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To utilize other supply sources, we would need to identify and qualify new suppliers to our quality standards and obtain any additional regulatory approvals required to change suppliers, which could result in manufacturing delays and increase our expenses.
−Removed: Although we require our third-party suppliers to supply us with components that meet our specifications and comply with applicable provisions of the FDA’s Quality System Regulation (“QSR”) and other applicable legal and regulatory requirements in our agreements and contracts, and we perform incoming inspection, testing or other acceptance activities to ensure the components meet our requirements, there is a risk that our suppliers will not always act consistent with our best interests, and may not always supply components that meet our requirements or supply components in a timely manner.
+Added: Although we require our third-party suppliers to supply us with components that meet our specifications and comply with applicable provisions of the FDA’s Quality Management System Regulation (“QMSR”) and other applicable legal and regulatory requirements in our agreements and contracts, and we perform incoming inspection, testing or other acceptance activities to ensure the components meet our requirements, there is a risk that our suppliers will not always act consistent with our best interests, and may not always supply components that meet our requirements or supply components in a timely manner.
We have limited experience manufacturing our products in significant commercial quantities and we face manufacturing risks that may adversely affect our ability to manufacture our products, reduce our gross margins and negatively affect our business, financial condition and results of operations.
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Further, we have in the past, and may in the future, experienced delays in developing and deploying remedial measures and patches designed to address identified vulnerabilities.
−Removed: Our IT and infrastructure, and other third parties, including technology partners and providers, face and may be vulnerable to a variety of evolving threats, including but not limited to social engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks (such as credential stuffing), ransomware attacks, software bugs, server malfunction, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fire,
−Removed: flood, and other similar threats.
+Added: Our IT and infrastructure, and other third parties with whom we work, including technology partners and providers, face and may be vulnerable to a variety of evolving threats, including but not limited to social engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks (such as credential stuffing), credential harvesting, ransomware attacks, software bugs, server malfunction, software or hardware failures, loss of data or other information technology assets, adware,
+Added: telecommunications failures, earthquakes, fire, flood, attacks enhanced or facilitated by AI, and other similar threats.
In addition to traditional computer “hackers,” threat actors, “hacktivists,” organized criminal threat actors, personnel misconduct or error (such as theft or misuse), sophisticated nation-state and nation-state supported actors now engage and are expected to continue to engage in cyberattacks, including without limitation nation-state actors for geopolitical reasons and in conjunction with military conflicts and defense activities.
3 unchanged sentences
Similarly, supply chain attacks have increased in frequency and severity, and we cannot guarantee that third parties and infrastructure in our supply chain have not been compromised or that they do not contain exploitable defects or bugs that could result in a breach of or disruption to our platform, systems and networks or the systems and networks of third parties that support us and our services.
+Added: Any of the previously identified or similar threats have in the past and may in the future cause a security incident or other interruption that have in the past or may in the future result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our sensitive information or our information technology systems, or those of the third parties with whom we work.
Although the aggregate impact of security incidents on our operations and financial condition has not been material to date, we have occasionally been the target of events of this nature and expect them to continue as security threats have been rapidly evolving in sophistication and becoming more prevalent in the industry.
For example, we have been the target of unsuccessful phishing attempts in the past and expect such attempts will continue in the future.
−Removed: Additionally, the Company launched the LungTraX Platform in 2024 which will involve the processing of more patient PHI in the Company-managed system in our capacity as a Business Associate (as defined by the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”)), the unintended release of which could have additional material adverse impacts on the Company financially and reputationally.
+Added: Additionally, the Company launched the LungTraX Platform in 2024 which involves the processing of patient PHI in the Company-managed system in our capacity as a Business Associate (as defined by the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”)), the unintended release of which could have additional material adverse impacts on the Company financially and reputationally.
Advances in computer capabilities, new technological discoveries or other developments may result in cyberattacks becoming more sophisticated and more difficult to detect.
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Threat actors may also gain access to other networks and systems after a compromise of our networks and systems.
−Removed: We may expend significant resources or modify our business activities (including our clinical trial activities) to try to protect against security incidents.
+Added: For example, threat actors may use an initial compromise of one part of our environment to gain access to other parts of our environment, or leverage a compromise of our networks or systems to gain access to the networks or systems of third parties with whom we work, such as through phishing or supply chain attacks.We may expend significant resources or modify our business activities (including our clinical trial activities) to try to protect against security incidents.
Certain data privacy and information security obligations may require us to implement and maintain specific security measures or industry-standard or reasonable security measures to protect our information technology systems and sensitive information.
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additional reporting requirements and/or oversight;
−Removed: temporary or permanent bans on all or some processing of personal data;
+Added: temporary or permanent bans on
+Added: all or some processing of personal data;
or orders to destroy or not use personal data.
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Such disclosures and related actions can be costly, and the disclosures or the failure to comply with such applicable requirements, could lead to adverse consequences.
−Removed: Further, individuals or other relevant stakeholders could sue us for our actual or
−Removed: perceived failure to comply with our security obligations, including, without limitation, in class action litigation.
+Added: Further, individuals or other relevant stakeholders could sue us for our actual or perceived failure to comply with our security obligations, including, without limitation, in class action litigation.
Security incidents could also result in indemnity obligations, negative publicity and financial loss.
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Furthermore, we may discover security issues that were not found during due diligence of such acquired or integrated entities, and it may be difficult to integrate companies into our information technology environment and security program.
+Added: While we have implemented security measures designed to protect against security incidents, there can be no assurance that these measures will be effective.
The reliability and continuous availability of our LungTraX Platform is critical to our success.
1 unchanged sentence
The LungTraX Platform is a new service for us and we have limited experience installing and managing this platform and the services that we render though this platform.
+Added: We have not and may not detect and remediate all such vulnerabilities including on a timely basis.
Additionally, even if we are able to develop a patch or other fix to address such vulnerabilities, such fix may be difficult to push out to our customers or may otherwise be delayed.
−Removed: Additionally, our business depends upon the appropriate and successful implementation of our platform by our customers.
+Added: Additionally, our business employs a shared responsibility model where our customers are responsible for using, configuring, and otherwise implementing security measures related to our platform in a manner that meets applicable cybersecurity standards, complies with laws, and addresses their information security risk.
If our customers fail to use our platform according to our specifications, our customers may suffer a security incident on their own systems or other adverse consequences.
−Removed: Even if such an incident is unrelated to our security practices, it could result in our incurring of significant economic and operational costs in investigating, remediating, and implementing additional measures to further protect our customers from their own vulnerabilities, and could result in reputational harm.
+Added: Even if we are not the cause of the resulting customer security issue or incident and such an incident is unrelated to our security practices, we could incur significant economic and operational costs in investigating, remediating, and implementing additional measures to further protect our customers from their own vulnerabilities, and it could result in reputational harm.
Our results of operations will be materially harmed if we are unable to accurately forecast customer demand for our solution and manage our inventory.
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Our ability to accurately forecast demand for our solution could be negatively affected by many factors, including our failure to accurately manage our expansion strategy, product introductions by competitors, an increase or decrease in customer demand for our solution or for products of our competitors, our failure to accurately forecast customer acceptance of new products, unanticipated changes in general market conditions or regulatory matters and weakening of economic conditions or consumer confidence in future economic conditions.
−Removed: Inventory levels in excess of customer demand may result in
−Removed: inventory write-downs or write-offs, which would cause our gross margin to be adversely affected and could impair the strength of our brand.
+Added: Inventory levels in excess of customer demand may result in inventory write-downs or write-offs, which would cause our gross margin to be adversely affected and could impair the strength of our brand.
Conversely, if we underestimate customer demand for our solution, our internal manufacturing team may not be able to deliver products to meet our requirements, and this could result in damage to our reputation and customer relationships.
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• the timing and cost of, and level of investment in, research, development, licenses, regulatory approval, commercialization activities, acquisitions and other strategic transactions, or other significant events relating to our products, which may change from time to time;
−Removed: • the cost of manufacturing our products, which may vary depending on the quantity of production and the terms of our agreements with third-party suppliers and manufacturers which are subject to macroeconomic factors including inflation;
+Added: • the cost of manufacturing our products, which may vary depending on the quantity of production and the terms of our agreements with third-party suppliers and manufacturers which are subject to macroeconomic factors including fluctuating inflation and interest rates, as well as tariffs, the threat of new or increased tariffs, trade disputes and escalating trade tensions, and changes in trade agreements;
• the number of patients treated with Zephyr Valves, including the average number of Zephyr Valves used for a patient, pricing, discounts and incentives;
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The overall rate of smoking among the U.S.
−Removed: adult population
−Removed: has been steadily declining from 42.4% in 1965 to 11.6% in 2022 and there are increased efforts to decrease the rate of smoking globally.
+Added: adult population has been steadily declining from 42.4% in 1965 to 11.6% in 2022 and there are increased efforts to decrease the rate of smoking globally.
If the overall rate of smokers continues to decline, this may eventually decrease the number of patients suffering from COPD and emphysema and, accordingly, who would benefit from our solution.
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Currently, we carry business interruption coverage and cyber insurance to mitigate certain potential losses but this insurance is limited in amount, and we cannot be certain that such potential losses will not exceed our policy limits.
−Removed: We are increasingly dependent on complex information technology to manage our infrastructure.
+Added: We are increasingly dependent
+Added: on complex information technology to manage our infrastructure.
Our information systems require an ongoing commitment of significant resources to maintain, protect and enhance our existing systems.
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If we are unable to obtain insurance at an acceptable cost or on acceptable terms or otherwise protect against potential product liability claims, we could be exposed to significant liabilities.
−Removed: A product liability claim,
−Removed: recall or other claim with respect to uninsured liabilities or for amounts in excess of insured liabilities could negatively affect our business, financial condition and results of operations.
+Added: A product liability claim, recall or other claim with respect to uninsured liabilities or for amounts in excess of insured liabilities could negatively affect our business, financial condition and results of operations.
We do not carry specific hazardous waste insurance coverage, and our property, casualty and general liability insurance policies specifically exclude coverage for damages and fines arising from hazardous waste exposure or contamination.
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Our indebtedness may limit our flexibility in operating our business and negatively affect our business, financial condition, results of operations and competitive position.
−Removed: In March 2021, we entered into an Amended and Restated Loan and Security Agreement (as amended, the “CIBC Agreement”) with Canadian Imperial Bank of Commerce (“CIBC”), under which we have borrowed $37.0 million in debt financing as of December 31, 2024.
−Removed: See the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations⸺Liquidity and Capital Resources;
−Removed: Plan of Operation⸺CIBC Loan” and the notes to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
+Added: On March 2, 2026, we entered into a Credit Agreement and Guaranty (as amended, the “Perceptive Credit Agreement”) with the subsidiary guarantors party thereto from time to time, the lenders party thereto from time to time, and Perceptive Credit Holdings V, LP (“Perceptive”), as the initial lender, administrative agent and collateral agent, under which we have borrowed $40.0 million in debt financing as of March 2, 2026.
+Added: See the section entitled “Subsequent Events - Perceptive Credit Agreement” in the notes to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
In order to service this indebtedness and any additional indebtedness we may incur in the future, we need to generate cash from our operating activities.
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We cannot assure you that our business will be able to generate sufficient cash flow from operations or that future borrowings or other financings will be available to us in an amount sufficient to enable us to service our indebtedness and fund our other liquidity needs.
−Removed: To the extent we are required to use cash from operations or the proceeds of any future financing to service our indebtedness instead of funding working capital, capital expenditures or other general corporate purposes, we will be less able to plan for, or react to, changes in our business, industry and in the economy generally.
+Added: To the extent we are required to use cash from operations or the proceeds of any future financing to service our indebtedness instead of funding working capital, capital expenditures or other general corporate purposes, we will be less able to plan for, or react to, changes in our
+Added: business, industry and in the economy generally.
This will place us at a competitive disadvantage compared to our competitors that have less indebtedness.
−Removed: In addition, the CIBC Agreement contains, and any agreements evidencing or governing other future indebtedness may contain, certain covenants that limit our ability to engage in certain transactions that may be in our long-term best interests.
+Added: In addition, the Perceptive Credit Agreement contains, and any agreements evidencing or governing other future indebtedness may contain, certain covenants that limit our ability to engage in certain transactions that may be in our long-term best interests.
Subject to certain limited exceptions, these covenants limit our ability to, among other things:
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• merge or consolidate with, or acquire all or substantially all of the capital stock or assets of, any other company;
−Removed: • create, incur, assume or be liable for any additional indebtedness, or create, incur, allow or permit to exist any additional liens;
+Added: • create, incur, assume, be liable for or make payments on any additional indebtedness, or create, incur, allow or permit to exist any additional liens;
• pay cash dividends on, make any other distributions in respect of, or redeem, retire or repurchase, any shares of our capital stock;
−Removed: • make certain investments;
+Added: • make certain investments and;
• enter into transactions with our affiliates.
−Removed: • under certain circumstances, settle pending or threatened litigation for greater amounts than are disclosed to CIBC in writing from time to time.
There can be no guarantee that we will not breach these covenants.
Our ability to comply with these covenants may be affected by events and factors beyond our control.
−Removed: In the event that we breach one or more covenants, our lender may choose to declare an event of default and require that we immediately repay all amounts outstanding, terminate any commitment to extend further credit and foreclose on the collateral granted to it to collateralize such indebtedness.
+Added: In the event that we breach one or more covenants, our lenders may choose to declare an event of default and require that we immediately repay all amounts outstanding, terminate any commitment to extend further credit and foreclose on the collateral granted to it to collateralize such indebtedness.
The occurrence of any of these events could negatively affect our business, financial condition and results of operations.
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Our competitors may seek to discredit our products by challenging our short operating history or relatively limited number of scientific studies and publications.
−Removed: Smaller companies could also launch new or enhanced products and services that
−Removed: we do not offer and that could gain market acceptance quickly.
+Added: Smaller companies could also launch new or enhanced products and services that we do not offer and that could gain market acceptance quickly.
Additionally, certain of our competitors may challenge our intellectual property, may develop additional competing or superior technologies and processes and compete more aggressively and sustain that competition over a longer period of time than we could.
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Since inception, we have incurred significant net losses and expect to continue to incur net losses for the foreseeable future.
−Removed: Since our inception, our operations have been financed primarily through the sale of equity securities, debt financing arrangements and sales of our products.
−Removed: As of December 31, 2024, we had $101.5 million in cash, cash equivalents and marketable securities, and an accumulated deficit of $467.6 million.
−Removed: Based on our current planned operations, we expect our cash, cash equivalents and short-term marketable securities will enable us to fund our operating expenses for at least the next twelve months.
+Added: Since our inception, our operations have been financed primarily through the sale of equity securities, debt
+Added: financing arrangements and sales of our products.
+Added: As of December 31, 2025, we had $69.8 million in cash and cash equivalents, and an accumulated deficit of $521.6 million.
+Added: Based on our current planned operations, we expect our cash and cash equivalents will enable us to fund our operating expenses for at least the next twelve months.
We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect.
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We also expect to continue to make investments in research and development, regulatory affairs and clinical studies to develop future generations of our solution, broaden the addressable market and expand indications, support regulatory submissions and demonstrate the clinical efficacy of our solution.
−Removed: We continue to make progress
−Removed: with our CONVERT II pivotal trial of the AeriSeal System, a potential product in development for the treatment of severe emphysema patients who are not qualified for Zephyr Valve treatment due to excessive collateral ventilation.
+Added: We continue to make progress with our CONVERT II pivotal trial of the AeriSeal System, a potential product in development for the treatment of severe emphysema patients who are not qualified for Zephyr Valve treatment due to excessive collateral ventilation.
Moreover, we expect to incur additional expenses associated with operating as a public company, including legal, accounting, insurance, exchange listing and Securities and Exchange Commission (“SEC”) compliance, investor relations and other expenses.
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From time to time, there have been and may in the future be changes in our management team or other key employees resulting from the hiring or departure of these personnel.
−Removed: For example, in March 2024, Glendon French retired as the President and Chief Executive Officer of the Company.
−Removed: Our board of directors appointed Steven Williamson as our President and Chief Executive Officer and as a member of our board of directors.
−Removed: Additionally, in April 2024, Mehul Joshi was appointed as Chief Financial Officer of the Company and John McKune, our Interim Chief Financial Officer, returned to his prior position as the Company’s Vice President Finance and Corporate Controller.
+Added: For example, in October 2025, we announced that Steven Williamson resigned as President and Chief Executive Officer and as a member of our board of directors and that Mehul Joshi resigned as Chief Financial Officer.
+Added: We also announced that Glendon E.
+Added: French would return as the Company’s President and Chief Executive
+Added: Officer and Derrick Sung, Ph.D.
+Added: would rejoin the Company as our Chief Operating Officer and Chief Financial Officer.
The failure to successfully execute this leadership transition could negatively impact our business and results of operations.
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We may not be able to attract or retain qualified engineers and medical researchers in the future due to the competition for qualified personnel.
−Removed: We have from time to time experienced, and we expect to continue to experience, difficulty in hiring and retaining employees with appropriate
−Removed: qualifications.
+Added: We have from time to time experienced, and we expect to continue to experience, difficulty in hiring and retaining employees with appropriate qualifications.
Many of the companies with which we compete for experienced personnel have greater resources than us.
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Many of our employees have become or will soon become vested in a substantial amount of our common stock or a number of common stock options.
−Removed: Our employees may be more likely to leave us if the shares they own have significantly appreciated in value relative to the original purchase prices of the shares, or if the exercise prices of the options that they hold are significantly below the market price of our common stock.
+Added: Our employees may be more likely to leave us if the shares they own have significantly depreciated in value relative to the original purchase prices of the shares, or if the exercise prices of the options that they hold are significantly above the market price of our common stock.
Our future success also depends on our ability to continue to attract and retain additional executive officers and other key employees.
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Sales in markets outside of the United States accounted for approximately 37.0% and 32.6% of our revenue for the years ended December 31, 2025 and December 31, 2024, respectively.
−Removed: We currently focus our international sales and marketing efforts in Australia, Austria, Belgium, China, Denmark, France, Germany, Ireland, Italy, Japan, the Netherlands, South Korea, Spain, Switzerland and the United Kingdom.
+Added: We currently focus our international sales and marketing efforts in Australia, Austria, Belgium, China, Denmark, France, Germany, Ireland, Italy, Japan, the Netherlands, Spain, Sweden, Switzerland and the United Kingdom.
International sales are subject to a number of risks, including:
• difficulties in staffing and managing our international operations;
+Added: • the impacts of tariffs, the threat of new or increased tariffs, trade disputes, escalating trade tensions, and changes in trade agreements;
• increased competition as a result of more products and procedures receiving regulatory approval or otherwise free to market in international markets;
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Future licensors may allege that we have breached our license agreement with them, and accordingly seek to terminate our license, which could adversely affect our competitive business position and harm our business prospects.
+Added: Significant changes or developments in U.S.
+Added: and international laws or policies, including changes in U.S.
+Added: trade policies and tariffs and the reaction of other countries thereto, could have a material adverse effect on our business and financial condition.
+Added: We operate in a global economy, which includes utilizing third-party suppliers in several countries outside the U.S.
+Added: There is inherent risk, based on the complex relationships among the U.S.
+Added: and the countries in which we conduct our business, that political, diplomatic, and national security factors can lead to global trade restrictions and changes in trade policies and export regulations that may adversely affect our business and operations.
+Added: The current international trade and regulatory environment is subject to significant ongoing uncertainty.
+Added: government has announced substantial new tariffs affecting a wide range of products and jurisdictions and has indicated an intention to continue developing new trade policies.
+Added: In response, certain foreign governments have announced or implemented retaliatory tariffs and other protectionist measures.
+Added: Because we rely on a global sourcing strategy and significant international sales, significant changes or developments in U.S.
+Added: and international laws and policies, such as laws and policies surrounding international trade, foreign affairs, manufacturing and development and investment in the territories and countries where we or our customers operate, could increase our costs, increase our customers’ costs and adversely impact our customers’ business and financial condition, make our products less competitive in the U.S.
+Added: and other markets affected by such actions, and materially adversely affect our business and financial condition.
+Added: Current or future tariffs or other retaliatory trade measures may raise the costs of raw materials, components or finished goods, which may impact our product sales, manufacturing costs, and operational expenses.
+Added: Such cost increases may reduce our margins or require us to increase prices.
+Added: Any price increases could harm our competitive position, reduce customer demand and damage customer relationships.
+Added: We may also experience supply chain disruptions as a result of increased costs and uncertainty.
+Added: Unlike many industries, our ability to pass increased costs to customers is limited by the structure of medical device pricing and reimbursement systems.
+Added: Many of our products’ pricing are established through annual or multi-year contracts with commercial, third-party payors, customers, and group purchasing organizations, and reimbursement methodologies established by government programs, such as Medicare.
+Added: These arrangements typically include fixed pricing terms that were negotiated prior to the implementation of the recently announced tariffs.
+Added: As a result, and depending on the timing and scope of the implementation of these tariffs, cost increases due to tariffs may be difficult or impossible to pass through to customers until the next negotiation cycle, which could be up to 36 months away.
+Added: Current or future tariffs will also result in increased research and development expenses, including with respect to increased costs associated with raw materials, laboratory equipment and research materials and components.
+Added: Trade restrictions affecting the import of materials necessary for clinical trials could result in delays to our development timelines.
+Added: Increased development costs and extended development timelines could place us at a competitive disadvantage compared to companies operating in regions with more favorable trade relationships and could reduce
+Added: investor confidence and negatively impact our business, results of operations, financial condition and growth prospects.
+Added: The evolving trade environment may also contribute to broader macroeconomic and financial market weakness, including overall decreased spending, inflationary pressures affecting interest rates, exchange rate volatility, financial market instability, and economic recessions or downturns, which may result in decreased demand for our products, increased operational costs, difficulties raising capital, and limit expansion opportunities with existing customers.
+Added: Ongoing tariff uncertainty and related legal challenges, as well as trade restrictions and macroeconomic uncertainty has and may continue to contribute to volatility in the price of our common stock.
+Added: The complexity of the announced or future tariffs may also increase the risk that we or our customers or suppliers may be subject to civil or criminal enforcement actions in the U.S.
+Added: or foreign jurisdictions related to compliance with trade regulations.
+Added: Foreign governments may also adopt non-tariff measures, such as informal disincentives to engage with, purchase from or invest in U.S.
+Added: entities, or may take other retaliatory actions against U.S.
+Added: entities, such as decreased intellectual property protection, increased enforcement actions, or delays in regulatory approvals, which may result in heightened international legal and operational risks.
+Added: In addition, the U.S.
+Added: and other governments have imposed and may continue to impose additional sanctions, such as trade restrictions or trade barriers, which could restrict us from doing business directly or indirectly in or with certain countries or parties and may impose additional costs and complexity to our business.
+Added: We cannot predict how current or future developments in tariff and other trade policies will evolve and the extent to which they will affect our business, operations and financial condition.
+Added: Additionally, the Bureau of Industry and Security, U.S.
+Added: Department of Commerce, has recently initiated an investigation to determine whether medical devices, including their components and accessories, manufactured outside the United States pose a national security risk and should be subject to additional tariffs.
+Added: While we continue to monitor this investigation and the other developments described above, the full impact of these risks remains uncertain and any prolonged economic downturn, escalation in trade tensions, or deterioration in international perception of U.S.-based companies could materially and adversely affect our business, results of operations, financial condition and prospects.
+Added: In addition, trade developments have and may continue to heighten the risks related to the other risk factors described elsewhere in this Annual Report on Form 10-K.
Unfavorable global economic conditions, including as a result of geopolitical conflict, could negatively affect our business, financial condition or results of operations.
1 unchanged sentence
A severe or prolonged economic downturn, such as the global financial crisis of 2008, could result in a variety of risks to our business, including weakened demand for our solution, and our ability to raise additional capital when needed on acceptable terms, if at all.
−Removed: A weak or declining economy, including due to the impact of inflationary pressures, could also strain our suppliers, possibly resulting in supply disruption, or cause our customers to delay making payments for our services.
+Added: A weak or declining economy, including due to the impact of inflationary pressures, tariffs, trade disputes, escalating trade tensions and other political tensions between the U.S.
+Added: and other countries, could also strain our suppliers, possibly resulting in supply disruption, or cause our customers to delay making payments for our services.
Any of the foregoing will negatively affect our business, financial condition and results of operations and we cannot anticipate all of the ways in which the economic climate and financial market conditions could negatively affect our business, financial condition and results of operations.
2 unchanged sentences
Accordingly, although we have no current commitments with respect to any acquisition or investment, we may in the future pursue the acquisition of, or joint ventures relating to, complementary businesses, applications or technologies instead of developing them ourselves.
−Removed: The pursuit of potential acquisitions may divert the attention of management and cause us to incur various costs and expenses in identifying, investigating and pursuing suitable acquisitions, whether or not they are consummated.
+Added: The pursuit of potential acquisitions may divert the attention of management and cause us to incur various costs and expenses in identifying, investigating and pursuing suitable
+Added: acquisitions, whether or not they are consummated.
We may not be able to identify desirable acquisition targets or be successful in entering into an agreement with any particular target or obtain the expected benefits of any acquisition or investment.
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Foreign Corrupt Practices Act, as well as export control laws, customs laws, sanctions laws and other laws governing our operations.
−Removed: If we fail to comply with these laws, we could be subject to civil or criminal penalties, other remedial
−Removed: measures and legal expenses, which could negatively affect our business, financial condition and results of operations.
+Added: If we fail to comply with these laws, we could be subject to civil or criminal penalties, other remedial measures and legal expenses, which could negatively affect our business, financial condition and results of operations.
As we grow our international presence and global operations, we will be increasingly exposed to trade and economic sanctions and other restrictions imposed by the United States, the European Union and other governments and organizations.
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We have various policies and procedures designed to ensure compliance by us and our directors, officers, employees, representatives, consultants and agents with the FCPA, OFAC restrictions, the Bribery Act and other export control, anti-corruption, anti-money-laundering and anti-terrorism laws and regulations.
−Removed: We cannot assure you, however, that our policies and procedures are or will be sufficient or that directors, officers, employees, representatives, consultants and agents have not engaged and will not engage in conduct for which we may be held responsible, nor can we assure you that our business partners have not engaged and will not engage in conduct that could materially affect their ability to perform their contractual obligations to us or even result in our being held liable for such conduct.
+Added: We cannot assure
+Added: you, however, that our policies and procedures are or will be sufficient or that directors, officers, employees, representatives, consultants and agents have not engaged and will not engage in conduct for which we may be held responsible, nor can we assure you that our business partners have not engaged and will not engage in conduct that could materially affect their ability to perform their contractual obligations to us or even result in our being held liable for such conduct.
Violations of the FCPA, OFAC restrictions, the Bribery Act or other export control, anti-corruption, anti-money laundering and anti-terrorism laws or regulations may result in severe criminal or civil sanctions, and we may be subject to other liabilities, which could negatively affect our business, financial condition and results of operations.
9 unchanged sentences
Future changes in our stock ownership, some of which might be beyond our control, could result in an ownership change under Section 382 of the Code.
−Removed: For these reasons,
−Removed: in the event we experience a change of control, we may not be able to utilize a material portion of the NOLs, research and development credit carryforwards or disallowed interest expense carryovers, even if we attain profitability.
+Added: For these reasons, in the event we experience a change of control, we may not be able to utilize a material portion of the NOLs, research and development credit carryforwards or disallowed interest expense carryovers, even if we attain profitability.
We may not be able to achieve or maintain satisfactory pricing and margins for our products.
8 unchanged sentences
Governmental regulation of the import or export of our products, or our failure to obtain any required import or export authorization for our products, when applicable, will harm our international sales and adversely affect our revenue.
−Removed: Compliance with applicable regulatory requirements regarding the export of our products may create delays in the introduction of our products in international markets or, in some cases, prevent the export of our products to some countries altogether.
+Added: Compliance with applicable regulatory requirements regarding the export of our products may create delays in the introduction of our products in international markets
+Added: or, in some cases, prevent the export of our products to some countries altogether.
Furthermore, U.S.
3 unchanged sentences
Any decreased use of our products or limitation on our ability to export or sell access to our products would likely negatively affect our business, financial condition and results of operations.
−Removed: Significant changes or developments in U.S.
−Removed: and international laws or policies, including changes in U.S.
−Removed: trade policies and tariffs and the reaction of other countries thereto, could have a material adverse effect on our business and financial condition.
−Removed: From time to time, the U.S.
−Removed: government has indicated a willingness to revise, renegotiate, or terminate various existing multilateral trade agreements and to impose new taxes and restrictions on certain goods imported into the U.S.
−Removed: For example, the Trump administration has indicated various intentions to impose new tariffs on goods imported from China and on other U.S.
−Removed: imports and make substantial changes to trade policies, which could result in the imposition of retaliatory tariffs on U.S.
−Removed: exports in affected countries.
−Removed: Because we rely on a global sourcing strategy and significant international sales, significant changes or developments in U.S.
−Removed: and international laws and policies, such as laws and policies surrounding international trade, foreign affairs, manufacturing and development and investment in the territories and countries where we or our customers operate, could increase our costs, increase our customers’ costs and adversely impact our customers’ business and financial condition, make our products less competitive in the U.S.
−Removed: and other markets affected by such actions, and materially adversely affect our business and financial condition.
−Removed: Although the ultimate scope and timing of any such tariffs or changes to trade policies is indeterminable, if implemented, they could have a significant impact on our results of operations and financial condition.
Public health crises have in the past and may in the future have a material adverse impact on our business, financial condition and results of operations.
13 unchanged sentences
Our products and operations are subject to extensive government regulation and oversight both in the United States and abroad.
−Removed: If we fail to obtain and maintain necessary regulatory approvals for the Zephyr Valve and related products, or if approvals for future products and indications are delayed or not issued, it will negatively affect our business, financial condition and results of operations.
+Added: If we fail to obtain and maintain necessary regulatory approvals for the Zephyr Valve and
+Added: related products, or if approvals for future products and indications are delayed or not issued, it will negatively affect our business, financial condition and results of operations.
The Zephyr Valve, and any other medical device products for which we obtain the necessary approvals are subject to extensive regulation by the FDA in the United States and comparable foreign regulatory authorities abroad.
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Similar changes in the past have resulted in reduced payments as well as added costs and have added more complex regulatory and administrative requirements.
−Removed: Further changes in federal, state, local and third-party payor regulations or policies may negatively affect our business, financial condition and results of operations.
+Added: Further changes in federal, state, local and third-party payor regulations or policies may negatively
+Added: affect our business, financial condition and results of operations.
Actions by agencies regulating insurance or changes in other laws, regulations, or policies may also negatively affect our business, financial condition and results of operations.
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For those devices that we place on the market in the EU on the basis of the transitional provisions of the MDR, we intend to complete conformity assessment procedures for such medical devices in accordance with the MDR prior to the expiration of our existing CE Certificate(s) of Conformity issued by our Notified Body, BSI, issued on the basis of the MDD, in accordance with the transitional provisions of the MDR.
−Removed: The changes to the regulatory system implemented in the EU by the MDR include stricter requirements
−Removed: for clinical evidence and pre-market assessment of safety and performance, new classifications to indicate risk levels, requirements for third party testing by Notified Bodies, tightened and streamlined quality management system assessment procedures and additional requirements for the quality management system, additional requirements for traceability of products and transparency as well a refined responsibility of economic operators.
+Added: The changes to the regulatory system implemented in the EU by the MDR include stricter requirements for clinical evidence and pre-market assessment of safety and performance, new classifications to indicate risk levels, requirements for third party testing by Notified Bodies, tightened and streamlined quality management system assessment procedures and additional requirements for the quality management system, additional requirements for traceability of products and transparency as well a refined responsibility of economic operators.
We are also required to provide clinical data in the form of a clinical evaluation report.
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Disruptions at the FDA and other agencies may also slow the time necessary for new devices to be reviewed and/or approved or cleared by necessary government agencies, which would adversely affect our business.
−Removed: For example, over the last several years, including for 35 days beginning on December 22, 2018, the U.S.
+Added: For example, over the last several years, including for 43 days beginning on October 1, 2025, the U.S.
government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA employees and stop critical activities.
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• federal criminal laws that prohibit executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;
−Removed: • the federal Physician Payments Sunshine Act, created under the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, the “Affordable Care Act”) and its implementing regulations, which requires certain manufacturers of drugs, medical devices, biologicals and medical supplies for which payment is available under Medicare,
−Removed: Medicaid, or the Children’s Health Insurance Program to report annually to CMS, information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other health care professionals (such as physician assistants and nurse practitioners) and teaching hospitals, as well as information regarding ownership and investment interests held by physicians and their immediate family members;
+Added: • the federal Physician Payments Sunshine Act, created under the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, the “Affordable Care Act”) and its implementing regulations, which requires certain manufacturers of drugs, medical devices, biologicals and medical supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program to report annually to CMS, information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other health care professionals (such as physician assistants and nurse practitioners) and teaching hospitals, as well as information regarding ownership and investment interests held by physicians and their immediate family members;
• federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers;
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Additionally, as a result of these investigations, healthcare providers and entities may have to agree to additional compliance and reporting requirements as part of a consent decree or corporate integrity agreement.
−Removed: Any such investigation or settlement
−Removed: could increase our costs or otherwise negatively affect our business, financial condition and results of operations.
+Added: Any such investigation or settlement could increase our costs or otherwise negatively affect our business, financial condition and results of operations.
Even an unsuccessful challenge or investigation into our practices could cause adverse publicity and be costly to respond to.
In December 2022, we received a civil investigative demand (“CID”) from the U.S.
−Removed: Department of Justice, Civil Division in connection with an investigation under the Anti-Kickback Statute and False Claims Act (the “Investigation”).
−Removed: The CID requests information and documents regarding our relationships with certain health care providers, medical practices, and hospitals in connection with the sales and marketing of the Zephyr Valves and related products and services.
−Removed: We are fully cooperating with the Investigation.
−Removed: We are unable to express a view at this time regarding the ultimate outcome of the Investigation or estimate an amount or range of reasonably possible loss.
−Removed: Depending on the outcome of the Investigation, there could be a material impact on our business, results of operations and financial condition.
+Added: Department of Justice, Civil Division (“USDOJ”) in connection with an investigation under the False Claims Act.
+Added: The CID requested information and documents regarding our relationships with certain health care providers, medical practices, and hospitals in connection with the sales and marketing of the Zephyr Valves and related products and services.
+Added: Subsequently, on or about January 27, 2025 the US DOJ filed on behalf of itself and certain states attorneys general, a Notice of Election to Decline Intervention in and to unseal the underlying action filed by an individual (the “Relator”) in U.S.
+Added: District Court for the Northern District of California (the “Qui Tam Action”).
+Added: In December 2025, the Company entered into a settlement agreement with the Relator with approval by the US DOJ and the various states’ attorneys general who were parties to the Qui Tam Action.
+Added: The Qui Tam Action was dismissed on December 22, 2025.
Although we have adopted policies and procedures designed to comply with these laws and regulations and conduct internal reviews of our compliance with these laws, our activities, including those relating to the reporting of discount and rebate information and other information affecting federal, state and third-party reimbursement of our products (such as our patient reimbursement support program) and the sale and marketing of our products, may be subject to scrutiny under these laws.
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For those medical devices sold in the EU and for which we have obtained a CE Certificate of Conformity by a Notified Body, we must notify our Notified Body if significant changes are made to the devices or if there are substantial changes to our quality assurance systems affecting those products.
−Removed: In addition, if we make any substantial changes to medical devices for which we have obtained a CE Certificate of Conformity on the basis of the MDD and which we continue to place on the EU market on the basis of the transitional provisions of the MDR, we will no
−Removed: longer be able to benefit from the transitional provisions of the MDR.
+Added: In addition, if we make any substantial changes to medical devices for which we have obtained a CE Certificate of Conformity on the basis of the MDD and which we continue to place on the EU market on the basis of the transitional provisions of the MDR, we will no longer be able to benefit from the transitional provisions of the MDR.
Substantial changes to such devices will trigger immediate compliance with the full regulatory framework of the MDR.
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If treatment guidelines change so that different treatments become desirable, the clinical utility of one or more of our products could be diminished and will negatively affect our business, financial condition and results of operations.
−Removed: If we or our suppliers fail to comply with the FDA’s QSR or the European Union MDR, our manufacturing or distribution operations could be delayed or shut down and our revenue could suffer.
−Removed: Our manufacturing and design processes and those of our third-party suppliers are required to comply with the FDA’s QSR and the European Union MDR, including Quality Management System requirements, both of which cover procedures and documentation of the design, testing, production, control, quality assurance, labeling, packaging, storage and shipping of Zephyr Valves, the AeriSeal System, the Chartis Catheter and the Chartis Console.
+Added: If we or our suppliers fail to comply with the FDA’s QMSR or the European Union MDR, our manufacturing or distribution operations could be delayed or shut down and our revenue could suffer.
+Added: Our manufacturing and design processes and those of our third-party suppliers are required to comply with the FDA’s QMSR and the European Union MDR, including Quality Management System requirements, both of which cover procedures and documentation of the design, testing, production, control, quality assurance, labeling, packaging, storage and shipping of Zephyr Valves, the AeriSeal System, the Chartis Catheter and the Chartis Console.
We are also subject to similar state requirements and licenses, and comply with ongoing International Organization for Standardization (“ISO”) in all operations, including design, manufacturing, and service, to maintain our CE Marks.
In addition, we must engage in extensive recordkeeping and reporting and must make available our facilities and records for periodic unannounced inspections by governmental agencies, including the FDA, state authorities, competent authorities of EU Member States, European Union Notified Bodies and comparable authorities in other countries.
−Removed: If we fail a regulatory inspection, our operations could be disrupted and our
−Removed: manufacturing interrupted.
+Added: If we fail a regulatory inspection, our operations could be disrupted and our manufacturing interrupted.
Failure to take adequate corrective action in response to an adverse regulatory inspection could result in, among other things, a shutdown of our manufacturing or product distribution operations, significant fines, suspension of marketing clearances, certification and approvals, seizures or recalls of our device, operating restrictions and criminal prosecutions, any of which would negatively affect our business, financial condition and results of operations.
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The FDA has broad post-market and regulatory enforcement powers.
−Removed: We are subject to unannounced inspections by the FDA and the Food and Drug Branch of the CDPH to determine our compliance with the QSR and other regulations at our manufacturing facility, and these inspections may include the manufacturing facilities of our suppliers.
−Removed: We believe that we are in compliance, in all material respects, with the QSR.
+Added: We are subject to unannounced inspections by the FDA and the Food and Drug Branch of the CDPH to determine our compliance with the QMSR and other regulations at our manufacturing facility, and these inspections may include the manufacturing facilities of our suppliers.
+Added: We believe that we are in compliance, in all material respects, with the QMSR.
We also maintain a CE Certificate of Conformity in accordance with the MDD and a separate CE Certificate of Conformity in according with the MDR for the design and manufacture of our products issued by BSI in the Netherlands, our European Notified Body.
We believe that we are in compliance, in all material respects, with the MDD and MDR, as applicable to our products.
−Removed: We can provide no assurance that we will continue to remain in compliance with the QSR, MDR, and MDD, as applicable to our products.
+Added: We can provide no assurance that we will continue to remain in compliance with the QMSR, MDR, and MDD, as applicable to our products.
If the FDA, CDPH, BSI or competent authorities of EU Member States inspect any of our facilities and discover compliance problems, we may have to cease manufacturing and product distribution until we can take the appropriate remedial steps to correct the audit findings.
Taking corrective action may be expensive, time consuming and a distraction for management and if we experience a delay at our manufacturing facility, we may be unable to produce our solutions, which will negatively affect our business, financial condition and results of operations.
−Removed: The misuse or off-label use of our solution will harm our image in the marketplace, result in injuries that lead to product liability suits or result in costly investigations and sanctions by regulatory bodies if we are deemed to have engaged in the promotion of these uses, any of which will negatively affect our business, financial condition and results of operations.
+Added: The misuse or off-label use of our solution will harm our image in the marketplace, result in injuries that lead to product liability suits or result in costly investigations and sanctions by regulatory bodies if we are deemed to
+Added: have engaged in the promotion of these uses, any of which will negatively affect our business, financial condition and results of operations.
Our solution has been approved by the FDA for specific indications.
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Successful results of pre-clinical studies are not necessarily indicative of future clinical trial results, and predecessor clinical trial results may not be replicated in subsequent clinical trials.
−Removed: Additionally, the FDA or comparable foreign regulatory authorities may disagree with our interpretation of the data from our pre-clinical studies and clinical trials, or may find the clinical trial design, conduct or results inadequate to prove safety or efficacy, and may require us to pursue additional pre-clinical studies or clinical trials, which could further delay the clearance, certification or
−Removed: approval of our products.
+Added: Additionally, the FDA or comparable foreign regulatory authorities may disagree with our interpretation of the data from our pre-clinical studies and clinical trials, or may find the clinical trial design, conduct or results inadequate to prove safety or efficacy, and may require us to pursue additional pre-clinical studies or clinical trials, which could further delay the clearance, certification or approval of our products.
The data we collect from our pre-clinical studies and clinical trials may not be sufficient to support FDA or comparable foreign regulatory authority clearance or approval, or certification, and if we are unable to demonstrate the safety and efficacy of our future products in our clinical trials, we will be unable to obtain regulatory clearance, certification or approval to market our products.
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To the extent our collaborators or the CROs fail to enroll participants for our clinical trials, fail to conduct the study to GCP standards or are delayed for a significant time in the execution of trials, including achieving full enrollment, we may be affected by increased costs, program delays or both.
−Removed: In addition, clinical trials that are conducted in countries outside the United States may subject us to further delays and expenses as a result of increased shipment costs, additional regulatory
−Removed: requirements and the engagement of non-U.S.
+Added: In addition, clinical trials that are conducted in countries outside the United States may subject us to further delays and expenses as a result of increased shipment costs, additional regulatory requirements and the engagement of non-U.S.
CROs, as well as expose us to risks associated with clinical investigators who are unknown to the FDA, and different standards of diagnosis, screening and medical care.
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If we initiate a correction or removal for the Zephyr Valve to reduce a risk to health posed by it, we would be required to submit a publicly available correction and removal report to the FDA and, in many cases, similar reports to other regulatory authorities.
−Removed: This report could be classified by the FDA or comparable foreign regulatory authorities as a device recall which could lead to increased scrutiny by the FDA, other foreign regulatory authorities and our customers regarding the quality and safety of our solutions.
+Added: This report could be classified by the FDA or comparable foreign regulatory
+Added: authorities as a device recall which could lead to increased scrutiny by the FDA, other foreign regulatory authorities and our customers regarding the quality and safety of our solutions.
Furthermore, the submission of these reports could be used by competitors against us and cause physicians to delay or cancel prescriptions, which will harm our reputation.
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If we modify our products, we may need to apply for additional regulatory approvals or certification before we are permitted to sell the modified product.
−Removed: In addition, we may not continue to meet the quality and safety standards
−Removed: required to maintain the authorizations or certification that we have received.
+Added: In addition, we may not continue to meet the quality and safety standards required to maintain the authorizations or certification that we have received.
If we are unable to maintain our authorizations or certification in a particular country, we will no longer be able to sell the applicable product in that country.
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The IRA also eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and through a newly established manufacturer discount program.
−Removed: It is possible that the Affordable Care Act will be subject to judicial or congressional challenges in the future, including congressional legislation to modify or replace the Affordable Care Act or elements of the Affordable Care Act.
+Added: It is possible that the Affordable Care Act will be subject to judicial or congressional challenges in the future, including congressional legislation to modify or replace the
+Added: Affordable Care Act or elements of the Affordable Care Act.
It is unclear how any such challenges and the healthcare reform measures of the current administration will impact the Affordable Care Act and our business, financial condition and results of operations.
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In addition, privacy advocates and industry groups have proposed, and may propose in the future, standards by which we are legally or contractually bound to comply.
−Removed: New data privacy and information security laws are being enacted in the United States and globally, and existing ones are being updated and strengthened.
+Added: New data privacy and information security laws are being enacted in the United States on the federal, state, and local levels, and existing ones are being updated and strengthened.
+Added: Numerous U.S.
+Added: states have enacted comprehensive privacy laws that impose certain obligations on covered business, including providing specific disclosures in privacy notices and affording residents with certain rights concerning their personal data.
For example, the California Consumer Privacy Act (“CCPA”) went into effect on January 1, 2020 and requires companies that process personal data on California residents to make new disclosures to consumers about their data collection, use and sharing practices, and allow consumers to opt out of certain data sharing with third parties.
−Removed: The CCPA also provides for civil penalties for violations (up to $7,500 per intentional violation), as well as a private right of action for certain data breaches that is expected to increase data breach litigation.
−Removed: In addition, the California Privacy Rights Act of 2020 (“CPRA”), which became effective on January 1, 2023, expands the compliance requirements and rights available to consumers under the CCPA.
−Removed: The CPRA also establishes a new California Privacy Protection Agency to implement and enforce the CCPA (as amended), which could increase the risk of an enforcement action.
−Removed: As such, the CPRA may require additional compliance investment and potential business process changes in the meantime.
−Removed: Other states, such as Virginia, Colorado, Utah and Connecticut, have also passed comprehensive data privacy laws, and similar laws are being considered in several other states, as well as at the federal and local levels, and we expect more states to pass similar laws in the future.
+Added: The CCPA also provides for civil penalties for violations (up to $7,500 per intentional violation), as well as a private right of action for certain data
+Added: breaches that is expected to increase data breach litigation.
+Added: Similar laws are being considered in several other states, as well as at the federal and local levels, and we expect more states to pass similar laws in the future.
While these states, like the CCPA, also exempt some data processed in the context of clinical trials, these developments further complicate compliance efforts, and increase legal risk and compliance costs for us and the third parties with whom we work.
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Outside the United States, an increasing number of laws, regulations, and industry standards govern data privacy and information security.
−Removed: For example, the GDPR governs the processing (which can include any action, such as collection, use, storage adaptation or alteration, disclosure or transfer) of personal data relating to individuals located in Europe (including the UK).
+Added: For example, the European Union’s General Data Protection Regulation (“EU GDPR”), the United Kingdom’s GDPR (“UK GDPR”) (collectively, “GDPR”) governs the processing (which can include any action, such as collection, use, storage adaptation or alteration, disclosure or transfer) of personal data relating to individuals located in Europe (including the UK).
Among other things, the GDPR sets out extensive compliance requirements, including providing detailed disclosures about how personal data is collected and processed, demonstrating that an appropriate legal basis is in place to justify data processing activities;
granting various rights for data subjects in regard to their personal data, such as the right to delete certain personal data, as well as enhancing pre-existing rights (e.g., data subject access requests);
−Removed: introducing the obligation to notify data protection regulators or supervisory authorities
−Removed: (and in certain cases, affected individuals) of significant data breaches;
+Added: introducing the obligation to notify data protection regulators or supervisory authorities (and in certain cases, affected individuals) of significant data breaches;
imposing limitations on retention of personal data;
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and expanding the definition of personal data to include coded data and requiring changes to informed consent practices, as well as more detailed notices for clinical trial subjects and investigators.
−Removed: The GDPR imposes substantial fines for breaches and violations (up to the greater of €20 million, £17.5 million, or, in each case, 4% of our global turnover, whichever is greater).
+Added: The GDPR imposes substantial fines for breaches and violations (up to the greater of €20 million, £17.5 million, or, in each case, 4% of our global turnover, whichever is greater), and companies may also face temporary or definitive bans on data processing and other corrective actions.
The GDPR also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies and obtain compensation for damages resulting from violations of the GDPR.
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Other jurisdictions may adopt or have already adopted similarly stringent data localization and cross-border data transfer laws.
−Removed: Although there are currently various mechanisms that may be used to transfer personal data from the EEA and UK to the United States in compliance with law, such as the EEA and UK’s standard contractual clauses, the UK’s International Data Transfer Agreement / Addendum, and the EU-U.S.
+Added: Although there are currently various mechanisms that may be used to transfer personal data from the EEA and UK to the United States in compliance with law, such as the EEA standard contractual clauses, the UK’s International Data Transfer Agreement / Addendum, and the EU-U.S.
Data Privacy Framework and the UK extension thereto (which allows for transfers to relevant U.S.-based organizations who self-certify compliance and participate in the Framework), these mechanisms are subject to legal challenges, and there is no assurance that we can satisfy or rely on these measures to lawfully transfer personal data to the United States.
If there is no lawful manner for us to transfer personal data from the EEA, the UK or other jurisdictions to the United States, or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against our processing or transferring of personal data necessary to operate our business.
−Removed: Additionally, companies that transfer personal data out of the EEA and UK to other jurisdictions, particularly to the United States, are subject to increased scrutiny from regulators, individual litigants, and activist groups.
+Added: Additionally, companies that transfer personal data out of the EEA and UK to other jurisdictions, particularly to the United States, are subject to increased scrutiny from regulators, individual litigants, and activist
Some European regulators have ordered certain companies to suspend or permanently cease certain transfers out of Europe for allegedly violating the GDPR’s cross-border data transfer limitations.
−Removed: Regulators in the United States such as the Department of Justice are also increasingly scrutinizing certain personal data transfers and have enacted data localization requirements, including, for example, the executive order on Preventing Access to Americans’ Bulk Sensitive Personal Data and United States Government-Related Data by Countries of Concern issued in February 2024.
+Added: Additionally, the U.S.
+Added: Department of Justice issued a rule entitled the Preventing Access to U.S.
+Added: Sensitive Personal Data and Government-Related Data by Countries of Concern or Covered Persons, which places additional restriction on certain data transactions involving countries of concern (e.g., China, Russia, Iran) and covered individuals (i.e., individuals and entities located in or controlled by individuals or entities located in those jurisdictions) that may impact certain business activities such as vendor engagements, employment of certain individuals, and investor agreements.
+Added: Violations of the rule could lead to significant civil and criminal fines and penalties.
+Added: The rule applies regardless of whether data is anonymized, key-coded, pseudonymized, de-identified or encrypted.
We cannot assure you that our third-party service providers with access to our or our customers’, suppliers’, trial patients’ and employees’ personal data and other sensitive or confidential information in relation to which we are responsible will not breach contractual obligations imposed by us, or that they will not experience security incidents or attempts thereof, which could have a corresponding effect on our business, including putting us in breach of our obligations under privacy and information security laws and regulations, which could in turn adversely affect our business, results of operations and financial condition.
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Moreover, complying with the various data privacy and information security laws that are applicable to us could require us to take on more onerous obligations in our contracts, restrict our ability to collect, use and disclose data, or in some cases, impact our ability to operate in certain jurisdictions.
−Removed: In addition, these obligations may require us
−Removed: to change our business model.
−Removed: Any failure (or perceived failure) to comply could result in government enforcement actions (which could include civil or criminal penalties), private litigation, imprisonment of company officials, and/or adverse publicity and could negatively affect our operating results and business.
+Added: In addition, these obligations may require us to change our business model.
+Added: Any failure (or perceived failure) to comply could result in government enforcement actions (which could include civil or criminal penalties), private litigation and mass arbitration demands, additional reporting requirements and/or oversight, bans or restrictions on processing personal data, orders to destroy or not use personal data, imprisonment of company officials, and/or adverse publicity and could negatively affect our operating results and business.
+Added: In particular, plaintiffs have become increasingly more active in bringing privacy-related claims against companies, including class claims and mass arbitration demands.
+Added: Some of these claims allow for the recovery of statutory damages on a per violation basis, and, if viable, carry the potential for monumental statutory damages, depending on the volume of data and the number of violations.
Claims that we have violated individuals’ privacy rights, failed to comply with privacy laws, or breached our contractual obligations, even if we are not found liable, could be expensive and time consuming to defend, could result in adverse publicity and could have a material adverse effect on our business, financial condition, and results of operations.
−Removed: Our employees and personnel use generative AI technologies to perform their work, and the disclosure and use of personal data in generative AI technologies is subject to various privacy laws and other privacy obligations.
+Added: Our employees and personnel use generative AI (“AI”) technologies to perform their work, and the disclosure and use of personal data in generative AI technologies is subject to various privacy laws and other privacy obligations.
Governments have passed and are likely to pass additional laws regulating generative AI.
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Several jurisdictions around the globe, including Europe and certain U.S.
−Removed: states, have proposed or enacted laws governing AI/machine learning (“ML”).
+Added: states, have proposed or enacted laws governing AI technologies.
For example, European regulators enacted a stringent AI regulation, and we expect other jurisdictions will adopt similar laws.
−Removed: Additionally, certain privacy laws extend rights to consumers (such as the right to delete certain personal data) and regulate automated decision making, which may be incompatible with our use of AI/ML.
−Removed: These obligations may make it harder for us to conduct our business using AI/ML, lead to regulatory fines or penalties, require us to change our business practices, retrain our AI/ML, or prevent or limit our use of AI/ML.
−Removed: For example, the FTC has required other companies to turn over (or disgorge) valuable insights or trainings generated through the use of AI/ML where they allege the company has violated privacy and consumer protection laws.
−Removed: If we cannot use AI/ML or that use is restricted, our business may be less efficient, or we may be at a competitive disadvantage.
+Added: Additionally, certain privacy laws extend rights to consumers (such as the right to delete certain personal data) and regulate automated decision making, which may be incompatible with our use of AI.
+Added: These obligations may make it harder for us to conduct our business using AI, lead to regulatory fines or penalties, require us to change our business practices, retrain our AI, or prevent or limit our use of AI.
+Added: the FTC has required other companies to turn over (or disgorge) valuable insights or trainings generated through the use of AI where they allege the company has violated privacy and consumer protection laws.
+Added: If we cannot use AI or that use is restricted, our business may be less efficient, or we may be at a competitive disadvantage.
We face potential liability related to the privacy of health information we obtain.
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Misconduct by these parties could include intentional, reckless or negligent conduct or other unauthorized activities that violate the regulations of the FDA and non-U.S.
−Removed: regulators, including those laws requiring the reporting of true, complete and accurate information to such regulators, manufacturing standards, healthcare fraud and abuse laws and regulations in the United States and internationally or laws that require the true, complete and accurate reporting of financial information or data.
+Added: including those laws requiring the reporting of true, complete and accurate information to such regulators, manufacturing standards, healthcare fraud and abuse laws and regulations in the United States and internationally or laws that require the true, complete and accurate reporting of financial information or data.
In particular, sales, marketing and business arrangements in the healthcare industry, including the sale of medical devices, are subject to extensive laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices.
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Additionally, our products include components that we purchase from vendors, and may include design components that are outside of our direct control.
−Removed: Our competitors, many of which have substantially greater resources and have made substantial investments in patent portfolios, trade secrets, trademarks, and competing technologies, may have applied for or obtained, or may in the future apply for or obtain, patents or trademarks that will prevent, limit or otherwise interfere with our ability to make, use, sell or export our products or to use our technologies or product names.
+Added: Our competitors, many of which have substantially greater resources and have made substantial investments in patent portfolios, trade secrets, trademarks, and competing technologies, may have applied for or obtained, or may in the future apply for or obtain, patents or trademarks that will prevent, limit or otherwise interfere with our ability to make, use, sell or export our
+Added: products or to use our technologies or product names.
Moreover, in recent years, individuals and groups that are non-practicing entities, commonly referred to as patent trolls, have purchased patents and other intellectual property assets for the purpose of making claims of infringement in order to extract settlements.
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Despite our efforts to protect our proprietary rights, unauthorized parties may be able to obtain and use information that we regard as proprietary.
−Removed: In addition, the issuance of a patent does not ensure that it is valid or enforceable, so even if we obtain patents, they may not be valid or enforceable against
−Removed: third parties.
+Added: In addition, the issuance of a patent does not ensure that it is valid or enforceable, so even if we obtain patents, they may not be valid or enforceable against third parties.
Our patent applications may not result in issued patents and our patents may not be sufficiently broad to protect our technology.
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These contracts may not provide meaningful protection for our trade secrets, know-how, or other proprietary information in the event of any unauthorized use, misappropriation, or disclosure of such trade secrets, know-how, or other proprietary information.
−Removed: There can be no
−Removed: assurance that such third parties will not breach their agreements with us, that we will have adequate remedies for any breach, or that our trade secrets will not otherwise become known or independently developed by competitors.
+Added: There can be no assurance that such third parties will not breach their agreements with us, that we will have adequate remedies for any breach, or that our trade secrets will not otherwise become known or independently developed by competitors.
Despite the protections we do place on our intellectual property or other proprietary rights, monitoring unauthorized use and disclosure of our intellectual property is difficult, and we do not know whether the steps we have taken to protect our intellectual property or other proprietary rights will be adequate.
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The USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process.
−Removed: In addition, periodic maintenance fees on issued patents often must be paid to the USPTO and foreign patent agencies over the lifetime of
+Added: In addition, periodic maintenance fees on issued patents often must be paid to the USPTO and foreign patent agencies over the lifetime of the patent.
While an unintentional lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction.
6 unchanged sentences
The requirements for patentability and trademarking may differ in certain countries, particularly developing countries.
−Removed: The laws of some foreign countries do not protect intellectual property rights to the same extent as laws in the United States.
+Added: The laws of some foreign countries do not protect
+Added: intellectual property rights to the same extent as laws in the United States.
Consequently, we may not be able to prevent third parties from utilizing our inventions and trademarks in all countries outside the United States.
13 unchanged sentences
Some of these employees, consultants and contractors, may have executed proprietary rights, non-disclosure and non-competition agreements in connection with such previous employment.
−Removed: Although we try to ensure that our employees and consultants do not use the intellectual property, proprietary information, know-how or trade secrets of others in their
−Removed: work for us, we may be subject to claims that we or these individuals have, inadvertently or otherwise, misappropriated the intellectual property or disclosed the alleged trade secrets or other proprietary information, of these former employers or competitors.
+Added: Although we try to ensure that our employees and consultants do not use the intellectual property, proprietary information, know-how or trade secrets of others in their work for us, we may be subject to claims that we or these individuals have, inadvertently or otherwise, misappropriated the intellectual property or disclosed the alleged trade secrets or other proprietary information, of these former employers or competitors.
Additionally, we may be subject to claims from third parties challenging our ownership interest in intellectual property we regard as our own, based on claims that our employees or consultants have breached an obligation to assign inventions to another employer, to a former employer, or to another person or entity.
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Any litigation or the threat thereof may adversely affect our ability to hire employees or contract with independent sales personnel.
−Removed: A loss of key personnel or their work product could hamper or prevent our ability to commercialize our products, which could have an adverse effect on our business, financial condition and results of operations.
+Added: A loss of key personnel or their work product could hamper or prevent our ability to
+Added: commercialize our products, which could have an adverse effect on our business, financial condition and results of operations.
Changes in patent law could diminish the value of patents in general, thereby impairing our ability to protect our existing and future products.
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We have not yet registered certain of our trademarks and as a result we sell certain products using names that may not be protected or may be subject to third party challenges for infringement of such third party’s trademarks.
−Removed: We cannot assure you that our trademark applications will be approved.
+Added: We cannot assure you that our trademark
+Added: applications will be approved.
During trademark registration proceedings, we may receive rejections.
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and extension is available for only those claims covering the approved device, a method for using it, or a method for manufacturing it.
−Removed: We have applied for such an extension
−Removed: however, the applicable authorities, including the FDA and the USPTO in the United States, and any equivalent regulatory authority in other countries, may not agree with our assessment of whether such extensions are available, and may refuse to grant extensions to any patents we obtain, or may grant more limited extensions than we request.
+Added: We have applied for such an extension however, the applicable authorities, including the FDA and the USPTO in the United States, and any equivalent regulatory authority in other countries, may not agree with our assessment of whether such extensions are available, and may refuse to grant extensions to any patents we obtain, or may grant more limited extensions than we request.
An extension may not be granted or may be limited where there is, for example, a failure to exercise due diligence during the testing phase or regulatory review process, failure to apply within applicable deadlines, failure to apply before expiration of relevant patents, or some other failure to satisfy applicable requirements.
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Broad market and industry fluctuations, as well as general economic, political, regulatory, and market conditions, may negatively impact the market price of our common stock.
−Removed: In addition, given the relatively small expected public float of shares of our common stock on the Nasdaq Global Select Market, the trading market for our shares may be
−Removed: subject to increased volatility.
+Added: In addition, given the relatively small expected public float of shares of our common stock on the Nasdaq Global Select Market, the trading market for our shares may be subject to increased volatility.
In the past, companies that have experienced volatility in the market price of their securities have been subject to securities class action litigation.
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If, notwithstanding our efforts, we fail to comply with evolving laws, regulations, and standards, regulatory authorities may initiate legal proceedings against us, and our business may be harmed.
−Removed: Failure to comply with these rules might also make it more difficult for us to obtain certain types of insurance, including director and officer liability insurance, and we might be forced to accept reduced policy limits and coverage or incur substantially higher costs to
−Removed: obtain the same or similar coverage.
+Added: Failure to comply with these rules might also make it more difficult for us to obtain certain types of insurance, including director and officer liability insurance, and we might be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage.
We cannot predict or estimate the amount of additional costs we will incur as a public company or the specific timing of such costs.
15 unchanged sentences
Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware and, to the extent enforceable, the federal district courts of the United States are the exclusive forums for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
−Removed: Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware lacks subject matter jurisdiction, any state court located within
−Removed: the State of Delaware or, if all such state courts lack subject matter jurisdiction, the federal district court for the District of Delaware) is the sole and exclusive forum for the following types of actions or proceedings under Delaware statutory or common law for:
+Added: Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware lacks subject matter jurisdiction, any state court located within the State of Delaware or, if all such state courts lack subject matter jurisdiction, the federal district court for the District of Delaware) is the sole and exclusive forum for the following types of actions or proceedings under Delaware statutory or common law for:
• any derivative action or proceeding brought on our behalf;
6 unchanged sentences
Accordingly, both state and federal courts have jurisdiction to entertain such claims and there is uncertainty as to whether a court would enforce such a forum selection provision as written in connection with claims arising under the Securities Act.
−Removed: To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our amended and restated certificate of incorporation further provides that the federal district courts of the United States are the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.
+Added: To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our amended and restated certificate of incorporation further provides that the federal district courts of the United States are the
+Added: exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.
Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and to have consented to the provisions of our amended and restated certificate of incorporation described above.
5 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.