions are enacted in the future, they could cause us to face higher costs or supply chain disruptions.

These actions could adversely affect our margins, profitability, financial condition, and results of operations.

While we have not experienced adverse impacts of tariffs to date, we cannot predict future changes in trade policy or the terms of any renegotiated trade agreements, nor can we determine the impact they may have on our business.

Any such changes could have a material adverse effect on our business, financial condition, and results of operations.

We outsource the manufacturing of key elements of the tools we use for AirSculpt ® procedures to a single third-party manufacturer.

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Insurance coverage may not continue to be available at a cost allowing us to maintain adequate levels of insurance.

If one or more successful claims against us, our affiliated

Professional Associations or surgeons were not covered by or exceeded the coverage of our insurance, our financial condition and results of operations could be adversely affected.

If one or more successful claims against us, our affiliated Professional Associations or surgeons were not covered by or exceeded the coverage of our insurance, our financial condition and results of operations could be adversely affected.

Our business, profitability and growth prospects could suffer if we face negative publicity or we pay damages or defense costs in connection with a claim that is outside the scope or limits of coverage of any applicable insurance coverage, including claims related to adverse patient events, contractual disputes, professional and general liability, and directors’ and officers’ duties.

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Our revenue is particularly sensitive to regulatory, economic and other conditions in the states and jurisdictions in which we have centers.

As of the date of this Annual Report on Form 10-K, we operate through our arrangements with our affiliated Professional Associations thirty-two centers in Arizona, California, Colorado, Florida, Georgia, Illinois, Kansas, Massachusetts, Michigan, Minnesota, Nevada, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Utah, Washington, and Virginia as well as Toronto, Canada and London, United Kingdom.

As of the date of this Annual Report on Form 10-K, we operate through our arrangements with our affiliated Professional Associations centers in Arizona, California, Colorado, Florida, Georgia, Illinois, Kansas, Massachusetts, Michigan, Minnesota, Nevada, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Utah, Washington, Virginia and Toronto, Canada.

In addition, our five centers located in California represented 20% of our revenue in 2025 and 2024.

As a result, our business, financial condition and results of operations could be adversely affected by disruptions in the Southern California economy resulting from recent wildfires.

We expect that disruptions in the Southern California economy resulting from recent wildfires may impact the demand for our procedures at our five centers located in California, in particular at our center located in Beverly Hills.

our business in those states and jurisdictions, which could have a material adverse effect on our business, prospects, results of operations and financial condition.

As a result, our business, financial condition and results of operations could be adversely affected by disruptions in the Southern California economy.

In the event of any other adverse regulatory, economic or other developments in any of the states and jurisdictions in which we have a higher concentration of centers there could be unanticipated adverse impacts on our business in those states and jurisdictions, which could have a material adverse effect on our business, prospects, results of operations and financial condition.

We depend on our senior management, and we may be adversely affected if we lose any member of our senior management.

Because our senior management has been key to our success, we are highly dependent on Dr.

Aaron Rollins, our founder and Executive Chairman of our board of directors.

We do not maintain “key man” life insurance policies on any of our officers.

Competition for senior management generally, and within the cosmetic surgery and healthcare industry specifically, is intense and we may not be able to recruit and retain the personnel we need if we were to lose an existing member of senior management.

Because our senior management is instrumental to our future success, the loss of key management personnel, without adequate replacements, or our inability to attract, retain and motivate sufficient numbers of qualified management personnel could have a material adverse effect on our financial condition and results of operations.

Because our senior

management is instrumental to our future success, the loss of key management personnel, without adequate replacements, or our inability to attract, retain and motivate sufficient numbers of qualified management personnel could have a material adverse effect on our financial condition and results of operations.

We rely on Vesey Street Capital Partners, L.L.C., our private equity sponsor and the interests of our Sponsor may conflict with the interests of the Company and its other stockholders.

We have in recent years depended on our relationship with our Sponsor to help guide our business plan.

Our Sponsor has significant expertise in financial matters.

This expertise was available to us through the representatives our Sponsor has on our board of directors and as a result of our management agreement with an affiliate of our Sponsor (the "Management Agreement").

In connection with the completion of our IPO, the Management Agreement terminated.

Daniel Sollof and Adam Feinstein remain on our board of directors and hold contractual rights to seats on our board of directors for as long as our Sponsor maintains certain levels of ownership of our common stock.

Our Sponsor has significant expertise in financial matters, which is available to us through the representatives our Sponsor has on our board of directors.

Our Sponsor holds contractual rights to seats on our board of directors for as long as our Sponsor maintains certain levels of ownership of our common stock.

We have entered into, and may in the future enter into, agreements with our Sponsor which constitute related-party transactions as defined under Item 404 of Regulation S-K, as disclosed in further detail in this Annual Report on Form 10-K under the caption “Certain Relationships and Related Transactions, and Director Independence.” As of the date of this Annual Report on Form 10-K, affiliates of our Sponsor beneficially own 47% of our common stock.

Affiliates of our Sponsor may elect to reduce their ownership in our Company, which could reduce or eliminate the benefits we have historically achieved through our relationship with it.

Affiliates of our Sponsor may elect to reduce their ownership in our Company, which could reduce or eliminate the benefits we have historically achieved through our relationship with our Sponsor..

Additionally, our Sponsor is in the business of making investments in companies and may from time to time acquire and hold interests in businesses that compete directly or indirectly with us.

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Our leverage could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry, expose us to interest rate risk to the extent of our variable rate debt and prevent us from meeting our obligations under our outstanding indebtedness.

As of December 31, 2024, total outstanding indebtedness under our senior credit facility was approximately $75.8 million, consisting of $70.8 million in term loans (the “Term Loan”) and $5.0 million drawn on the revolving credit facility (the “Revolver”) (the “Term Loan and Revolving Credit Facility”).

As of December 31, 2025, total outstanding indebtedness under our senior credit facility was approximately $75.8 million, consisting of $56 million in term loans (the “Term Loan”) and there is $5.0 million available on our revolving credit facility (the “Revolver”) (the “Term Loan and Revolving Credit Facility”).

Our leverage could have important consequences, including:

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Our ability to pay or to refinance our indebtedness will depend upon our future operating performance, which will be affected by general economic, financial, competitive, legislative, regulatory, business and other factors beyond our control.

On March 12, 2025, the Company, EBS Intermediate Parent LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company (“EBS Parent”), EBS Enterprises LLC, a Delaware limited liability company (“Borrower”), Silicon Valley Bank, a division of First-Citizens Bank & Trust Company, as the administrative agent (“SVB”), and the lenders a party thereto entered into a Third Amendment to Credit Agreement (the “Third Amendment”) in connection with that certain Credit Agreement, dated as of November 7, 2022 (as amended by that certain First Amendment and Limited Waiver to Credit Agreement, dated as of March 9, 2023, by that certain Second Amendment to Credit Agreement, dated as of September 13, 2024, and by the Third Amendment, collectively, the “Credit Agreement”), among the Company, EBS Parent, Borrower, the several banks and other financial institutions or entities from time to time party thereto (each a “Lender” and, collectively, the “Lenders”) and SVB, the form of which was attached as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the U.S.

to the Company’s Current Report on Form 8-K filed with the U.S.

Securities and Exchange Commission (the “SEC”) on November 9, 2022.

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On March 12, 2025, in connection with the Third Amendment, the Company, SVB and our Sponsor (through certain affiliated entities) entered into that certain Limited Guarantee by and among Vesey Street Capital Partners Healthcare Fund, L.P., Vesey Street Capital Partners Healthcare Fund-A, L.P., SVB and the Company (the “Limited Guarantee”), pursuant to which our Sponsor agreed to provide a $10.0 million guaranty of the Company’s obligations under the Credit Agreement.

The Limited Guarantee is callable on June 15, 2025 (or upon the earlier occurrence of certain defaults described therein) if the Company has not prepaid the Term Loan (excluding regularly scheduled amortization) by $10.0 million as of such date.

Under the terms of the Limited Guarantee, if Sponsor is required to make any payment under the Limited Guarantee (other than as a result of a bankruptcy event), then Sponsor will be deemed to have purchased shares of common stock of the Company having an aggregate value equal to the amount of such payment.

The Company has agreed to issue a subordinated note to Sponsor if a payment occurs under the Limited Guarantee, to the extent such payment does not result from the issuance of shares of common stock by the Company to Sponsor.

The Limited Guarantee was callable on June 15, 2025 (or upon the earlier occurrence of certain defaults described therein) if the Company had not prepaid the Term Loan (excluding regularly scheduled amortization) by $10.0 million as of such date.

The Company made the required $10.0 million repayment prior to June 15, and the Limited Guarantee automatically terminated on March 12, 2026 following the prepayment of the Term Loan in an aggregate amount of $20.0 million since the date of the Limited Guarantee.

Restrictive covenants in our debt instruments may adversely affect us.

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A breach of any of these covenants could result in a default under our Term Loan and Revolving Credit Facility.

Upon the occurrence of an event of default under our Term Loan and Revolving Credit Facility, the lenders could elect to declare all amounts outstanding under our Term Loan and Revolving Credit Facility to be immediately due and payable and terminate all commitments to extend further credit.

Upon the occurrence of an event of default under our Term Loan and

Revolving Credit Facility, the lenders could elect to declare all amounts outstanding under our Term Loan and Revolving Credit Facility to be immediately due and payable and terminate all commitments to extend further credit.

If we were unable to repay those amounts, the lenders could proceed against the collateral granted to them to secure that indebtedness.

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Although the Term Loan and Revolving Credit Facility, including the recent Third Amendment, contains restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of significant qualifications and exceptions, and the indebtedness incurred in compliance with these restrictions could be substantial.

In addition, as of December 31, 2024 we had no availability under our Revolver.

In addition, as of December 31, 2025 we had $5.0 million under our Revolver.

If new debt is added to our or our subsidiaries’ current debt levels, the related risks that we face would be increased.

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We are a holding company, and our ability to service our debt is dependent upon the earnings from the business conducted by our subsidiaries that operate the centers.

The effect of this structure is that we depend on the earnings of our

subsidiaries, and the distribution or payment to us of a portion of these earnings to meet our obligations, including those under our Term Loan and Revolving Credit Facility and any of our other debt obligations.

The effect of this structure is that we depend on the earnings of our subsidiaries, and the distribution or payment to us of a portion of these earnings to meet our obligations, including those under our Term Loan and Revolving Credit Facility and any of our other debt obligations.

The distributions of those earnings or advances or other distributions of funds by these entities to us, all of which are contingent upon our subsidiaries’ earnings, are subject to various business considerations.

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For example, the Tax Cuts and Jobs Act of 2017 (the “Tax Cuts and Jobs Act”) enacted many significant changes to the U.S.

Future guidance from the Internal Revenue Service and other tax authorities may affect us, and certain aspects of the Tax Cuts and Jobs Act or other U.S.

Future guidance from the Internal Revenue Service and other tax authorities may affect us, and certain aspects of the Tax Cuts and Jobs Act, the OBBBA, or other U.S.

tax laws could be repealed or modified in future legislation.

In addition, it is uncertain if and to what extent various states will conform to any newly enacted federal tax legislation.

Proposals to change U.S.

or foreign tax laws could have an adverse impact on our effective tax rate, income tax expense, and financial performance.

For example, the U.S.

Congress, the Organization for Economic Cooperation and Development (“OECD”), and other government agencies are considering various proposals that may affect the taxation of multinational corporations.

Although we cannot predict whether or in what form these proposals may pass, changes in corporate tax rates, the realization of net deferred tax assets relating to our operations, the taxation of foreign earnings, or other changes could have a material impact on the value of our deferred tax assets, could result in significant one-time charges, or could increase our future tax expense.

Pending proposals from the U.S.

Congress, the Organization for Economic Cooperation and Development (“OECD”), and other government agencies regarding the taxation of multinational corporations could change corporate tax rates or foreign earnings rules.

Such changes may materially impact our deferred tax assets, resulting in significant one-time charges, or increase our future tax expense.

In addition, we may be subject to audits of our income, sales and other transaction taxes by U.S.

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Our management team has limited experience managing a public company.

Most members of our management team have limited experience managing a publicly traded company, interacting with public company investors, and complying with the increasingly complex laws pertaining to public companies.

Our management team has limited experience managing a publicly traded company, interacting with public company investors, and complying with the increasingly complex laws pertaining to public companies.

We are subject to significant regulatory oversight and reporting obligations under the federal securities laws, Nasdaq Stock Market, and the continuous scrutiny of securities analysts and investors.

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Such laws are inconsistent, and compliance in the event of a widespread security incident is complex and costly and may be difficult to implement.

Moreover, while we maintain cyber insurance that may help provide coverage for these types of incidents, we cannot assure you that our insurance will be adequate to cover all costs and liabilities related to these incidents.

Moreover, while we maintain cyber insurance that may help provide coverage for these types of incidents, we cannot

assure you that our insurance will be adequate to cover all costs and liabilities related to these incidents.

In addition, such insurance may not be available to us in the future on economically reasonable terms, or at all.

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We may be required to expend significant capital and other resources to protect against security breaches, to safeguard the privacy, security, and confidentiality of IIHI/PII and other sensitive data and information, to investigate, contain, remediate, and mitigate actual or potential security breaches, and/or to report security breaches to patients, employees, regulators, media, credit bureaus, and other third parties in accordance with applicable law and to offer complimentary credit monitoring, identity theft protection, and similar services to patients and/or employees where required by law or otherwise appropriate.

implementation of security measures, cyber-attacks are becoming more sophisticated and frequent, and we or our third-party service providers may be unable to anticipate these techniques or to implement adequate protective measures against them or to prevent additional attacks.

Despite our implementation of security measures, cyber-attacks are becoming more sophisticated and frequent, and we or our third-party service providers may be unable to anticipate these techniques or to implement adequate protective measures against them or to prevent additional attacks.

Our information technology networks and systems used in our business, as well as those of our service providers, may experience an increase in attempted cyber-attacks, seeking to take advantage of shifts to employees working remotely using their household or personal internet networks.

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We exercise limited control over our third-party service providers and, in the case of some third-party service providers, may not have evaluated the adequacy of their security measures, which increases our vulnerability to problems with services they provide.

A security breach, security incident, or privacy violation that leads to unauthorized use, disclosure, access, acquisition, loss or modification of, or that prevents access to or otherwise impacts the confidentiality, security, or integrity of, patient or employee information, including IIHI/PII that we or our third-party service providers Process, could harm our reputation, compel us to comply with breach notification laws, cause us to incur significant costs for investigation, containment, remediation, mitigation, fines, penalties, settlements, notification to individuals, regulators, media, credit bureaus, and other third parties, complimentary credit monitoring, identity theft protection, training and similar services to patients and/or employees where required by law or otherwise appropriate, for measures intended to repair or replace systems or technology and to prevent future occurrences.

compel us to comply with breach notification laws, cause us to incur significant costs for investigation, containment, remediation, mitigation, fines, penalties, settlements, notification to individuals, regulators, media, credit bureaus, and other third parties, complimentary credit monitoring, identity theft protection, training and similar services to patients and/or employees where required by law or otherwise appropriate, for measures intended to repair or replace systems or technology and to prevent future occurrences.

We may also be subject to potential increases in insurance premiums, resulting in increased costs or loss of revenue.

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In addition, publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all.

Therefore, we cannot be certain that we were the first to

make the inventions claimed in our patents or pending patent applications or that we were the first to file for patent protection of such inventions.

Therefore, we cannot be certain that we were the first to make the inventions claimed in our patents or pending patent applications or that we were the first to file for patent protection of such inventions.

Changes in either the patent laws or their interpretation in the United States and other countries may diminish our ability to protect our inventions, obtain, maintain, and enforce our patent rights and, more generally, could affect the value of our patents or narrow the scope of our patents.

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The coverage claimed in a patent application can be significantly reduced before a patent is issued, and its scope can be reinterpreted after issuance.

Even if our patent applications issue as patents, they may not issue in a form that will provide us with any meaningful protection, prevent competitors or other third parties from competing with us, or otherwise provide us with any competitive advantage.

Even if our patent applications issue as patents, they may not issue in a form that will provide us with any meaningful protection, prevent

competitors or other third parties from competing with us, or otherwise provide us with any competitive advantage.

As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain.

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Our competitors, many of which have substantially greater resources and have made substantial investments in patent portfolios, trade secrets, trademarks and competing technologies, may have applied for or obtained, or may in the future apply for or obtain, patents or trademarks that will prevent, limit or otherwise interfere with our ability to make, use, sell and/or export our technology and procedures or to use our proprietary names.

Because patent applications can take years to issue and are often afforded confidentiality for some period of time, there is a risk we may develop one or more procedures or other technologies without knowledge of a pending patent application, which if such patent application

issued into a patent would result in our procedures or technologies infringing such patent.

From time to time, we may receive threatening letters, notices or “invitations to license,” or may be the subject of claims that our procedures, technology, brands, proprietary names and marks, and/or business operations infringe or violate the intellectual property rights of others.

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Such mechanisms include re-examination, post-grant review, inter partes review, interference proceedings, derivation proceedings and equivalent proceedings in foreign jurisdictions (e.g., opposition proceedings).

In any such lawsuit or other proceedings, a court or other administrative body may decide that a patent of

ours is invalid or unenforceable, in whole or in part, construe the patent’s claims narrowly or refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question.

In any such lawsuit or other proceedings, a court or other administrative body may decide that a patent of ours is invalid or unenforceable, in whole or in part, construe the patent’s claims narrowly or refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question.

The outcome following legal assertions of invalidity and unenforceability is unpredictable.

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In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments, and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock.

Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for development activities or any future sales, marketing or distribution activities.

Such litigation or proceedings could substantially increase our operating losses and reduce the resources available

for development activities or any future sales, marketing or distribution activities.

We may not have sufficient financial or other resources to conduct such litigation or proceedings adequately.

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Our failure to secure, protect and enforce our intellectual property rights could substantially harm the value of our brand and business.

The theft or unauthorized use or publication of our trade secrets and other confidential proprietary information could reduce the differentiation of our

procedures and harm our business, the value of our investment in development could be reduced and third parties may make claims against us related to losses of their confidential or proprietary information.

The theft or unauthorized use or publication of our trade secrets and other confidential proprietary information could reduce the differentiation of our procedures and harm our business, the value of our investment in development could be reduced and third parties may make claims against us related to losses of their confidential or proprietary information.

Further, it is possible that others will independently develop the same or similar technology or otherwise obtain access to our unpatented technology, and in such cases we could not assert any trade secret rights against such parties.

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We also seek to preserve the integrity and confidentiality of our data and other confidential information by maintaining physical security of our premises and physical and electronic security of our information technology systems.

While we have confidence in these individuals, organizations and systems, agreements or security measures may be breached and detecting the disclosure or misappropriation of confidential information and enforcing a claim that a party illegally disclosed or misappropriated confidential information is difficult, expensive and time-consuming, and the outcome is unpredictable.

have confidence in these individuals, organizations and systems, agreements or security measures may be breached and detecting the disclosure or misappropriation of confidential information and enforcing a claim that a party illegally disclosed or misappropriated confidential information is difficult, expensive and time-consuming, and the outcome is unpredictable.

Further, we may not be able to obtain adequate remedies for any breach.

Any of the foregoing could materially and adversely affect our business, financial condition and results of operations.

We may not be able to protect our intellectual property rights throughout the world to the same extent as in the United States.

While we have applied for patent protection in the United States and internationally relating to certain of our procedures, a company may attempt to commercialize competing procedures utilizing our proprietary methods in foreign countries where we do not have any patents or patent applications and where legal recourse may be limited or unavailable.

In addition, we currently own registered trademarks and trademark applications relating to our business in the United States and other markets, but other companies may own these marks in other jurisdictions.

Any such third-party rights may have a significant commercial impact on our ability to expand into foreign markets.

Filing, prosecuting and defending patents or trademarks on our current and future procedures in all countries throughout the world would be prohibitively expensive.

In addition, we may not accurately predict all of the jurisdictions where patent or trademark protection will ultimately be desirable.

If we fail to timely file a patent or trademark application in some jurisdictions, we may be precluded from doing so at a later date.

The requirements for patentability and for obtaining trademark protection may differ in certain countries, particularly developing countries.

The laws of some foreign countries do not protect intellectual property rights to the same extent as laws in the United States.

Consequently, we may not be able to prevent third parties from utilizing our inventions, trademarks and other proprietary rights in all countries outside the United States.

Competitors may use our technologies or trademarks in jurisdictions where we have not obtained patent or trademark protection to develop or market their own procedures.

Our patents, trademarks or other intellectual property rights may not be effective or sufficient to prevent them from competing.

Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.

The legal systems of certain countries, particularly certain developing countries, do not favor, or may not be sufficiently robust for, the meaningful enforcement of patents, trademarks and other intellectual property rights, which could make it difficult for us to stop the infringement or other violation of our patents, trademarks and other intellectual property rights.

Proceedings to enforce our intellectual property rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents and trademarks at risk of being invalidated or interpreted narrowly and/or result in the unsuccessful prosecution of our patent or trademark applications, and could provoke third parties to assert claims against us.

We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful.

In addition, many countries, including India, China and certain countries in Europe, have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties.

In those countries, we may have limited remedies if our patents are infringed or if we are compelled to grant a license to our patents to a third party, which could materially diminish the value of those patents.

This could limit our potential revenue opportunities.

Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from our intellectual property.

Finally, our ability to protect and enforce our intellectual property rights may be adversely affected by unforeseen changes in foreign intellectual property laws.

If our trademarks and trade names are not adequately protected, that could adversely impact our ability to build name recognition in certain markets.

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Over the long term, if we are unable to establish name recognition through our trademarks and trade names, then we may not be able to compete effectively and our business, financial condition and results of operations may be adversely affected.

The aesthetic body contouring market is characterized by rapid technological change, and if we are unable to maintain the superiority of our proprietary AirSculpt® method, our business and financial results may be materially harmed.

We rely significantly on the proprietary and patented AirSculpt® method and our associated body contouring procedures as a core competitive differentiator.

The market for aesthetic and cosmetic procedures is rapidly evolving and is subject to new product introductions, technological innovations, and changes in patient preferences.

Our ability to compete successfully depends on our capacity to maintain the distinctiveness and perceived superiority of our procedures compared to existing and future alternatives, including traditional surgical procedures (such as liposuction and abdominoplasty) and non-surgical body fat reduction and skin tightening treatments.

Competitors may develop and introduce new technologies, products, or procedures that are more effective, less invasive, have better clinical outcomes, are more widely accepted by patients, or are more cost-effective than the AirSculpt® method.

If this occurs, or if our proprietary rights are challenged or expire, our technology may become obsolete, less appealing to customers, or face significant competitive pressure.

Our failure to anticipate, keep pace with, or effectively respond to these technological advances could lead to a loss of competitive advantage, a decrease in the market acceptance of our procedures, and a material adverse effect on our revenue, market share, and results of operations.

Risks Related to Government Regulations

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Any enforcement action against us, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business.

In pursuing our growth strategy, we may seek to expand our presence into states in which we do not currently operate.

While we do not expect to open new centers in the next year, in pursuing our long-term growth strategy, we may seek to expand our presence into states in which we do not currently operate.

In new geographic areas, we may encounter laws and regulations that differ from those applicable to our current operations.

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We provide comprehensive, administrative and non-clinical Management Services to our affiliated Professional Associations in exchange for a management fee.

Regulatory authorities, state boards of medicine, state attorneys general and other parties

may assess or determine that our relationships with our affiliated Professional Associations and surgeons violate state CPOM and/or fee-splitting prohibitions.

Regulatory authorities, state boards of medicine, state attorneys general and other parties may assess or determine that our relationships with our affiliated Professional Associations and surgeons violate state CPOM and/or fee-splitting prohibitions.

If any of these events occur, we could be subject to significant fines and penalties, certain relationships with our affiliated Professional Associations and surgeons could be voided and declared unenforceable and/or we could be required to materially change the way we do business, which, could adversely affect our business, financial condition and results of operations.

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The regulation applicable to our business and to the healthcare industry generally to which we are subject is constantly in a state of flux.

A number of states, including states in which we operate, such as California, Massachusetts, and New York have passed recent legislation that are materially increasing the scrutiny of investors investing in for-profit health care providers, which could ultimately impact our existing structure.

A number of states, including states in which we operate, such as California, Massachusetts, and New York

have passed recent legislation that are materially increasing the scrutiny of investors investing in for-profit health care providers, which could ultimately impact our existing structure.

While we believe that we have structured our agreements and operations in material compliance with applicable healthcare laws and regulations, there can be no assurance that we will be able to successfully address changes in the current regulatory environment or changes in interpretation of existing laws and regulations.

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These laws and regulations are often ambiguous, contradictory, and subject to changing or differing interpretations, and we expect new laws, rules and regulations regarding privacy, data protection, and information security to be proposed and enacted in the future.

For example, the California Confidentiality of Medical

Information Act (CMIA) regulates the disclosure of medical information, and applies to the IIHI we Process in the ordinary course of our Business.

For example, the California Confidentiality of Medical Information Act (CMIA) regulates the disclosure of medical information, and applies to the IIHI we Process in the ordinary course of our Business.

Violations of the CMIA can result in personal liability to the patient, the imposition of administrative fines and civil penalties, and even criminal liability.

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As a result, our stockholders may not have access to certain information that they may deem important.

We could remain an emerging growth company until December 31, 2026, although circumstances could cause us to lose that status earlier, including if our total annual gross revenue is $1.235 billion or more, if we issue more than $1 billion in non-convertible debt during the previous three-year period, or if the Company qualifies as a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act.

cannot predict if investors will find our common stock less attractive because we may rely on these exemptions.

We cannot predict if investors will find our common stock less attractive because we may 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 stock price may be more volatile.

After December 31, 2025 we will no longer be considered an emerging growth company but rather an accelerated filer where we will be subjected to compliance under the Sarbanes-Oxley Act.

We filed a registration statement on Form S-3 with the SEC, and the number of shares of common stock being registered for sale is significant in relation to the number of our outstanding shares of common stock.

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These shares of common stock represent a large number of shares of our common stock, and if sold in the market all at once or at about the same time, could depress the market price of our common stock during the period the registration statement remains effective and could also affect our ability to raise equity capital.

Although we do not expect to rely on the “controlled company” exemption, we are a “controlled company” within the meaning of the Nasdaq listing standards, and we qualify for exemptions from certain corporate governance requirements.

A “controlled company,” as defined in the Nasdaq listing standards, is a company of which more than 50% of the voting power for the election of directors is held by an individual, a group or another company.

Controlled companies are not required to comply with certain Nasdaq listing standards relating to corporate governance, including:

• the requirement that a majority of its board of directors consist of independent directors;

• the requirement that its nominating and corporate governance committee be composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities;

• the requirement that its compensation committee be composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities.

Our Sponsor currently owns a majority of the voting power for the election of our directors, and thus we meet the definition of a “controlled company.” As a result, these requirements do not apply to us as long as we remain a “controlled company.”

Although we qualify as a “controlled company,” we currently do not, and we do not expect to, rely on this exemption and we currently comply with, and we expect to continue to comply with, all relevant corporate governance requirements under the Nasdaq listing standards.

However, if we were to utilize some or all of these exemptions, you may not have the same protections afforded to shareholders of companies that are subject to all of the Nasdaq listing standards that relate to corporate governance.

Our stock price could be extremely volatile, and, as a result, you may not be able to resell your shares at or above the price you paid for them.

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Certain of our directors and executive officers hold a substantial portion of our common stock, which may lead to conflicts of interest with other stockholders over corporate transactions and other corporate matters.

Certain of our directors and executive officers beneficially own a substantial portion of our outstanding common stock.

Certain of our directors beneficially own a substantial portion of our outstanding common stock.

This concentration of ownership may not be in the best interests of our other stockholders.

These stockholders, acting together, would be able to influence significantly all matters requiring stockholder approval, including the election of directors and significant corporate transactions such as mergers or other business combinations.

This control could delay, deter, or prevent a third party from acquiring or merging with us, which could adversely affect the market price of our common stock.

These stockholders, acting together, would be able to have significant influence over all matters requiring stockholder approval, including the election of directors and significant corporate transactions such as mergers or other business combinations.

This influence could delay, deter, or prevent a third party from acquiring or merging with us, which could adversely affect the market price of our common stock.

Provisions in our charter documents and Delaware law may deter takeover efforts that could be beneficial to stockholder value.

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For the avoidance of doubt, this provision is intended to benefit and may be enforced by us, our officers and directors, the underwriters to any offering giving rise to such Proceeding, and any other professional or entity whose profession gives authority to a statement made by that person or entity and who has prepared or certified any part of the documents underlying the offering.

However, these choice of forum provisions may limit a stockholder’s ability to bring a Proceeding in a judicial forum that it finds favorable for disputes with us or our directors, officers, other employees or stockholders.

However, these choice of forum provisions may limit a stockholder’s ability to bring a Proceeding

in a judicial forum that it finds favorable for disputes with us or our directors, officers, other employees or stockholders.

Further, these choice of forum provisions may increase the costs for a stockholder to bring such a Proceeding and may discourage them from doing so.

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As a public company, we are required to evaluate our internal controls over financial reporting.

Furthermore, at such time as we cease to be an “emerging growth company,” as more fully described in the risk factor “ We are an “emerging growth company,” as defined in the Securities Act, and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors, ” we will also be required to comply with Section 404 of the Sarbanes-Oxley Act.

Furthermore, after December 31, 2025, we will no longer qualify as an “emerging growth company” and we will be required to comply with Section 404 of the Sarbanes-Oxley Act.

At such time, we may identify material weaknesses that we may not be able to remediate in time to meet the applicable deadline imposed upon us for compliance with the requirements of Section 404 of the Sarbanes-Oxley Act.

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Operating as a public company makes it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage.

This could also make it more difficult for us to attract and retain qualified people to serve on our board of directors, our board committees, or as executive officers.

This could also make it

more difficult for us to attract and retain qualified people to serve on our board of directors, our board committees, or as executive officers.

Furthermore, if we are unable to satisfy our obligations as a public company, we could be subject to delisting of our common stock, fines, sanctions, and other regulatory action and potentially civil litigation, which could have a material adverse effect on our financial condition and results of operations.

As an “emerging growth company” under the JOBS Act, we are permitted to, and intend to, take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements.

As an “emerging growth company” under the JOBS Act, we take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements.

When these exemptions cease to apply, we expect to incur additional expenses and devote increased management effort toward ensuring compliance with them.

We will remain an “emerging growth company” for up to five years, although we may cease to be an emerging growth company earlier under certain circumstances.

See the risk factor “ We are an “emerging growth company,” as defined in the Securities Act, and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors ” for additional information on when we may cease to be an emerging growth company.

We cannot predict or estimate the amount of additional costs we may incur as a result of becoming a public company or the timing of such costs.

After December 31, 2025 we will no longer qualify as an “emerging growth company”.

As a result, we will be required to comply with the auditor attestation requirements pursuant to SOX 404.

To achieve compliance with Section 404 of SOX, we are engaged in a process to document and evaluate our internal control over financial reporting, which is both costly and challenging.

In this regard, we will need to continue to dedicate internal resources, potentially engage outside consultants, adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented, and implement a continuous reporting and improvement process for internal control over financial reporting.

See the risk factor "After December 31, 2025, we will no longer qualify as an "emerging growth company" as defined in the JOBS Act, and the reduced disclosure requirements applicable to emerging growth companies will no longer apply to us" for additional information on the potential implications of our loss of emerging growth company status.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors