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Item 1. Business

2026-03-31 compared with 2025-03-25 · 154 added, 798 removed, 61 unchanged (94% of the section changed)

We are a neurotechnology company focused on neurological wellness.

Our purpose is to develop, license or acquire non-implantable technologies targeted at reducing symptoms of neurological disease or trauma.

We are a listed digital asset treasury (“DAT”) dedicated to acquiring and holding Solana tokens (“SOL”).

Solana Company’s DAT objective is to maximize SOL per share through strategic use of capital markets and onchain opportunities, offering public market investors direct exposure to Solana.

Strategic digital asset reserves like SOL lay the groundwork for a future where global payments, credentialing, and personalized learning can be powered by decentralized infrastructure, enhancing how we grow our company.

We believe that Solana represents a uniquely scalable, high-performance blockchain platform that aligns with our long-term vision of integrating innovative technologies into our services.

By investing in and participating in the Solana ecosystem, we aim to both enhance our digital asset treasury strategy and create strategic optionality for product innovation in our core business.

We are, to a lesser extent, also a neurotechnology company focused on neurological wellness.

Digital Asset Treasury

In September 2025, we adopted a digital asset treasury strategy centered on acquiring SOL and began repositioning a substantial portion of our balance sheet around that strategy.

We expect the digital asset treasury strategy to be our principal strategic focus.

Our assets are expected to remain concentrated primarily in SOL.

Our objective is to increase long-term shareholder value by increasing the amount of SOL underlying each share, generating yield on treasury assets where appropriate, and using public-market financing and treasury tools in a disciplined manner to compound net asset value (“NAV”) over time.

Unlocked and Locked SOL

We hold SOL, which consist of both unrestricted tokens (“Unlocked SOL”), which unless qualified otherwise, Unlocked SOL shall only refer to unrestricted SOL tokens that are readily transferrable onchain on the Solana network or staked SOL subject to the normal unbonding period, and restricted tokens subject to contractual lock‑up (“Locked SOL”).

Locked SOL tokens are subject to contractual and onchain restrictions (“Smart Contracts”) that limit our ability to withdraw, transfer, or otherwise direct the use of the tokens until specified unlock conditions are met.

The Locked SOL are subject to relatively even monthly unlocks through January 2028.

We continue to benefit from staking rewards earned on Locked SOL.

Investment Objective and Capital Allocation Framework

We believe SOL is a strategically differentiated digital asset within public markets.

We believe SOL remains earlier in its institutional treasury adoption curve than Bitcoin, at 4% of Bitcoin market capitalization and 1% of SOL held by institutions compared to 16% for Bitcoin as of year-end, while also offering a native yield component through staking and broader opportunities for deployment across the Solana ecosystem.

Our treasury strategy is designed around those attributes.

We expect to manage our balance sheet with the goal of improving long-term per-share exposure to SOL.

That may include issuing equity, preferred securities, or debt when we believe the cost of capital is attractive relative to the value of the assets acquired;

purchasing SOL in the open market or through negotiated transactions;

staking treasury assets;

and, where appropriate, monetizing a portion of treasury holdings to support operations, opportunistic capital allocation, or other corporate purposes, including legally permissible share repurchases authorized by our Board of Directors.

We may also use derivatives, structured products, or other risk management tools in connection with treasury management.

Any such decisions will depend on market conditions, liquidity needs, treasury performance, volatility, counterparty terms, macroeconomic considerations, and the timing and structure of capital raising activity.

How the Company Intends to Build SOL Exposure

Accumulating, holding, and managing a SOL-denominated treasury is central to our current business model.

We expect treasury growth to come from a combination of initial capital raised in public and private offerings of our securities when deemed accretive, internally generated cash flow from treasury activities, and other strategic opportunities that may arise within the SOL ecosystem.

We expect future capital decisions to be shaped by the relationship between our public market valuation and the NAV of our SOL holdings, as well as by prevailing volatility, credit conditions, and investor demand for various security types.

For example, periods of elevated volatility may improve the attractiveness of certain convertible or structured instruments, while strong equity market conditions may favor common equity issuance.

We may also seek to acquire SOL below prevailing spot prices through negotiated transactions, over-the-counter purchases, strategic partnerships, or other arrangements.

We expect to periodically disclose treasury-related metrics, including SOL holdings and other information relevant to NAV.

NAV is expected to reflect the fair market value of SOL and other treasury assets, including cash, stablecoins, and other digital assets, net of liabilities, using pricing derived from our principal market.

Treasury Productivity and Active Management

We do not intend to treat our treasury solely as a static reserve.

We expect to pursue a range of treasury productivity measures intended to increase the economic utility of held SOL while maintaining a risk management framework appropriate for a public company.

These measures may include native staking, liquid staking, institutional lending arrangements, and selected traditional finance and decentralized finance (“DeFi”) strategies.

We may also establish additional vehicles, structures, or accounts to support specialized treasury activities, subject to legal, accounting, operational, and market constraints.

Counterparties are expected to include institutional digital asset trading firms, market makers, custodians, staking providers, and other service providers selected based on execution quality, credit profile, economics, and operational reliability.

We may from time to time employ options-based strategies designed to generate premium income, improve entry prices, or define downside risk.

These strategies may include covered calls, cash-secured puts, collars, or structured yield products tied to SOL price performance.

We may also engage in basis or other relative-value strategies when we believe the risk-adjusted return profile is attractive.

Staking and Yield Generation

A substantial portion of our SOL treasury is staked.

Through staking, we participate in SOL’s proof-of-stake system as a delegator and earn rewards generated by network participation.

We have delegated across a combination of white-label validator arrangements and other third-party validators that we believe offer strong performance, uptime, economics, and operational reliability.

We expect to diversify delegation across multiple operators in order to reduce operational concentration and improve overall treasury resilience.

We are currently in preliminary stages of exploring the buildout of our own validator service and we may self-validate in the future.

We expect staking yield to arise from inflationary rewards, transaction and priority fee economics, and other validator-related economics available within the Solana network.

Validator relationships may be periodically reallocated based on performance and treasury objectives.

We may also negotiate custom arrangements with validator operators, infrastructure providers, or protocol teams where we believe those arrangements may improve economics or strategic alignment.

We have a strategic roadmap to invest in a new low-latency cluster across the Asia-Pacific region, beginning with nodes connecting Seoul, Tokyo, Singapore, and Hong Kong.

This infrastructure buildout is designed to drive staking and validation, support ecosystem development in the region, and diversify our revenue streams.

The buildout is designed to serve market makers, high-frequency traders, exchanges, and traditional finance partners, and is expected to include DeFi, liquid staking, AMM, RPC, and execution services for our institutional partners in the region.

Beyond staking, we believe there are scalable yield opportunities in both institutional and decentralized markets.

Traditional finance opportunities may include institutional lending, covered call programs, and basis trading.

DeFi opportunities may include supplying SOL to decentralized lending protocols, using liquid staking tokens, and providing liquidity to certain onchain venues.

We expect any DeFi allocation to begin conservatively and remain subject to ongoing review of smart contract risk, liquidity risk, governance risk, and operational controls.

We have a collaboration with Anchorage Digital and Kamino to enable borrowing against natively staked SOL held in qualified custody for deployment into onchain protocols on Solana.

Under the structure, Anchorage Digital acts as collateral manager for our natively staked SOL, allowing us to earn staking rewards while simultaneously unlocking borrowing power on Kamino, all while our assets remain in a segregated custody account at Anchorage Digital Bank.

Liquidity and Treasury Risk Management

Because a large portion of our assets may be staked or otherwise deployed, liquidity management is a core element of the treasury strategy.

Native staking on Solana generally involves an unstaking or deactivation period before assets can be freely transferred, and under normal network conditions that process may take approximately 48 hours, although it could take longer depending on network conditions.

As a result, we expect to maintain a portion of treasury assets in unstaked SOL, cash, stablecoins, or other liquid forms in order to meet near-term obligations and preserve flexibility.

We also expect to use liquid staking tokens (“LSTs”) selectively.

LSTs may allow us to continue earning staking-related economics while retaining greater liquidity and broader usability across Solana-based applications.

We expect the mix between native staking, liquid staking, and unencumbered treasury assets to vary over time depending on market opportunities, cash needs, collateral requirements, and overall risk tolerance.

We may also use capital markets activity to support liquidity, including at-the-market programs, debt instruments, preferred securities, structured products, and other financing tools.

Where derivatives are used, we will need to manage associated margin, collateral, and cash flow variability.

Liquidity decisions are expected to reflect both treasury optimization and our broader corporate obligations.

Custody, Control, and Safeguarding of Assets

We expect substantially all of our SOL to be held with multiple U.S.-based regulated third-party custodians selected for institutional security, operational controls, and service quality.

A nominal operational balance may be maintained in a hot wallet for limited working purposes, but we expect the vast majority of treasury assets to remain in custody.

We currently hold all of our SOL with two custodians.

Our custodial arrangements generally include standard storage and transaction fees, one- to three-year contractual terms, termination rights, and restrictions prohibiting custodians from rehypothecating or otherwise using our SOL.

We expect our custodians to maintain institutional-grade security procedures, including offline key generation, strict approval workflows, cold storage, geographic redundancy, and independent assessments consistent with SOC-type control frameworks.

Although we believe these arrangements are designed to reduce key management and operational risk, no custody arrangement can eliminate the possibility of theft, security failure, service interruption, insolvency, or legal uncertainty with respect to custodially held digital assets.

Solana as the Treasury Asset

SOL is the native token of the Solana network and serves both as the staking asset securing the network and as the token used to pay transaction fees.

New SOL enters circulation primarily through inflationary rewards distributed to validators and delegators.

SOL’s monetary design currently includes a declining inflation schedule moving toward a long-term floor, while staking yield also reflects transaction and priority fee economics and other network-level activity.

The circulating supply of SOL may also be affected over time by unlock schedules and other market dynamics.

We believe Solana is one of the most important public blockchain networks in the market today.

We believe Solana’s distinguishing features include high throughput, low latency, parallelized execution, and an architecture designed to scale

with advancements in hardware and bandwidth over time.

Solana processes nearly 1,000 transactions per second with less than 400 millisecond block times, which compares to Bitcoin at less than 10 transactions per second and roughly 10-minute block times and Ethereum at less than 30 transactions per second and 12-second block times.

We also believe Solana has achieved meaningful adoption across decentralized exchange activity, payments, stablecoins, real-world asset tokenization, gaming, social applications, and broader decentralized finance.

Major global financial platforms including Stripe, Paypal, and Western Union have launched payments and stablecoin efforts on Solana.

We believe Solana’s clear emphasis on stablecoin based payments, the development of onchain digital capital markets via tokenization, growing institutional adoption, and integration of artificial intelligence agents are expected to drive widespread adoption within the Solana ecosystem and support the long-term value of SOL.

A growing number of asset managers, including Apollo Global and Franklin Templeton, have conducted tokenized asset issuance on Solana.

According to Blockworks, a financial media and information platform focused on digital assets, Solana has facilitated almost 98% of tokenized equities spot volume, showing that Solana is the number one chain where tokenized equities actually move.

According to the Developer Report, it is the chain with the most net new developers since the beginning of 2024.

We further believe SOL differs from non-yielding digital assets because it can be economically productive through staking and other treasury applications.

We believe those characteristics make SOL particularly well-suited for a public balance sheet strategy, although there can be no assurance that market participants will continue to value SOL accordingly.

Network, Ecosystem, and Concentration Risk

Our strategy is highly dependent on the continued functionality, adoption, and market value of SOL and the Solana network.

Any material adverse development affecting Solana, including software failures, governance disputes, trading venue disruptions, smart contract exploits, validator concentration, custody failures, adverse regulation, or a sustained decline in network activity or public perception, could materially and disproportionately harm our Company.

Because our treasury is expected to remain concentrated primarily in SOL, we are exposed to substantial asset concentration risk.

Solana has experienced performance disruptions in the past, and future disruptions remain possible.

Major technical upgrades, including proposed changes to Solana’s consensus or validator architecture, could improve network performance but may also introduce implementation risk.

Our ability to transfer, stake, monetize, or otherwise deploy SOL may also be impaired by outages, congestion, cyber incidents, service provider failures, or closures affecting custodians, exchanges, counterparties, or other infrastructure on which we depend.

Competitive Positioning

We operate within an emerging group of public companies using digital assets as a primary treasury strategy.

We believe competition in this sector is likely to increase as additional companies adopt asset-specific treasury models and seek to differentiate through asset selection, financing strategy, yield generation, operational execution, and ecosystem relationships.

We believe our concentrated focus on SOL, together with our intended use of staking, capital markets tools, and ecosystem engagement, positions us differently from more passive treasury vehicles.

At the same time, the competitive landscape remains fluid, and larger or better-capitalized participants may emerge over time.

Relationship with the Solana Ecosystem

We and certain of our investors have entered into a non-binding letter of intent with the Solana Foundation establishing a framework for potential collaboration.

Under the principal contemplated terms, we would conduct our onchain activity on Solana, support institutional partnership referrals, and participate in initiatives intended to highlight Solana’s capabilities, including events, roundtables, and ecosystem programming.

The letter also contemplates a potential option for us, subject to specified conditions, to purchase a defined quantity of SOL at a discount.

We view this framework as consistent with our role as a long-term institutional advocate for the Solana ecosystem, although the arrangement is non-binding and may not result in definitive transactions on the terms described, or at all.

PoNS Therapy Operations

Following our adoption of our digital asset treasury strategy in September 2025, we continue to operate, to a lesser extent, our neurotechnology and medical device business.

The purpose of this business is to develop, license or acquire non-implantable technologies targeted at reducing symptoms of neurological disease.

Our product, known as the Portable Neuromodulation Stimulator, or PoNS®, is an innovative non-implantable medical device, inclusive of a controller and mouthpiece, which delivers mild electrical stimulation to the surface of the tongue to provide treatment of gait deficit and chronic balance deficit.

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These impulses stimulate sensory nerves in the tongue that have direct pathways to the brain, through the brain stem.

The combination of mild stimulation with supervised therapeutic exercise promotes neuromodulation and likely trigger neuroplastic effects, which potentially lead to functional improvements in balance and gait.

The combination of mild stimulation with supervised therapeutic exercise promotes neuromodulation and likely triggers neuroplastic effects, which potentially lead to functional improvements in balance and gait.

During each clinic visit and at the end of the 14-week therapy, the clinic downloads and reviews the PoNS usage data from the device.

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The patient initiates their PoNS Therapy sessions with the PoNS device initially under the supervision of the clinicians, then through regular check-ins.

Clinical research has shown that translingual neurostimulation activates two major cranial nerves – the trigeminal nerve, and the facial nerve, which creates a flow of neural impulses that are delivered directly into the brain stem and cerebellum – the main control centers for multiple functions including sensory perception and movement.

From the brain stem, these impulses travel throughout the brain and may activate or reactivate signaling pathways involved in human function.

Researchers believe that supervised therapeutic exercise with neurostimulation can modulate neural activity and initiate adaptive changes in the brain that lead to restructuring and reorganization (neuroplasticity) processes in specific areas of the brain.

The PoNS device is ergonomically designed for patient comfort, is relatively light, contains a replaceable hygienic mouthpiece and a rechargeable battery with built-in technology to allow for tracking of the patient’s usage, including time and intensity of treatments.

See Figure 1.

The Portable Neuromodulation Stimulator, PoNS device

The mouthpiece of the PoNS device sits on the front third of the tongue and is held in place by the lips and closed mouth.

See Figure 2.

A rechargeable lithium polymer battery with built-in charge safety circuitry provides power.

While the voltage and pulse timing to each electrode are programmed into the device and cannot be altered, the user can adjust the stimulus intensity, which is achieved by adjusting the electrical pulse width.

The sensation produced by the mouthpiece is similar to the feeling of drinking a carbonated beverage.

The patented waveform is specifically designed to minimize the potential for tissue irritation.

Overview of MS and Current Available Treatments

MS is currently classified as an autoimmune disease of the central nervous system.

The disease attacks the myelin, the protective covering of the nerve necessary for the transmission of nerve impulses through nerve fibers, causing inflammation and often damaging the myelin.

Damage to the myelin is variable, depending on the course of the disease, which influences the type and severity of symptoms.

MS is unpredictable and can cause symptoms such as extreme fatigue, lack of coordination, weakness, tingling, impaired sensation, vision problems, bladder problems, cognitive impairment and mood changes.

Its effects can be physical and emotional with a substantial financial burden.

Currently there is no cure and patients with MS experience a progressive decline in health over time.

There are a variety of treatments available for MS, some of which are experimental, including pharmaceutical, dietary, and surgical, which may or may not be covered by government or private health insurance.

Findings from a 2019 National MS Society study (Wallin et al, 2019) estimate that nearly 1 million people in the U.S.

are living with MS of which approximately 25-30% are on Medicare.

The National MS Society estimates that 2.9 million people live with MS globally.

and Canada have the highest rates of MS, with 337.9 to 362.6 cases per 100,000 in the U.S.

In Canada, 93,000 people are living with MS with 290 cases per 100,000 in Canada (Statistics Canada, Gilmour et al, 2018).

Given the nature of this neurodegenerative disease, these individuals and their caretakers are active in exploring treatment options that may resolve or delay the progression of symptoms.

There is also a well-established advocacy framework.

Mobility disability and walking impairment are among the most debilitating consequences of MS with approximately 72% of individuals diagnosed with MS reporting gait impairment as a major limitation in their daily lives (Williams et al, 2014).

Gait is one of the most important bodily functions for MS patients and gait parameters, such as walking speed and stride length, have been shown to be significant predictors of patient’s independence in daily activities.

A survey of 436 patients found that 45% reported a mobility disability in the first month following diagnosis, with upwards of 90% of patients reporting a mobility disability within 10 years of their diagnosis (Baird et al, 2019).

Additionally, 50-80% of MS patients suffer from balance and gait dysfunction (Cameron et al, 2018) and over 56% fall at least once within a three-month period (Carlin et al, 2018).

It has also been reported that unemployment rates in MS patients range from 24-80% with higher rates associated with decreased ambulation and mobility (Julian et al, 2008).

The Centers for Disease Control, or CDC, reports that individuals with disabilities, like MS, that result in limited mobility are at greater risk for health problems including injury, mental health and depression, overweight and obesity, pain, pressure sores or ulcers and other issues.

A 2016 economic analysis of MS found the total lifetime costs per person with MS to be $4.1 million (Owens, 2016), with average yearly healthcare costs ranging from $57 thousand to $93 thousand based on the severity of the disease, and averaging $65 thousand more in yearly healthcare costs than that of someone without MS (Bebo et al, 2022).

In 2019, the total economic burden attributed to MS in the U.S was $85.4 billion and the average annual cost of living with MS was $88 thousand (Bebo et al, 2022).

Since the exact cause of MS is still unknown, there is no known prevention.

Although there is no cure for MS yet, immunotherapy can provide disease-modifying effects, and other pharmacological and non-pharmacological treatments can manage symptoms.

MS medications are designed to lessen the frequency of relapses and slow the progression of the disease, but none have been proven to halt progression of the disease.

While there are several disease-modifying medications approved by the FDA to treat MS, only one drug approved by FDA and Heath Canada, Ampyra® (dalfampridine), which is indicated for the improvement of gait speed in conjunction with physical therapy in patients with MS, offers the closest, albeit limited only to speed, comparison to PoNS Therapy on improvement in gait.

Overview of TBI and Current Available Treatments

There are an estimated 49.0 million people globally (Guan et al, 2023), with 5.3 million in the U.S.

(Centers for Disease Control and Prevention, 2015) and 2% of Canadians estimated to be 760,000 (Brain Injury Canada, N.D.), living with a TBI-related disability.

Every year there are 27.2 million newly diagnosed TBIs globally (Guan et al, 2023), of which 2.8 million (Taylor et al, 2017) and 165,000 (Brain Injury Canada, N.D.) occur in the U.S.

and Canada, respectively.

This condition often has a significant impact on one’s quality of life, negatively affecting independence, employability,

productivity, mental health and participation in the community.

Rehabilitation is often required following a TBI for resulting motor, cognitive and behavioral impairments.

Approximately 80% of individuals who sustain a TBI report balance impairment (Dever et al, 2022).

The current standard of care to address balance issues following a TBI is supervised therapeutic exercise.

While supervised therapeutic exercise can help to promote balance recovery, individuals are often unable to return to their full function and are left living with a balance deficit.

Prior to the development of the PoNS device, there were no cleared treatments that were clinically indicated to treat balance deficit.

A few studies have suggested that supervised therapeutic exercise aimed at improving balance and gait may be mildly effective for rehabilitation in the mmTBI population.

Given the small number of published studies, the small number of patients enrolled in the studies of which we are aware, the varying range of interventional protocols employed in such studies and the lower levels of study design, it is difficult to draw any conclusions regarding the effectiveness and dosing parameters of using supervised therapeutic exercise alone for the treatment of balance deficit following mmTBI.

Consequently, we believe that there is a large potential commercial opportunity for the PoNS Therapy in the treatment of balance deficit due to mmTBI.

Our goal is to establish the PoNS Therapy as the standard of care for this condition all over the world.

Overview of Stroke and Current Available Treatments

According to the World Stroke Organization, there are more than 101 million people across the globe who have experienced a stroke, and over 12 million new strokes occur each year (Feigin et al, 2022).

In the U.S., approximately 650,000 people survive a new stroke each year and an estimated 7 million Americans live with ongoing complications of stroke (Dobkin, 2013).

The Canadian Chronic Disease Surveillance System states that stroke is the third leading cause of death in Canada and the tenth largest contributor to disability-adjusted life years (the number of years lost due to ill-health, disability or early death).

About 878,000 Canadian adults aged 20+ have experienced a stroke (Heran et al, 2022) and with the population aging, more and more Canadians are at risk.

This condition often has a significant impact on one’s functional ability, negatively affecting independence, employability, productivity, mental health and participation in the community.

In addition, more than 80% of the survivors have gait impairment (Carmen, 2020).

Rehabilitation is required following a stroke for resulting motor, cognitive and behavioral impairments.

Most province public health systems in Canada offers stroke rehabilitation services along with private establishments.

The potential for commercial opportunity for PoNS to support all these public and private establishments is wide.

PoNS Therapy offers new opportunities for this type of service by enhancing physical rehabilitation and helping attain the desired goals.

PoNS Clinical Trials and Scientific Support in MS

There are two peer-reviewed published studies reporting on the results of clinical trials comparing active PoNS + PT vs a no frequency pulse sham device (placebo PoNS) + PT in subjects with mild and moderate MS:

Journal of Neuro Engineering and Rehabilitation 2014, 11:79 and Leonard et al.

Multiple Sclerosis Journal Experimental, Translational and Clinical January-March 2017:

10.1177/ 2055217317690561.

Summary results of the Tyler study in 20 subjects with mild and moderate MS:

● The study was designed as a between-group comparison of the Dynamic Gait Index (DGI) score improvement in 10 subjects treated with active PoNS, in conjunction with two weeks of treatment in clinic under supervision of a registered PoNS trainer, and, individually, at home over 12 weeks, as compared to 10 subjects treated with placebo PoNS and the same physical therapy regimen, after a total of 14 weeks of treatment.

● The primary endpoint demonstrated a statistically significant improvement greater than 4 points in the DGI score from baseline in the active PoNS group as compared to placebo at endpoint (Week 14) (p<0.005).

● The DGI improvement was already clinically meaningful at 2 weeks of treatment and continued to increase over the following 8 weeks of therapy with an average improvement of 7.7 points, which was then maintained (slightly increased) through week 14.

Summary results from the Leonard study in 14 patients treated with mild and moderate MS:

● A statistically significant improvement in the NeuroCom Sensory Organization Test (SOT), a test of subject’s ability to balance, from baseline to week 14 of treatment in 7 subjects treated with active PoNS as compared to the 7 subjects in placebo PoNS group (p=0.001).

● Functional MRI data showed an increased blood oxygen dependent level (BOLD) signal in specific brain cortical areas, suggesting that sustained PoNS neuromodulation-induced activation of these cortical areas is likely to trigger a series of adaptive changes (neuroplasticity), expected to rehabilitate existing pathways as well as engage new mechanisms to deliver functional signals to the spinal cord, that may correlate with PoNS therapeutic outcomes observed in the Tyler study.

Summary of Real-World Evidence (RWE) in MS patients treated with PoNS in Canada.

● Gait deficit treatment outcomes for PoNS-treated individuals are routinely captured through a proprietary validated data capture software.

At the time of this retrospective analysis, all data from the MS treated subjects available in our database, specifically 43 MS subjects treated with PoNS for gait deficit in Canada between March 2019 and December 2019, were utilized.

● The mean improvement in the FGA (functional gait assessment) from baseline to Week 14 was 4.53 (95% CI 3.35 to 5.72) with a median improvement of 5 points.

● A minimal detectable change, greater or equal to 4-point FGA improvement, was met by 56.7% of subjects, most of whom had chronic MS with long durations of the disease.

● An analysis of the surveillance safety database demonstrated an excellent safety profile supporting a positive benefit-risk ratio in the real-world clinical utilization setting.

Summary of PoNS Therapeutic Experience Program (PoNSTEP) study in MS.

● PoNSTEP study assesses the adherence to on-label PoNS® Therapy for improvement of gait in people with multiple sclerosis (MS) in a real-world clinical setting, and aims at understanding the utilization, treatment compliance, and the short/long-term clinical benefits of PoNS Therapy.

● The study enrolled 43 patients with gait deficit due to mild-to-moderate MS into the study who were receiving standard clinical care for their medical condition.

The recommended dose of PoNS Therapy was 100-120 min per day for 14 weeks, performed 5 days/week in the clinic for the first 2 weeks (Phase 1), followed by a 12-week unsupervised therapy at home (Phase 2).

Participants were also evaluated after a 6-month post-treatment observation period (Phase 3).

● The primary endpoint was maintenance of gait improvement from the end of supervised therapy (Phase 1) to the end of unsupervised therapy (Phase 2) in relation to the subject’s adherence to PoNS therapy.

Secondary endpoints included, among others, maintenance of improvement of gait and balance deficit over time.

● 41 patients started treatment, 38 completed the 14-week treatment protocol, and 29 of 38 were evaluated at the 6-month follow-up.

Participants who declined 30% or more in their functional improvement from the end of Phase 2, were eligible for an additional 12-wk course of PoNS Therapy at home.

● The mean improvement in DGI during Phase 1 and Phase 2, among the 38 subjects completing the protocol, was 5.00 points (4.1 to 5.9, p<0.001) at week 14.

Average therapy adherence was almost 90% in Phase 1 (with no significant association with DGI improvement [r=0.14;

p=0.42]), whereas in Phase 2, adherence was over 67% with a significant linear correlation with DGI improvement (r=0.345;

The mean changes [SD] in Phase 2 for subjects with ≥85% and <85% adherence were 3.7 [1.8] and 2.0 [1.8] points, respectively (p=0.008).

● 70.7% participants were evaluated Week 26 and the mean percentage decline in DGI was -4.1% (95% CI -9.4% to 1.1%) with only 1/28 (3.6%) experiencing at least a 30% decline in DGI (95% exact binomial confidence interval:

0.09% to 18.4%).

No correlations between the mean decline from Week 14 to Week 26 and the treatment adherence metrics was observed (0.16 for Phase 1, 0.20 for Phase 2, and 0.20 for the whole 14-wk treatment period, all with p>0.30).

PoNS Clinical Trials and Scientific Support in mmTBI

There are two peer-reviewed published studies reporting on the clinical trials’ results of the PoNS Therapy in people with mmTBI.

The first is from our registrational clinical trial (TBI-001):

Ptito A, Papa, L, Gregory, K, Folmer, RL, Walker, WC, Prabhakaran, V, Wardini, R, Skinner, KL, Yochelson, M, (2020).

“A Prospective, Multicenter Study to Assess the Safety and Efficacy of Translingual Neurostimulation Plus Physical Therapy for the Treatment of a Chronic Balance Deficit Due to Mild-to-Moderate Traumatic Brain Injury”.

Neuromodulation:

Technology at the Neural Interface .

The second is from the Long-Term Treatment study in mmTBI Trial:

Tyler, ME, Skinner, KL, Prabhakaran, V, Kaczmarek, KA, Danilov, YP (2019).

“Translingual neurostimulation for the treatment of chronic symptoms due to mild-to-moderate traumatic brain injury.” Archives of Rehabilitation Research and Clinical Translation;

1(304):100026.

PoNS Registrational Clinical Trial in mmTBI

Both studies were double-blind randomized, controlled, aiming to assess the safety and effectiveness of the PoNS Therapy using translingual noninvasive electric stimulation in conjunction with physical therapy performed in clinic for the first two weeks of treatment under supervision of a registered PoNS trainer, and, individually, at home over a short-term period of time (3 or 12 weeks) for a total of 5- or 14-week therapy, respectively for the short- and long-term studies.

Both trials enrolled chronic (> 1 year post head trauma event) TBI subjects with a balance deficit established as sensory organizational test (SOTT) composite score of at least 16 points below the normative value for the participant’s age, who have reached a plateau in their prior physical rehabilitation regimen outcome.

According to published clinical trial data, balance impaired TBI subjects treated with physical therapy alone reached an average improvement of 10-13 points in their SOT composite score over a short-term treatment period, an improvement that trended back towards baseline values upon physical therapy discontinuation.

In both PoNS studies, participants entered the trial with an average SOT composite score of 40 (1-100 range), indicative of compromised functional balance, and were randomized to treatment with PoNS devices that delivered either a high-frequency pulse ( HFP) (25.7 million pulses per 20 minute treatment) or a low-frequency pulse (LFP) (13,728 pulses per 20-minute treatment).

In both studies, the primary efficacy endpoint was constructed for a between-group (HFP-treated and LFP-treated cohorts) comparison based on a greater than 15-point SOT composite score improvement at endpoint.

The statistical plans also provided for a key secondary efficacy endpoint that established the treatment response (> 15 points on SOT composite score) from baseline in the pooled HFP and LFP groups at endpoint(s), should the primary measure failed to establish a significant difference between the HFP and LFP treatment groups.

Summary results of the registrational study (Ptito et al.

2020) in mild to moderate TBI subjects with balance deficit:

● The trial, launched in 2015 in conjunction with the U.S.

Army Medical Research and Materiel Command, or the USAMRMC and conducted at seven sites in the U.S.

and Canada, evaluated 122 randomized subjects.

● The primary efficacy endpoint, although failing to demonstrate a between-group difference (p<0.081), showed a higher responder rate in the HFP arm with 71.2% of subjects experiencing a greater than 15-point improvement on the SOT composite score as compared to 63.5% in the LFP arm over a 5-week treatment period.

● The key secondary efficacy endpoints demonstrated a statistically significant increase (p<0.0005) in SOT composite scores from baseline for the pooled arms with a mean improvement of 18.3 points at two weeks of treatment and of 24.6 points at five weeks of treatment.

● The primary safety endpoint demonstrated a decrease in the frequency of falls as determined by daily event(s) during the in-clinic phase of the study (week two).

● The secondary safety endpoint demonstrated a decrease in the frequency and severity of headaches (by the Headache Disability Index) from baseline to end of treatment (at week 5).

● No device-related serious adverse events were observed.

Summary of the results of the 26-week long-term treatment study (Tyler et al, 2019) in people with mmTBI:

● The study, performed to evaluate the durability of response to the PoNS Therapy over a 26-week period (14-week therapy followed by 12-week washout period) conducted at the Tactile Communication & Neurorehabilitation Laboratory at the University of Wisconsin-Madison and sponsored by the U.S.

Army, enrolled 44 mild-to-moderate subjects with gait deficit.

● The primary efficacy endpoint, although similar to the registrational study, did not show a separation on the composite SOT score improvement between the HFP and LFP groups, confirmed the trend of a higher response rate in the HFP group.

● The secondary endpoint showed a 29.8-point improvement of the composite SOT score from baseline in the HFP-treated group at the end of 14 weeks of treatment.

● At the end of the 12-week washout period, the participants maintained, on average, the same SOT composite score achieved over the 14 weeks of PoNS Therapy.

● The study confirmed the favorable safety profile shown in the registrational study.

These studies demonstrated that the PoNS Therapy could, on average, allow people with mmTBI who had balance deficit reach, over 14 weeks of treatment, and maintain, over 12-week post-treatment, an SOT composite score within or above the normal range.

Furthermore, in a subset of nine participants, who underwent sequential magnetic resonance imaging (MRI) scans, showed meaningful structural and functional changes in specific brain areas consistent with PoNS therapeutic effect on the balance function.

PoNS Clinical Evidence and Scientific Support in Stroke

In a clinical study (2017) published by Dr.

Mary Galea, PoNS Therapy displayed a statistically significant effect on improving balance deficit after 2 weeks of intense physical therapy rehabilitation with PoNS, as compared to high-intensity physical therapy alone.

The study was conducted in an in-patient rehabilitation setting on 10 patients who were in the subacute stroke phase and with therapy intensity higher than in most stroke rehabilitation settings.

The following is a summary of the real-world evidence (“RWE “) database analysis of stroke patients treated with PoNS in Australia:

● The combined intervention with PoNS was significantly more effective than high intensity physiotherapy alone for the rehabilitation of balance in stroke survivors.

● After two weeks of therapy, the median score on the Mini-BEST was 22.0 in the PoNS-treated group, compared to 13 in the control group, providing a clinically significant and meaningful therapeutic outcome, especially when considering that a cut-off score of 17.5 has been shown to discriminate between fallers and non-fallers with chronic stroke (> 6 months).

Gait deficit treatment outcomes for PoNS-treated individuals were analyzed through a RWE retrospective analysis of clinical data from 10 clinical rehabilitation settings in Canada sites.

The RWE dataset consisted of 31 consecutive stroke patients that started treatment between March 2019 and November 2022.

Patients included in this data set met the criteria for mild to moderate chronic stroke based on the rating of gait (walking) ability.

Gait performance was determined using the FGA.

FGA at Baseline and at Week 14, as well as changes form Baseline to Week 14 and FGA values at intermediate time points were summarized using means, standard deviations, medians, minimum and maximum values and where appropriate using 95% confidence intervals.

Summary of RWE database analysis in stroke patients treated with PoNS in Canada:

● The adjusted mean improvement in the FGA was 6.74 (95% CI:

4.85 to 8.63) among 30 subjects.

The lower bound of this confidence interval exceeds the reported minimum detectable change (MDC) of 4.2 points for improvements in FGA in stroke patients.

● 18 of 26 (69.2%) subjects with complete data at baseline and at Week 14 had improvements larger than the MDC (95% 2-sided binomial exact CI 51.5% to 87.0%).

● Among subjects with evaluable baseline and Week 14 FGA, 25 of 26 (96.2%) subjects were at risk for falling at baseline (FGA<23).

Among the 25 subjects with baseline fall risk, 7 (28%) subjects were no longer at risk for falling at Week 14.

The one subject not at fall risk at baseline remained not at fall risk at Week 14.

● There was no statistically reliable evidence that effectiveness varies by age, gender, or clinical site.

Safety and Tolerability Profile of PoNS Therapy

PoNS Therapy has an excellent high safety profile.

Overall, the therapy is safe and well tolerated.

Reported adverse events were mild and typically related to baseline comorbidities and not PoNS treatment.

Galea’s two-week randomized controlled study, no serious device-related adverse events were reported for any subject treated with PoNS.

Similarly, in the MS and TBI randomized studies, there were no serious PoNS device-related adverse events in any disease groups.

Furthermore, there were reductions from baseline in fall rate and in the Headache Disability Index (“HDI”) and improvements in sleep quality were also reported in the TBI studies.

The PoNS device has been used in clinical rehabilitation settings with over 798 patients since March 4, 2019 to treat balance and gait disorders with more than 247,000 patient sessions recorded, no serious device-related events have been recorded along with zero reported adverse events.

Regulatory Status Worldwide

Canadian Regulatory Status:

mmTBI, MS and Stroke

On October 17, 2018, we received our Canadian marketing authorization from Health Canada allowing us to commercialize the PoNS device in Canada for use as a short-term treatment (14 weeks) of balance deficit due to mmTBI.

On March 18, 2020, we received marketing authorization from Health Canada allowing us to commercialize the PoNS device in Canada for the treatment of gait deficit in patients with mild and moderate MS symptoms.

Our market authorization application comprised objective statistical evidence as well as independently reviewed clinical research analysis.

This label expansion expanded our addressable market in Canada to include a patient population seeking treatment options that may resolve or delay the progression of MS gait deficit symptoms.

On March 8, 2023, we received marketing authorization from Health Canada allowing us to commercialize the PoNS device in Canada for use as a short-term treatment of gait deficit due to mild and moderate symptoms from stroke.

This expands our addressable market in Canada to include a patient population seeking treatment options that may resolve stroke gait deficit symptoms.

Regulatory Status:

On May 7, 2020, we received Breakthrough Designation for the PoNS device as a potential treatment for gait deficit due to symptoms of MS, to be used as an adjunct to a supervised therapeutic exercise program.

The goal of the Breakthrough Devices Program is to provide patients and health care providers with timely access to these medical devices by speeding up their development, assessment, and review, while preserving the statutory standards for premarket approval, 510(k) clearance, and de novo classification and clearance, consistent with FDA’s mission to protect and promote public health.

The Breakthrough Devices Program offers manufacturers an opportunity to interact with the FDA to efficiently address topics as they arise during the premarket review phase, which can help manufacturers receive feedback from the FDA and identify areas of agreement in a timely way.

Manufacturers can also expect prioritized review of their submission.

Breakthrough Device Designation does not change the requirements for approval of an application for a marketing authorization.

On March 26, 2021, we received marketing authorization from the FDA of the PoNS device for use as a short-term treatment of gait deficit due to mild-to-moderate symptoms of MS and is to be used as an adjunct to a supervised therapeutic exercise program in patients 22 years of age and over by prescription only.

On February 29, 2024, we received Healthcare Common Procedure Coding System (HCPCS) codes for the PoNS controller and for the PONS mouthpiece, which became effective on April 1, 2024.

We also intend to provide broad access and reimbursement for the PoNS Therapy over time through commercial insurers.

Prior to the initiation of CMS or broad commercial payer coverage, the primary source of sales has been self-pay patients.

We expect to continue to support the cost of the PoNS Therapy by collaborating with third parties to provide self-pay patients with financing options as well as working with advocacy groups and charitable organizations to help self-pay patients access our technology.

In general, we anticipate that it will take at least 24 months to obtain broad coverage and reimbursement among government and private payers.

Regulatory Status:

In August 2021, we received Breakthrough Designation for the PoNS device as a potential treatment for dynamic gait and balance deficits due to symptoms from stroke, to be used as an adjunct to a supervised therapeutic exercise program in patients 22 years of age and over.

With Breakthrough Designation received, we have started a stroke registrational program (SPR) including two company sponsored pivotal studies, a randomized controlled double blinded trial (HMI-RCT) and an open label study (OLS) of PoNS Therapy in people with gait and/or balance deficit due to chronic stroke, at 10 clinical sites across the US and Canada.

In addition, the SPR includes an investigator-initiated pilot study, sharing the same study design, patient population, study treatment, endpoints, and statistical analysis of the pivotal studies, conducted at the Medical University of South Carolina and at Brooks Rehabilitation (FL).

All studies are fully enrolled and we are targeting a submission to FDA in mid-to-late 2025.

Regulatory Status:

regulatory strategy initially focused on pursuing de novo classification and clearance of the PoNS device from the FDA for the treatment of balance deficit due to mmTBI.

We submitted a request for de novo classification and clearance of the PoNS device to the FDA for this indication in August 2018.

This request was supported by data from two of our clinical trials in mmTBI, including our registrational trial, TBI-001.

In April 2019, we announced that the FDA had completed its review and had denied our request for de novo classification and clearance of the PoNS device for the treatment of balance deficit due to mmTBI.

In reaching its conclusion, the FDA noted, via a denial letter, that although the safety profile of the PoNS device is acceptable, the FDA did not have sufficient information to discern the relative independent contributions of the PoNS device and physical therapy on the improvements from baseline.

The FDA noted that we could generate additional data to address its concerns and resubmit our application.

In October 2019, we had a pre-submission meeting where the FDA provided feedback needed to help complete the design of a new clinical trial intended to address the FDA’s request for a trial that demonstrates the benefit of the PoNS Therapy compared to physical therapy alone.

In January 2020, we received the FDA’s feedback on the minutes from the October 2019 pre-submission meeting.

In its feedback, the FDA provided post-meeting notes with specific recommendations regarding the trial design that were not discussed in the October 2019 pre-submission meeting.

Based on the receipt of the FDA’s final minutes from the pre-submission meeting, we are assessing the feasibility of a clinical program to advance the development of a study aimed to obtain clearance for gait and balance deficits in mmTBI if nondilutive financing to fund the program becomes available.

European Regulatory Status

In December 2018, we submitted an application for CE certification with a notified body in the European Union (“EU”), which, if granted, would allow us to CE mark and market the PoNS device in the EU.

During the second quarter of 2019, we engaged with our notified body in Europe to answer questions that we received from them as part of the conformity assessment of our PoNS device for CE certification.

In August 2019, we withdrew our application to be CE certified due to uncertainty in Europe caused by the switch from the Medical Device Directive, or MDD, to the Medical Device Regulation, or MDR, Brexit, and the withdrawal of Lloyd’s Register Quality Assurance, our notified body, from the EU notified body business.

We have engaged G-MED NA (North America) as our ISO registrar and will reconsider submitting to the EU when conditions stabilize.

Australian Regulatory Status

In the third quarter of 2019, we initiated the submission of our application to the Therapeutic Goods Administration, or TGA.

We supplemented our submission with additional data based on questions supplied to date and provided responses to additional questions during the third quarter of 2020.

In November 2021, we received market authorization from the TGA for the sale of PoNS as a Class IIa medical device.

In Australia, PoNS is intended for short term use by healthcare professionals as an adjunct to a therapeutic exercise program to improve balance and gait.

PoNS is not intended to be used alone without an exercise program.

HTC Exclusive Distribution Agreement

On March 3, 2023, we entered into an Exclusive Distribution Agreement with Health Tech Connex, Inc.

(“HTC”) (“HTC Exclusivity Agreement”), whereby, subject to certain terms and conditions, we granted to HTC the exclusive right to provide the PoNS Therapy in the Fraser Valley and Vancouver metro regions of British Columbia, where HTC has operated a PoNS authorized clinic since February 2019.

HTC purchases the PoNS devices for use in these regions exclusively from us and on terms no less favorable than the then-current standard terms and conditions.

This HTC Exclusivity Agreement replaces the previous Clinical Research and Co-Promotion Agreement (“HTC Co-Promotion Agreement”) between the parties dated October 2019.

Product Development, Manufacturing and Logistics Services

The commercial design of the PoNS device was originally manufactured and assembled by Key Tronic Corporation (“Key Tronic”), our contract manufacturing partner since 2017, at its facility located in Oakdale, Minnesota.

During the third quarter of 2023, the Company began implementing the transition of the manufacturing of PoNS device controllers and mouthpieces from Key Tronic to Minnetronix, Inc (“Minnetronix”) in St.

The Company has completed the transition during the fourth quarter of 2024.

Minnetronix now manufactures devices for engineering and design verification testing and for our FDA submissions as well as commercial devices for inventory.

We place an emphasis on protecting our patented technology, trade secrets and know-how and only share confidential information on an as-needed basis.

Minnetronix is registered as a medical device manufacturer in good standing with the FDA and along with Cambridge Consultants, our design services supplier, are certified in accordance with International Organization for Standardization, or ISO, 13485, a comprehensive quality management system for the design and manufacture of medical devices.

HMI maintains a compliant quality management system certified to ISO 13485:2016 and is compliant with MDSAP requirements for the U.S., Canada and Australia.

During 2021, we contracted with Healthlink International Inc.

(“Healthlink”) to provide third party logistics for domestic and Canadian shipment and order fulfillment, and to provide warehousing services for finished goods.

Healthlink began fulfilling orders in the United States effective with the commencement of commercial sales in the United States in April 2022 and in Canada during the fourth quarter of 2022.

Healthlink is a life science solutions company, specializing in

logistics, temperature-controlled warehousing, fulfillment and freight management as well as back-office services, including multilingual customer service, financial services and VAT management.

Commercialization

Commercialization Activities

On March 26, 2021, we received marketing authorization from the FDA for the PoNS device.

The PoNS device is indicated for use as a short-term treatment of gait deficit due to mild-to-moderate symptoms of MS and is to be used as an adjunct to a supervised therapeutic exercise program in patients 22 years of age and over by prescription only.

Throughout the pre-commercial phase during 2021 and early 2022, we developed and refined our commercial strategy including a focus on payer strategy, both government and commercial, securing distribution licenses in various states and beginning to build relationships with key large neurorehabilitation centers, which focus on treatment of MS patients.

We continue to generate data on outcomes of the PoNS Therapy generated from treatment of patients in Canada and ensuring that our scientific data is presented at many of the key national and international neurology and neuromodulation meetings.

We believe this scientific dissemination may begin to pave the way to establishing the PoNS Therapy as the standard of care for the treatment of MS-related gait deficit.

We began accepting prescriptions for PoNS in the U.S.

in the first quarter of 2022, and our first commercial sales began in April 2022.

We have targeted specific Key Opinion Leaders (i.e., neurologists and physiatrists) and their associated neurorehabilitation centers, where selected physical therapists will be trained to deliver the PoNS Therapy.

Importantly, this focused strategy will also allow us to measure patient outcomes to determine if they are comparable to those observed in our clinical trials.

In June 2022, we launched the Patient Therapy Access Program (“PTAP”) program, which provided qualifying patients access to PoNS Therapy at a significantly reduced price.

Through the PTAP program, the Company collected important health information that helped gain insight into the value of PoNS on key therapeutic outcomes that supplemented the data collected through clinical trials and real-world data.

The PTAP was not renewed and terminated on June 30, 2023.

In December 2022, we launched an e-commerce site in the US to make it easier for patients to obtain PoNS devices and began processing orders in January 2023.

Accessed via ponstherapy.com, the site is powered through a new partnership with UpScriptHealth, a leading telehealth company focused on making medications and devices available direct-to-consumer.

UpScriptHealth’s platform provides for (1) online health evaluations with qualified medical providers, (2) fulfillment of prescriptions required for PoNS Therapy and (3) shipping of PoNS devices directly to the homes of eligible patients in the United States.

The UpScriptHealth platform makes it possible for people with MS to have a PoNS device delivered directly to their doorstep.

During 2021, we contracted with an industry consultant to conduct a health economic study of PoNS.

Based upon the results of this study and comparing PoNS to other medical devices utilizing similar patented technologies we established a U.S.

list price for the PoNS device of $25,700, comprised of $17,800 for the controller and $7,900 for the mouthpiece.

We are pursuing commercial insurance coverage and Medicare reimbursement for PoNS within the Durable Medical Equipment (“DME”), benefit category.

Effective in 2025, the list price for the PoNS Device is $28,270, comprised of $19,580 for the controller and $8,690 for the mouthpiece.

We initially applied for unique Healthcare Common Procedure Coding System (“HCPCS”) codes during the third quarter of 2021.

In order to address CMS’s request for additional information to “further understand the PoNS device indication for use”, we decided to monitor real-world utilization of PoNS Therapy and collect additional clinical evidence through the PoNSTEP study and our registry program.

Based on consistent reports of positive therapeutic benefits experienced by MS patients through our commercial programs, we reapplied for HCPCS codes in the second quarter of 2023 leveraging new information, addressing their questions and providing further support in favor of obtaining unique HCPCS codes for PoNS.

In February 2024, CMS assigned HCPCS Level II codes A4593, “Neuromodulation stimulator system, adjunct to rehabilitation therapy regime” to describe the PoNS controller and A4594, “Neuromodulation stimulator system, adjunct to rehabilitation therapy regime, mouthpiece each” to describe the PoNS mouthpiece.

The new HCPCS codes became effective April 1, 2024.

On May 2, 2024, CMS published a proposed fee schedule payment rates for the PoNS controller and PoNS mouthpiece to be discussed at CMS' bi-annual Healthcare Common Procedure Coding System (“HCPCS”) public meeting to be held on May 29, 2024.

For the PoNS Controller (HCPCS Code A4593), CMS preliminarily set pricing by mapping reimbursement to existing code E0745, (Neuromuscular stimulator, electronic shock unit), resulting in a capped fee of $1,206.53.

For the PoNS Mouthpiece (HCPCS code A4594), CMS based pricing on the previously offered, temporary, cash pay price of $4,500, resulting in a total capped payment of $3,075.53.

The Company subsequently provided CMS additional information to support reimbursement economics and presented that information at the public meeting with CMS on May 29, 2024 for consideration by CMS for determination of the final reimbursement amount for each of the PoNS controller and mouthpiece.

On October 7, 2024, CMS posted the final payment rate for the PoNS Mouthpiece (HCPCS code A4594) at $2,963.30, which will be effective January 1, 2025 and deferred final national determination of the payment rate for the PoNS Controller (HCPCS Code A4593) to the next payment cycle.

At the Company’s request, Company management subsequently met with CMS in December 2024 prior to PoNS Mouthpiece pricing taking effect on January 1, 2025 to request that they revisit the starting point for the gap filling process to more appropriately use the market pricing established through negotiation with the VA and an insurance carrier.

On October 8, 2024, CMS published the preliminary rate for the PoNS Controller (HCPCS Code A4593) at the capped total payment of $519.80, based on its view that the product is comparable to devices reported with HCPCS code E0730 (transcutaneous electrical nerve stimulation (TENS) device, four or more leads, for multiple nerve stimulation) to be effective April 1, 2025.

On January 13, 2025, CMS posted final Medicare Durable Medical Equipment, Prosthetics, Orthotics, and Supplies fee schedule payment rates for the PoNS Controller (HCPCS Code A4593) at the capped total payment of $532.27 and no changes to the previous final determination for the PoNS Mouthpiece (HCPCS code A4594) were made.

The Company continues to disagree with CMS’ pricing determinations for both the Controller and Mouthpiece and plans to continue to challenge the pricing decisions through avenues available including the individual claims appeal process.

During the first quarter of 2024, the Company partnered with Lovell Government Services (“Lovell”), an SBA-certified Service-Disabled Veteran-Owned Small Business, to make the PoNS device available to federal healthcare systems.

In May 2024, PoNS became available on the Veteran Affairs Federal Supply Schedule and General Services Administration Advantage Contracts at $23,843.72 for the PoNS device and $7,344.97 for the PoNS mouthpiece.

In July 2024, PoNS became available to the Department of Defense and U.S.

Military facilities on the Distribution and Pricing Agreement at $23,724.50 for the PoNS device and $7,308.25 for the PoNS mouthpiece.

In December 2024, the first PoNS System sale to the VA Healthcare System through Lovell was delivered at the contracted price of $23,844, comprised of $16,499 for the PoNS Controller and $7,345 for the PoNS Mouthpiece.

Concurrently, we will be approaching various third-party payers to negotiate coverage under these codes.

In general, we anticipate that it will take at least 24 months to obtain broad coverage and reimbursement among government and private payers.

Canadian Commercialization Efforts

In March 2019, we commenced the commercialization of our PoNS Therapy in Canada, where PoNS became the first and only device authorized by Health Canada for the treatment of balance deficit due to mmTBI.

Throughout 2019, we made important progress in advancing and refining our commercialization strategy in Canada building access, awareness and credibility for the PoNS Therapy, including the acquisition of the Heuro Canada, Inc.

(“Heuro”) operating entity of HTC.

These efforts, which were led by our local Canadian commercial team, included the establishment of our authorized clinic network throughout Canada, launching digital marketing campaigns, and building key opinion leader and advocacy networks.

On March 18, 2020, the Company received notification that its Canadian Class II license amendment application for the treatment of gait deficit in patients with mild and moderate symptoms from MS, when used in conjunction with physical therapy, was successful and received marketing authorization for PoNS from Health Canada.

On March 9, 2023, we announced the authorization from Health Canada to market PoNS Therapy for the treatment of gait deficit due to mild and moderate symptoms from stroke.

This indication is instrumental as it is one of the most significant indications impacting balance and gait in Canada, and it provides the opportunity to extend options for coverage through government and third-party payers.

Following in-depth market analysis and field intelligence, our Canadian commercial team began an expansion plan to increase the number of authorized PoNS clinics.

In addition to continuing to increase the number of clinic locations, we have shifted our focus to driving patient throughput to these clinics.

The value dossiers for mmTBI, stroke and MS that were created in mid-2020 to fully demonstrate, in both scientific and financial terms, the merits of PoNS Therapy for claimants are now being utilized along with submissions from clinics on behalf of their patients.

The dossiers are provided to our clinics across Canada to submit as part of treatment plans with reimbursement applications to the payer community.

Our reimbursement strategy for mmTBI is focused on the auto collision insurance and workers’ compensation (“WC”), market as well as long-term disability cases.

Our reimbursement strategy for MS is focused on commercial insurers/extended health benefits and charitable foundations that support these patient conditions .

Our reimbursement strategy for stroke is focused on private payers while also demonstrating to public health organizations the benefits and potential PoNS Therapy could provide within their respective networks.

As part of our overall PoNS Therapy strategy, we are also gathering comprehensive health economic assessments of treatment outcomes.

These data will, in-turn, be used to support our applications for WC, auto insurance and commercial insurance reimbursement initiatives in Canada, the U.S.

and other markets around the world.

The real-world results from the collective experience of our patients that have completed the 14-week PoNS Therapy in Canada, thus far, have been encouraging.

Consistent with what we observed in our two clinical trials, one for 5 weeks and the other for 14 weeks, commercial MS and mmTBI patients demonstrated improvements in balance and gait within the first two weeks followed by continued improvement over the following twelve weeks.

The majority of patients had a mean patient adherence to treatment of over 90% and showed significant improvement in their balance and gait with a meaningful clinical difference at the end of their treatment.

Similar results were observed in the treatment of patients with symptoms from stroke.

The consistency of the patient results from our initial commercial experience supports our plans to expand access PoNS Therapy in Canada.

Commercialization in Other Markets

We submitted an application to be CE certified in December 2018.

In preparation for our launch in the United Kingdom (“UK”), and the EU, we entered into a consulting agreement with a UK-based company with expertise in the development of new services in the healthcare industry to leverage local market insights to develop a comprehensive commercialization strategy and tactical plan for launch of the PoNS Therapy in the UK.

As previously described, in August 2019, we withdrew our application to be EU certified and will revisit our UK and EU commercialization plans as terms of CE/UKCA certification become clearer under the new regulations.

We submitted an application to the TGA in Australia during the third quarter of 2019.

We supplemented our submission with additional data based on questions supplied to date and provided responses to additional questions during the third quarter of 2020.

In November 2021, we received market authorization from the TGA for the sale of PoNS as a Class IIa medical device.

In Australia, PoNS is authorized as a non-implantable neurostimulator intended for short term used by healthcare professionals as an adjunct to a therapeutic exercise program to improve balance and gait.

PoNS is not intended to be used alone without an exercise program.

We are working to establish a distribution partner for Australia but have not yet had any commercial sales of PoNS in Australia.

Global Economic Conditions

Generally, worldwide economic conditions remain uncertain, in part due to supply chain disruptions, labor shortages, global conflicts and increased inflation.

The general economic and capital market conditions both in the U.S.

and worldwide, have been volatile in the recent years and at times have adversely affected our access to capital and have increased the cost of capital.

The capital and credit markets may not be available to support future capital raising activity on favorable terms.

If economic conditions continue to remain volatile or decline, our future cost of equity or debt capital and access to the capital markets could be adversely affected.

Our operating results could be materially impacted by changes in the overall macroeconomic environment and other economic factors.

Changes in economic conditions, supply chain constraints, logistics challenges, labor shortages, global conflicts such as the conflicts in Ukraine and in the Middle East, and steps taken by governments and central banks as well as other stimulus and spending programs, have led to higher inflation, which has led to an increase in costs and has caused changes in fiscal and monetary policy, including increased interest rates.

Although we may take measures to mitigate these impacts, if these measures are not effective, our business, financial condition, results of operations, and liquidity could be materially adversely affected.

Coverage and Reimbursement

Canadian Reimbursement

We believe that traditional life and health payers may be among the most relevant to provide coverage and reimbursement for the PoNS Therapy, and therefore, we are focusing on gaining coverage for the PoNS Therapy through them.

Life and health encompass long- and short-term disability claims.

Because these payers are responsible for both medical expenses and lost wages, they have an incentive to seek ways to help injured employees to return to work.

As part of our commercial treatment program in Canada, we will collect both outcomes and return to work data, which we plan to utilize with life and health, provincial workers compensation insurance programs, and property and casualty insurers to demonstrate both the clinical and economic value associated with the PoNS Therapy.

In addition to private and public payers, we are pursuing in-patient hospital utilization with submissions to hospital formularies to encourage the use of PoNS in acute treatment especially in post-Traumatic Brain Injury and Stroke patients.

Reimbursement

In the U.S., we plan to engage with select payer segments to obtain coverage and reimbursement for the PoNS Therapy.

We intend to combine evidence from our clinical trials and real-world experience from commercial clinics in Canada to demonstrate the value proposition of the PoNS Therapy to payers and support favorable coverage and reimbursement decisions.

Significant uncertainty exists regarding the coverage and reimbursement status of products approved by the FDA and other government authorities.

In the United States, sales of our products depend in significant part on the availability and adequacy of coverage and reimbursement from third party payers for our product and for services that use our products.

Third-party payers include government authorities such as Medicare and Medicaid, managed care providers, private health insurers, and other organizations.

The process for determining whether a payer will provide coverage may be separate from the process for setting the reimbursement rate that the payer will pay for the product or service.

Moreover, a payer’s decision to provide coverage does not imply that an adequate reimbursement rate will be approved.

Adequate third-party

reimbursement may not be available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in product development.

Third-party payers are increasingly challenging the prices charged for, examining the medical necessity, safety, and efficacy of, and assessing the cost-effectiveness of medical products.

government and state legislatures have shown significant interest in implementing cost containment programs to limit the growth of government-paid health care costs, including price controls and restrictions on reimbursement.

Any such downward pressure on the reimbursement for our products could limit our ability to realize an appropriate return on our investment in product development.

CMS has indicated that it is developing a program that would provide a pathway for expedited transitional coverage of emerging technologies under the Medicare program, though that rule has yet to be released.

While we continue to monitor this, we will also remain focused on building out our reimbursement strategy for both commercial and government payers.

We continue to work with Medicare requirements and policies for coverage, coding, and payment of durable medical equipment and assess how the PoNS device may be treated with respect to coding, coverage, and reimbursement under the Medicare program.

The neurostimulation market is predominantly comprised of surgically implanted, invasive technologies that are not directly competitive with our technology.

Several neurostimulation companies are large, publicly traded companies that have a history in the market, have significantly easier access to capital and other resources and have an established product pipeline.

The combined clinical research and product development done by the industry, including by us and all of our competitors, is uncovering the beneficial effects of neurostimulation which now establishes neuromodulation as a valid and scientifically supported approach to the treatment of neurological conditions, and accordingly, we expect for competition in the non-implantable space to grow in the future.

However, we believe that we will have the first-mover advantage in the non-implantable neurostimulation space.

We believe that the PoNS Therapy introduces an innovative target and method of stimulation, because targeting the tongue for neurostimulation provides several advantages that competitively distinguish the PoNS Therapy, which are discussed below.

Advantages of the PoNS Therapy

We believe that the PoNS Therapy offers the following benefits over existing neurostimulation technologies:

● The PoNS device stimulates the trigeminal nerve, which developing science has implicated to be beneficial in some neurological disorder models.

Specifically, PoNS stimulates only one branch of the trigeminal nerve, the lingual nerve through its terminals in the tongue, while other technologies stimulate other branches of the trigeminal nerve.

● Translingual stimulation also results in stimulating the facial nerve through its chorda tympani branch, which has its nerve terminals in the tongue.

Although it’s unclear whether concomitant stimulation of additional nerves is material to the efficacy or safety of PoNS, stimulation of these two cranial nerves triggers selective activation of specific cerebellar, brainstem, and cerebral areas involved in the control of movement and coordination functions.

Furthermore, the ability to stimulate more than one nerve at a time differentiates our technology from our competition.

● The tongue has an anatomically unique surface with a high density of receptors, a consistently moist and conductive environment, constant pH, constant temperature and a direct connection to the brain through at least two cranial nerves.

This a critical feature of how PoNS therapeutic effect is mediated since, similarly to the way most of the pharmacological agents act, translingual stimulation allows direct activation of neural targets that mediate signal transmission to the spinal cord and resulting therapeutic effect.

● Scientific studies suggest that the trigeminal cranial nerves offer a high-bandwidth pathway for impulses to directly affect the central nervous system.

The trigeminal nerves project directly onto several areas of the brain, primarily the brainstem (trigeminal and solitary nuclei), cerebellum, cochlear nuclei and spinal cord.

Secondary targets include the cerebral premotor, motor, and prefrontal cortices, as well as deep brain areas such as the limbic system, basal ganglia and thalamus.

We believe that this range of projections will allow impulses to reach central and peripheral targets that regulate dozens of functions.

● Unlike deep brain stimulation devices, implantable vagal nerve devices and other invasive forms of electrical stimulation, the tongue allows for neurostimulation to be delivered via a portable, non-implantable device.

This allows for the concomitant utilization of portable neurostimulation with a wide range of pharmacological therapies and non-pharmacological interventions previously unexplored for neurological rehabilitation.

Intellectual Property

Licensed Intellectual Property

Pursuant to the Second Amended and Restated Patent Sub-License, or the Sublicense Agreement, dated June 6, 2014 entered into between Advanced NeuroRehabilitation LLC, or ANR, and HMI, ANR has granted HMI a worldwide, exclusive license to make, have made, use, lease and sell devices utilizing certain patent applications, which are collectively referred to as the “Patent Pending Rights.” The Patent Pending Rights relate to the PoNS device and include the following patents and patent applications, which cover a device that noninvasively delivers neurostimulation through the skin or intra-orally to the brain stem via various nerves including the trigeminal and facial nerves:

Application No.

Subject Matter

Non-invasive neurostimulation of the skin combined with simultaneous physical therapy to provide neurorehabilitation of a patient to treat various maladies including, e.g., TBI, stroke and Alzheimer’s disease

Non-invasive neurostimulation within a patient’s mouth combined with physical therapy to provide neurorehabilitation of a patient to treat various maladies including, e.g., TBI, stroke, and Alzheimer’s disease

Non-invasive neurostimulation within a patient's mouth combined with cognitive therapy to provide neurorehabilitation of a patient resulting in improved reading comprehension and increased attention span as well as the treatment various maladies including, but not limited to, TBI, stroke, and Alzheimer's disease

Non-invasive neurostimulation within a patient’s mouth combined with stimulation of the patient’s vision, hearing, vestibular systems, or somatosensory systems for the treatment of tinnitus

Non-invasive neurostimulation of a patient’s skin combined with cognitive therapy to provide neurorehabilitation of a patient resulting in improved reading comprehension and increased attention span as well as the treatment various maladies including, e.g., TBI, stroke, and Alzheimer’s disease

Non-invasive neurostimulation of a patient’s mouth combined with therapy to provide neurorehabilitation of a patient, with a focus on features of a neurostimulation device

Non-invasive neurostimulation of a subject’s oral cavity while the subject engages in an exercise in order to enhance the subject’s proficiency in the exercise

Non-invasive neurostimulation of a subject’s oral cavity or skin while the subject engages in a physical or cognitive exercise in order to enhance the subject’s proficiency in the exercise

Non-invasive neurostimulation within a patient’s mouth or on a patient’s skin combined with an exercise for treatment of a disorder affecting sleep patterns

Non-invasive neurostimulation of a subject's oral cavity or skin while the subject engages in a physical or cognitive exercise in order to enhance a subject's proficiency in the exercise

Non-invasive neurostimulation of a subject's oral cavity or skin while the subject engages in a physical or cognitive exercise in order to enhance the subject's proficiency in the exercise

Non-invasive neurostimulation of a subject’s oral cavity or skin while the subject engages in a physical or cognitive exercise in order to enhance the subject’s proficiency in the exercise

Non-invasive neurostimulation of a subject’s oral cavity or skin while the subject engages in a physical or cognitive exercise and while the patient is not engaged in the exercise in order to enhance the subject’s proficiency in the exercise

(Provisional)

and 12,064,629 and U.S.

Application No.

18/773,984 claim priority to U.S.

provisional patent application provides the means to establish an early effective filing date for a later filed nonprovisional patent application.

Therefore, though the two provisional applications have expired, they establish a priority date for U.S.

and 12,064,629, and U.S.

Application No.

18/773,984, and any future filings that claim priority.

We intend to file additional continuation applications in the United States Patent and Trademark Office, or USPTO, claiming priority to U.S.

Provisional Patent Application Nos.

61/019,061 and 61/020,265 to protect other aspects of the PoNS device and related non-invasive neurostimulation techniques.

ANR holds an interest in the Patent Pending Rights pursuant to an exclusive license from the inventors.

and 12,064,629, and U.S.

Application No.

18/773,984 are included in the exclusive license as the exclusive license agreement covers (i) U.S.

Patent Application No.

12/348,301 (now U.S.

8,849,407) and Provisional Application No.

61/019,061, (ii) any patents issuing therefrom and (iii) any patents claiming priority to U.S.

Patent Application No.

12/348,301 or Provisional Application No.

61/019,061, which U.S.

and 12,064,629, and U.S.

Application No.

18/773,984 claim priority through such provisional application as well as through Provisional Application 61/020,265.

In addition, ANR has agreed that ownership of any improvements, enhancements or derivative works of the Patent Pending Rights that are developed by HMI or ANR shall be owned by HMI, provided that if HMI decides not to patent such improvements, ANR may choose to pursue patent rights independently.

Pursuant to the Sublicense Agreement, HMI has agreed to pay ANR royalties equal to 4% of HMI’s revenues collected from the sale of devices covered by the Patent Pending Rights and services related to PoNS Therapy or use of devices covered by the Patent Pending Rights in therapy services.

The Sublicense Agreement provides that the sublicense granted by ANR to HMI, if in good standing, shall not be cancelled;

limited or impaired in any way should there be a termination of the master license granted by the inventors to ANR, which was acknowledged by the inventors in the Sublicense Agreement.

On June 6, 2014, HMI and ANR entered into a second amended and restated sublicense agreement, or the Second Sublicense Agreement, which acknowledges the Reverse Merger (see “Our Corporate History – Acquisition of Helius Medical, Inc and Concurrent Financing” below) and adds us as a party to the agreement.

The license of the Patent Pending Rights is subject to the right of the government of the United States, which funded certain research relating to the development of the PoNS device, to a nonexclusive, non-transferable, irrevocable, paid-up license to use the Patent Pending Rights for governmental purposes.

In addition, HMI has granted a perpetual, royalty-free license to the Patent Pending Rights back to ANR for non-profit research and development activities, which do not compete with HMI’s business and to produce and derive revenues from devices and services in connection with investigational uses of the PoNS device and related technology.

Company Owned Intellectual Property

As of February 23, 2025, we have been granted 36 U.S.

patent applications related to various technical and ornamental aspects of the PoNS device:

15 patents that cover various technical features in the current version device and 21 design patents describing various ornamental designs.

We have also filed two U.S.

provisional patent applications related to aspects of our next generation neurostimulation technology.

We are the sole assignee for these 38 U.S.

patent filings.

Our current U.S.

patent portfolio consists of the following:

Application No.

Subject Matter

Utility patent covering overall system design, including controller and mouthpiece

Utility patent covering strain relief mechanisms for the connection between the mouthpiece and the controller

Utility patent covering shape of the mouthpiece

Utility patent covering center of gravity of the mouthpiece

Utility patent covering structural support of the mouthpiece

Utility patent covering glue wells of the mouthpiece

Utility patent covering overall system design, including controller and mechanical details of the mouthpiece

Utility patent covering aspects of the controller

Utility patent covering authentication techniques

Utility patent covering the locators of the mouthpiece

Utility patent covering methods of manufacturing the mouthpiece

Utility application covering overall system design, including controller and mechanical details of the mouthpiece

Utility application covering methods of manufacturing the mouthpiece

Utility patent application covering methods of placing a mouthpiece in a patient’s mouth prior to engaging in NINM

Utility patent application covering overall system design, including controller and mechanical details of the mouthpiece, where controller and mouthpiece communicate wirelessly

Provisional patent application covering next generation neurostimulation technology

Design patent covering an alternative version of the current PoNS device -over-ear double boom design

Design patent covering an alternative version of the current PoNS device -overhead minimal interference design

Design patent covering system design used in the current PoNS device

Design patent covering an alternative mouthpiece not used in the current PoNS device

Design patent covering the controller used in the PoNS device

Design patent covering an alternative controller not used in the current PoNS device

Design patent covering an alternative mouthpiece not used in the current PoNS device

Design patent covering mouthpiece used in the current PoNS device

Design patent covering an alternative controller not used in the current PoNS device

Design patent covering alternative system design used in the current PoNS device

Design patent covering mouthpiece retainer case design used in the current PoNS device

Design patent covering carry case design used in the current PoNS device

Design patent covering alternative system design used in the current PoNS device

In addition to our U.S.

patents, we currently own 17 foreign utility patents (nine in Australia, two in Canada, two in Israel, three in Europe (validated in France, Germany, Italy, the UK and Spain), and one in the UK and 34 foreign design patents (three in Australia, ten in Canada, six in Russia, and fifteen registered community designs in Europe).

Further, we have six foreign utility patent applications that are currently pending:

two in Europe, and one in each of Australia, Canada, China and Israel.

Our current owned foreign utility patent portfolio consists of the following:

Foreign patents/

PCT application

US Priority document(s) (filing date)

*patent applications

WO2016/089751A1

14/559,080 (3 December 2014)

AU2015355211B2

(PCT/US2015/062950)

14/559,123 (3 December 2014)

AU2017218934B2

14/559,118 (3 December 2014)

AU2017276270B2

14/559,105 (3 December 2014)

AU2018204184B2

Systems and Methods for

AU2018247259B2

Providing Non-Invasive

Neurorehabilitation of a Patient

WO2016/089752A1

14/557,787 (3 December 2014)

AU2015355212B2

(PCT/US2015/062953)

14/557,789 (3 December 2014)

AU2017228517B2

14/559,045 (3 December 2014)

AU2019200175B2

AU2019246836B2

Devices for Delivering Non-

Invasive Neuromodulation to a

EP19190373.1A*

WO2016/089795A1

14/559,080 (3 December 2014)

(PCT/US2015/063059)

14/559,123 (3 December 2014)

14/559,118 (3 December 2014)

14/559,105 (3 December 2014)

Methods of Manufacturing

Devices for the Neurorehabilitation

WO2020/176954

62/812,185 (28 February 2019)

AU2020228618A1*

(PCT/US2020/019853)

CN113728393A*

Computer Systems and

EP20712806.7A*

Methods for Enhancing

Neurorehabilitation

Our current owned Australian design patent portfolio consists of the following:

Australian Design

Application No.

Subject Matter

Design patent covering system design used in the PoNS device

Design patent covering the controller design used in the PoNS device

Design patent covering the mouthpiece design used in the PoNS device

Our current owned Canadian design patent portfolio consists of the following:

Canadian Design

Application No.

Subject Matter

Design patent covering system design used in the current PoNS device

Design patent covering an alternative mouthpiece not used in the current PoNS device

Design patent covering mouthpiece used in the current PoNS device

Design patent covering an alternative controller not used in the current PoNS device

Design patent covering the controller used in the PoNS device

Design patent covering system design used in the current PoNS device

Design patent covering alternative system design used in the current PoNS device

Our current owned Russian design patent portfolio consists of the following:

Russian Design

Application No.

Subject Matter

Design patent covering the system design currently used in the PoNS device

Design patent covering the mouthpiece design currently used in the PoNS device

Design patent covering the controller design currently used in the PoNS device

Design patent covering alternative system design used in the current PoNS device

Our current owned EU design patent portfolio consists of the following:

EU Community Design

Application No.

Subject Matter

002712026-0001 - 002712026-0007

Design patents covering several aspects of the system design currently used in the PoNS device

006753877-0001 – 006753877-0008

Design patents covering the controller design used in the PoNS device

Currently, we own rights in five trademarks:

PoNS, PoNS Therapy, Helius, Helius Medical, and Helius Medical Technologies.

We own the rights to the PoNS mark by virtue of an assignment agreement having an effective date of October 27, 2014 and entered into with ANR and the inventors of the PoNS technology.

We are also the owner of the rights in the PoNS Therapy, Helius, Helius Medical, and Helius Medical Technologies marks.

We are the owner of the trademark registrations for the Helius, Helius Medical, PoNS, and PoNS Therapy marks in the U.S.

as well as the trademark registrations for the PoNS mark in Australia, Europe, Israel, New Zealand, and Russia.

We have also applied for the Helius trademark in Canada.

Below is a listing of our active trademark registrations or pending trademark applications:

Registration Number

Application Number

HELIUS MEDICAL

In August 2021, we received Breakthrough Designation from the U.S.

Food and Drug Administration (“FDA”) for the PoNS device as a potential treatment for dynamic gait and balance deficits due to symptoms from stroke, to be used as an adjunct to a supervised therapeutic exercise program in patients 22 years of age and over.

In July 2021, we announced the positive outcome of our PoNS Stroke Registrational Program and, in September 2025we filed a FDA 510(k) submission for the PoNS device label expansion seeking an indication for gait deficit in patients with chronic stroke symptoms.

The submission was made with data generated in our Stroke Registrational Program and was filed under our current FDA Breakthrough Device Designation.

We are awaiting a determination from the FDA.

Government Regulation

Our products under development and our operations are subject to significant government regulation.

In the U.S., our products are regulated as medical devices by the FDA and other federal, state, and local regulatory authorities.

The following is a general description of the review and marketing authorization process of the FDA for medical devices.

FDA Regulation of Medical Devices

The FDA and other U.S.

and foreign governmental agencies regulate, among other things, the following activities with respect to medical devices:

● design, development and manufacturing;

● testing, labeling, content and language of instructions for use and storage;

● clinical trials;

● product storage and safety;

● marketing, sales and distribution;

● pre-market clearance and approval;

● record keeping procedures;

● advertising and promotion;

● recalls and field safety corrective actions;

● post-market surveillance, including reporting of deaths or serious injuries and malfunctions that, if they were to recur, could lead to death or serious injury;

● post-market approval studies;

● product import and export.

In the U.S., numerous laws and regulations govern all the processes by which medical devices are brought to market and marketed.

These include the Food, Drug, and Cosmetic, or FD&C Act and the FDA’s implementation of regulations, among others.

The FDA Review, Clearance and Approval Processes

Unless an exemption applies, each medical device commercially distributed in the U.S.

requires either FDA clearance of a 510(k) premarket notification, approval of a premarket approval, or PMA, or approval of a de novo application.

Under the FDCA, medical devices are classified into one of three classes—Class I, Class II or Class III— depending on the degree of risk associated with each medical device and the extent of manufacturer and regulatory control needed to ensure its safety and effectiveness.

Classification of a device is important because the class to which a device is assigned determines, among other things, the necessity and type of FDA review required prior to marketing the device.

Class I devices are those for which safety and effectiveness can be assured by adherence to FDA’s “general controls” for medical devices, which include compliance with the applicable portions of the FDA’s Quality System Regulation, or QSR, facility registration and product listing, reporting of adverse medical events, and appropriate, truthful and non-misleading labeling, advertising, and promotional materials.

Some Class I devices also require premarket clearance by the FDA through the 510(k) premarket notification process described below.

Class II devices are subject to FDA’s general controls, and any other “special controls” deemed necessary by FDA to ensure the safety and effectiveness of the device, such as performance standards, product-specific guidance documents, special labeling requirements, patient registries or post-market surveillance.

Premarket review and clearance by the FDA for Class II devices is accomplished through the 510(k) premarket notification process, though certain Class II devices are exempt from this premarket review process.

When a 510(k) is required, the manufacturer must submit to the FDA a premarket notification submission demonstrating that the device is “substantially equivalent” to a legally marketed device, which in some cases may require submission of clinical data.

Unless a specific exemption applies, 510(k) premarket notification submissions are subject to user fees.

If the FDA determines that the device, or its intended use, is not substantially equivalent to a legally marketed device, the FDA will place the device, or the particular use of the device, into Class III, and the device sponsor must then fulfill much more rigorous premarketing requirements.

Class III devices, consisting of devices deemed by the FDA to pose the greatest risk, such as life-sustaining, life-supporting or implantable devices, or devices deemed not substantially equivalent to a predicate device.

The safety and effectiveness of Class III devices cannot be assured solely by general or special controls.

Submission and FDA approval of a premarket approval, or PMA, application is required before marketing of a Class III device can proceed.

As with 510(k) submissions, unless subject to an exemption, PMA submissions are subject to user fees.

The PMA process is much more demanding than the 510(k) premarket notification process.

A PMA application, which is intended to demonstrate that the device is safe and effective, must be supported by extensive data, typically including data from preclinical studies and human clinical trials.

Our PoNS device is currently regulated as a Class II medical device for use in MS.

However, if the FDA requires us to go through a lengthier, more rigorous examination for the PoNS device for balance and gait deficit in stroke, introducing the product for stroke could be delayed or canceled.

For example, if the FDA decides that the de novo classification procedures are not the appropriate path to obtain marketing authorizations for the PoNS device in stroke, the FDA may require us to submit a PMA application, which is generally more costly and uncertain and can take from one to three years, or longer, from the time the application is submitted to the FDA until an approval is obtained.

Further, even with respect to those future products where a PMA may not be required, we cannot be certain that we will be able to obtain 510(k) clearance with respect to our PoNS device.

510(k) Clearance Process

To obtain 510(k) clearance for a medical device, an applicant must submit to the FDA a premarket notification submission demonstrating that the proposed device is “substantially equivalent” to a legally marketed device, known as a “predicate device.” A legally marketed predicate device may include a device that was legally marketed prior to May 28, 1976 for which a PMA is not required (known as a “pre-amendments device” based on the date of enactment of the Medical Device Amendments of 1976), a device that has been reclassified from Class III to Class II or Class I, or a device that was found substantially equivalent through the 510(k) process.

A device is substantially equivalent if, with respect to the predicate device, it has the same intended use and has either (i) the same technological characteristics, or (ii) different technological characteristics, but the information provided in the 510(k) submission demonstrates that the

device does not raise new questions of safety and effectiveness and is at least as safe and effective as the predicate device.

A showing of substantial equivalence sometimes, but not always, requires clinical data.

Before the FDA will accept a 510(k) submission for substantive review, the FDA will first assess whether the submission satisfies a minimum threshold of acceptability through its eSTAR submission form.

If the eSTAR does not pass technical screening (i.e., an eSTAR is provided where none of the attachments to a question are relevant to the question, or if an inaccurate response is provided to any question), the submission may be put on an early Technical Screening hold for 180 days, until a complete replacement eSTAR is submitted.

An applicant must submit the requested information before the FDA will proceed with additional review of the submission.

Once the 510(k) submission is accepted for review, by regulation, the FDA has 90 days to review and issue a determination.

As a practical matter, clearance often takes longer.

The FDA may require additional information, including clinical data, to make a determination regarding substantial equivalence.

If the FDA agrees that the device is substantially equivalent to a predicate device currently on the market, it will grant 510(k) clearance to commercially market the device.

If the FDA determines that the device is “not substantially equivalent” to a previously cleared device, the device is automatically designated as a Class III device.

The device sponsor must then fulfill more rigorous PMA requirements, or can request a risk-based classification determination for the device in accordance with the “de novo” process, which is a route to market for novel medical devices that are low to moderate risk and are not substantially equivalent to a predicate device.

After a device receives 510(k) marketing clearance, any modification that could significantly affect its safety or effectiveness, or that would constitute a major change or modification in its intended use, will require a new 510(k) marketing clearance or, depending on the modification, PMA approval.

The determination as to whether or not a modification could significantly affect the device’s safety or effectiveness is initially left to the manufacturer using available FDA guidance.

Many minor modifications today are accomplished by a “letter to file” in which the manufacture documents the rationale for the change and why a new 510(k) is not required.

However, the FDA may review such letters to file to evaluate the regulatory status of the modified product at any time and may require the manufacturer to cease marketing and recall the modified device until 510(k) clearance or PMA approval is obtained.

The manufacturer may also be subject to significant regulatory fines or penalties.

De novo Classification Process

If a previously unclassified new medical device does not qualify for the 510(k) pre-market notification process because no predicate device to which it is substantially equivalent can be identified, the device is automatically classified into Class III.

The Food and Drug Administration Modernization Act of 1997 established a new route to market for low to moderate risk medical devices that are automatically placed into Class III due to the absence of a predicate device, called the “Request for Evaluation of Automatic Class III Designation,” or the de novo classification procedure.

This procedure allows a manufacturer whose novel device is automatically classified into Class III to request classification of its medical device into Class I or Class II on the basis that the device presents low or moderate risk, rather than requiring the submission and approval of a PMA.

Prior to the enactment of the Food and Drug Administration Safety and Innovation Act, or FDASIA, in July 2012, a medical device could only be eligible for de novo classification if the manufacturer first submitted a 510(k) pre-market notification and received a determination from the FDA that the device was not substantially equivalent.

FDASIA streamlined the de novo classification pathway by permitting manufacturers to request de novo classification directly without first submitting a 510(k) pre-market notification to the FDA and receiving a not substantially equivalent determination.

Under FDASIA, the FDA was required to classify the device within 120 days following receipt of the de novo application.

If the manufacturer sought reclassification into Class II, the manufacturer was to include a draft proposal for special controls necessary to provide a reasonable assurance of the safety and effectiveness of the medical device.

The FDA may reject the reclassification petition if it identifies a legally marketed predicate device that would be appropriate for a 510(k) or determines that the device is not low to moderate risk or that general controls would be inadequate to control the risks and special controls cannot be developed.

FDA granted de novo classification for the PoNS device for gait deficit in MS, which resulted in Class II classification.

In order to be placed in Class II, the FDA required reasonable assurance of safety and effectiveness of the PoNS device.

Under Class II, general controls (e.g., premarket notification) and special controls (e.g., specific performance testing) are applicable.

Clinical Trials

Clinical trials are typically required to support a PMA and are sometimes required to support a 510(k) or de novo submission.

All clinical investigations of devices to determine safety and effectiveness must be conducted in accordance with the FDA’s investigational device exemption, or IDE, regulations which govern investigational device labeling, prohibit promotion of the investigational device, and specify an array of recordkeeping, reporting and monitoring responsibilities of study sponsors and study investigators.

If the device presents a “significant risk,” as defined by the FDA, to human health, the FDA requires the device sponsor to submit an IDE application to the FDA, which must become effective prior to commencing human clinical trials.

A significant risk device is one that presents a potential for serious risk to the health, safety or welfare of a patient and either is implanted, used in supporting or sustaining human life, substantially important in diagnosing, curing, mitigating or treating disease or otherwise preventing impairment of human health, or otherwise presents a potential for serious risk to a subject.

An IDE application must be supported by appropriate data, such as animal and laboratory test results, showing that it is safe to test the device in humans and that the testing protocol is scientifically sound.

The IDE will automatically become effective 30 days after receipt by the FDA unless the FDA notifies the company that the investigation may not begin.

If the FDA determines that there are deficiencies or other concerns with an IDE for which it requires modification, the FDA may permit a clinical trial to proceed under a conditional approval.

If the device is considered a “non-significant risk,” IDE submission to FDA is not required.

Instead, only approval from the Institutional Review Board, or IRB, overseeing the investigation at each clinical trial site is required.

The IRB is responsible for the initial and continuing review of the IDE and may pose additional requirements for the conduct of the study.

If an IDE application is approved by the FDA and one or more IRBs, human clinical trials may begin at a specific number of investigational sites with a specific number of patients, as approved by the FDA.

If the device presents a non-significant risk to the patient, a sponsor may begin the clinical trial after obtaining approval for the trial by one or more IRBs without separate approval from the FDA, but must still follow abbreviated IDE requirements, such as monitoring the investigation, ensuring that the investigators obtain informed consent, and labeling and record-keeping requirements.

Acceptance of an IDE application for review does not guarantee that the FDA will allow the IDE to become effective and, if it does become effective, the FDA may or may not determine that the data derived from the trials support the safety and effectiveness of the device or warrant the continuation of clinical trials.

An IDE supplement must be submitted to, and approved by, the FDA before a sponsor or investigator may make a change to the investigational plan that may affect its scientific soundness, study plan or the rights, safety or welfare of human subjects.

During a study, the sponsor is required to comply with the applicable FDA requirements, including, for example, trial monitoring, selecting clinical investigators and providing them with the investigational plan, ensuring IRB review, adverse event reporting, record keeping and prohibitions on the promotion of investigational devices or on making safety or effectiveness claims for them.

The clinical investigators in the clinical study are also subject to FDA’s regulations and must obtain patient informed consent, rigorously follow the investigational plan and study protocol, control the disposition of the investigational device, and comply with all reporting and record keeping requirements.

Additionally, after a trial begins, the sponsor, the FDA or the IRB could suspend or terminate a clinical trial at any time for various reasons, including a belief that the risks to study subjects outweigh the anticipated benefits.

Even if a clinical trial is completed, there can be no assurance that the data generated during a clinical study will meet the safety and effectiveness endpoints or otherwise produce results that will lead the FDA to grant marketing clearance or approval.

Pervasive and Continuing U.S.

Food and Drug Administration and Healthcare Regulation

After a device is cleared or approved for marketing, numerous and pervasive regulatory requirements continue to apply.

These include:

● establishment, registration and device listing with the FDA;

● QSR requirements, which require manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the design and manufacturing process;

● labeling regulations and FDA prohibitions against the promotion of investigational products, or ‘‘off-label’’ uses of cleared or approved products;

● requirements related to promotional activities;

● clearance or approval of product modifications to 510(k)-cleared devices that could significantly affect safety or effectiveness or that would constitute a major change in intended use of one of our cleared devices;

● medical device reporting regulations, which require that a manufacturer report to the FDA if a device it markets may have caused or contributed to a death or serious injury, or has malfunctioned and the device or a similar device that it markets would be likely to cause or contribute to a death or serious injury, if the malfunction were to recur;

● correction, removal and recall reporting regulations, which require that manufacturers report to the FDA field corrections and product recalls or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FDCA that may present a risk to health;

● the FDA’s recall authority, whereby the agency can order device manufacturers to recall from the market a product that is in violation of governing laws and regulations;

● post-market surveillance activities and regulations, which apply when deemed by the FDA to be necessary to protect the public health or to provide additional safety and effectiveness data for the device.

Advertising and promotion of medical devices, in addition to being regulated by the FDA, are also regulated by the FTC and by state regulatory and enforcement authorities.

Recently, promotional activities for FDA-regulated products of other companies have been the subject of enforcement action brought under healthcare reimbursement laws and consumer protection statutes.

In addition, under the federal Lanham Act and similar state laws, competitors and others can initiate litigation relating to advertising claims.

If the FDA determines that promotional materials or training constitutes promotion of an unapproved or uncleared use, it could request that modification of promotional materials or subject a company to regulatory or enforcement actions.

It is also possible that other federal, state or foreign enforcement authorities might take action if they consider promotional or training materials to constitute promotion of an unapproved or uncleared use, which could result in significant fines or penalties under other statutory authorities, such as laws prohibiting false claims for reimbursement.

Healthcare providers, physicians, and third party payers play a primary role in the recommendation and use of our current products and will do so for any future products we commercialize.

Arrangements with third party payers, healthcare providers and physicians expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we market, sell and distribute products.

In the United States, we are subject to various federal and state anti-fraud and abuse laws, including, without limitation, the federal health care program Anti-Kickback Statute, the federal civil False Claims Act, and the health care fraud provisions of the federal Health Insurance Portability and Accountability Act.

The Anti-Kickback Statute makes it illegal for any person, including a device manufacturer (or a party acting on its behalf), to knowingly and willfully solicit, receive, offer or pay any remuneration, directly or indirectly, in cash or in kind, that is intended to induce or reward referrals, including the purchase, lease, or order , or arranging for or recommending, any good or service, including a device, for which payment may be made under a federal healthcare program, such as Medicare or Medicaid.

The term “remuneration” expressly includes kickbacks, bribes, or rebates and also has been broadly interpreted to include anything of value.

There are a number of statutory exceptions and regulatory safe harbors protecting certain business arrangements from prosecution under the Anti-Kickback Statute, however, those exceptions and safe harbors are drawn narrowly, and there may be no available exception or safe harbor for many common business activities, such as reimbursement support programs, educational and research grants, or charitable donations.

Practices that involve remuneration to those who prescribe, purchase, or recommend medical devices, including discounts, providing items or services for free or engaging such individuals as consultants, advisors, or speakers, may be subject to scrutiny if they do not fit squarely within an exception or safe harbor and would be subject to a facts and circumstances analysis to determine compliance with the Anti-Kickback Statute.

Violations of this law are

punishable by up to ten years in prison, criminal fines, administrative civil money penalties, damages, disgorgement and exclusion from participation in federal healthcare programs.

In addition, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it.

Various states have adopted laws similar to the Anti-Kickback Statute, and some of these state laws may be broader in scope in that some of these state laws extend to all payers and may not contain safe harbors.

The federal civil False Claims Act imposes civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities (including manufacturers) for, among other things, knowingly presenting, or causing to be presented, false or fraudulent claims for payment of government funds or knowingly presenting or causing to be presented a false statement or record material to payment of a false claim or knowingly and improperly avoiding, decreasing or concealing an obligation to pay money to the federal government.

Penalties for a False Claims Act violation include three times the actual damages sustained by the government, plus significant mandatory civil penalties for each separate false claim and the potential for exclusion from participation in federal healthcare programs.

The government may deem manufacturers to have “caused” the submission of false or fraudulent claims by, for example, providing inaccurate billing or coding information to customers or promoting a product off-label.

Claims which include items or services resulting from a violation of the federal Anti-Kickback Statute also are deemed false or fraudulent claims for purposes of the False Claims Act.

Our marketing and activities relating to the reporting of wholesaler or estimated retail prices for our products and other information affecting federal, state and third-party reimbursement for our products, and the sale and marketing of our product and any future product candidates, are subject to scrutiny under this law.

Conduct that violates the False Claims Act also may implicate various federal criminal statutes.

Various states have adopted laws similar to the False Claims Act, and many of these state laws are broader in scope and apply to all payers, and therefore, are not limited to only those claims submitted to the federal government.

The federal Health Insurance Portability and Accountability Act (“HIPAA”) imposes criminal liability for, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payers, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.

Similar to the federal healthcare Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation.

The federal Physician Payment Sunshine Act, implemented as the Open Payments Program, requires certain manufacturers of drugs, devices, biologics, and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to the Centers for Medicare and Medicaid Services information related to payments and other transfers of value, directly or indirectly, to physicians, physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, and certified nurse midwives, and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members.

The manufacturing processes associated with medical devices are required to comply with the applicable portions of the QSR, which cover the methods and the facilities and controls for the design, manufacture, testing, production, processes, controls, quality assurance, labeling, packaging, distribution, installation and servicing of finished devices intended for human use.

The QSR also requires, among other things, maintenance of a device master file, design history file, device history records, and complaint files.

As a manufacturer, we are subject to periodic scheduled or unscheduled inspections by the FDA.

Any failure to maintain compliance with the QSR requirements could result in the shut-down of, or restrictions on, manufacturing operations and the recall or seizure of products, which would have a material adverse effect on our business.

The discovery of previously unknown problems with any of our products, including unanticipated adverse events or adverse events of increasing severity or frequency, whether resulting from the use of the device within the scope of its clearance or off-label by a physician in the practice of medicine, could result in restrictions on the device, including the removal of the product from the market or voluntary or mandatory device recalls.

The FDA has broad regulatory compliance and enforcement powers.

If the FDA determines that a company has failed to comply with applicable regulatory requirements, it can take a variety of compliance or enforcement actions, which may result in any of the following sanctions:

● untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties;

● unanticipated expenditures to address or defend such actions

● customer notifications for repair, replacement, refunds;

● recall, detention or seizure of our products;

● operating restrictions or partial suspension or total shutdown of production;

● refusing or delaying our requests for 510(k) clearance or PMA approval of new products or modified products;

● operating restrictions;

● withdrawing 510(k) clearances or PMA approvals that have already been granted;

● refusal to grant export approval for our products;

● criminal prosecution.

Healthcare Reform

In the United States, there has been significant interest in implementing cost-containment programs to limit the growth of government-paid healthcare costs, including price controls and restrictions on reimbursement.

Because private payers often follow Medicare and Medicaid coverage policy and payment limitations in setting their own reimbursement rates, any reduction in reimbursement that results from federal legislation or regulation may result in a similar reduction in payments from private payers.

We expect to experience pricing pressures in connection with the sale of our due to the trend toward managed healthcare, the increasing influence of health maintenance organizations, and additional legislative and regulatory measures.

Such legislative changes in the United States include the Affordable Care Act (ACA), which intended to broaden access to health insurance, reduced or constrained the growth of healthcare spending, enhanced remedies against healthcare fraud and abuse, added new transparency requirements for healthcare and health insurance industries, and imposed additional health policy reforms.

We expect that additional federal, state, and foreign healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal, state, and foreign governments will pay for healthcare products and services, which could result in limited coverage and reimbursement of, reduced demand for, or additional pricing pressures on our products.

Health Canada

After a medical device has been approved for commercial use in Canada, there are a number of Health Canada requirements that must be adhered to including but not limited to the following:

● annual license renewals;

● labeling regulations, which prohibit “misbranded” devices from entering the market, as well as prohibit on the promotion of products for unapproved or “off-label” use and impose other restrictions on labeling including truthfulness and accuracy;

● assessment of product modifications for significant changes that would require license amendments;

● post-market surveillance including medical device reporting, which requires manufacturers report to Health Canada if their device may have caused or contributed to a death or serious injury, or malfunctioned in a way that would likely cause or contribute to a death or serious injury if it were to recur;

● other post-approval restrictions or conditions.

European Union

We submitted an application for a CE certification of the PoNS device with our UK based notified body in December 2018.

In August 2019, we withdrew our application for the CE certification conformity process procedure due to notified body activities being delayed by Brexit and the upcoming medical devices regulation changes.

We have engaged G-MED NA as our notified body and will reconsider submitting to the EU when conditions stabilize.

The successful completion of this review would result in CE certification of the PoNS device in the EU, which now excludes the UK.

Some EU member states have additional notification requirements that we expect to satisfy before we launch our PoNS Therapy in those member states.

Once the PoNS device is placed into the EU market, post market requirements apply including but not limited to:

● ensuring that the labeling promotes only intended use(s) of the device which have been certified;

● assessment of product modifications for significant changes may require license amendments;

● post-market surveillance including vigilance reporting, which requires manufacturers report to authorities if our PoNS device caused or contributed to a death or serious injury, or malfunctioned in a way that would likely cause or contribute to a death or serious injury if it were to recur;

● other post-approval restrictions or conditions.

We submitted our application for marketing authorization to the TGA during the third quarter of 2019.

We supplemented our submission with additional data based on questions supplied to date and provided responses to additional questions during the third quarter of 2020.

In November 2021, we received market authorization from the TGA for the sale of PoNS as a class IIa medical device.

In Australia, PoNS is indicated for short term use by healthcare professionals as an adjunct to a therapeutic exercise program to improve balance and gait.

PoNS is not intended to be used alone without an exercise program.

Data Privacy and Security Laws;

Medical device companies may be subject to U.S.

federal and state health information privacy, security and data breach notification laws, which may govern the collection, use, disclosure and protection of health-related and other personal information.

The Health Insurance Portability and Accountability Act of 1996, or HIPAA, imposes privacy, security and breach reporting obligations with respect to individually identifiable health information upon “covered entities” (health plans, health care clearinghouses and certain health care providers), and their respective business associates, individuals or entities that create, receive, maintain or transmit protected health information in connection with providing a service for or on behalf of a covered entity.

HIPAA mandates the reporting of certain breaches of health information to the U.S.

Department of Health and Human Services, or HHS, affected individuals and if the breach is large enough, the media.

Entities that are found to be in violation of HIPAA as the result of a breach of unsecured protected health information, or PHI, a complaint about privacy practices or an audit by HHS, may be subject to significant civil, criminal and administrative fines and penalties and/or additional reporting and oversight obligations if required to enter into a resolution agreement and corrective action plan with HHS to settle allegations of HIPAA non-compliance.

Even when HIPAA does not apply, according to the FTC, failing to take appropriate steps to keep consumers’ personal information secure constitutes unfair acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act, 15 U.S.C § 45(a).

The FTC expects a company’s data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities.

Personally identifiable health information is considered sensitive data that merits stronger safeguards.

The FTC’s guidance for appropriately securing consumers’ personal information is similar to what is required by the HIPAA Security Rule.

With respect to privacy, the FTC also sets expectations that companies honor the privacy promises made to individuals about how the company handles consumers’ personal information;

any failure to honor promises, such as the statements made in a privacy policy or on a website, may also constitute unfair or deceptive acts or practices in violation of the FTC Act.

The FTC has the power to enforce promises as it interprets them, and events that we cannot fully control, such as data breaches, may be

result in FTC enforcement.

Enforcement by the FTC under the FTC Act can result in civil penalties or enforcement actions.

In addition, certain state laws govern the privacy and security of health information in certain circumstances, some of which may be more stringent, broader in scope or offer greater individual rights with respect to PHI, than HIPAA, and many of which differ from each other, thus complicating compliance efforts.

Failure to comply with these laws, where applicable, can result in the imposition of significant civil and/or criminal penalties and private litigation.

For example, California enacted the California Consumer Privacy Act, as amended by the California Privacy Rights Act (“CCPA”) which gives California residents expanded rights to access and delete their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used.

The CCPA provides for civil penalties for violations, as well as a private right of action for certain data breaches that is expected to increase data breach litigation.

The amendments introduced by the CPRA went effect on January 1, 2023, and new implementing regulations continue to be introduced by the California Privacy Protection Agency, a dedicated California privacy regulator.

Failure to comply with the CCPA may result in, among other things, significant civil penalties and injunctive relief, or statutory or actual damages.

In addition to the CCPA, numerous other states’ legislatures are considering similar laws that will require ongoing compliance efforts and investment.

For example, Virginia, Colorado, Utah, Indiana, Iowa, Tennessee, Montana, Texas, and Connecticut have enacted privacy laws similar to the CCPA that impose new obligations or limitations in areas affecting our business and we continue to assess the impact of these state legislation, on our business as additional information and guidance becomes available.

In the European Union, the General Data Protection Regulation, including as implemented in the UK (collectively “GDPR”), imposes many requirements for controllers and processors of personal data, including, for example, higher standards for obtaining consent from individuals to process their personal data, more robust disclosures to individuals and a strengthened individual data rights regime, shortened timelines for data breach notifications, limitations on retention and secondary use of information, increased requirements pertaining to health data and pseudonymized (i.e., key-coded) data and additional obligations when we contract third-party processors in connection with the processing of the personal data.

The GDPR allows EU member states to make additional laws and regulations further limiting the processing of genetic, biometric or health data.

Failure to comply with the requirements of GDPR and the applicable national data protection laws of the EU member states may result in fines for the most serious breaches of up to €20 million or up to 4% of the total worldwide annual turnover of the preceding financial year, whichever is higher, and other administrative penalties.

With regard to transfer of personal data, the GDPR restricts the ability of companies to transfer personal data from the EU to the U.S.

and other countries, which may adversely affect our ability to transfer personal data or otherwise may cause us to incur significant compliance costs for implementing lawful transfer mechanisms, conducting data transfer impact assessments, and implementing additional measures where necessary to ensure that personal data transferred are adequately protected in a manner essentially equivalent to the EU.

The GDPR provides different transfer mechanisms we can use to lawfully transfer personal data from the EU to countries outside the EU.

An example is relying on adequacy decisions of the European Commission, such as the EU-U.S.

Data Privacy Framework.

In July 2023, the European Commission adopted its adequacy decision for the EU-U.S.

Data Privacy Framework.

The adequacy decision concludes that the U.S.

ensures an adequate level of protection (compared to that of the EU) for personal data transferred from the EU to U.S.

companies participating in the EU-U.S.

Data Privacy Framework.

The adequacy decisions of the European Commission are subject to periodic reviews and may be amended or withdrawn.

Another example of a lawful transfer mechanism is using the EU Standard Contractual Clauses as approved by the European Commission in June 2021.

In order to use the EU Standard Contractual Clauses mechanism, the exporter and the importer must ensure that the importer may guarantee a level of personal data protection in the importing country’s level of protection must be adequate that is essentially equivalent to that of the EEA.

Compliance with EU data transfer obligations involves conducting transfer impact assessments, which includes documenting detailed analyses of data access and protection laws in the countries in which data importers are located, which can be costly and time-consuming.

Data importers must also expend resources in analyzing their ability to comply with transfer obligations, including implementing new safeguards and controls to further protect personal data.

A lack of valid transfer mechanisms for GDPR-covered data could increase exposure to enforcement actions and may affect our business operations and require commercial cost (including potentially limiting our ability to collaborate/work with certain third parties and/or requiring an increase in our data processing capabilities in the EU/UK).

Further, the European/UK data protection laws (including laws on data transfers) may also be updated/revised,

accompanied by new guidance and/or judicial/regulatory interpretations, which could entail further impacts on our compliance efforts and increased cost.

Additionally, other countries outside of Europe/UK have enacted or are considering enacting similar cross-border data transfer restrictions and laws requiring local data residency, which could increase the cost and complexity of delivering our services and operating our business.

The type of challenges we face in Europe/UK will likely also arise in other jurisdictions that adopt laws similar in construction to the GDPR or regulatory frameworks of equivalent complexity.

Our operations are subject to extensive and evolving regulation in the United States and other jurisdictions.

As a publicly traded company whose principal business strategy involves the acquisition and holding of SOL as a digital asset treasury, our regulatory obligations are primarily governed by federal securities laws, digital asset regulatory frameworks, and AML and sanctions compliance requirements.

We actively monitor regulatory developments and seek to conduct our operations

in a manner consistent with applicable law, our public company disclosure obligations, and our internal governance policies.

Regulatory frameworks applicable to digital assets in the United States continue to evolve.

In January 2025, the SEC established a dedicated Crypto Task Force with a mandate to evaluate policy approaches for digital assets, including registration pathways, disclosure frameworks, and asset classification.

Also in January 2025, the President of the United States issued Executive Order 14178, titled “Strengthening American Leadership in Digital Financial Technology,” which revoked certain prior executive orders and directed federal agencies to engage in the development of a coordinated regulatory framework for digital assets.

The executive order also prohibited the establishment, issuance or promotion of a central bank digital currency and established a President’s Working Group on Digital Asset Markets tasked with proposing federal regulatory recommendations within a specified period.

These initiatives coincided with a broader shift in regulatory emphasis from enforcement toward clarity, including the dismissal of certain prior enforcement actions and the revision of accounting guidance that had previously posed impediments to institutional digital asset holdings.

In addition, Congress has passed legislation affecting digital asset markets, including legislation establishing comprehensive regulatory standards for stablecoins, which was signed into law in July 2025.

The Guiding and Establishing National Innovation for U.S.

Stablecoins Act (the “GENIUS Act”) establishes comprehensive regulatory standards for stablecoins, including a one-for-one reserve backing requirement and a dual federal and state supervisory regime for stablecoin issuers.

In March 2026, the SEC and CFTC issued joint interpretive guidance (the “Release”) indicating that certain digital assets, including SOL, may be characterized as “digital commodities” and that certain related activities, including staking and secondary market transactions, may not constitute securities transactions under specified circumstances.

However, the Release does not constitute formal rulemaking and does not have the force of law, and the regulatory characterization of SOL and related activities therefore remains subject to ongoing development.

While these developments may contribute to increased clarity regarding the regulatory treatment of certain digital asset activities, the regulatory environment remains complex and subject to change.

Regulatory authorities continue to assess and refine their approaches to digital asset classification, market structure and compliance expectations.

There can be no assurance that future regulatory actions will be consistent with current interpretations or that such developments will benefit the Company’s operations or strategic objectives.

As a publicly traded company, we are subject to the reporting, disclosure, governance, and internal control requirements of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC, including periodic reporting obligations, disclosure controls and procedures, internal control over financial reporting, and applicable stock exchange listing standards.

Our digital asset holdings and treasury activities are reflected in our financial statements in accordance with applicable accounting standards and SEC guidance, which remain subject to development and change.

Our digital asset treasury activities and participation in DeFi protocols may be subject to AML and sanctions laws and regulations, including requirements administered by the Financial Crimes Enforcement Network (“FinCEN”) under the Bank Secrecy Act and economic sanctions programs administered by the Office of Foreign Assets Control (“OFAC”).

We maintain policies and procedures designed to support compliance with applicable requirements and to mitigate the risk of facilitating prohibited activities.

We are subject to federal and state data protection and privacy laws governing the collection, use, storage, and security of personal information, as well as SEC disclosure requirements relating to cybersecurity incident reporting and risk management.

Compliance with these requirements may necessitate additional safeguards and increase our operating costs.

Our Corporate History Highlights

4 unchanged sentences

Ltd.) and 0995162 B.C.

to reorganize the business structure of such three entities in such a manner which would allow Boomerang Oil, Inc.

to reorganize the business structure of such three entities in such a manner which would allow Boomerang Oil,

to spin us out to become an independent entity that is a reporting issuer in Canada and for us to complete a reverse take-over of 0995162 B.C.

2 unchanged sentences

On March 11, 2025, we obtained a Certificate of Formation for Revelation Neuro with the Secretary of State of Texas.

On September 5, 2025, we obtained a Certificate of Incorporation for Marvel with the Secretary of State of Delaware.

On September 26, 2025, we changed our name from Helius Medical Technologies, Inc.

to Solana Company with the Secretary of State of Delaware.

On October 24, 2025, we obtained articles of incorporation for SCHK with the Registrar of Companies Hong Kong Special Administrative Region.

Acquisitions, Mergers and Dissolutions

9 unchanged sentences

Our principal executive offices are located at 642 Newtown Yardley Road, Suite 100, Newtown, PA 18940 and our telephone number is 215-944-6100.

We maintain a corporate website at www.heliusmedical.com.

We maintain a corporate website at www.solanacompany.co.

We make available free of charge through our Internet website our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and any amendments to these reports, as soon as its reasonably practicable after we electronically file such material with, or furnish such material to the SEC.

3 unchanged sentences

Human Capital Resources

As a neurotechnology company focused on neurological wellness through the development, licensing or acquisition of non-implantable technologies targeted at reducing symptoms of neurological disease or trauma, our human capital is important to the long-term success of our company.

As a digital asset treasury and neurotechnology company, our human capital is important to the long-term success of our company.

We believe our diverse workforce is comprised of engaged individuals with appropriate qualifications and competencies to support our growth.

Our senior management team has an average of over 25 years of experience in the health sciences industry with recognized leadership expertise in their functional areas.

As of December 31, 2024, we had 21 full-time employees, of which 19 are located in the United States and 2 are located in Canada.

Our senior management team has an average of over 25 years of professional experience focused in the treasury, financial and medical device markets and public company management.

As of December 31, 2025, we had 21 full-time employees, of which 18 are located in the United States, two are located in Canada and one is located in Hong Kong.

None of our employees were covered by collective bargaining agreements.

7 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.

What changed 10-K

Item 1. Business