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Risks Related to Our Business
−Removed: Our future results depend upon our ability to successfully commercialize, market and sell our newly approved EluPro antibacterial envelope device and the success of a smaller suite of established products than has historically been the case.
−Removed: The Company has focused much of its attention recently on EluPro, which was cleared for marketing by the U.S.
−Removed: Food and Drug Administration (“FDA”) in June 2024 and is indicated for use with implantable electronic devices including cardiac and neurostimulator devices.
−Removed: We believe the Company’s success is highly dependent on the successful commercialization, marketing and sale of EluPro, as well as the extension of our drug-eluting biomatrix (“DEB”) technology into potential adjacent applications.
−Removed: Alongside EluPro, we continue to market the CanGaroo bioenvelope, our first generation product, which uses the same biomatrix but does not contain antibiotics.
−Removed: Our Device Protection products, EluPro and CanGaroo, are sold through both our internal sales force and independent sales agents and our commercial
−Removed: partner, Boston Scientific Corporation.
−Removed: We believe the commercialization and marketing efforts with respect to EluPro will require significant investments in time and resources.
−Removed: However, there can be no assurance that we will have or be able to obtain sufficient resources to make the necessary investments in order to increase the sales and market penetration for EluPro, or that if made, such investments will yield the results sought.
−Removed: If we fail to successfully commercialize, market and sell EluPro, the Company’s business and financial condition may be materially adversely affected.
−Removed: On November 8, 2023, we sold our Orthobiologics Business for consideration of $14.6 million up front, as adjusted, and up to $20 million payable in the form of earn-out payments over the five years following the closing.
−Removed: The purchaser did not assume any liabilities related to the FiberCel or VBM Recalls, or any claims or lawsuits related thereto.
−Removed: Our former Orthobiologics segment accounted for 52% and 39% of our consolidated net sales and gross profit, respectively in the year ended December 31, 2022.
−Removed: Our future results depend on the success of our Device Protection, Women’s Health and Cardiovascular businesses.
−Removed: There can be no guarantee, however, that we will be able to increase the sales or profitability of the remaining businesses sufficiently to replace or exceed the financial contribution from the Orthobiologics Business.
−Removed: Our enhanced reliance in the wake of the disposition of the Orthobiologics Business on a smaller suite of existing products and on future products may pose risks to the Company’s growth.
−Removed: If the financial contribution from remaining legacy products and other DEB products fail to replace lost contribution from the Orthobiologics Business, or otherwise fail to meet expectations, the Company’s business and financial condition may be materially adversely affected.
−Removed: We have incurred operating losses and may continue to do so in the near-term, and we cannot assure you that we will be able to generate sufficient revenue to achieve or sustain profitability.
−Removed: For the years ended December 31, 2024 and 2023, we had net losses of $53.9 million and $37.7 million, respectively.
+Added: Our future results largely depend upon our ability to successfully develop, commercialize, market and sell breast reconstruction biologic products.
+Added: We have focused much of our attention recently on EluPro, which was cleared for marketing by the U.S.
+Added: Food and Drug Administration (“ FDA ”) in June 2024 and was indicated for use with implantable electronic devices including cardiac and neurostimulator devices.
+Added: On October 1, 2025, we completed the sale of all of our assets related to its business of researching, developing, administering, operating, commercializing, manufacturing, selling and marketing cardiac implantable electronic device (“ CIED ”) products, including its CanGaroo, CanGaroo RM, EluPro and CIED envelope products, including next generation CIED envelope products (collectively the “ CIED Business ”).
+Added: Consequently, our future results now depend on the success of our Women’s Health and Cardiovascular businesses.
+Added: There can be no guarantee, however, that we will be able to increase the sales or profitability of the remaining businesses sufficiently to replace or exceed the financial contribution, or potential financial contribution, from the sold CIED Business.
+Added: Elutia’s current strategy principally focuses on applying the Company’s drug-eluting biologics platform to advance NXT-41x, a biomatrix that seeks to improve the interaction between implanted medical devices and patients by reducing complications associated with surgery, including infection, migration, erosion, implant rejection, and fibrosis.
+Added: We believe the development, commercialization and marketing efforts with respect to NXT-41x will require significant investments in time and resources.
+Added: Although the sale of the CIED Business has resulted in significant cash net proceeds to the Company, there can be no assurance that these resources, or other resources we may raise or have access to in the future, will be sufficient to make the necessary investments in order to develop and commercially exploit NXT-41x, or that if made, such investments will yield the results sought.
+Added: Moreover, there is no guarantee that the FDA approvals we may seek will be granted on a timely basis, or at all, or that other actions or approvals are not required.
+Added: If we fail to successfully develop, commercialize, market and sell NXT-41x, the Company’s business and financial condition may be materially adversely affected.
+Added: Our enhanced reliance in the wake of the disposition of the CIED Business on a smaller suite of existing products and on future products poses risks to the Company’s growth.
+Added: If the financial contribution from remaining legacy products and NXT-41x and other potential future drug-eluting biomatrix products fail to replace lost contribution from the CIED Business, or otherwise fail to meet expectations, the Company’s business and financial condition may be materially adversely affected.
+Added: We have incurred operating losses and may continue to do so in the near-term, and we cannot assure that we will be able to generate sufficient revenue to achieve or sustain profitability.
+Added: For the years ended December 31, 2025 and 2024, we had losses from continuing operations of $26.9 million and $30.7 million, respectively.
We expect our losses to continue for the foreseeable future, and these losses will continue to have an adverse effect on our financial position.
Our ability to achieve profitability will depend on our ability to generate sales from existing or new products sufficient to exceed our ongoing operating expenses and capital requirements.
−Removed: Because of the numerous risks and uncertainties affecting product sales and our ongoing commercialization and product development efforts, including our ability to commercialize our flagship Device Protection product, EluPro, we are unable to predict with any certainty whether we will be able to increase sales of our products or the timing or amount of ongoing expenditures we will be required to incur.
+Added: Because of the numerous risks and uncertainties affecting product sales and our ongoing commercialization and product development efforts, we are unable to predict with any certainty whether we will be able to increase sales of our products or the timing or amount of ongoing expenditures we will be required to incur.
Sales of our products, as well as meaningful reductions, suspensions or discontinuations of such sales, may not offset our operating expenses.
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Our inability to achieve and then maintain profitability would negatively affect our business, financial condition, results of operations and cash flows, negatively affect the value of our securities and our ability to raise capital and continue operations .
−Removed: We have identified conditions and events that raise substantial doubt regarding our ability to continue as a going concern.
−Removed: We have incurred net losses since our inception in 2015.
−Removed: For the year ended December 31, 2024, we had a net loss of $53.9 million and as of December 31, 2024, we had an accumulated deficit of $229.6 million.
−Removed: To date, we have financed our operations primarily through amounts borrowed under our credit facilities, sales of our products, proceeds from offerings and sales of our common stock and more recently, through the sale of our Orthobiologics Business.
−Removed: We have devoted the majority of our resources to manufacturing costs, research and development, clinical and administrative activity and investing in our commercial infrastructure through our direct sales force and commercial partners in order to expand our presence and to promote awareness and adoption of our products.
−Removed: As noted above, we cannot assure you that we will achieve profitability or sustain it if we do.
−Removed: Without sustained profitability, we may not be able to satisfy our obligations as they become due, including our indebtedness or our obligations related to the FiberCel Recall or VBM Recall, which are described in further detail in Part I, Item 3, “Legal Proceedings” and Note 17 to the consolidated financial statements, in this Annual Report.
−Removed: As a result, we anticipate that we will need additional funding to support our continuing operations and pursue our growth strategy.
−Removed: In order to mitigate the current and potential future liquidity issues caused by the matters noted above, we may seek to raise capital through
−Removed: the issuance of common stock or pursue asset sales or other transactions, such as the sale of the Orthobiologics Business described above.
−Removed: However, such transactions may not be successful, and we may not be able to raise additional equity, refinance our debt instruments, or sell assets on acceptable terms, or at all.
−Removed: As such, there can be no assurance that we will be able to continue as a going concern.
−Removed: Our indebtedness and our Revenue Interest Obligation to Ligand Pharmaceuticals Incorporated may limit our flexibility in operating our business and adversely affect our financial health and competitive position.
−Removed: As of December 31, 2024, we had $23.9 million of indebtedness outstanding, consisting of $23.5 million outstanding under our SWK Loan Facility (as defined under Part II, Item 7.
−Removed: “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources — Credit Facilities”), plus $0.9 million of exit fee liabilities, less $0.5 million of unamortized discount and deferred financing costs.
−Removed: In addition, we are party to a royalty agreement with Ligand Pharmaceuticals Incorporated (“Ligand”) pursuant to a long-term obligation to Ligand, which we amended in January 2024 (the “Revenue Interest Obligation”).
−Removed: The Revenue Interest Obligation requires us to pay Ligand 5.0% of future sales of our CanGaroo, ProxiCor, Tyke and VasCure products, and substantially similar products, such as EluPro, through May 31, 2027, subject to annual minimum payments of $4.4 million.
−Removed: See Part II, Item 7.
−Removed: “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Significant Judgment and Estimates — Revenue Interest Obligation.”
−Removed: In order to service this indebtedness and our Revenue Interest Obligation, and any additional indebtedness or other long-term obligations we may incur in the future, we need to generate sufficient levels of cash from our operating activities.
−Removed: Our ability to generate cash is subject, in part, to our ability to successfully execute our business strategy, as well as general economic, financial, competitive, regulatory and other factors beyond our control.
−Removed: We cannot assure you that our business will be able to generate sufficient levels of cash from operations or that future borrowings or other financings will be available to us in an amount sufficient to enable us to service our indebtedness, satisfy our obligations under the Revenue Interest Obligation and fund our other liquidity needs.
−Removed: To the extent we are required to use cash from operations or the proceeds of any future financing to service our indebtedness and satisfy our obligations under the Revenue Interest Obligation instead of funding working capital, capital expenditures or other general corporate purposes, we will be less able to plan for, or react to, changes in our business, industry and in the economy generally.
−Removed: This will place us at a competitive disadvantage compared to our competitors that have less indebtedness.
−Removed: In addition, the agreements governing our SWK Loan Facility contains, and any agreements evidencing or governing other future indebtedness may also contain, certain covenants that limit our ability to engage in certain transactions that may be in our long-term best interests.
−Removed: Subject to certain limited exceptions, these covenants limit our ability to, among other things:
−Removed: ● incur additional indebtedness;
−Removed: ● incur certain liens;
−Removed: ● pay dividends or make other distributions on equity interests;
−Removed: ● enter into agreements restricting their subsidiaries’ ability to pay dividends;
−Removed: ● redeem, repurchase or refinance subordinated indebtedness;
−Removed: ● consolidate, merge or sell or otherwise dispose of their assets;
−Removed: ● make investments, loans, advances, guarantees and acquisitions;
−Removed: ● enter into transactions with affiliates;
−Removed: ● amend or modify their governing documents;
−Removed: ● amend or modify certain material agreements;
−Removed: ● alter the business conducted by them and their subsidiaries;
−Removed: ● enter into sale and leaseback transactions.
−Removed: In addition to these covenants, the agreement governing our SWK Loan Facility also contains two financial covenants, the first of which is measured quarterly, and requires us to achieve a specified minimum aggregate revenue (as defined therein) for the preceding 12-month period, and the second of which requires us to maintain a minimum liquidity (as defined therein) of the greater of $5.0 million and the sum of the operating burn (as defined therein) for the two prior consecutive fiscal quarters then ended.
−Removed: While we were in compliance with all covenants under the agreement as of December 31, 2024, there can be no guarantee that we will not breach these covenants in the future.
−Removed: Our ability to comply with these covenants may be affected by events and factors beyond our control.
−Removed: In the event that we breach one or more covenants, our lenders may choose to declare an event of default and require that we immediately repay all amounts outstanding, terminate any commitment to extend further credit and foreclose on the collateral granted to them to collateralize such indebtedness.
−Removed: The occurrence of any of these events could have a material adverse effect on our business, financial condition and results of operations.
−Removed: In addition, we may incur significant additional indebtedness in the future.
−Removed: Although the agreement governing our SWK Loan Facility contains restrictions on the incurrence of additional indebtedness by us, such restrictions are subject to a number of qualifications and exceptions, and the indebtedness incurred in compliance with these restrictions could be substantial.
−Removed: Also, these restrictions do not prohibit us from incurring obligations that do not constitute indebtedness as defined therein.
−Removed: To the extent that we incur additional indebtedness or such other obligations, the risks associated with our substantial indebtedness described above will increase.
−Removed: Various events permit the lender under the SWK Loan Facility to terminate the agreement, following a cure period.
−Removed: Such events include, without limitation, a failure to timely pay interest or principal, insolvency, or an action by the FDA or such other material adverse event impacting the operations of Elutia.
−Removed: If the lender were to terminate either the SWK Loan Facility, the lender may declare all or any portion of these obligations to become immediately due and payable.
We face significant litigation related to our FiberCel and Viable Bone Matrix recalls and have no more insurance coverage on the FiberCel recall.
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However, conversely, we have no more insurance to cover the cost of the FiberCel liability and the related defense costs as of December 31, 2025.
−Removed: Because we have exhausted our insurance coverage for this matter, the entire contingent
−Removed: liability for FiberCel Recall product liability losses is our financial responsibility.
+Added: Because we have exhausted our insurance coverage for this matter, the entire contingent liability for FiberCel Recall product liability losses is our financial responsibility.
The satisfaction of this obligation and the future costs incurred are expected to have a material adverse effect on our cash flow, results of operations, financial position and prospects.
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S ince September 2021, we have received notice of 110 separate lawsuits or claims related to the FiberCel Recall alleging that the plaintiffs contracted tuberculosis and/or suffered substantial symptoms and complications following the implantation of FiberCel during spinal fusion operations.
−Removed: As of December 31, 2024, 66 lawsuits or claims related to the FiberCel Recall and 15 lawsuits and claims related to the VBM Recall remain outstanding .
+Added: As of December 31, 2025, five unsettled lawsuits or claims related to the FiberCel Recall and 11 unsettled lawsuits and claims related to the VBM Recall remain outstanding .
These lawsuits and claims are described in further detail in See Part II, Item 1, “Legal Proceedings” and Note 17 to the consolidated financial statements included elsewhere in this Annual Report.
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Additionally, we may be subject to product liability claims, proceedings and lawsuits, even if the apparent injury is due to the actions of others or the pre-existing health of the patient.
−Removed: For example, we rely on physicians and other healthcare providers to properly and correctly use our products.
+Added: For example, we rely on physicians and other healthcare providers to use our products properly and correctly.
If these physicians or other healthcare providers are not properly trained or are negligent in using our products, the capabilities of our products may be diminished, or the patient may suffer critical injury.
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Our future capital needs are uncertain, and we may need to raise funds in the future, and such funds may not be available on acceptable terms or at all.
−Removed: Our future capital needs are uncertain and, as such, we may seek to raise additional capital through equity offerings, debt financings, collaborations or other arrangements to finance our ongoing operations, including our efforts to commercialize, market and sell EluPro, or as all or part of the consideration paid for acquisitions and strategic investments that we may make in the future.
+Added: Our future capital needs are uncertain and, as such, we may seek to raise additional capital through equity offerings, debt financings, collaborations or other arrangements to finance our ongoing operations, including our efforts to develop, commercialize and market NXT-41 and NXT-41x , our next-generation biologic scaffolds combined with local
+Added: antibiotic delivery, or as all or part of the consideration paid for acquisitions and strategic investments that we may make in the future.
Any future funding requirements will depend on many factors, including, among other things:
−Removed: ● our ability to commercialize, market and sell our newly approved EluPro antibacterial envelope device;
−Removed: ● continued patient, physician and market acceptance of our products;
−Removed: ● the scope, rate of progress and cost of our current and future pre-clinical and clinical studies;
● the cost of our research and development activities and the cost of commercializing new products or technologies;
+Added: ● our ability to commercialize, market and sell our anticipated future products;
+Added: ● continued patient, physician and market acceptance of our current products;
+Added: ● the scope, rate of progress and cost of our current and future pre-clinical and clinical studies;
● the cost and timing of expanding our sales and marketing capabilities;
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● unanticipated general, legal and administrative expenses.
−Removed: In addition, our operating plan may change as a result of any number of factors, including those set forth above and other factors currently unknown to us, and we may need additional funds sooner than anticipated.
+Added: In addition, our operating plan may change as a result of a number of factors, including those set forth above and other factors currently unknown to us, and we may need additional funds sooner than anticipated.
Any additional equity or debt financing that we raise may contain terms that are not favorable to us or our stockholders.
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We are subject to risks arising from adverse changes in general domestic and global economic conditions, including any recession, economic slowdown or disruption of credit markets.
−Removed: During the year ended December 31, 2024, global markets continued to experience significant volatility, driven by concerns over persistent inflation, rising interest rates, slowing economic growth and geopolitical uncertainty.
+Added: During the year ended December 31, 2025, global markets continued to experience significant volatility, driven by concerns over persistent inflation, rising interest
+Added: rates, slowing economic growth, government shutdowns and geopolitical uncertainty.
These events, and any financial crisis that may occur in the future, could make it more difficult and more expensive for hospitals and health systems to obtain credit, which may contribute to pressures on their operating margins.
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Should we have limited access to additional financing sources, we may need to defer capital expenditures or seek other sources of liquidity, which may not be available to us on acceptable terms or at all.
−Removed: All of these factors related to global economic
−Removed: conditions, which are beyond our control, could adversely impact our business, financial condition, results of operations and liquidity.
+Added: All of these factors related to global economic conditions, which are beyond our control, could adversely impact our business, financial condition, results of operations and liquidity.
Our long-term growth depends on our ability to enhance our products, expand our product indications and develop, acquire and commercialize additional product offerings.
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If we are not successful in expanding our indications and developing, acquiring and commercializing new products and product enhancements, our ability to increase our net sales may be impaired, which could have a material adverse effect on our business, financial condition and results of operations.
−Removed: In addition, our research and development efforts may require a substantial investment of time and resources before we are adequately able to determine the commercial viability of a new product, technology or other innovation.
−Removed: Even if we are successful in obtaining the required regulatory clearance, there can be no assurances that we will be able to achieve market acceptance or that we will able to realize the intended benefits from commercializing this product candidate.
−Removed: In addition, we will be required to invest additional time and resources to address the outstanding items and provide the additional data requested to FDA, which could divert management’s attention from core business and result in additional research and development expenses.
−Removed: For instance, on June 14, 2024, we received written notice from the FDA that it had reviewed our premarket notification report filed under Section 510(k) of the Federal Food, Drug and Cosmetic Act of 2022 related to the antibacterial envelope device known during development as CanGarooRM, and now known as EluPro, that the FDA had determined “substantial equivalence” with respect to such device, and that such device may be marketed and sold subject to the general controls provisions of that law.
−Removed: In order for Elutia to capitalize on such clearance however, the company will have to invest time and resources into commercializing and marketing EluPro in order to increase its sales and market penetration, and to leverage the company’s drug-eluting bioenvelope technology into potential adjacent applications.
+Added: In addition, our research and development efforts may require a substantial investment of time and resources before we are able to determine the commercial viability of a new product, technology or other innovation.
+Added: Even if we are successful in obtaining the required regulatory clearance, there can be no assurances that we will be able to achieve market acceptance or that we will be able to realize the intended benefits from commercializing this product candidate.
+Added: In order for Elutia to capitalize on such clearance, we will have to invest time and resources into commercializing and marketing this product candidate in order to increase its sales and market penetration, and to leverage our drug-eluting bioenvelope technology into potential adjacent applications.
These efforts will require significant investments.
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Furthermore, to the extent we seek to enhance our products and broaden our product portfolio through acquisitions or other commercial transactions, we will be subject to additional risks.
−Removed: See “— We regularly evaluate opportunities to make acquisitions of, investments in, and licenses or other commercial arrangements involving, other companies or technologies, and to enter into other strategic transactions.
+Added: See other risk factor entitled “— We regularly evaluate opportunities to make acquisitions of, investments in, and licenses or other commercial arrangements involving, other companies or technologies, and to enter into other strategic transactions.
These transactions entail significant risks .”
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The earn-out payments are equal to 10% of the actual revenue earned by Berkeley in each of the five years after the closing of the sale from sales of specified Orthobiologics products under the purchase agreement (including improvements, modifications, derivatives and enhancements related to those products).
−Removed: Additionally, the purchase agreement provides for a customary indemnity holdback in the amount of $1.5 million to be retained by Berkeley for 24 months after close.
−Removed: There can be no assurance that we will be able to realize the expected benefits of the transaction, or that we will receive all of the potential consideration associated with the earn-out payments or customary indemnity holdback.
+Added: Additionally, the purchase agreement provided for a customary indemnity holdback in the amount of $1.5 million to be retained by Berkeley for 24 months after the closing of the transaction.
+Added: In March 2026, the indemnity holdback was resolved with Berkeley remitting $0.4 million to Elutia.
+Added: There can be no assurance that we will be able to realize the expected benefits of the transaction, or that we will receive all of the potential consideration associated with the earn-out payments.
If we are unable to or do not realize the expected strategic, economic, or other benefits of the transaction, it could adversely affect our business and financial position.
Because we depend upon a limited number of third-party suppliers and manufacturers and, in certain cases, exclusive suppliers for products essential to our business, we may incur significant product development costs and experience material delivery delays if we lose any significant supplier, which could materially and adversely affect our business, financial condition and results of operations.
−Removed: We obtain some of our raw materials from a limited group of suppliers and, for reasons of quality assurance, cost-effectiveness, availability or constraints resulting from regulatory requirements, we rely on a single supplier, Cook, to source the SIS ECM biomaterial used to manufacture EluPro, CanGaroo and our Cardiovascular products.
+Added: We obtain some of our raw materials from a limited group of suppliers and, for reasons of quality assurance, cost-effectiveness, availability or constraints resulting from regulatory requirements, we rely on a single supplier, Cook, to source the SIS ECM biomaterial used to manufacture our Cardiovascular products.
Additionally, with the sale of our Orthobiologics Business in November 2023 to Berkeley, we no longer operate our former Richmond, California human tissue processing and distribution facility;
however, we continue to have contract manufacturing relationship with Berkeley under which we receive SimpliDerm.
−Removed: At present, Berkeley is our single source of supply for SimpliDerm, but we are evaluating additional options for supply redundancy.
−Removed: For us to be successful, our suppliers must be able to provide us with products and components in substantial quantities, in compliance with regulatory requirements, in accordance with agreed upon specifications, at acceptable costs
−Removed: and on a timely basis.
+Added: At present, Berkeley is our single source of supply for SimpliDerm.
+Added: For us to be successful, our suppliers must be able to provide us with products and components in substantial quantities, in compliance with regulatory requirements, in accordance with agreed upon specifications, at acceptable costs and on a timely basis.
Our efforts to maintain a continuity of supply and high quality and reliability may not be successful on a timely basis or at all.
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A change in suppliers could require significant effort or investment in circumstances where the items supplied are integral to product performance or incorporate unique technology.
−Removed: Transitioning to a new supplier could be time-consuming and expensive, may result in interruptions in our operations and product delivery, could affect the performance specifications of our products or could require that we modify the design of those systems.
+Added: Transitioning to a new supplier could be
+Added: time-consuming and expensive, may result in interruptions in our operations and product delivery, could affect the performance specifications of our products or could require that we modify the design of those systems.
A reduction or interruption in manufacturing, or an inability to secure alternative sources of raw materials or supplies, could have a material and adverse effect on our business, financial condition, results of operations and cash flows.
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In addition, if a change in manufacturer results in a significant change to any product, a new 510(k) clearance from the FDA or similar international regulatory authorization, or certification may be necessary before we implement the change, which could cause substantial delays.
−Removed: A substantial portion of our net sales is generated through our commercial partners and independent sales agents, which subjects us to various risks.
−Removed: We currently rely on the efforts of our commercial partners and independent sales agents to generate a substantial portion of our net sales, and we expect to continue to rely on these third parties to generate a substantial portion of our net sales in the future while we work to grow our direct sales force.
−Removed: For example, we have commercial agreements with major medical device companies, including Boston Scientific, Tiger and LeMaitre Vascular.
−Removed: As a result, the impairment or termination of these relationships for any reason, or the failure of these parties to diligently sell our products and comply with applicable laws and regulations, has and could in the future materially and adversely affect our ability to generate revenue and profits.
−Removed: Because our commercial partners and independent sales agents control the relationships with our end customers, if our relationship with any commercial partner or independent sales agent ends, we will likely also lose our relationship with their customers.
−Removed: Furthermore, our success is partially dependent on the willingness and ability of the sales representatives and other employees of our commercial partners and independent sales agents to diligently sell our products.
+Added: Our net sales are generated through independent sales agents, which subjects us to various risks.
+Added: We currently rely on the efforts of our independent sales agents to generate our Women’s Health and Cardiovascular sales, and we expect to continue to rely on these third parties to generate these sales in the future.
+Added: Because our independent sales agents control the relationships with our end customers, if our relationship with any independent sales agent ends, we will likely also lose our relationship with their customers.
+Added: Furthermore, our success is partially dependent on the willingness and ability of the sales representatives and other employees of our independent sales agents to diligently sell our products.
However, we cannot guarantee that they will be successful in marketing our products.
−Removed: In addition, because our commercial partners and independent sales agents do not sell our products exclusively, they may focus their sales efforts and resources on other products that produce better margins or greater commissions for them or are incorporated into a broader strategic relationship with a partner.
−Removed: Because we do not control the sales representatives and other employees of our commercial partners, we cannot guarantee that our sales processes, regulatory compliance and other priorities will be consistently communicated and executed.
−Removed: In addition, we do not have staff in many of the areas covered by our commercial partners and independent sales agents, which makes it particularly difficult for us to monitor their performance.
−Removed: While we may take steps to mitigate the risks associated with noncompliance by our commercial partners and independent sales agents, there remains a risk that they will not comply with regulatory requirements or our requirements and policies.
−Removed: Actions by the sales representatives and other employees of our commercial partners and independent sales agents that are beyond our control could adversely impact sales in that territory or result in harm to the reputation of the Company or our products or legal liability, any of which could have a material adverse effect on our business, financial condition and results of operations.
−Removed: In addition to the risk of losing customers, the operation of local laws and our agreements with our commercial partners and independent sales agents would make it difficult for us to replace a commercial partner or independent sales agent we believe is underperforming.
−Removed: The loss of one or more significant commercial partners, a material reduction in their purchases of our product or their inability to perform their contractual obligations, including, for example, committed purchase requirements could adversely affect our business, financial condition and results of operations.
−Removed: In order to increase our sales, we intend to develop relationships and arrangements with additional commercial partners and/or independent sales agents, which we may not be able to do on commercially reasonable terms or at all.
−Removed: If we are unable to establish new commercial partner and independent sales agent relationships and maintain our relationships with our existing commercial partners and independent sales agents, in each case, on commercially reasonable terms, we will be unable to increase sales of our products, which, in turn, could materially and adversely affect our business, financial condition and results of operations.
+Added: In addition, because our independent sales agents do not sell our products exclusively, they may focus their sales efforts and resources on other products that produce better margins or greater commissions for them or are incorporated into a broader strategic relationship with a partner.
+Added: Because we do not control the sales representatives and other employees of our independent sales agents, we cannot guarantee that our sales processes, regulatory compliance and other priorities will be consistently communicated and executed.
+Added: In addition, we do not have staff in many of the areas covered by our independent sales agents, which makes it particularly difficult for us to monitor their performance.
+Added: While we may take steps to mitigate the risks associated with noncompliance by our independent sales agents, there remains a risk that they will not comply with regulatory requirements or our requirements and policies.
+Added: Actions by the sales representatives and other employees of our independent sales agents that are beyond our control could adversely impact sales in that territory or result in harm to the reputation of the Company or our products or legal liability, any of which could have a material adverse effect on our business, financial condition and results of operations.
+Added: In addition to the risk of losing customers, the operation of local laws and our agreements with our independent sales agents would make it difficult for us to replace an independent sales agent we believe is underperforming.
+Added: In order to increase our sales, we intend to develop relationships and arrangements with additional independent sales agents, which we may not be able to do on commercially reasonable terms or at all.
+Added: If we are unable to establish new independent sales agent relationships and maintain our relationships with our existing independent sales agents, in each case, on commercially reasonable terms, we will be unable to maintain or increase sales of our commercial products, which, in turn, could materially and adversely affect our business, financial condition and results of operations.
Our future growth depends on physician awareness of the distinctive characteristics, benefits, safety, clinical efficacy and cost-effectiveness of our products.
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The acceptance of our products depends in part on our ability to educate these individuals as to the distinctive characteristics, benefits, safety, clinical efficacy and cost-effectiveness of our products compared to alternative products, procedures and therapies.
−Removed: We support our direct sales force, commercial partners and independent sales agents through in-person and online educational programs, among other things.
+Added: We support our sales force through in-person and online educational programs, among other things.
We also produce and distribute marketing and educational materials, including materials outlining our products, for our sales teams using printed, video and multimedia formats.
−Removed: However, our efforts to educate physicians, surgeons and other healthcare professionals regarding our products may not be successful, particularly in markets where we rely exclusively on the efforts of our commercial partners and independent sales agents.
−Removed: If we do not adequately educate physicians, surgeons and other healthcare professionals about our products, as well as any adverse events involving these products, our products may not gain or maintain market acceptance, which may adversely affect our business, financial condition and results of operations.
+Added: However, our efforts to educate physicians, surgeons and other healthcare professionals regarding our products may not be successful, particularly in markets where we rely exclusively on the efforts of our independent sales agents.
+Added: If we do not adequately educate physicians, surgeons and other
+Added: healthcare professionals about our products, as well as any adverse events involving these products, our products may not gain or maintain market acceptance, which may adversely affect our business, financial condition and results of operations.
Our success depends on the continued and future acceptance of our products by the medical community.
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If we do not receive this support (e.g., because we are unable to demonstrate favorable long-term clinical data or otherwise), physicians and hospitals may not use our products, which would significantly impair our ability to increase our sales and prevent us from achieving and sustaining profitability.
+Added: Unfavorable results from any of our pre-clinical or clinical studies, comparative effectiveness, economic or other studies, or from similar studies conducted by others, may negatively affect the use or adoption of our products by physicians, hospitals and payors, which could have a negative impact on the market acceptance of our products and their profitability.
+Added: We conduct a variety of pre-clinical and clinical studies, comparative effectiveness studies and economic and other studies of our products in an effort to generate clinical and real-world outcomes and cost effectiveness data in order to obtain product approval and drive further penetration in the markets we serve.
+Added: If a clinical study conducted by us or a
+Added: third party fails to demonstrate statistically significant results supporting performance, use benefits or compelling health or economic outcomes from using our products, physicians may elect not to use our products.
+Added: Furthermore, in the event of an adverse clinical study outcome, our products may not achieve “standard-of-care” status, where they exist, for the conditions in question, which could deter the adoption of our products.
+Added: Also, if serious adverse events are reported during the conduct of a study, it could affect continuation of the study, product approval, certification or clearance and product adoption.
+Added: In addition, U.S.
+Added: and foreign regulatory authorities routinely conduct audits of clinical studies and such audits may result in adverse regulatory actions.
+Added: If we are unable to develop a body of statistically significant evidence from our clinical study program, whether due to adverse results or the inability to complete properly designed studies, domestic and international public and private payors could refuse to cover procedures using our products, limit the manner in which they cover our products or reduce the price they are willing to pay or reimburse for procedures using our products.
+Added: Any of these events could have a negative impact on market acceptance of procedures using our products and their profitability, which could have a material adverse effect on our business, financial condition and results of operations.
We may need to continue to expand our organization and managing growth may be more difficult than we expect.
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If we fail to meet these challenges effectively, there may be an adverse effect on our business, financial condition and results of operations.
−Removed: We regularly evaluate opportunities to make acquisitions of, investments in, and licenses or other commercial arrangements involving, other companies or technologies, and to enter into other strategic transactions.
−Removed: These transactions entail significant risks.
−Removed: Our success depends, in part, on our ability to continually enhance and broaden our product offerings in response to changing customer demands, competitive pressures and advances in technologies.
−Removed: Accordingly, although we have no current commitments with respect to any acquisition or investment, we regularly review potential acquisitions of, investments in, and licenses or other commercial arrangements involving, complementary businesses, products or technologies instead of developing them ourselves.
−Removed: In addition, in regularly evaluating our financial and operating performance, we may decide to sell one or more of our product lines or another portion of our business as we did with our Orthobiologics Business.
−Removed: Opportunities to engage in these transactions may not be readily available to us at commercially reasonable prices, on other terms acceptable to us or at all.
−Removed: Even if such opportunities are available, these transactions involve significant risks.
−Removed: In connection with one or more of these transactions, we may:
−Removed: ● issue additional equity securities that would dilute the value of your investment in us;
−Removed: ● use cash that we may need in the future to operate our business;
−Removed: ● incur debt that could have terms unfavorable to us or that we might be unable to repay;
−Removed: ● structure the transaction in a manner that has unfavorable tax consequences, such as a stock purchase that does not permit a step-up in the tax basis for the assets acquired;
−Removed: ● incur asset impairment or other acquisition-related charges, or unforeseen costs, expenditures and risks;
−Removed: ● be unable to realize the anticipated benefits, such as increased revenues, cost savings or synergies from additional sales of existing or newly acquired products;
−Removed: ● experience dis-synergies in shared functions following a divestment of any portion of our business;
−Removed: ● be unable to successfully integrate, operate, maintain and manage any newly acquired operations;
−Removed: ● divert management’s attention from the existing business to integrate, operate, maintain and manage any newly acquired operations and personnel, or to manage the complexities involved in separating divested operations, services, products and personnel;
−Removed: ● be unable to secure the services of key employees related to an acquisition or, in the case of a divestiture, lose one or more of our key employees;
−Removed: ● face increased scrutiny and review of our company and operations from government and other regulatory authorities;
−Removed: ● otherwise be unable to succeed in the marketplace with the acquisition.
−Removed: The occurrence of any of the above could materially and adversely affect our business, financial condition and results of operations.
−Removed: Furthermore, business acquisitions also involve the risk of unknown liabilities associated with the acquired business, which could be material.
−Removed: Such liabilities could include lack of compliance with government regulations that could subject us to investigation, civil and criminal sanctions, litigation and/or other actions that make it impossible to realize the anticipated benefits of the transaction.
−Removed: For example, we may acquire a company that was not compliant with FDA quality requirements or was making payments or other forms of remuneration to physicians to induce them to use their products.
−Removed: Incurring unknown liabilities or the failure to complete or realize the anticipated benefits of an acquisition, sale, investment or other commercial arrangement, whether resulting from one or more of the factors described above or otherwise, could have a material and adverse effect on our business, financial condition and results of operations.
−Removed: New lines of business and new products and services may subject us to additional risks.
−Removed: From time to time, we may implement or acquire new lines of business or introduce new products and services within our existing business lines.
−Removed: There are risks and uncertainties associated with these efforts, particularly in instances where the markets are not fully developed or are evolving.
−Removed: In developing and commercializing new lines of business and new products and services, we may invest significant time and resources.
−Removed: External factors, such as regulatory compliance obligations, competitive alternatives, lack of market acceptance and shifting market preferences, may also affect the successful implementation of a new line of business or a new product or service.
−Removed: Failure to successfully plan for and manage these risks in the development and implementation of new lines of business or new products or services could have a material adverse effect on our business, financial condition and results of operations.
We face significant and continuing competition from other companies, some of which have longer operating histories, more established products and/or greater resources than we do, which could adversely affect our business, financial condition and results of operations.
We operate in highly competitive markets that are characterized by intense competition, subject to rapid change and significantly affected by new product introductions, technological advancements and other market activities of industry participants.
−Removed: Our competitors have historically dedicated, and will continue to dedicate, significant resources to promote their products and to develop new products that compete with ours.
+Added: Our competitors have historically dedicated, and will continue to dedicate, significant resources to promoting their products and to developing new products that compete with ours.
Customers in our target markets consider many factors when selecting a product, including product efficacy, ease of use, price, availability of payor coverage and adequate third-party reimbursement for procedures using the product, customer support services for technical-, clinical- and reimbursement-related matters and customer preference for, and loyalty to, particular products or a particular manufacturer.
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As a result, we will be required to devote continued efforts and financial resources to develop and commercialize new products and enhancements to our existing products, deliver cost-effective clinical outcomes, manage our costs and expand our geographic reach.
+Added: In addition, digital technologies, including artificial intelligence (“AI”) and machine learning capabilities, have and may continue to increase in their applicability and importance to various aspects of our business, operating and competitive environments, research and development pipeline and product portfolio.
+Added: We believe we will need to develop new and enhanced digital capabilities and competencies in order to remain competitive.
Many of our current and potential competitors have longer operating histories and substantially greater financial, technical, marketing, sales, distribution and other resources than we do, which may prevent us from achieving significant market penetration or improved operating results.
−Removed: Certain competitors’ products, such as competitors of SimpliDerm, are subject to a simpler reimbursement process than are our products.
−Removed: Competitors may also be able to leverage their market share and other resources to set prices at a level below that which is profitable for us.
+Added: Certain competitors’ products, such as competitors of SimpliDerm, are subject to a simpler reimbursement process than our products are.
+Added: Competitors may also be able to leverage their market
+Added: share and other resources to set prices at a level below that which is profitable for us.
These companies may also enjoy other competitive advantages, including, without limitation:
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● more effective pricing and revenue strategies.
−Removed: Our ability to achieve and maintain profitability will depend, in part, on our ability to develop or acquire proprietary products that reach the market in a timely manner, receive adequate coverage and reimbursement for
−Removed: procedures using our products, and are safer and more effective than their alternatives, as well as our ability to otherwise compete effectively on the factors listed above.
+Added: Our ability to achieve and maintain profitability will depend, in part, on our ability to develop or acquire proprietary products that reach the market in a timely manner, receive adequate coverage and reimbursement for procedures using our products, and are safer and more effective than their alternatives, as well as our ability to otherwise compete effectively on the factors listed above.
If we are unable to do so, our sales and/or margins will decrease, which could have a material adverse effect on our business, financial condition and results of operations.
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We expect that market demand, government regulation, third-party coverage and reimbursement policies and societal pressures will continue to change the healthcare industry worldwide, resulting in further business consolidations and alliances among our customers, which may exert further downward pressure on the prices for our products.
−Removed: The processing of porcine tissue for our products is technically complex, requiring high levels of quality control and precision, which subjects us to increased production risks.
−Removed: We manufacture our porcine tissue products using technically complex processes requiring specialized facilities, highly specific raw materials, skill and diligence by our personnel and other production constraints.
−Removed: The complexity of
−Removed: these processes, as well as strict company and government standards for the manufacture and storage of our products, subject us to production risks.
−Removed: In addition to ongoing production risks, process deviations or unanticipated effects of approved process changes may result in non-compliance with regulatory requirements, including stability requirements or specifications.
−Removed: The occurrence of this or any other actual or suspected production or distribution problem can lead to lost inventory, customer returns and, in some cases, recalls, with consequential damage to our reputation and customer relationships and the risk of product liability.
−Removed: Product recalls and investigations, and the remediation of any potential or identified problems can cause production delays and result in substantial additional expenses and lost revenue.
−Removed: In addition, we may experience difficulties in scaling up processing and production of our porcine tissue products, including problems related to yields, quality control and assurance, tissue availability, adequacy of control policies and procedures and availability of skilled personnel.
−Removed: Furthermore, developing and maintaining our production capabilities has required, and will continue to require, the investment of significant resources, and we cannot guarantee that we will be able to achieve economies of scale.
−Removed: If we are unable to process and produce our porcine tissue products on a timely basis, at acceptable quality and costs and in sufficient quantities, or if we experience technological problems, delays in production, failure in the storage of our products or other loss of supply, our business would be materially and adversely affected.
Performance issues, service interruptions or price increases by our shipping carriers could adversely affect our business, harm our reputation and impair our ability to provide our products on a timely basis or at all.
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In addition, any significant increase in shipping rates could adversely affect our operating margins and results of operations.
−Removed: Similarly, strikes, severe weather, natural disasters, equipment malfunctions or other service interruptions affecting the delivery services we use, would impair our ability to process orders for our products on a timely basis or at all, which could have a material adverse effect on our business, financial condition and results of operations.
−Removed: If our facilities are damaged or become inoperable, we will be unable to continue to research, develop and supply our products and, as a result, there will be an adverse effect on our business until we are able to secure new facilities and rebuild our inventory.
+Added: Similarly, strikes, severe weather, natural disasters, terrorism, civil or political unrest, equipment malfunctions or other service interruptions affecting the delivery services we use, would impair our ability to process orders for our products on a timely basis or at all, which could have a material adverse effect on our business, financial condition and results of operations.
+Added: If our research and development facility is damaged or becomes inoperable, we will be unable to continue to research and develop our product candidates and delays in our product development could result in an adverse effect on our business.
+Added: All of our research and development for our new products and product candidates takes place at our facility in Gaithersburg, Maryland.
We do not have redundant facilities.
−Removed: The SIS ECM biomaterial used in our medical device products are manufactured by Cook at their facility in West Lafayette, Indiana and converted to a finished product at our facility in Roswell, Georgia.
−Removed: Regulatory approvals or certifications of our products are limited to one or more specifically approved manufacturing facilities.
−Removed: As a result, if we fail to produce enough of a product at a facility, or if any of our production facilities were to be shut down or otherwise become unavailable for any reason, finding alternative manufacturing capabilities and obtaining the necessary regulatory approvals or certifications would require a considerable amount of time and expense and would cause a significant disruption in service to our customers.
−Removed: Disruption to our facilities could arise for a variety of reasons, including technical, labor or other difficulties, equipment malfunction, contamination, the failure of our employees to follow specific protocols and procedures, the destruction of, or damage to, any facility (as a result of a natural or man-made disaster, including, but not limited to, a tornado, flood, fire, power outage or other event), quality control issues or other reasons.
−Removed: Any disruption in the operation of our facilities as a result of any of the above could impair our product development and commercialization efforts and result in lost sales, lost customers and harm to our reputation, any of which would negatively impact our growth prospects and profitability and have a material adverse effect on our business, financial condition and results of operations.
−Removed: In addition, certain of these events, such as natural or man-made disasters, would cause us to incur additional losses, including the time and expense required to repair and/or replace our equipment and to rebuild our inventory.
+Added: Disruption to our Gaithersburg, Maryland facility could arise for a variety of reasons, including technical, labor or other difficulties, equipment malfunction, contamination, the failure of our employees to follow specific protocols and procedures, the destruction of, or damage to, our facility (as a result of a natural or man-made disaster, including, but not limited to, a tornado, flood, fire, power outage or other event, or as a result of political or civil unrest, terrorist act or act of war or otherwise), quality control issues or other reasons.
+Added: Any disruption in our facility as a result of any of the above could impair our product development and commercialization efforts and result in lost sales, lost customers and harm to our reputation, any of which would negatively impact our growth prospects and profitability and have a material adverse effect on our business, financial condition and results of operations.
+Added: In addition, certain of these events, such as natural or man-made disasters, or damage to our facilities caused by civil or political unrest, terrorist acts, or otherwise, would cause us to incur additional losses, including the time and expense required to repair and/or replace our equipment.
Our insurance for damage to our property and the disruption of our business may not be sufficient to cover all of our potential losses and may not continue to be available to us on acceptable terms or at all.
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These prices may fluctuate based on a number of factors beyond our control, including changes in supply and demand, general economic conditions, labor costs, delivery costs, competition, import duties, excises and other indirect taxes, currency exchange rates and government regulation.
−Removed: Due to the highly competitive nature of the healthcare industry and the cost containment efforts of our customers and third-party payors, we may be unable to pass along cost increases for key supplies or raw materials through higher prices to our customers.
+Added: Due to the highly competitive nature of the healthcare industry
+Added: and the cost containment efforts of our customers and third-party payors, we may be unable to pass along cost increases for key supplies or raw materials through higher prices to our customers.
If the cost of key supplies or raw materials increases, and we are unable to fully recover these increased costs through price increases or offset these increases through other cost reductions, we could experience lower margins and profitability.
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To ensure adequate inventory supply, we must forecast inventory needs and place orders with our suppliers based on our estimates of future demand for our products.
−Removed: Demand for our products can change, and has changed, rapidly and unexpectedly, including during the time between when raw materials are ordered from our suppliers and the finished product is offered for sale.
+Added: Demand for our products can change, and has changed rapidly and unexpectedly, including during the time when raw materials are ordered from our suppliers and the finished product is offered for sale.
Our ability to accurately forecast demand for our products could be negatively affected by a number of factors, many of which are beyond our control, including our failure to accurately manage our expansion strategy, product introductions by competitors, an increase or decrease in customer demand for our products or for products of our competitors, our failure to accurately forecast customer acceptance of new products, unanticipated changes in general market conditions, reimbursement or regulatory matters and weakening of economic conditions.
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Because the Medicare and Medicaid programs are increasingly used as models for how private payors and other governmental payors develop their coverage and reimbursement policies, a Medicare national or local non-coverage decision, denying coverage for procedures using one or more of our products, could result in private and other third-party payors also denying coverage.
−Removed: Third-party payors also may deny reimbursement for procedures using our products if they determine that a product used in a procedure was not medically necessary, was not used in accordance with cost-effective treatment methods, as determined by the third-party payor, or was used for an unapproved use.
+Added: Third-party payors also may deny reimbursement for procedures using our products if they determine that a product used in a procedure was not medically necessary, was not
+Added: used in accordance with cost-effective treatment methods, as determined by the third-party payor, or was used for an unapproved use.
Unfavorable coverage or reimbursement decisions by government programs or private payors underscore the uncertainty that our products face in the market and could have a material adverse effect on our business.
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Quality is extremely important to us and our customers due to the serious and costly consequences of product failure.
−Removed: Quality and safety issues may occur with respect to any of our products, and our future operating results will depend on our ability to maintain an effective quality control system and effectively train and manage our workforce with
−Removed: respect to our quality system.
+Added: Quality and safety issues may occur with respect to any of our products, and our future operating results will depend on our ability to maintain an effective quality control system and effectively train and manage our workforce with respect to our quality system.
The development, manufacture and control of our products are subject to extensive and rigorous regulation by numerous government agencies, including the FDA.
−Removed: Compliance with these regulatory requirements, including but not limited to the FDA’s Quality System Regulation (“QSR”), current Good Manufacturing Practices (“GMPs”) and adverse events/recall reporting requirements in the United States and other applicable regulations worldwide, is subject to continual review and is monitored rigorously through periodic inspections by the FDA.
+Added: Compliance with these regulatory requirements, including but not limited to the FDA’s Quality Management System Regulation (“QMSR”), current Good Manufacturing Practices (“GMPs”) and adverse events/recall reporting requirements in the United States and other applicable regulations worldwide, is subject to continual review and is monitored rigorously through periodic inspections by the FDA.
If we fail to comply with our reporting obligations, the FDA or other regulatory authority could take action, including issuance of warning letters and/or untitled letters, administrative actions, criminal prosecution, imposition of civil monetary penalties, revocation of our device clearance, seizure of our products or delay in the clearance of future products.
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If our products do not function as designed, or are designed improperly, we or the third-party manufacturer of such products may withdraw such products from the market, whether by choice or as a result of regulatory requirements.
−Removed: We had two recalls in products formerly distributed through our recently divested Orthobiologics Business – one in June 2021 and one in July 2023.
+Added: We had two recalls in products formerly distributed through our divested Orthobiologics Business – one in June 2021 and one in July 2023.
These recalls had negative effects on our business, financial condition and results of operations and resulted in a number of lawsuits filed against us as discussed under the risk factor “We face significant litigation related to our FiberCel and Viable Bone Matrix recalls, and have no more insurance coverage on the FiberCel recall” included in this Annual Report.
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Our quarterly and annual financial results may fluctuate as a result of a variety of factors, many of which are outside our control and, as a result, may not fully reflect the underlying performance of our business.
−Removed: One such factor includes seasonal variations in our sales.
−Removed: We have experienced and may in the future experience higher sales in the fourth quarter as hospitals in the United States increase their purchases of our products to coincide with the end of their budget cycles.
−Removed: Satisfaction of patient deductibles through the course of the year also results in increased sales later in the year.
−Removed: In general, our first quarter usually has lower sales than the preceding fourth quarter as patient deductibles are re-established with the new year, thereby increasing the patients’ out-of-pocket costs.
−Removed: Other factors that may cause fluctuations in our quarterly and annual results include, among other things:
+Added: Factors that may cause fluctuations in our quarterly and annual results include, among other things:
● the timing of medical procedures using our products;
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● changes in our supply or manufacturing costs;
−Removed: ● cost containment initiatives or policies developed by government and commercial payors that create financial incentives not to use our products;
+Added: ● cost containment initiatives or policies developed by government and commercial payors that create financial incentives for not using our products;
● our inability to demonstrate that our products are cost-effective or superior to competing products;
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● sanctions imposed by federal or state governments due to non-compliance with laws or regulations;
−Removed: ● general global economic conditions and political instability, such as the conflict between Russia and Ukraine;
+Added: ● general global economic conditions and political instability, such as the military conflicts in the Middle East and between Russia and Ukraine;
● economic conditions specific to the healthcare industry.
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Accordingly, any significant shortfall in sales relative to our planned expenditures would have an immediate adverse effect on our business, results of operations and financial condition.
−Removed: Further, as a strategic response to changes in the competitive environment or to changes in laws and regulations,
−Removed: we may from time to time make certain pricing, service or marketing decisions (e.g., reduce prices) that could have a material and adverse effect on our business, financial condition and results of operations.
+Added: Further, as a strategic response to changes in the competitive environment or to changes in laws and regulations, we may from time to time make certain pricing, service or marketing decisions (e.g., reduce prices) that could have a material and adverse effect on our business, financial condition and results of operations.
Due to the foregoing factors, our revenue and operating results are and will remain difficult to forecast.
Security breaches, loss of or damage to data, information technology system failures and other disruptions could compromise sensitive information related to our business or our customers’ patients, or prevent us from accessing critical information and expose us to liability, which could adversely affect our business and our reputation.
−Removed: In the ordinary course of our business, we may become exposed to, or collect and store, sensitive data, including procedure-based information and legally protected health information, credit card, and other financial information, insurance information and other potentially personally identifiable information.
+Added: In the ordinary course of our business, we may become exposed to, or collect and store, sensitive data, including procedure-based information and legally protected health information, credit card, and other financial information, insurance information and other potentially personally identifiable information on information technology (“IT”) systems, some of which are managed by third parties.
We also store sensitive intellectual property and other proprietary business information.
−Removed: Regardless of any precautions we may take, our information technology (“IT”) and infrastructure, and that of our technology partners and providers, may be vulnerable to attack, damage and interruption from computer viruses and malware (e.g.
−Removed: ransomware), malicious code, natural disasters, terrorism, war, telecommunication and electrical failures, hacking, cyberattacks, phishing attacks and other social engineering schemes, employee theft or misuse, human error, fraud, denial or degradation of service attacks, sophisticated nation-state and nation-state-supported actors or unauthorized access or use by persons inside our organization, or persons with access to systems inside our organization.
+Added: Regardless of any precautions we may take, our IT and infrastructure, and that of our technology partners, vendors and providers, may be vulnerable to attack, damage and interruption from computer viruses and malware (e.g.
+Added: ransomware), malicious code, natural disasters, terrorism, war, telecommunication and electrical failures, hacking, cyberattacks, phishing attacks and other social engineering schemes, credential theft, employee theft, misuse or other malfeasance, human error, fraud, denial or degradation of service attacks, sophisticated nation-state and nation-state-supported actors, unauthorized access or use by persons inside our organization, or persons with access to systems inside our organization or exploitation of vulnerabilities in third-party software and systems.
Attacks upon IT systems are increasing in their frequency, levels of persistence, sophistication and intensity, and are being conducted by sophisticated and organized groups and individuals with a wide range of motives and expertise.
In addition to unauthorized access to or acquisition of personal information, confidential information, intellectual property or other sensitive information, such attacks could include the deployment of harmful malware and ransomware, and may use a variety of methods, including denial-of-service attacks, social engineering and other means, to attain such unauthorized access or acquisition or otherwise affect service reliability and threaten the confidentiality, integrity and availability of information.
−Removed: As a result of the COVID-19 pandemic, we may also face increased cybersecurity risks due to our reliance on internet technology and the number of our employees who are working remotely, which may create additional opportunities for cybercriminals to exploit vulnerabilities.
−Removed: Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and often are not foreseeable or recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures.
+Added: Cyberattacks and the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems are diverse and constantly evolving, especially given the advances in, and the rise of the use of, artificial intelligence, thereby increasing the difficulty of preventing, detecting, and successfully defending against them, and may be more difficult to detect, mitigate and implement adequate preventative measures, including as threat actors use artificial intelligence and other advanced tools to enhance attacks and impersonation tactics.
We may also experience security breaches that may remain undetected for an extended period.
Even if identified, we may be unable to adequately investigate or remediate incidents or breaches due to attackers increasingly using tools and techniques that are designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence.
−Removed: Any breakdowns or breaches of our systems, or resulting access, disclosure, or other loss of information, could significantly disrupt our business and result in legal claims or proceedings, liability under laws that protect the privacy of personal information, and damage to our reputation, any of which could have a material and adverse effect on our business, financial condition and results of operations.
+Added: Any breakdowns or breaches of our systems, or resulting access, disclosure, or other loss of information, could significantly disrupt our business and result in legal claims or proceedings, liability under laws that protect the privacy of personal information, and damage to our
+Added: reputation, any of which could have a material and adverse effect on our business, financial condition and results of operations.
We and certain of our service providers are from time to time subject to cyberattacks and security incidents.
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Additionally, the insurer may disclaim coverage as to any claim.
−Removed: The successful assertion of one or more large claims against us that exceed or are not covered by our insurance coverage or changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have a material adverse effect on our business, prospects, operating results and financial condition.
+Added: The successful assertion of one or more large claims against us that exceed or are not covered by insurance coverage or changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have a material adverse effect on our business, prospects, operating results and financial condition.
Our success depends on our ability to retain and motivate key management personnel and other employees and consultants, to attract, retain and motivate additional qualified personnel and to effectively navigate changes in our senior management team.
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The inability to recruit or a loss of the services of any executive, key employee or consultant may impede the progress of our research, development, commercialization and sales growth objectives, which could have a material adverse effect on our business, financial condition, results of operations and our ability to grow our business.
−Removed: We are subject to anti-bribery, anti-corruption and anti-money laundering laws, including the U.S.
−Removed: Foreign Corrupt Practices Act, as well as export control laws, customs laws, sanctions laws and other laws governing our operations.
−Removed: If we fail to comply with these laws, we could be subject to civil or criminal penalties, other remedial measures and legal expenses, any of which would adversely affect our business, financial condition and results of operations.
−Removed: We are subject to anti-corruption, anti-bribery, and other similar laws and regulations in various jurisdictions in which we operate, including the U.S.
−Removed: Foreign Corrupt Practices Act (“FCPA”), the U.K.
−Removed: Bribery Act 2010 (“Bribery Act”), and other anti-corruption laws and regulations.
−Removed: These laws generally prohibit us and our officers, directors, employees and business partners acting on our behalf, including agents, from corruptly offering, promising, authorizing or providing anything of value to obtain or retain business or otherwise obtain favorable treatment and require companies to maintain accurate books and records and a system of internal controls or adequate procedures to prevent bribery.
−Removed: We are also subject to economic sanctions laws, export control laws and regulations, as well as customs regulations, in the various jurisdictions in which we operate, including those administered and enforced by OFAC, the U.S.
−Removed: Department of State, BIS, His Majesty’s Treasury of the United Kingdom, the United Nations Security Council, the European Union (and its member states) and other relevant sanctions authorities .
−Removed: Such laws and regulations prohibit or restrict certain operations, investment decisions, and sales activities, including dealings with certain countries or territories, and with certain governments and designated persons.
−Removed: Investigations of alleged sanctions and export controls violations can be expensive and disruptive.
−Removed: As our international operations increase, we expect to implement policies and procedures designed to promote compliance by us and our directors, officers, employees, representatives, consultants and agents with the FCPA, the Bribery Act and other anti-corruption laws, as well as economic sanctions and export controls.
−Removed: We cannot assure you, however, that any such policies and procedures will be sufficient or that directors, officers, employees, representatives, consultants and agents have not engaged, and will not engage, in conduct for which we may be held responsible, nor can we assure you that our business partners have not engaged, and will not engage, in conduct that could materially affect
−Removed: their ability to perform their contractual obligations to us or result in our being held liable for such conduct.
−Removed: Violations of the FCPA, Bribery Act, other anti-corruption laws, economic sanctions, export control laws and/or anti-money laundering and anti-terrorism laws or regulations may result in severe criminal or civil sanctions, and we may be subject to other liabilities, which could have a material adverse effect on our business, financial condition and results of operations.
−Removed: Our officers, employees, independent contractors, principal investigators, consultants, commercial partners and independent sales agents may engage in misconduct or activities that are improper under other laws and regulations, which would create liability for us.
−Removed: We are exposed to the risk that our officers, employees, independent contractors (including contract research organizations (“CROs”)), principal investigators, consultants, commercial partners and independent sales agents may engage in fraudulent conduct or other illegal activity and/or may fail to disclose unauthorized activities to us.
−Removed: Misconduct by these parties could include, but is not limited to, intentional, reckless and/or negligent failures to comply with the laws and regulations of the FDA and its foreign counterparts, including, but not limited to, those relating to the manufacture, processing, packing, holding, investigating or distributing in commerce of medical devices, biological products and/or HCT/Ps, requiring the reporting of true, complete and accurate information to such regulatory bodies (including any safety problems associated with the use of our products), and relating to the conduct of clinical studies and the protection of human research subject.
+Added: Our officers, employees, independent contractors, principal investigators, consultants and independent sales agents may engage in misconduct or activities that are improper under other laws and regulations, which would create liability for us.
+Added: We are exposed to the risk that our officers, employees, independent contractors (including contract research organizations (“CROs”)), principal investigators, consultants and independent sales agents may engage in fraudulent conduct or other illegal activity and/or may fail to disclose unauthorized activities to us.
+Added: Misconduct by these parties could include, but is not limited to, intentional, reckless and/or negligent failures to comply with the laws and regulations of the FDA and its foreign counterparts, including, but not limited to, those relating to the manufacture, processing, packing,
+Added: holding, investigating or distributing in commerce of medical devices, biological products and/or HCT/Ps, requiring the reporting of true, complete and accurate information to such regulatory bodies (including any safety problems associated with the use of our products), and relating to the conduct of clinical studies and the protection of human research subject.
In particular, companies involved in the manufacture of medical products are subject to laws and regulations intended to ensure that medical products that will be used in patients are safe and effective, and specifically that they are not adulterated or contaminated, that they are properly labeled, and have the identity, strength, quality and purity that they are represented to possess.
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Even if we are successful in defending against the imposition of any such fines or other sanctions, we could be required to incur substantial legal fees and other costs, and management’s attention will be diverted from our core business operations, either of which would negatively affect our business, financial condition and results of operations.
+Added: Our estimates of market opportunity and forecasts of market and sales growth may prove to be inaccurate, and even if the markets in which we compete achieve the forecasted growth, our business could fail to grow at similar rates, if at all.
+Added: Market opportunity estimates and growth forecasts are inherently uncertain.
+Added: Our estimates of the annual total addressable markets for our products are based on a number of internal and third-party estimates and assumptions, including, without limitation, the number of implantable electronic device procedures as well as the number of procedures using biologic products annually in the United States.
+Added: While we believe our assumptions and the data underlying our estimates are reasonable, these assumptions and estimates may not be correct and the conditions supporting our assumptions or estimates may change at any time, thereby reducing the predictive accuracy of these underlying factors.
+Added: As a result, our estimates of the annual total addressable market for any of our products may prove to be incorrect.
+Added: If the actual number of procedures, the price at which we are able to sell any of our products, or the annual total addressable market is smaller than we have estimated, it may impair our sales growth and have an adverse impact on our business, financial condition and results of operations.
Our ability to use certain tax attributes to offset future income tax liabilities may be subject to limitations.
−Removed: We have net operating losses and other tax attributes, including net operating loss carryforwards (“NOLs”) for federal income tax purposes of approximately $129.3 million and state NOLs of approximately $46.9 million as of December 31, 2024.
+Added: After partial utilization in connection with our 2025 income, we have remaining net operating losses and other tax attributes, including net operating loss carryforwards (“NOLs”) for federal income tax purposes of approximately $118.6 million and state NOLs of approximately $42.4 million as of December 31, 2025.
If not utilized, $6.6 million of our NOLs will begin to expire for federal income tax purposes beginning in 2038, and our state NOLs will expire beginning in 2031.
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Accordingly, we may not be able to utilize a material portion of our federal and state NOLs or credits.
−Removed: Our ability to utilize our NOLs or credits is
−Removed: conditioned upon our attaining profitability and generating U.S.
+Added: Our ability to utilize our NOLs or credits is conditioned upon our attaining profitability and generating U.S.
federal and state taxable income.
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Changes in tax laws and regulations, or their interpretation and application, in the jurisdictions where we are subject to tax, could materially impact our effective tax rate.
−Removed: For example, changes in tax law implemented by the tax reform legislation known as H.R.
−Removed: 1, commonly referred to as the Tax Cuts and Jobs Act (the “TCJA”) in the United States became effective in 2018 and 2019, and we expect the U.S.
−Removed: Treasury to continue to issue future notices and regulations under the TCJA.
−Removed: Certain provisions of the TCJA and the regulations issued thereunder could have a significant impact on our future results of operations as could interpretations made by us in the absence of regulatory guidance and judicial interpretations.
−Removed: In addition, in 2018, we established valuation allowances against all deferred tax assets (including interest carry forwards) to reflect certain limitations on these assets and their anticipated impact on our ability to utilize these tax assets following the adoption of the TCJA.
−Removed: Additionally, the U.S.
−Removed: Congress, government agencies in jurisdictions outside the United States where we do business and the Organization for Economic Co-operation and Development (the “OECD”) have recently focused on issues related to the taxation of multinational corporations.
−Removed: One example is in the area of “base erosion and profit shifting,” where profits are claimed to be earned for tax purposes in low-tax jurisdictions, or payments are made between affiliates from a jurisdiction with high tax rates to a jurisdiction with lower tax rates.
−Removed: The OECD has released several components of its comprehensive plan to create an agreed set of international rules for fighting base erosion and profit shifting.
−Removed: As a result, the tax laws in the United States and other countries, in which we do business, could change on a prospective or retroactive basis and any such changes could materially adversely affect our business, financial condition and results of operations.
−Removed: Unfavorable results from any of our pre-clinical or clinical studies, comparative effectiveness, economic or other studies, or from similar studies conducted by others, may negatively affect the use or adoption of our products by physicians, hospitals and payors, which could have a negative impact on the market acceptance of our products and their profitability.
−Removed: We regularly conduct a variety of pre-clinical and clinical studies, comparative effectiveness studies and economic and other studies of our products in an effort to generate clinical and real-world outcomes and cost effectiveness data in order to obtain product approval and drive further penetration in the markets we serve.
−Removed: If a clinical study conducted by us or a third party fails to demonstrate statistically significant results supporting performance, use benefits or compelling health or economic outcomes from using our products, physicians may elect not to use our products.
−Removed: Furthermore, in the event of an adverse clinical study outcome, our products may not achieve “standard-of-care” status, where they exist, for the conditions in question, which could deter the adoption of our products.
−Removed: Also, if serious adverse events are reported during the conduct of a study, it could affect continuation of the study, product approval, certification or clearance and product adoption.
−Removed: In addition, U.S.
−Removed: and foreign regulatory authorities routinely conduct audits of clinical studies and such
−Removed: audits may result in adverse regulatory actions.
−Removed: If we are unable to develop a body of statistically significant evidence from our clinical study program, whether due to adverse results or the inability to complete properly designed studies, domestic and international public and private payors could refuse to cover procedures using our products, limit the manner in which they cover our products or reduce the price they are willing to pay or reimburse for procedures using our products.
−Removed: Any of these events could have a negative impact on market acceptance of procedures using our products and their profitability, which could have a material adverse effect on our business, financial condition and results of operations.
−Removed: As we conduct clinical studies designed to generate long-term data on some of our existing products, the data we generate may not be consistent with our existing data and may demonstrate less favorable safety or efficacy.
−Removed: We are currently collecting and plan to continue collecting long-term clinical data regarding the quality, safety and effectiveness of some of our existing products.
−Removed: The clinical data collected and generated as part of these studies will further strengthen our clinical evaluation concerning safety and performance of these products.
−Removed: We believe that this additional data will help with the marketing of our products by providing surgeons and physicians with additional confidence in their long-term safety and efficacy.
−Removed: If the results of these clinical studies are negative, these results could reduce demand for our products and significantly reduce our ability to achieve expected net sales.
−Removed: We do not expect to undertake such studies for all of our products and will only do so in the future where we anticipate the benefits will outweigh the costs and risks.
−Removed: For these reasons, surgeons and physicians could be less likely to purchase our products than competing products for which longer-term clinical data are available.
−Removed: Also, we may not choose or be able to generate the comparative data that some of our competitors have or are generating and we may be subject to greater regulatory and product liability risks.
−Removed: If we are unable to or determine not to collect sufficient long-term clinical data supporting the quality, safety and effectiveness of our existing products, our business, financial condition and results of operations could be adversely affected.
−Removed: Our estimates of market opportunity and forecasts of market and sales growth may prove to be inaccurate, and even if the markets in which we compete achieve the forecasted growth, our business could fail to grow at similar rates, if at all.
−Removed: Market opportunity estimates and growth forecasts are inherently uncertain.
−Removed: Our estimates of the annual total addressable markets for our products are based on a number of internal and third-party estimates and assumptions, including, without limitation, the number of implantable electronic device procedures as well as the number of procedures using biologic products annually in the United States.
−Removed: While we believe our assumptions and the data underlying our estimates are reasonable, these assumptions and estimates may not be correct and the conditions supporting our assumptions or estimates may change at any time, thereby reducing the predictive accuracy of these underlying factors.
−Removed: As a result, our estimates of the annual total addressable market for any of our products may prove to be incorrect.
−Removed: If the actual number of procedures, the price at which we are able to sell any of our products, or the annual total addressable market is smaller than we have estimated, it may impair our sales growth and have an adverse impact on our business, financial condition and results of operations.
+Added: For example, the One Big Beautiful Bill Act, or the OBBBA, was signed into law on July 4, 2025 and made significant changes to U.S.
+Added: federal tax law.
+Added: New lines of business and new products and services may subject us to additional risks.
+Added: From time to time, we may implement or acquire new lines of business or introduce new products and services within our existing business lines.
+Added: There are risks and uncertainties associated with these efforts, particularly in instances where the markets are not fully developed or are evolving.
+Added: In developing and commercializing new lines of business and new products and services, we may invest a significant amount of time and resources.
+Added: External factors, such as regulatory compliance obligations, competitive alternatives, lack of market acceptance and shifting market preferences, may also affect the successful implementation of a new line of business or a new product or service.
+Added: Failure to successfully plan for and manage these risks in the development and implementation of new lines of business or new products or services could have a material adverse effect on our business, financial condition and results of operations.
+Added: We may from time to time evaluate opportunities to make acquisitions of, investments in, and licenses or other commercial arrangements involving, other companies or technologies, and to enter into other strategic transactions.
+Added: These transactions entail significant risks.
+Added: Our success depends, in part, on our ability to continually enhance and broaden our product offerings in response to changing customer demands, competitive pressures and advances in technologies.
+Added: Accordingly, although we have no current commitments with respect to any acquisition or investment, we may from time to time review potential acquisitions of investments in, and licenses or other commercial arrangements involving, complementary businesses, products or technologies instead of developing them ourselves.
+Added: In addition, in regularly evaluating our financial and operating performance, we may decide to sell one or more of our product lines or another portion of our business as we did with our Orthobiologics Business and our CIED Business.
+Added: Opportunities to engage in these transactions may not be readily available to us at commercially reasonable prices, on other terms acceptable to us or at all.
+Added: Even if such opportunities are available, these transactions involve significant risks.
+Added: In connection with one or more of these transactions, we may:
+Added: ● issue additional equity securities that would dilute the value of your investment in us;
+Added: ● use cash that we may need in the future to operate our business;
+Added: ● incur debt that could have terms unfavorable to us or that we might be unable to repay;
+Added: ● structure the transaction in a manner that has unfavorable tax consequences, such as a stock purchase that does not permit a step-up in the tax basis for the assets acquired;
+Added: ● incur higher than expected acquisition or integration costs;
+Added: ● incur asset or goodwill impairment, contingencies or other acquisition-related charges, or unforeseen costs, expenditures and risks;
+Added: ● be unable to realize the anticipated benefits, such as increased revenues, cost savings or synergies from additional sales of existing or newly acquired products;
+Added: ● experience dis-synergies in shared functions following a divestment of any portion of our business;
+Added: ● be unable to successfully integrate, operate, maintain and manage any newly acquired operations;
+Added: ● divert management’s attention from the existing business to integrate, operate, maintain and manage any newly acquired operations and personnel, or to manage the complexities involved in separating divested operations, services, products and personnel;
+Added: ● be unable to secure the services of key employees related to an acquisition or, in the case of a divestiture, lose one or more of our key employees;
+Added: ● face increased scrutiny and review of our company and operations from government and other regulatory authorities;
+Added: ● otherwise, be unable to succeed in the marketplace with the acquisition.
+Added: The occurrence of any of the above could materially and adversely affect our business, financial condition and results of operations.
+Added: Furthermore, business acquisitions also involve the risk of unknown liabilities associated with the acquired business, which could be material.
+Added: Such liabilities could include lack of compliance with government regulations that could subject us to investigation, civil and criminal sanctions, litigation and/or other actions that make it impossible to realize the anticipated benefits of the transaction.
+Added: For example, we may acquire a company that was not compliant with FDA quality requirements or was making payments or other forms of remuneration to physicians to induce them to use their products.
+Added: Incurring unknown liabilities or the failure to complete or realize the anticipated benefits of an acquisition, sale, investment or other commercial arrangement, whether resulting from one or more of the factors described above or otherwise, could have a material and adverse effect on our business, financial condition and results of operations.
Risks Related to Government Regulation
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In addition, policies, regulations, or the type and amount of clinical data necessary to gain clearance, certification or approval may change during a product candidate’s development.
−Removed: Before we can market or sell a new medical device or a new use of or a claim for or significant modification to an existing medical device in the United States, we must obtain either clearance from the FDA under Section 510(k) of
−Removed: the Federal Food, Drug, and Cosmetic Act (the “FDCA”) or approval of an application for premarket approval, or PMA, unless an exemption applies.
−Removed: In the United States, we have obtained 510(k) premarket clearance from the FDA to market products such as our EluPro, CanGaroo, VasCure, ProxiCor and Tyke products.
+Added: Before we can market or sell a new medical device or a new use of or a claim for or significant modification to an existing medical device in the United States, we must obtain either clearance from the FDA under Section 510(k) of the Federal Food, Drug, and Cosmetic Act (the “FDCA”) or approval of an application for premarket approval, or PMA, unless an exemption applies.
+Added: In the United States, we have obtained 510(k) premarket clearance from the FDA to market our VasCure, ProxiCor and Tyke products.
In the 510(k) premarket clearance process, the FDA must determine that a proposed device is “substantially equivalent” to a device legally on the market, known as a “predicate” device, with respect to intended use, technology and safety and effectiveness, in order to clear the proposed device for marketing.
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If the FDA requires us to go through a lengthier, more rigorous examination for our products than we expect, our product introductions or modifications could be delayed or canceled, which could cause our sales to decline.
−Removed: Further, even where a PMA is not required, we cannot assure you that we will be able to obtain 510(k) clearances with respect to such product candidates or modifications to previously cleared products.
+Added: Further, even where a PMA is not
+Added: required, we cannot assure you that we will be able to obtain 510(k) clearances with respect to such product candidates or modifications to previously cleared products.
The FDA or any foreign regulatory agency or notified body can delay, limit or deny approval, certification or clearance of our product candidates or require us to conduct additional nonclinical or clinical testing or abandon a program for many reasons, including:
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The FDA, the competent authorities of the EU member states, and foreign regulatory authorities have the authority to require the recall of commercialized products in the event of material deficiencies or defects in design or manufacture of a product or in the event that a product poses an unacceptable risk to health.
−Removed: The FDA’s authority to require a recall for a medical device must be based on a finding that there is reasonable probability that the device could cause serious injury or death.
+Added: The FDA’s authority to require a recall for a medical device must be based on a finding that there is reasonable probability that the device could cause
+Added: serious injury or death.
With respect to human cells, tissues, and cellular and tissue-based products (“HCT/Ps”), the FDA may also require a recall where the conditions of manufacture of the HCT/P do not provide adequate protections against risks of communicable disease transmission, or where the HCT/P is infected or contaminated so as to be a source of dangerous infections to humans.
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This may result in substantial fines or penalties.
−Removed: Additionally,
−Removed: the FDA may not approve our products for desired indications or could mandate clinical studies for modifications.
+Added: Additionally, the FDA may not approve our products for desired indications or could mandate clinical studies for modifications.
Any delays or failures in obtaining required clearances or approvals may impede the timely introduction of new or enhanced products, adversely affecting our future growth and operating results.
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It is also possible that other federal, state or foreign enforcement authorities might take action under other regulatory authority, such as false claims laws, if they consider our business activities to constitute promotion of an off-label use, which could result in significant penalties, including, but not limited to, criminal, civil and administrative penalties, damages, fines, disgorgement, exclusion from participation in government healthcare programs and the curtailment of our operations.
−Removed: Failure to comply with post-marketing regulatory requirements could subject us to enforcement actions, including substantial penalties, and might require us to recall or withdraw a product from the market.
+Added: Failure to comply
+Added: with post-marketing regulatory requirements could subject us to enforcement actions, including substantial penalties, and might require us to recall or withdraw a product from the market.
The regulations to which we are subject are complex and have become more stringent over time.
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These changes in policy or regulations may impose additional requirements, potentially leading to delays in obtaining new clearances, increased compliance costs, or limitations on maintaining current product clearances.
−Removed: It's important to note that the FDA and other regulatory bodies may alter their policies, and new government regulations may emerge, further complicating the regulatory landscape.
+Added: It is important to note that the FDA and other regulatory bodies may alter their policies, and new government regulations may emerge, further complicating the regulatory landscape.
The unpredictability of the likelihood, nature, and scope of future government regulations, both in the United States and internationally, adds an additional layer of uncertainty.
Failure to promptly adapt to changing requirements or maintain regulatory compliance could result in the loss of marketing approval for our products.
−Removed: Our HCT/P products are subject to extensive government regulation, and our failure to comply with these requirements could cause our business to suffer.
−Removed: In the United States, we sell human tissue-derived allografts, termed HCT/Ps by the FDA.
+Added: Our HCT/P product is subject to extensive government regulation, and our failure to comply with these requirements could cause our business to suffer.
+Added: In the United States, we sell SimpliDerm, a human tissue-derived allograft, termed HCT/P by the FDA.
Certain HCT/Ps fall under Section 361 of the Public Health Service Act (“PHSA”) and are known as "Section 361 HCT/Ps." These products, meeting specific criteria like "minimally manipulated" and intended for "homologous use," do not require 510(k) clearance, PMA approval, or Biologics License Applications (“BLAs”) before marketing.
−Removed: Our HCT/Ps are believed to be regulated solely under Section 361, and we haven't sought 510(k) clearance, PMA approval, or BLA licensure.
+Added: Our HCT/Ps are believed to be regulated solely under Section 361, and we have not sought 510(k) clearance, PMA approval, or BLA licensure.
However, the FDA could disagree, potentially requiring us to cease marketing or recall products pending proper authorization.
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● the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which created additional federal criminal statutes that prohibit, among other things, executing a scheme to defraud any healthcare benefit program and making false statements relating to healthcare matters;
−Removed: ● the federal Physician Sunshine Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or CHIP, to report annually to CMS, information related to payments and other transfers of value to physicians, which is defined broadly to include doctors, dentists, optometrists, podiatrists and chiropractors, certain non-physician providers such as physician assistants and nurse practitioners, and teaching hospitals, and applicable manufacturers and GPOs, to report annually ownership and investment interests held by such physicians and their immediate
−Removed: family members.
+Added: ● the federal Physician Sunshine Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or CHIP, to report annually to CMS, information related to payments and other transfers of value to physicians, which is defined broadly to include doctors, dentists, optometrists, podiatrists and chiropractors, certain non-physician providers such as physician assistants and nurse practitioners, and teaching hospitals, and applicable manufacturers and GPOs, to report annually ownership and investment interests held by such physicians and their immediate family members.
Manufacturers are required to submit annual reports to CMS and failure to do so may result in civil monetary penalties for all payments, transfers of value or ownership or investment interests not reported in an annual submission and may result in liability under other federal laws or regulations.
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Violations of healthcare laws may result in penalties, fines, exclusion from government programs, imprisonment, reputational harm, and operational curtailment or restructuring.
−Removed: Members of our management, and their affiliations, have been and may be involved in healthcare industry investigations, prosecutions, convictions, or settlements.
−Removed: For instance, Kevin Rakin, our board chairman, faced allegations in the United States ex rel.
−Removed: Advanced BioHealing, Inc., a whistleblower suit related to sales practices at ABH, where Mr.
−Removed: Rakin served as CEO.
−Removed: All claims were dismissed with prejudice in a settlement, where Mr.
−Removed: Rakin denied any wrongdoing.
−Removed: Such events could harm our reputation and adversely impact our business, financial condition, and results of operations.
Healthcare policy changes, including recently enacted legislation reforming the U.S.
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While we currently believe we are not directly regulated under HIPAA, criminal penalties may apply if we knowingly misuse health information from a HIPAA-covered entity.
−Removed: Additionally, the California Consumer Privacy Act (“CCPA”), effective since January 1, 2020, grants expanded rights to California residents regarding their personal information.
+Added: Additionally, the California Consumer
+Added: Privacy Act (“CCPA”), effective since January 1, 2020, grants expanded rights to California residents regarding their personal information.
The California Privacy Rights Act (“CPRA”), effective January 1, 2023, imposes more obligations on businesses, potentially increasing compliance costs and liabilities.
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Patents, if issued, may be challenged, deemed unenforceable, narrowed, invalidated or circumvented.
−Removed: Proceedings challenging our patents could result in either loss of the patent or denial of the patent application or loss or reduction in the scope of one or more of the claims of the patent or patent application.
+Added: Proceedings challenging our patents could result in either loss of the patent or
+Added: denial of the patent application or loss or reduction in the scope of one or more of the claims of the patent or patent application.
In addition, such proceedings may be costly.
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In recent years, patent rights have been the subject of significant litigation.
−Removed: Changes in either the patent laws or interpretation
−Removed: of the patent laws in the United States and other countries may diminish the value of our owned or licensed patents or narrow the scope of our patent protection.
+Added: Changes in either the patent laws or interpretation of the patent laws in the United States and other countries may diminish the value of our owned or licensed patents or narrow the scope of our patent protection.
Though an issued patent is presumed valid and enforceable, its issuance is not conclusive as to its inventorship, scope, validity or enforceability, and it may not provide us with adequate proprietary protection or competitive advantages against competitors with similar products.
Competitors could attempt to replicate some or all of the competitive advantages we derive from our development efforts, willfully infringe, misappropriate or otherwise violate our intellectual property rights, design around our patents or develop and obtain patent protection for more effective technologies, designs or methods.
−Removed: EluPro, CanGaroo and SimpliDerm are the only current products covered by issued patents.
+Added: SimpliDerm is the only current product covered by issued patents.
We rely on unpatented trade secrets and know-how for several of our current products to develop and maintain our competitive position.
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Moreover, it may be difficult or impossible to obtain evidence of infringement in a competitor’s or potential competitor’s product.
−Removed: We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if we were to prevail, may not be commercially meaningful.
+Added: We may not prevail in any lawsuits that we initiate and damages or other remedies awarded, if we were to prevail, may not be commercially meaningful.
In addition, proceedings to enforce or defend our patents could put our patents at risk of being invalidated, held unenforceable or interpreted narrowly, which could limit our ability to stop or prevent us from stopping others from using or commercializing similar or identical technology and products, or limit the duration of the patent protection of our technology and products.
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If the employees, consultants or collaborators that are parties to these agreements breach or violate their respective terms, we may not have adequate remedies for any such breach or violation.
−Removed: It is possible that technology relevant to our business will be independently developed by a person that is not a party to such an agreement.
+Added: It is possible that technology relevant to our business will be independently developed by a person who is not a party to such an agreement.
Furthermore, if the employees and consultants who are parties to these agreements breach or violate the terms of these agreements, we may not have adequate remedies for any such breach or violation, and we could lose our trade secrets through such breaches or violations.
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If we or our collaborators or licensors fail to establish, maintain or protect such patents and other intellectual property rights, such rights may be reduced or eliminated.
−Removed: If our collaborators or licensors are not fully cooperative or disagree with us as to the prosecution, maintenance or enforcement of any patent rights, such patent rights
−Removed: could be compromised.
+Added: If our collaborators or licensors are not fully cooperative or disagree with us as to the prosecution, maintenance or enforcement of any patent rights, such patent rights could be compromised.
If there are material defects in the form, preparation, prosecution or enforcement of our patents or patent applications, such patents may be invalid and/or unenforceable, and such applications may never result in valid and enforceable patents.
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However, prior to March 16, 2013, in the United States, the first to invent was entitled to the patent.
−Removed: Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are not published until 18 months after filing, or in some cases not at all.
+Added: Publications of discoveries in the scientific literature often
+Added: lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are 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.
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In addition, patent applications in the United States and elsewhere can be pending for many years before issuance, or unintentionally abandoned patents or applications can be revived, so there may be applications of others now pending or recently revived patents of which we are unaware.
−Removed: These applications may later result in issued patents, or the revival of previously abandoned patents, that will prevent, limit or otherwise interfere with our ability to make, use or sell our products.
−Removed: Third parties may, in the future,
−Removed: assert claims that we are employing their proprietary technology without authorization, including claims from competitors or from non-practicing entities that have no relevant product sales and against whom our own patent portfolio may have no deterrent effect.
+Added: These applications may later result in issued patents, or the revival of previously abandoned patents, which will prevent, limit or otherwise interfere with our ability to make, use or sell our products.
+Added: Third parties may, in the future, assert claims that we are employing their proprietary technology without authorization, including claims from competitors or from non-practicing entities that have no relevant product sales and against whom our own patent portfolio may have no deterrent effect.
As we continue to commercialize our products in their current or updated forms, launch new products and enter new markets, we expect competitors may claim that one or more of our products infringe, misappropriate or otherwise violate their intellectual property rights as part of business strategies designed to impede our successful commercialization and entry into new markets.
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We could encounter delays in product introductions while we attempt to develop alternative methods or products.
−Removed: If we fail to obtain any required licenses or make any necessary changes to our
−Removed: products or technologies, we may have to withdraw existing products from the market or may be unable to commercialize one or more of our products.
+Added: If we fail to obtain any required licenses or make any necessary changes to our products or technologies, we may have to withdraw existing products from the market or may be unable to commercialize one or more of our products.
In addition, we generally indemnify our customers with respect to infringement by our products of the proprietary rights of third parties.
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In addition, trade secrets may be independently developed by others in a manner that could prevent legal recourse by us.
−Removed: If any of our confidential or proprietary information, such as our trade secrets, were to be disclosed or misappropriated, or if any such information was independently developed by a competitor, it could have a material and adverse effect on our business, financial condition and results of operations.
−Removed: We may be unable to enforce our intellectual property rights throughout the world.
−Removed: Obtaining, maintaining and enforcing intellectual property rights is expensive and it is cost prohibitive to do so throughout the world.
−Removed: Accordingly, we may determine not to obtain, maintain or enforce intellectual property rights in certain jurisdictions.
−Removed: In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as the laws of the United States.
−Removed: Many companies have encountered significant problems in protecting and defending intellectual property rights in certain foreign jurisdictions.
−Removed: This could make it difficult for us to stop infringement of our foreign patents, if obtained, or the misappropriation or other violation of our other intellectual property rights.
−Removed: For example, some foreign countries have compulsory licensing laws under which a patent owner must grant licenses to third parties.
−Removed: In addition, some countries limit the enforceability of patents against third parties, including government agencies or government contractors.
−Removed: In these countries, patents may provide limited or no benefit.
−Removed: Patent protection must ultimately be sought on a country-by-country basis, which is an expensive and time-consuming process with uncertain outcomes.
−Removed: Accordingly, we may choose not to seek patent protection in certain countries, and we will not have the benefit of patent protection in such countries.
−Removed: Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business.
−Removed: Accordingly, our efforts to protect our intellectual property rights in such countries may be inadequate.
−Removed: In addition, changes in the law and legal decisions by courts in the United States and
−Removed: foreign countries may affect our ability to obtain adequate protection for our technology and the enforcement of our intellectual property.
−Removed: Any of the foregoing could have a material and adverse effect on our business, financial condition and results of operations.
+Added: If any of our confidential or proprietary information, such as our trade secrets, were to be disclosed or misappropriated, or if any such information were independently developed by a competitor, it could have a material and adverse effect on our business, financial condition and results of operations.
Third parties may assert ownership or commercial rights to inventions we develop.
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Accordingly, it is not clear what, if any, impact the Leahy-Smith Act will have on the operation of our business.
−Removed: This will require us to be cognizant going forward of the timing from invention to filing of a patent application and be diligent in filing patent applications, but circumstances could prevent us from promptly filing patent applications on our inventions.
+Added: This will require us to
+Added: be cognizant going forward of the timing from invention to filing of a patent application and be diligent in filing patent applications, but circumstances could prevent us from promptly filing patent applications on our inventions.
In addition, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the enforcement and defense of our issued patents.
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Any failure by us to adequately address the uncertainties and costs surrounding recent patent legislation could have a material and adverse effect on our business, financial condition and results of operations.
−Removed: Outside of the United States we cannot be certain that any country’s patent or trademark office will not implement new rules that could seriously affect how we draft, file, prosecute and maintain patents, trademarks and patent and trademark applications.
−Removed: We cannot be certain that the patent or trademark offices of countries outside the United States will not implement new rules that increase costs for drafting, filing, prosecuting and maintaining patents, trademarks and patent and trademark applications or that any such new rules will not restrict our ability to file for patent or trademark protection.
−Removed: For example, we may elect not to seek patent protection in some jurisdictions or for some drug candidates in order to save costs.
−Removed: We may be forced to abandon or return the rights to specific patents due to a lack of financial resources.
−Removed: For example, the impact of the withdrawal of the U.K.
−Removed: from the EU will not be known for some time, which could lead to a period of uncertainty relating to our ability to obtain and maintain patents and trademarks in the U.K.
−Removed: In 2012, the European Patent Package, or EU Patent Package, regulations were passed with the goal of providing for a single pan-European Unitary Patent, and a new European Unified Patent Court, or UPC, for litigation of European patents.
−Removed: It is possible that implementation of the EU Patent Package will occur in the first half of 2023.
−Removed: If the EU Patent Package is ratified and in effect, all European patents, including those issued prior to ratification, would by default automatically fall under the jurisdiction of the UPC and allow for the possibility of obtaining pan-European injunctions.
−Removed: Under the EU Patent Package as currently proposed, once the UPC is established, patent holders are permitted to “opt out” of the UPC on a patent-by-patent basis during an initial seven year period after the EU Patent Package is ratified.
−Removed: Owners of traditional European patent applications who receive notice of grant after the EU Patent Package is ratified could either accept a Unitary Patent or validate the patent nationally and file an opt-out demand.
−Removed: The EU Patent Package may increase the uncertainties and costs surrounding the enforcement or defense of our issued European patents and pending applications.
−Removed: The full impact on future European patent filing strategy and the enforcement or defense of our issued European patents in member states and/or the UPC is not known.
Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.
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Under certain circumstances, the government may also claim ownership in such inventions or compel us to license them to third parties.
−Removed: Any failure by
−Removed: us to comply with federal regulations regarding intellectual property rights that were developed through the use of U.S.
+Added: Any failure by us to comply with federal regulations regarding intellectual property rights that were developed through the use of U.S.
government funding could have a material and adverse effect on our business, financial condition and results of operations.
−Removed: If we do not obtain patent term extension in the United States under the Hatch-Waxman Amendments and in foreign countries under similar legislation, thereby potentially extending the term of marketing exclusivity for our product candidates, our business may be materially harmed.
+Added: If we do not obtain patent term extension in the United States under the Hatch-Waxman Amendments, thereby potentially extending the term of marketing exclusivity for our product candidates, our business may be materially harmed.
Patents have a limited lifespan.
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Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized.
−Removed: As a result, our owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours.
+Added: As a result, our owned and licensed
+Added: patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours.
In the United States, a patent that covers an FDA-approved drug, biologic or medical device may be eligible for a term extension designed to restore the period of the patent term that is lost during the premarket regulatory review process conducted by the FDA.
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A patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval, and only claims covering such approved product, a method for using it or a method for manufacturing it may be extended.
−Removed: In the European Union, our product candidates may be eligible for term extensions based on similar legislation.
If we are unable to obtain patent term extension or the term of any such extension is less than we request, the period during which we can enforce our patent rights for that product will be shortened and our competitors may obtain approval to market competing products sooner.
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We rely on these licenses in order to be able to use and sell various proprietary technologies that are material to our business, as well as technologies we intend to use in our future commercial activities.
−Removed: For example, we expect that we will be dependent on our licensing arrangements with Cook, relating to EluPro, CanGaroo and our cardiovascular products.
+Added: For example, we expect that we will be dependent on our licensing arrangements with Cook, relating to our Cardiovascular products.
Our rights to use these technologies and the inventions claimed in the licensed patents are subject to the continuation of and our compliance with the terms of those license agreements.
Our existing license agreements impose, and we expect that future license agreements will also impose on us, various diligence obligations, milestone payments, royalties and other obligations.
−Removed: we fail to comply with our obligations under these agreements, or if we are subject to a bankruptcy proceeding, the licensor may have the right to terminate the license, in which case we would not be able to market products covered by the license, which would adversely affect our business, financial condition and results of operations.
+Added: If we fail to comply with our obligations under these agreements, or if we are subject to a bankruptcy proceeding, the licensor may have the right to terminate the license, in which case we would not be able to market products covered by the license, which would adversely affect our business, financial condition and results of operations.
As we have done previously, we may need to obtain additional licenses from third parties in order to advance our research or allow commercialization of our products and technologies.
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If we are unable to do so, we may be unable to develop or commercialize the affected products and technologies, which could materially harm our business.
−Removed: In addition, the third parties owning such intellectual property rights could seek either an injunction prohibiting our sales, or, with respect to our sales, an obligation on our part to pay royalties or other forms of compensation and damages.
+Added: In addition, the third
+Added: parties owning such intellectual property rights could seek either an injunction prohibiting our sales, or, with respect to our sales, an obligation on our part to pay royalties or other forms of compensation and damages.
In some cases, we may not have the right to control the prosecution, maintenance or filing of the patents that are licensed to us, or the enforcement of these patents against infringement by third parties.
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● our involvement in the prosecution and enforcement of the licensed patents and our licensor’s overall patent enforcement strategy;
−Removed: ● our diligence obligations with respect to the use of the licensed technology in relation to our development and commercialization of our products and technologies, and what activities satisfy those diligence obligations;
+Added: ● our diligence obligations with respect to the use of licensed technology in relation to our development and commercialization of our products and technologies, and what activities satisfy those diligence obligations;
● the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners;
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In addition, the registered or unregistered trademarks or trade names that we own may be challenged, infringed, circumvented, declared generic, lapsed or determined to be infringing on or dilutive of other marks.
−Removed: We may not be able to protect our rights in these trademarks and trade names, which we need in order to build name recognition.
+Added: We may not be able to protect our rights in these trademarks
+Added: and trade names, which we need in order to build name recognition.
In addition, third parties may file for registration of trademarks similar or identical to our trademarks, thereby impeding our ability to build brand identity and possibly leading to market confusion.
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Risks Related to Our Common Stock
+Added: We may not be able to maintain a listing of our Class A common stock on the Nasdaq Capital Market.
+Added: Because our Class A common stock is listed on the Nasdaq Capital Market, we must meet certain financial and liquidity criteria to maintain such listing.
+Added: On November 7, 2025, we received a letter from the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”), notifying us that, for the last 30 consecutive business days, the closing bid price for our Class A common stock (the “Common Stock”) was below $1.00 per share, which is the minimum closing bid price required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”).
+Added: On December 23, 2025, we received a written notice from the Staff, indicating that we were not in compliance with the continued listing requirement set forth in Nasdaq Listing Rule 5550(b)(2), which requires listed companies to maintain a minimum market value of listed securities of at least $35 million (the “MVLS Requirement”).
+Added: On February 5, 2026, we received a letter from Nasdaq, confirming that the Staff determined that we had regained compliance with the MVLS Requirement.
+Added: On March 2, 2026, we received a letter from Nasdaq, confirming that the Staff determined that we had regained compliance with the Minimum Bid Price Requirement.
+Added: Although we have regained compliance with the Minimum Bid Price Requirement and the MVLS Requirement, there can be no assurance that we will be able to maintain compliance with these and any other Nasdaq continued listing requirements.
+Added: If we fail to meet any Nasdaq listing requirements in the future, our Common Stock may be subject to delisting.
+Added: A delisting of our Common Stock from Nasdaq may materially impair our stockholders’ ability to buy and sell our Common Stock and could have an adverse effect on the market price of, and the efficiency of the trading market for, our Common Stock.
+Added: In the event our Common Stock is delisted from Nasdaq, the delisting of our Common Stock could significantly impair our ability to raise capital and stockholder value.
We expect that the price of our Class A common stock will fluctuate substantially.
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The market price of our Class A common stock is likely to be highly volatile and may fluctuate substantially due to a variety of factors, many of which are outside of our control, including, among other things:
−Removed: ● our ability to successfully commercialize, market and sell our newly approved EluPro antibacterial envelope device;
+Added: ● our ability to successfully develop, commercialize and market additional product offerings, including NXT-41 and NXT-41x;
+Added: ● our ability to obtain regulatory or other marketing authorizations by the U.S.
+Added: Food and Drug Administration and comparable foreign authorities for our products and product candidates, including NXT-41 and NXT-41x, on a timely basis, or at all;
● the volume and timing of sales of our products;
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● disputes or other developments with respect to our or others’ intellectual property rights;
−Removed: ● our ability to develop, obtain regulatory clearance or approval for, and market new and enhanced products on a timely basis;
● changes or proposed changes in laws or regulations or differing interpretations or enforcement thereof affecting our business;
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Securities litigation brought against us following volatility in our stock price, regardless of the merit or ultimate results of such litigation, could result in substantial costs, which would hurt our financial condition and operating results and divert management’s attention and resources away from our business.
−Removed: The listing of our common stock on the Nasdaq Capital Market (“Nasdaq”) is subject to a number of conditions, including that the total market value of the Company’s listed securities remain at or above a certain level.
+Added: The listing of our common stock on the Nasdaq is subject to a number of conditions, including that the total market value of the Company’s listed securities remain at or above a certain level.
In the past, the Company has not maintained that required level and has been at risk of its common stock being delisted by Nasdaq.
Although the Company was able to regain compliance with the rule and avoid having its common stock delisted, there is no guarantee that, in view of the volatility of the Company’s stock and other factors, the Company might not run afoul of the market value listing condition or other similar listing conditions in the future.
−Removed: The delisting of the Company’s common stock would have a material adverse effect on the liquidity of the common stock, and could have a material adverse effect on its price.
+Added: The delisting of the Company’s common stock would have a
+Added: material adverse effect on the liquidity of the common stock, and could have a material adverse effect on its price.
Moreover, the threat of delisting could have similar consequences.
−Removed: Our principal stockholders have significant voting power and may take actions that may not be in the best interests of our other stockholders.
−Removed: As of December 31, 2024, our principal stockholder, HighCape Partners L.P.
−Removed: and its affiliates, held approximately 29.5% of our outstanding Class A common stock.
−Removed: As a result, HighCape Partners L.P.
−Removed: and its affiliates are able to significantly influence the management and affairs of our company and the outcome of most matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions.
−Removed: The interests of these stockholders may not be the same as or may even conflict with your interests.
−Removed: For example, these stockholders could attempt to delay or prevent a change in control of the company, even if such change in control would benefit our other stockholders, thereby depriving our other stockholders of an opportunity to receive a premium for their common stock as part of a sale of the company or our assets.
−Removed: Conversely, these stockholders may pursue acquisitions, divestitures and other transactions that, in their judgment, could enhance the value of their investment, even though such transactions might involve risks to you.
−Removed: Even in the absence of any actual conflict of interest, the degree of control possessed by these stockholders may affect the prevailing market price of our Class A common stock due to investors’ perceptions that such conflicts of interest may exist or arise.
−Removed: As a result, this concentration of ownership may not be in the best interests of our other stockholders and may impair your ability to realize any return on your investment in us and may impair your ability to avoid losing some or all of your investment.
−Removed: A significant portion of our total outstanding shares are eligible to be sold into the market in the near future, which could cause the market price of our Class A common stock to drop significantly, even if our business is doing well.
−Removed: Sales of a substantial number of shares of our outstanding Class A common stock in the public market could occur at any time.
−Removed: In addition, conversions of a substantial number of shares of our outstanding Class B common stock into Class A common stock and sales of such converted shares of our Class A common stock in the public market could occur at any time.
−Removed: These sales, or the perception in the market that the holders of a large number of such shares intend to sell shares, could reduce the market price of our Class A common stock.
−Removed: As of December 31, 2024, we had outstanding approximately 30.9 million shares of Class A common stock, of which 21.0 million shares of our Class A common stock were freely tradable without restriction or further registration under the Securities Act of 1933, as amended (the “Securities Act”), by persons other than our “affiliates,” as that term is defined under Rule 144 of the Securities Act and approximately 9.9 million shares were held by our affiliates and eligible for resale subject to volume, manner of sale and other limitations under Rule 144.
−Removed: Additionally, we had outstanding approximately 4.3 million shares of Class B common stock which may be converted on a one to one basis into shares of Class A common stock, of which all were freely tradable and held by persons other than our “affiliates.” We also have registered shares of our Class A common stock issued and available for issuance under our equity compensation plans, which can be freely sold in the public market, subject to vesting requirements and volume limitations applicable to affiliates.
−Removed: I f these shares are sold, or if it is perceived that they will be sold, in the public market, or when we are required to register the sale of our stockholders’ remaining shares of our Class A common stock, the trading price of our Class A common stock could decline .
−Removed: A decline in the trading price of our Class A common stock might impede our ability to raise capital through the issuance of additional shares of our Class A common stock or other equity securities and may impair your ability to sell shares of our Class A common stock at a price higher than the price you paid for them or at all.
−Removed: The dual class structure of our common stock and the option of the holders of shares of our Class B common stock to convert into shares of our Class A common stock may limit your ability to influence corporate matters.
−Removed: Our Class A common stock has one vote per share, while our Class B common stock is non-voting.
−Removed: Nonetheless, each share of our Class B common stock may be converted at any time into one share of Class A common stock at the option of its holder, subject to the limitations provided for in our certificate of incorporation that prohibit the conversion of our Class B common stock into shares of Class A common stock to the extent that, upon such conversion, such holder would beneficially own in excess of 4.9% of any class of our securities registered under the Exchange Act.
−Removed: Consequently, if holders of Class B common stock exercise their option to make this conversion, such exercise will have the effect of increasing the relative voting power of those prior holders of our Class B common stock (subject to the ownership limitation described in the previous sentence) and increasing the number of outstanding shares of our voting common stock, and correspondingly decreasing the relative voting power of the current holders of our Class A common stock, which may limit your ability to influence corporate matters.
−Removed: Because our Class B common stock is generally non-voting, stockholders who own more than 10% of our common stock overall but 10% or less of our Class A common stock will not be required to report changes in their ownership from transactions in our Class B common stock pursuant to Section 16(a) of the Exchange Act and would not be subject to the short-swing profit provisions of Section 16(b) of the Exchange Act.
You may be diluted by the future issuance of additional common stock in connection with any future public or private offerings of our securities, our incentive plans, acquisitions or otherwise.
As of December 31, 2025, we had 157,215,152 shares of Class A common stock authorized but unissued and 20,000,000 shares of Class B common stock authorized but unissued.
−Removed: We are authorized under our certificate of incorporation to issue these shares of common stock and other securities convertible into or exercisable or exchangeable for shares of our common stock for the consideration and on the terms and conditions established by our board of directors in its sole discretion, whether in connection with acquisitions or otherwise.
+Added: We are authorized under our certificate of incorporation to issue these shares of common stock and other securities convertible into or exercisable or exchangeable for shares of our common stock for consideration and on the terms and conditions established by our board of directors in its sole discretion, whether in connection with acquisitions or otherwise.
As of December 31, 2025, we had a total of 3,297,941 shares of our Class A common stock issuable upon the exercise of outstanding options under our 2015 Stock Option/Stock Issuance Plan, as amended (the “2015 Plan”) and our Amended and Restated 2020 Incentive Award Plan (the “2020 Plan”) at a weighted average exercise price of $4.75 per share, 2,195,285 of which were vested as of such date, 726,805 shares of Class A common stock issuable upon the settlement of RSUs granted under our 2020 Plan to several of our executive officers, employees and consultants, 1,597,158 additional shares of our Class A common stock reserved for future issuance under our 2020 Plan, not including the additional shares of Class A common stock that will be reserved for future issuance under our 2020 Plan pursuant to provisions in the 2020 Plan that automatically increase the number of shares of our Class A common stock reserved for future issuance thereunder, and 763,965 shares of our Class A common stock available for future issuance under our 2020 Employee Stock Purchase Plan (the “2020 ESPP”), not including the additional shares of Class A common stock that will be reserved for future issuance under our 2020 ESPP pursuant to provisions in the 2020 ESPP that automatically increase the number of shares of our Class A common stock reserved for future issuance thereunder.
−Removed: Additionally, as of December 31, 2024, we had total warrants outstanding of 4,486,295 to purchase our Class A common stock comprised of up to 187,969 warrants issued to the lender under the SWK Loan Facility and 4,298,326 warrants issued to investors in our September 2023 Class A common stock private placement or June 2024 Class A common stock registered direct offering.
−Removed: In addition, subsequent to the end of 2024, on February 4, 2025, the Company sold, in a registered direct offering, an aggregate of 5,520,000 shares of Class A common stock and prefunded warrants to purchase up to an aggregate of 480,000 shares of Class A Common Stock.
+Added: Additionally, as of December 31, 2025, we had total warrants outstanding of 4,716,295 to purchase our Class A common stock comprised of up to 187,969 warrants issued to the lender under the SWK Loan Facility and 4,528,326 warrants issued to investors in our September 2023 Class A common stock private placement or June 2024 and February 2025 Class A common stock registered direct offerings.
Any additional shares of common stock that we issue, including under our 2020 Plan, 2020 ESPP or other equity incentive plans that we may adopt in the future, or as a result of any exercise of outstanding warrants, would dilute the percentage ownership and voting power held by investors who purchase our common stock.
−Removed: In the future, we may also issue additional securities if we need to raise capital to finance our ongoing operations, including our efforts to commercialize, market and sell EluPro, or in connection with acquisitions or other strategic investments, which securities could constitute a material portion of our then-outstanding shares of our common stock.
−Removed: We are an “emerging growth company” and a “smaller reporting company,” and the reduced disclosure requirements applicable to emerging growth companies and smaller reporting companies may make our common stock less attractive to investors.
−Removed: We are an “emerging growth company,” as defined in the JOBS Act, and a “smaller reporting company,” as defined in Rule 12b-2 under the Exchange Act.
−Removed: Emerging growth companies and smaller reporting companies may take advantage of certain exemptions from various reporting requirements that are applicable to other publicly-traded entities that are not emerging growth companies or smaller reporting companies.
−Removed: With respect to emerging growth companies, these exemptions include:
−Removed: ● the option to present only two years of audited financial statements, in addition to any required unaudited interim financial statements, with a correspondingly reduced Management’s Discussion and Analysis of Financial Condition and Results of Operations;
−Removed: ● not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act;
−Removed: ● not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis);
−Removed: ● not being required to submit certain executive compensation matters to stockholder advisory votes, such as “say-on-pay,” “say-on-frequency” and “say-on-golden parachutes”;
−Removed: ● not being required to disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee compensation.
+Added: In the future, we may also issue additional securities if we need to raise capital to finance our ongoing operations, including our efforts to develop, commercialize and market NXT-41x, or in connection with acquisitions or other strategic investments, which securities could constitute a material portion of our then-outstanding shares of our common stock.
+Added: We are a “smaller reporting company,” and the reduced disclosure requirements applicable to smaller reporting companies may make our common stock less attractive to investors.
+Added: Although we ceased to be an “emerging growth company,” as defined in the JOBS Act on December 31, 2025, we remain a “smaller reporting company,” as defined in Rule 12b-2 under the Exchange Act.
+Added: Smaller reporting companies may take advantage of certain exemptions from various reporting requirements that are applicable to other publicly-traded entities that are smaller reporting companies, including (1) the option to present only two years of audited financial statements, (2) not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, provided we do not qualify as an “accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if our annual revenue was $100 million or more during our most recently completed fiscal year and the market value of our common equity held by non-affiliates is $75 million or more as of the last business day of our most recently completed second fiscal quarter, and only after we have been subject to the reporting requirements of the Exchange Act for a period of at least 12 calendar months and (3) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements.
We have elected to take advantage of certain of these reduced disclosure obligations and may elect to take advantage of other reduced reporting requirements in the future.
As a result, the information that we provide to our stockholders may be different than the information you might receive from other public reporting companies in which you hold equity interests.
−Removed: In addition, the JOBS Act permits emerging growth companies to delay adopting new or revised accounting standards until such time as those standards apply to private companies.
−Removed: We have elected to use this extended transition period for complying with new or revised accounting standards until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act.
−Removed: As a result, our consolidated financial statements and the reported results of operations contained therein may not be directly comparable to those of other public companies.
−Removed: We cannot predict whether investors will find our common stock less attractive because of our reliance on these exemptions.
−Removed: If some investors do find our common stock less attractive, there may be a less active trading market for our Class A common stock and our stock price may be reduced or more volatile.
−Removed: We will remain an emerging growth company, and will be able to take advantage of the foregoing exemptions, until the earliest of:
−Removed: (i) the last day of the first fiscal year in which our annual gross revenues are $1.235 billion or more;
−Removed: (ii) the last day of 2025;
−Removed: (iii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our common equity held by non-affiliates is $700 million or more as of the last business day of our most recently completed second fiscal quarter;
−Removed: or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the previous three years.
−Removed: Even after we cease to be an emerging growth company, we will still be a smaller reporting company until such time as (i) we determine that the market value of the voting and non-voting shares held by non-affiliates is $250 million or more but less than $700 million as of the last business day of our second fiscal quarter and our annual revenues are $100 million or more during our most recently completed fiscal year, or (ii) the market value of the voting and non-voting shares held by non-affiliates is $700 million or more measured on the last business day of our second fiscal quarter.
−Removed: If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies, including reduced financial and executive compensation disclosure.
−Removed: In addition, even if we cease to be an emerging growth company, we will remain exempt from the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act provided we do
−Removed: not qualify as an “accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if our annual revenue was $100 million or more during our most recently completed fiscal year and the market value of our common equity held by non-affiliates is $75 million or more as of the last business day of our most recently completed second fiscal quarter, and only after we have been subject to the reporting requirements of the Exchange Act for a period of at least 12 calendar months.
+Added: We may also have other “scaled” disclosure requirements that are less comprehensive than issuers that are not smaller reporting companies which could make our Common Stock less attractive to potential investors, which could make it more difficult for our stockholders to sell their shares.
+Added: We will remain a smaller reporting company until such time as (i) we determine that the market value of the voting and non-voting shares held by non-affiliates is $250 million or more but less than $700 million as of the last business
+Added: day of our second fiscal quarter and our annual revenues are $100 million or more during our most recently completed fiscal year, or (ii) the market value of the voting and non-voting shares held by non-affiliates is $700 million or more measured on the last business day of our second fiscal quarter.
We will continue to incur increased costs as a result of operating as a public company, and our management is required to devote substantial time to new compliance initiatives and corporate governance practices.
Failure to comply may result in delisting of our common stock, government penalties or other materially adverse consequences.
−Removed: As a public company, and particularly after we are no longer an emerging growth company, we incur and will continue to incur significant legal, accounting and other expenses.
+Added: As a public company, and particularly as we are no longer an emerging growth company, we incur and will continue to incur significant legal, accounting and other expenses.
The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of The Nasdaq Capital Market and other applicable securities rules and regulations impose various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices.
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These provisions could also limit the price that investors might be willing to pay in the future for shares of our common stock, thereby depressing the market price of our Class A common stock.
−Removed: In addition, because our board of directors is responsible for appointing the members of our management team, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current
−Removed: management by making it more difficult for stockholders to replace members of our board of directors.
+Added: In addition, because our board of directors is responsible for appointing the members of our management team, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors.
Among other things, these provisions include those establishing:
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Our certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty or other wrongdoing by any of our directors, officers, employees or agents to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL or our certificate of incorporation or bylaws, (iv) any action to interpret, apply, enforce or determine the validity of our certificate of incorporation or bylaws or (v) any action asserting a claim governed by the internal affairs doctrine;
−Removed: provided that, the exclusive forum provision will not apply to suits brought to enforce any liability or duty created
−Removed: by the Securities Act, the Exchange Act, the rules and regulations thereunder or any other claim for which the federal courts have exclusive jurisdiction;
+Added: provided that, the exclusive forum provision will not apply to suits brought to enforce any liability or duty created by the Securities Act, the Exchange Act, the rules and regulations thereunder or any other claim for which the federal courts have exclusive jurisdiction;
and provided further that, if and only if the Court of Chancery of the State of Delaware dismisses any such action for lack of subject matter jurisdiction, such action may be brought in another state or federal court sitting in the State of Delaware.
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Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and to have consented to the provisions of our certificate of incorporation described above.
−Removed: We believe these provisions benefits us by providing increased consistency in the application of Delaware law by chancellors particularly experienced in resolving corporate disputes and in the application of the Securities Act by federal judges, as applicable, efficient administration of cases on a more expedited schedule relative to other forums and protection against the burdens of multi-forum litigation.
+Added: We believe these provisions benefits us by providing increased consistency in the application of Delaware law by chancellors particularly experienced in resolving corporate disputes and in the application of the Securities Act by
+Added: federal judges, as applicable, efficient administration of cases on a more expedited schedule relative to other forums and protection against the burdens of multi-forum litigation.
However, these provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees or agents, which may discourage such lawsuits against us and our directors, officers and other employees and agents.
5 unchanged sentences
In the past, securities class action litigation has often been brought against a company following a decline in the market price of its securities.
−Removed: This risk is especially relevant for us because medical device companies have experienced significant stock price volatility in recent years.
+Added: This risk is especially relevant for us because we, along with other medical device companies, have experienced significant stock price volatility in recent years.
If we face such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business.
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Testing and maintaining internal controls may divert our management’s attention from other matters that are important to our business.
−Removed: In addition, once we are no longer an emerging growth company, provided we then qualify as an “accelerated filer” as defined in Rule 12b-2 under the Exchange Act, we will be required to include in the annual reports that we file with the SEC an attestation report on our internal control over financial reporting issued by our independent registered public accounting firm.
+Added: In addition, as we are no longer an emerging growth company, if we in the future qualify as an “accelerated filer” as defined in Rule 12b-2 under the Exchange Act, we will be required to include in the annual reports that we file with the SEC an attestation report on our internal control over financial reporting issued by our independent registered public accounting firm.
In connection with the implementation of the necessary procedures and practices related to internal control over financial reporting, we may identify deficiencies that we may not be able to remediate in time to meet the deadline imposed by the Sarbanes-Oxley Act for compliance with the requirements of Section 404.
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If securities or industry analysts do not publish research or reports about our business, or if they issue an adverse or misleading opinion regarding our Class A common stock, our stock price and trading volume would likely decline.
−Removed: The trading market for our Class A common stock will be influenced by the research and reports that industry or securities analysts publish about us and our business.
+Added: The trading market for our Class A common stock will be influenced by research and reports that industry or securities analysts publish about us and our business.
We do not control these analysts.
4 unchanged sentences
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.