What changed in this filing

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Item 1A. Risk Factors

2025-03-05 compared with 2024-03-08 · 124 added, 72 removed, 994 unchanged (16% of the section changed)

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Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the current economic climate and financial market conditions could adversely impact our business.

Potential significant political, trade, or regulatory developments may impact our business.

The potential impacts of recent political, trade, and regulatory developments on business operations are difficult to determine and manage.

The potential imposition of substantial tariffs by the U.S.

on imports from various countries, including China, Canada, and Mexico, and the possible countermeasures by these countries could increase costs, disrupt the global supply chain, and create additional operational challenges.

The uncertainty surrounding future trade relationships and the potential for increased market volatility and currency exchange rate fluctuations along with tariffs and trade regulations could have an adverse effect on the company's financial condition, results of operations, and cash flows.

In addition, reduction in Medicaid or other healthcare reimbursements may impact our domestic customers which may eventually have an adverse impact on the company.

Other actions which have not yet been announced create uncertainty and are difficult to predict and or manage.

We have incurred losses in the past and may be unable to achieve or sustain profitability in the future.

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In order to successfully commercialize our products and services, we will need to continue to expand our marketing efforts to develop new relationships and expand existing relationships with customers, to obtain regulatory clearances or approvals for our products in additional countries, to achieve and maintain compliance with all applicable regulatory requirements and to develop and commercialize our products and services with new features or for additional indications.

If we fail to successfully commercialize our products or services, we may never receive a return on the substantial investments in product development, sales and marketing, regulatory

compliance, manufacturing and quality assurance we have made, as well as further investments we intend to make, which may cause us to fail to generate revenue and gain economies of scale from such investments.

If we fail to successfully commercialize our products or services, we may never receive a return on the substantial investments in product development, sales and marketing, regulatory compliance, manufacturing and quality assurance we have made, as well as further investments we intend to make, which may cause us to fail to generate revenue and gain economies of scale from such investments.

In addition, potential customers may decide not to purchase our products or services, or our customers may decide to cancel orders due to changes in treatment offerings, research and development plans, adverse clinical outcomes, difficulties in obtaining coverage or reimbursement for procedures using our products, difficulties obtaining approval from a hospital, complications with manufacturing or the utilization of technology developed by other parties, all of which are circumstances outside of our control.

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We may need to raise additional capital to fund our existing commercial operations, develop and commercialize new products and expand our operations.

Based on our current business plan, we believe our current cash, borrowing capacity under our Credit Agreement and cash receipts from sales of our products will be sufficient to meet our anticipated cash requirements for at least the next 12 months.

Based on our current business plan, we believe our current cash, borrowing capacity under our Term Loan Agreement and cash receipts from sales of our products will be sufficient to meet our anticipated cash requirements for at least the next 12 months.

If our available cash balances, borrowing capacity, net proceeds from prior stock offerings and anticipated cash flow from operations are insufficient to satisfy our liquidity requirements, including because of lower demand for our products as a result of the risks described in this Annual Report on Form 10-K, we may seek to sell common or preferred equity or convertible debt securities, enter into an additional credit facility or another form of third-party funding or seek other debt financing.

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• impairment and other special charges.

O ur loan and s ecurity agreement with MidCap Financial contains covenants that may restrict our business and financing activities.

On December 29, 2023, we entered into an $80 million Credit, Security and Guaranty Agreement (the “Credit Agreement”) by and among (i) the Company and other borrowers party to the Credit Agreement (collectively, the “Borrowers”), (ii) MidCap Funding IV Trust, as Agent (“Agent”), (iii) MidCap Financial Trust, as Term Loan Servicer (“Servicer”), and (iv) the financial institutions or other entities from time to time party thereto as Lenders (collectively, “Lenders”).

The Credit Agreement restricts our ability to, among other things:

Our loan and security agreement with Braidwell LP contains covenants that may restrict our business and financing activities.

On August 5, 2024, we entered into a $100 million term loan and private placement arrangement with Braidwell LP by and among (i) the Company and other borrowers party to the Term Loan Agreement, (ii) Braidwell LP, and (iii) the financial institutions or other entities from time to time party thereto as Lenders.

Terms of the financing include a $50 million term loan and $50 million of convertible notes.

The term loan consists of an initial term loan of $25 million and access to a delayed draw term loan facility for an additional $25 million, subject to certain terms and conditions.

The Term Loan Agreement restricts our ability to, among other things:

• dispose of or sell our assets;

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• make certain investments.

The covenants in the Credit Agreement, as well as any future financing agreements into which we may enter, may restrict our ability to finance our operations and engage in, expand or otherwise pursue our business activities and strategies.

Our ability to comply with these covenants may be affected by events beyond our control, and future breaches of any of these covenants could result in a default under the Credit Agreement.

If not waived, future defaults could cause all of the outstanding indebtedness under the Credit Agreement to become immediately due and payable and terminate all commitments to extend further credit.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Indebtedness — Credit Agreement.”

The covenants in the Term Loan Agreement, as well as any future financing agreements into which we may enter, may restrict our ability to finance our operations and engage in, expand or otherwise pursue our business activities and strategies.

Our ability to comply with these covenants may be affected by events beyond our control, and future breaches of any of these covenants could result in a default under the Term Loan Agreement.

If not waived, future defaults could cause all of the outstanding indebtedness under the Term Loan Agreement to become immediately due and payable and terminate all commitments to extend further credit.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Indebtedness — Term Loan Agreement.”

If we do not have or are unable to generate sufficient cash available to repay our debt obligations when they become due and payable, either upon maturity or in the event of a default, we may be unable to obtain additional debt or equity financing on favorable terms, if at all, which may negatively impact our ability to operate and continue our business as a going concern.

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As of December 31, 2024, we had federal, state and foreign net operating loss carryforwards, or NOLs, of $136.6 million, $85.4 million and $35.2 million, respectively.

The federal, state and foreign net operating loss carryforwards will begin to expire, if not utilized, beginning in 2028.

Certain federal, state and foreign net operating loss carryforwards will begin to expire, if not utilized, beginning in 2028.

The deferred tax assets, except for those recorded in Canada and Israel, were fully offset by a valuation allowance as of December 31, 2024 and 2023, and no income tax benefit has been recognized in continuing operations related to the NOLs which have valuation allowances.

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It is possible that we have experienced other ownership changes.

We may experience ownership changes in the future as a result of subsequent shifts in our stock ownership, some of which may be outside of our control.

If an ownership change

occurs and our ability to use our net operating loss carryforwards is materially limited, it would harm our future operating results by effectively increasing our future tax obligations.

We may experience ownership changes in the future as a result of

subsequent shifts in our stock ownership, some of which may be outside of our control.

If an ownership change occurs and our ability to use our net operating loss carryforwards is materially limited, it would harm our future operating results by effectively increasing our future tax obligations.

Our goodwill, intangible assets and fixed assets are subject to potential impairment;

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During the third quarter of 2023 and 2022, we recorded an impairment charge of $1.0 million and $3.6 million, respectively, related to the ApiFix trademark asset.

During the fourth quarter of 2024 we recorded an impairment charge of $1.8 million related to the ApiFix trademark asset.

If actual results differ from the assumptions and estimates used in the goodwill and intangible asset calculations, we could incur future impairment or amortization charges, which could negatively impact our financial condition and results of operations.

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We might be unable to successfully commercialize our current products with domestic or international regulatory clearances or approvals or develop or obtain regulatory clearances or approvals to market new products.

Additionally, these products and any future products might not be accepted by the orthopedic surgeons or the third-party payors who reimburse for the procedures performed with our products or may not be successfully commercialized due to other factors.

Additionally, these products and any future products might not be accepted by the orthopedic surgeons or the third-party payors who reimburse for the procedures performed with our products or may not

be successfully commercialized due to other factors.

The success of any new product offering or enhancement to an existing product will depend on numerous factors, including our ability to:

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Because of the size of the potential market, we anticipate that companies will dedicate significant resources to developing competing products.

We have competitors in each of our three product categories, including the DePuy Synthes Companies (a subsidiary of Johnson and Johnson), Medtronic plc, Smith & Nephew plc and OrthoFix.

We have competitors in each of our three product categories, including Johnson & Johnson MedTech (a subsidiary of Johnson and Johnson), Medtronic plc, Smith & Nephew plc, OrthoFix, and Hanger clinics.

At any time, these and other potential market entrants may develop new devices or treatment alternatives that may render our products obsolete or uncompetitive.

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Many of our current and potential competitors have substantially greater sales and financial resources than we do.

In addition, these companies may have more established distribution networks, entrenched relationships with orthopedic surgeons and greater experience in launching, marketing, distributing and selling products.

In addition, these companies may have more established

distribution networks, entrenched relationships with orthopedic surgeons and greater experience in launching, marketing, distributing and selling products.

In addition, new market participants continue to enter the orthopedic industry.

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Furthermore, we may expend significant effort in these costly and time-consuming processes and still may not obtain VAC approval or a purchase contract from such hospitals or GPOs.

We have limited experience in marketing and selling our products, and if we are unable to successfully expand our sales infrastructure and adequately address our customers’ needs, it could negatively impact sales and market acceptance of our products and we may never generate sufficient revenue to achieve or sustain profitability.

We have limited experience in marketing and selling our products.

We may be unable to successfully expand our sales infrastructure and adequately address our customers’ needs, it could negatively impact sales and market acceptance of our products and we may never generate sufficient revenue to achieve or sustain profitability.

We began selling our products in the United States in 2008 and internationally in 2011.

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In 2023, we hired operating and sales representatives in Germany as salaried employees to better serve our customers.

As of December 31, 2023, our international sales organization cons isted of a network of more than 70 independent stocking distributors, 14 independent sales agencies and multiple direct sales representatives.

In 2024, we hired a VP of Asia-Pacific (APAC) sales to expand our sales in Australia and other Asia Pacific countries.

As of December 31, 2024, our international sales organization consisted of a network of more than 70 independent stocking distributors, 14 independent sales agencies and multiple direct sales representatives.

We sell our products in over 75 countries outside of the United States.

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PODs and the physicians who own, or partially own, them have significant market knowledge and access to the orthopedic surgeons who use our products and the hospitals that purchase our products and thus the growth of PODs may reduce our ability to compete effectively for business from orthopedic surgeons who own such distributorships.

Conversion of the Notes will dilute the ownership interest of existing stockholders or may

otherwise depress the price of our common stock.

The conversion of some or all of the Notes will dilute the ownership interests of existing stockholders to

the extent we deliver shares of our common stock upon conversion of any of the Notes.

The Notes may

from time to time in the future be convertible at the option of their holders prior to their scheduled terms

under certain circumstances.

Any sales in the public market of the common stock issuable upon such

conversion could adversely affect prevailing market prices of our common stock.

In addition, the existence

of the Notes may encourage short selling by market participants because the conversion of the Notes

could be used to satisfy short positions or anticipated conversion of the Notes into shares of our common

stock could depress the price of our common stock.

Provisions in the indenture governing the Notes could delay or prevent an otherwise beneficial

takeover of us.

Certain provisions in the Notes and the indenture governing the Notes could make a third-party attempt to

acquire us more difficult or expensive.

For example, if a takeover constitutes a fundamental change (as

defined in the indenture governing the Notes), then noteholders will have the right to require us to

repurchase their Notes for cash.

In addition, if a takeover constitutes a make-whole fundamental change

(as defined in the indenture governing the Notes), then we may be required to temporarily increase the

conversion rate.

In either case, and in other cases, our obligations under the Notes and the indenture

governing the Notes could increase the cost of acquiring us or otherwise discourage a third-party from

acquiring us or removing incumbent management, including in a transaction that noteholders or holders of

our common stock may view as favorable.

Risks Related to Administrative, Organizational and Commercial Operations and Growth

We may be unable to manage our anticipated growth effectively, which could make it difficult to execute our business strategy.

We have been growing rapidly and have a relatively short history of operating as a commercial company.

We have been growing rapidly as a commercial company.

For example, our revenue grew from $148.7 million for the year ended December 31, 2023 to $204.7 million for the year ended December 31, 2024.

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The loss of key employees, the failure of any key employee to perform or our inability to attract and retain skilled employees, as needed, or an inability to effectively plan for and implement a succession plan for key employees could harm our business.

We may be negatively impacted by restructuring initiatives.

In 2024, the Company initiated a restructuring plan aimed at improving operational efficiency and reducing costs.

This plan includes workforce reductions, the reduction of our physical site in Israel, and other cost-saving measures.

While the restructuring is expected to result in significant long-term benefits, it also presents several risks:

• Execution Risk:

The success of the restructuring plan depends on the timely and effective implementation of various initiatives.

Delays or inefficiencies in execution could adversely affect our financial performance and operational capabilities.

• Employee Morale and Retention:

Workforce reductions and changes in organizational structure may impact employee morale and could result in a loss of knowledge.

The loss of key personnel could disrupt our operations and negatively affect our ability to achieve strategic objectives.

• Costs and Financial Impact:

The restructuring plan involves upfront costs, including severance payments, lease termination expenses, and other related costs.

These expenses may exceed our initial estimates, impacting our short-term financial results.

• Operational Disruptions:

Consolidation of facilities and changes in business processes may lead to temporary disruptions in our operations.

These disruptions could affect our ability to meet customer demands and maintain service levels.

• Regulatory and Compliance Risks:

The restructuring activities must comply with various legal and regulatory requirements.

Non-compliance could result in fines, penalties, or other legal actions, adversely affecting our financial condition and reputation.

We will continue to monitor these risks and take appropriate measures to mitigate their impact.

However, there can be no assurance that the restructuring plan will achieve its intended benefits or that the associated risks will not materialize.

We face risks associated with our international business.

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We do not currently engage in any hedging transactions.

we are unable to address these risks and challenges effectively, our international operations may not be successful and our business could be harmed.

Climate change and related legislative and regulatory initiatives may materially affect the Company's business and results of operations.

If we are unable to address these risks and challenges effectively, our international operations may not be successful and our business could be harmed.

Climate change and related legislative and regulatory initiatives may materially affect our business and results of operations.

We recognize there are inherent risks wherever business is conducted;

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As a result of our public float as of June 30, 2023 and revenues for the year ended December 31, 2022, we have become an accelerated filer and are no longer qualified as a “smaller reporting company” as defined in the Exchange Act.

However, we are not required to reflect the change in our smaller reporting company status, and

comply with the associated increased disclosure obligations, until our quarterly report for the three-month period ending March 31, 2024.

We began reporting as an accelerated filer on our quarterly report for the three month-period ending March 31, 2024.

As an accelerated filer, we are subject to certain disclosure and compliance requirements that apply to other public companies but did not previously apply to us due to our status as a non-accelerated filer, such as the necessity of our independent registered public accounting firm providing an attestation on our internal control over financial reporting.

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For example, third parties may attempt to hack into our systems and obtain proprietary information.

The Company’s information technology systems, some of which are dependent on services provided by third parties, serve an important role in the operation of the business.

Our information technology systems, some of which are dependent on services provided by third parties, serve an important role in the operation of the business.

These systems could be damaged or cease to function properly due to any number of causes, such as catastrophic events, power outages, security breaches, computer viruses or cyber-based attacks.

The Company has contingency plans in place to prevent or mitigate the impact of these events, however, if they are not effective on a timely basis, business interruptions could occur which may adversely impact results of operations.

Increased cyber-security threats also pose a potential risk to the security of the Company’s information technology systems, as well as the confidentiality, integrity and availability of data stored on these systems.

We have contingency plans in place to prevent or mitigate the impact of these events, however, if they are not effective on a timely basis, business interruptions could occur which may adversely impact results of operations.

Increased cyber-security threats also pose a potential risk to the security of our information technology systems, as well as the confidentiality, integrity and availability of data stored on these systems.

In addition, as a number of our employees began working remotely during the COVID-19 pandemic, and some continue to work that way, we have been and may continue to be exposed to greater risks related to cyber-security.

Any breach of our systems could result in disclosure or misuse of confidential or proprietary information, including sensitive customer, vendor, employee or financial information.

Such events could cause damage to the Company’s reputation and result in significant recovery or remediation costs, which may adversely impact results of operations.

Such events could cause damage to our reputation and result in significant recovery or remediation costs, which may adversely impact results of operations.

Our business depends on the availability, reliability, and security of our information systems, networks, data, and intellectual property.

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Our operations are vulnerable to interruption or loss due to natural or other disasters, power loss, strikes and other events beyond our control.

product shipment or installation during the time required to repair, rebuild or replace our suppliers’ damaged manufacturing facilities;

A major earthquake, fire or other disaster (such as a major flood, tsunami, volcanic eruption or terrorist attack) affecting our facilities, or those of our suppliers, could significantly disrupt our operations, and delay or prevent product shipment or installation during the time required to repair, rebuild or replace our suppliers’ damaged

manufacturing facilities;

these delays could be lengthy and costly.

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In the United States, before we can market a new medical device, or a new use of, new claim for or significant modification to an existing product, we must first receive either clearance under Section 510(k) of the FDCA or approval of a premarket approval application, or PMA, from the FDA, unless an exemption applies.

In the 510(k) clearance process, before a device may be marketed, the FDA must determine that a proposed device is “substantially equivalent” to a legally-marketed “predicate” device, which includes a device that has been previously cleared through the 510(k) process, a

device that was legally marketed prior to May 28, 1976 (pre-amendments device), a device that was originally on the U.S.

market pursuant to an approved PMA and later down-classified, or a 510(k)-exempt device.

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The Medical Devices Regulation ("MDR") entered into force in May 2017 and, due to the COVID-19 pandemic, was postponed from its original application date of May 2020 to May 2021.

On February 16, 2023, the European Parliament approved, in part, the extension of the application date for Class III and IIb implantable devices to

December 31, 2027.

The MDR imposes significant additional reporting requirements on manufacturers of all medical devices.

On February 16, 2023, the European Parliament approved, in part, the extension of the application date for Class III and IIb implantable devices to December 31, 2027.

The MDR imposes significant additional reporting requirements on manufacturers of all

medical devices.

It imposes an obligation on manufacturers to appoint a "qualified person" responsible for regulatory compliance, and provides for more strict clinical evidence requirements.

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Any delay or failure in obtaining required clearances or approvals would adversely affect our ability to introduce new or enhanced products in a timely manner, which in turn would harm our future growth.

Furthermore, the FDA’s ongoing review of the 510(k) clearance process may make it more difficult for us to make modifications to our previously cleared products, either by imposing more strict requirements on when a new 510(k) notification for a modification to a previously cleared product must be submitted, or applying more onerous

review criteria to such submissions.

The FDA continues to review its 510(k) clearance process, which could result in additional changes to regulatory requirements or guidance documents, which could increase the costs of compliance or restrict our ability to maintain current clearances.

The FDA continues to review its 510(k) clearance process, which could result

in additional changes to regulatory requirements or guidance documents, which could increase the costs of compliance or restrict our ability to maintain current clearances.

Our products must be manufactured in accordance with federal and state regulations, and we could be forced to recall our installed systems or terminate production if we fail to comply with these regulations.

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In addition, FDA regulations and guidance are often revised or reinterpreted by the FDA in ways that may significantly affect our business and our products.

statutes, regulations or revisions or reinterpretations of existing regulations may impose additional costs or lengthen review times of any future products or make it more difficult to manufacture, market or distribute our products.

Any new statutes, regulations or revisions or reinterpretations of existing regulations may impose additional costs or lengthen review times of any future products or make it more difficult to manufacture, market or distribute our products.

We cannot determine what effect changes in regulations, statutes, legal interpretation or policies, when and if promulgated, enacted or adopted may have on our business in the future.

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On February 16, 2023, the European Parliament approved, in part, the extension of the application date for Class III and IIb implantable devices to December 31, 2027.

The Company can continue marketing existing CE-marked products under the previous regulation until June 2024 so long as a certification extension is granted by its notified body.

We can continue marketing existing CE-marked products under the previous regulation until June 2024 so long as a certification extension is granted by our notified body.

Any products not yet CE-marked or products with significant changes that require additional notified review are subject to the MDR as of May 2021, including the requirement of obtaining QSR certification under the MDR.

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Devices sold in Northern Ireland will be required to keep the CE Marking after the transition period ends.

In order to comply with the new regulations and continue selling medical devices in Great Britain (England, Wales and Scotland) following the transition period, the Company must appoint a UK Responsible Person and register the medical devices with the MHRA.

In order to comply with the new regulations and continue selling medical devices in Great Britain (England, Wales and Scotland) following the transition period, we must appoint a UK Responsible Person and register the medical devices with the MHRA.

A new conformity assessment must be completed by a UK Approved Body.

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Our business practices and relationships with providers and hospitals are subject to scrutiny under these laws.

We may also be subject to patient information privacy and security regulation by both the federal government and the states and foreign jurisdictions in which we conduct our business.

We may also be subject to patient information privacy and security regulation by both the federal government and the states and foreign

jurisdictions in which we conduct our business.

The healthcare laws and regulations that may affect our ability to operate include:

• the federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or

indirectly, in cash or in kind, to induce either the referral of an individual or furnishing or arranging for a good or service, for which payment may be made, in whole or in part, under federal healthcare programs, such as Medicare and Medicaid.

• the federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce either the referral of an individual or furnishing or arranging for a good or service, for which payment may be made, in whole or in part, under federal healthcare programs, such as Medicare and Medicaid.

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.

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Failure to comply with the HIPAA privacy and security standards can result in civil monetary penalties, and, in certain circumstances, criminal penalties.

State attorneys general can also bring a civil action to enjoin a HIPAA violation or to obtain statutory damages on behalf of residents of his or her state;

• analogous state and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-

party payor, including commercial insurers or patients;

State attorneys general can also bring a civil action to

enjoin a HIPAA violation or to obtain statutory damages on behalf of residents of his or her state;

• analogous state and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers or patients;

state laws that require device companies to comply with the industry’s voluntary compliance guidelines and the applicable compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers and other potential referral sources;

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• expanded the eligibility criteria for Medicaid programs.

The Biden Administration and the U.S.

The Trump Administration and the U.S.

Congress may take further action regarding the Affordable Care Act, including, but not limited to, repeal or replacement.

Additionally, all or a portion of the Affordable Care Act and related subsequent legislation may be modified, repealed or otherwise invalidated through judicial challenge,

which could result in lower numbers of insured individuals, reduced coverage for insured individuals and adversely affect our business.

Additionally, all or a portion of the Affordable Care Act and related subsequent legislation may be modified, repealed or otherwise invalidated through judicial challenge, which could result in lower numbers of insured individuals, reduced coverage for insured individuals and adversely affect our business.

In addition, other legislative changes have been proposed and adopted since the Affordable Care Act was enacted.

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We rely on our network of independent sales agencies and distributors to market and distribute our products in both the United States and international markets.

In the United States, our products are primarily sold by multiple direct sales representatives as well as a net work of nearly 40 independent sales agencies.

In the United States, our products are primarily sold by multiple direct sales representatives as well as a net work of nearly over 40 independent sales agencies.

We may not be successful in maintaining strong relationships with our independent sales agencies.

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We sell our products in over 75 countries outside of the United States, and we expect a significant amount of our revenue to come from international sales for th e foreseeable future.

In the past, we have experienced issues collecting payments from certain of our independent stocking distributors and we may again experience such issues in the future.

In the past, we have experienced issues collecting

payments from certain of our independent stocking distributors and we may again experience such issues in the future.

Our ability to market, distribute, and sell our products through our network of distributors and agencies has been adversely affected as a result of precautionary responses to the COVID-19 pandemic, including travel restrictions, suspension and shutdown orders and other measures intended to limit person-to-person contact.

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Some of our independent sales agencies and distributors have historically accounted for a material portion of our sales volume.

Sales through two of our independent sales agencies in the United States accounted for 10.8% and 10.7%, respectively, of our global revenue in 2023.

Sales through two of our independent sales agencies in the United States accounted fo r 9.8% and 8.8%, respectively, of our global revenue in 2024.

Sales through two of our independent sales agencies in the United States accounted for 10.8% and 10.7%, respectively, of our global revenue in 2023.

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We rely on third-party contract manufacturers to assemble our products, and a loss or degradation in performance of these contract manufacturers could have a material adverse effect on our business and financial condition.

We rely on a small number of third-party contract manufacturers in the United States to assemble our products.

We rely on a small number of third-party contract manufacturers in the United States to assemble the majority of our products.

If any of these contract manufacturers fails to adequately perform, our revenue and profitability could be adversely affected.

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If we are required to change contract manufacturers due to any termination of our relationships with our contract manufacturers, we may lose revenue, experience manufacturing delays, incur increased costs or otherwise suffer impairment to our customer relationships.

We cannot guarantee that we will be able to establish alternative manufacturing relationships on similar terms or without delay.

We cannot guarantee that we will be

able to establish alternative manufacturing relationships on similar terms or without delay.

Furthermore, our contract manufacturers could require us to move to another one of their production facilities.

This could disrupt our ability to fulfill orders during

a transition and impact our ability to utilize our current supply chain.

This could disrupt our ability to fulfill orders during a transition and impact our ability to utilize our current supply chain.

In addition, we currently use Structure Medical, LLC and Vilex, LLC, Squadron-affiliated entities, as suppliers for some of the components of our products.

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We own numerous issued patents and pending patent applications that relate to our platform technology.

As of December 31, 2023, we own ed 67 issued U.S.

As of December 31, 2024, we owned 77 issued U.S.

patents and 207 issued foreign patents and we had 50 pending U.S.

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In addition, trade secrets may be independently developed by others in a manner that could prevent legal recourse by us.

If any of our confidential or proprietary information, such as our trade secrets, were to be disclosed or misappropriated, or if any such information was independently developed by a competitor, our business and competitive position could be harmed.

If any of our confidential or proprietary information, such as our trade secrets, were to be

disclosed or misappropriated, or if any such information was independently developed by a competitor, our business and competitive position could be harmed.

We may be unable to enforce our intellectual property rights throughout the world.

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• commercial success and market acceptance of our products;

• continued selling of shares by shareholders with large holdings;

• success of our competitors in developing or commercializing products;

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Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns.

Increased interest from investors and others regarding environmental, social, and governance (“ESG”) responsibilities could result in additional costs and risks, and adversely impact our reputation, employee retention, and willingness of customers and suppliers to do business with us.

Investor advocacy groups, certain investment funds, institutional investors, stockholders, and other market participants have increasingly focused on the ESG practices of companies.

Select stakeholders have placed increased importance on the implications of the social cost of their investments.

While we are increasing our ESG efforts and related disclosures, if our ESG efforts do not meet stakeholder expectations and standards, which continue to evolve, our reputation and employee retention may be negatively impacted based on an assessment of our ESG practices.

Our future disclosures may include our efforts on a variety of social and ethical matters, including corporate governance, environmental compliance, employee health and safety practices, supply chain, human capital management, and workforce inclusion and diversity.

It is possible that stakeholders may not be satisfied with our ESG efforts or the speed of adoption.

We could also incur additional costs and require additional resources to monitor, report, and comply with various ESG practices.

Also, our failure, or perceived failure, to meet the standards included in any ESG disclosure could negatively impact our reputation, employee retention, and the willingness of our customers and suppliers to do business with us.

Future sales of our common stock may cause our stock price to decline.

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The interests of these stockholders may not be the same as or may even conflict with your interests.

For example, these stockholders could attempt to delay or prevent a change in control of the company, even if such a change in control would benefit our other stockholders, which could deprive our stockholders of an opportunity to receive a premium for their common stock as part of a sale of the company or our assets and might affect the prevailing price of our common stock.

For example, these stockholders could attempt to delay or prevent a change in control of the company, even if

such a change in control would benefit our other stockholders, which could deprive our stockholders of an opportunity to receive a premium for their common stock as part of a sale of the company or our assets and might affect the prevailing price of our common stock.

The significant concentration of stock ownership may negatively impact the price of our common stock due to investors’ perception that conflicts of interest may exist or arise.

In addition, pursuant to an agreement with the Company, Squadron has the right to designate up to four nominees for election to the Company’s board of directors, depending on the percentage of capital stock beneficially owned by Squadron.

In addition, pursuant to an agreement with the Company, Squadron has the right to designate up to four nominees for election to our board of directors, depending on the percentage of capital stock beneficially owned by Squadron.

Currently, three members of our board are Squadron designees.

15 unchanged sentences

Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty or other wrongdoing by any of our directors, officers, employees or agents to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL or our amended and restated certificate of incorporation or amended and restated bylaws or (iv) any action asserting a claim governed by the internal affairs doctrine.

This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and other employees.

Alternatively, if a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions.

3 unchanged sentences

We currently intend to retain all available funds and any future earnings to finance the growth and development of our business.

In addition, the Credit Agreement contains, and the terms of any future credit agreements we enter into may contain, terms prohibiting or limiting the amount of dividends that may be declared or paid on our common stock.

In addition, the Term Loan Agreement contains, and the terms of any future credit agreements we enter into may contain, terms prohibiting or limiting the amount of dividends that may be declared or paid on our common stock.

As a result, capital appreciation, if any, of our common stock will be your sole source of gain for the foreseeable future.

6 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 1A. Risk Factors