What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2025-03-31 compared with 2024-03-29 · 129 added, 91 removed, 18 unchanged (92% of the section changed)

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities .

Market for Registrant’s Common Equity, Related Stockholder

Matters and Issuer Purchases of Equity Securities .

Market Information

3 unchanged sentences

under the symbols “MDAI” and “MDAIW”, respectively.

As of March 25, 2024,

there were at least 4,893 holders of record of 17,466,871 shares of our Common Stock and 25 holders of record of our redeemable

We have not declared or paid any dividends

on our capital stock to date.

We anticipate that we will retain all of our future earnings, if any, for use in the operation and expansion

of our business and do not anticipate paying cash dividends in the foreseeable future.

Any future determination related to our dividend

policy will be made at the discretion of our board of directors after considering our business prospects, results of operations, financial

condition, cash requirements and availability, debt repayment obligations, capital expenditure needs, contractual restrictions, covenants

in the agreements governing current and future indebtedness, industry trends, the provisions of Delaware law affecting the payment of

dividends and distributions to stockholders and any other factors or considerations the Board deems relevant.

Securities Authorized for Issuance

Under Equity Compensation Plans

We previously maintained the Spectral

MD Holdings, Ltd.

2018 Long Term Incentive Plan (the “2018 Plan”), which provided for the discretionary grant of incentive

stock options, non-qualified stock options, stock appreciation rights, restricted stock, stock units, performance shares, performance

units, incentive bonus awards and other cash-based or stock-based awards to our eligible employees, directors and consultants, including

the named executive officers.

3,526,200 shares of our Common Stock are issuable upon the exercise of outstanding options under the 2018

Long Term Incentive Plan.

We also previously maintained

the Spectral MD Holdings, Ltd.

2022 Long Term Incentive Plan (the “2022 Plan”).

The 2022 Plan provides for the discretionary

grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, stock units, performance shares,

performance units, incentive bonus awards and other cash-based or stock-based awards to our employees, directors and consultants.

the 2022 Long Term Incentive Plan, 88,749 shares of common stock are issuable upon the exercise of outstanding options and 58,197

RSUs are issuable.

As of December 31, 2023, 1,792,918 shares remain available for issuance through grants of future options.

As of March 26, 2025, there were at least 1,600 holders of record of

25,317,196 shares of our Common Stock and 15 holders of record of our redeemable warrants.

We have not declared or

paid any dividends on our capital stock to date.

We anticipate that we will retain all of our future earnings, if any, for use in the

operation and expansion of our business and do not anticipate paying cash dividends in the foreseeable future.

Any future determination

related to our dividend policy will be made at the discretion of our board of directors after considering our business prospects, results

of operations, financial condition, cash requirements and availability, debt repayment obligations, capital expenditure needs, contractual

restrictions, covenants in the agreements governing current and future indebtedness, industry trends, the provisions of Delaware law

affecting the payment of dividends and distributions to stockholders and any other factors or considerations the Board deems relevant.

Securities Authorized for Issuance Under Equity

Compensation Plans

In 2024, we awarded options

to key employees (including our named executive officers) for retention, engagement and bonus compensation awards.

These awards are designed

to align a portion of our named executive officers’ compensation with the interests of our existing stockholders and to build retention

value by incentivizing our named executive officers to remain in our service.

As part of the Business Combination Agreement,

the outstanding securities issuable under the 2018 Plan and 2022 Plan will be exchanged for shares of the Company’s 2023 Long-Term

Incentive Plan upon approval by the Company’s stockholders at the next annual meeting.

Information related to this item will be

contained in our 2024 Proxy Statement under the heading “Proposal 2 – Ratification of the 2023 Long Term Incentive Plan.

and restricted stock units to key employees (including our named executive officers) for retention, engagement and bonus compensation

These awards are designed to align a portion of our named executive officers’ compensation with the interests of our existing

stockholders and to build retention value by incentivizing our named executive officers to remain in our service.

2018 Long Term Incentive Plan

On July 24, 2018, Legacy

Spectral’s Board of Directors adopted the 2018 Long Term Incentive Plan (the “2018 Plan”) which permitted granting

of incentive stock options (which must meet all statutory requirements), non-qualified stock options, stock appreciation rights, restricted

stock, stock units, performance shares, performance units, incentive bonus awards, and other cash-based or stock-based awards.

2024, all awards outstanding under the 2018 Plan were replaced with corresponding awards to be issued pursuant to the 2023 Plan, as discussed

below, and no new grants will be made under the 2018 Plan.

2022 Long Term Incentive Plan

On September 27, 2022, Legacy

Spectral’s stockholders approved the adoption of the 2022 Long Term Incentive Plan (the “2022 Plan”) which permitted

granting of incentive stock options (they must meet all statutory requirements), non-qualified stock options, stock appreciation rights,

restricted stock, stock units, performance shares, performance units, incentive bonus awards, and other cash-based or stock-based awards.

In May 2024, all awards outstanding under the 2022 Plan were replaced with corresponding awards to be issued pursuant to the 2023 Plan,

as discussed below, and no new grants will be made under the 2022 Plan.

2023 Long Term Incentive Plan

On May 14, 2024, the Company’s shareholders approved the adoption

of the 2023 Long Term Incentive Plan (the “2023 Plan”) which permits granting of incentive stock options (they must meet all

statutory requirements), non-qualified stock options, stock appreciation rights, restricted stock, stock units, performance shares, performance

units, incentive bonus awards, and other cash-based or stock-based awards.

The options, restricted stock units and other securities issued

pursuant to the 2018 Plan and 2022 Plan have been replaced with a corresponding award to be issued pursuant to the 2023 Plan.

No new grants

will be made under the 2022 Plan and the 2018 Plan and all outstanding grants under the 2018 Plan and 2022 Plan will be assumed by the

The maximum aggregate number of shares that may be issued under the Plan shall not exceed 8,000,000.

The Board of Directors

may increase the number of shares in the Plan by adding additional shares on January 1st of each year for a period of up to ten years,

commencing on January 1, 2024 and ending on (and including) January 1, 2033, in an amount equal to the lesser of (i) five percent (5%)

of the total number of shares of stock outstanding on December 31st of the preceding calendar year, and (ii) an amount determined by the

Board of Directors.

No new shares were added to the Plan in 2025.

Pursuant to the 2023 Plan, stock options must expire within 10 years

and must be granted with exercise prices of no less than the fair value of the common stock on the grant date, as determined by the Board

of Directors.

As of December 31, 2024, under the 2023 Plan, 3,594,488 shares of common stock were issuable upon exercise of outstanding

options and 169,400 restricted stock units (“RSUs”) were issuable.

Under the 2023 Plan, 4,236,113 shares remain available

for issuance through grants of future options.

RSUs awarded under the 2023 Plan for the purchase of common stock will vest based on continued

service which is generally three years or based on the achievement of market terms as set forth in the individual awards.

The grant date

fair value of the award will be recognized as compensation expense over the requisite service period.

The fair value of the RSUs is estimated

on the date of grant based on the fair value of the Company’s common stock.

The 2023 Plan provides that the Compensation Committee

shall determine the vesting conditions of awards granted under the 2023 Plan, and the Compensation Committee has, from time-to-time, approved

vesting schedules for certain awards that deviate from the vesting conditions described in the previous sentence.

Performance Graph

The performance graph has been omitted

as permitted under rules applicable to smaller reporting companies.

The performance graph has

been omitted as permitted under rules applicable to smaller reporting companies.

Recent Sales of Unregistered Securities;

Use of Proceeds from Registered Offerings

of Proceeds from Registered Offerings

Unregistered Securities

Yorkville Standby Equity

Purchase Agreement

Yorkville Standby Equity Purchase Agreement

On March 20, 2024, the Company

entered into the Standby Equity Purchase Agreement (“SEPA”) with YA II PN, LTD, a Cayman Islands exempt limited partnership

(“Yorkville”) pursuant to which the Company has the right to sell to Yorkville up to $30,000,000 of its shares of Common Stock,

subject to certain limitations and conditions set forth in the SEPA, from time to time during the term of the SEPA (such transaction,

(“Yorkville”) pursuant to which the Company has the right to sell to Yorkville up to $30,000,000 of its shares of Common

Stock, subject to certain limitations and conditions set forth in the SEPA, from time to time during the term of the SEPA (such transaction,

the “Yorkville Transaction”).

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sales, are at the Company’s option, and the Company is under no obligation to sell any shares of Common Stock to Yorkville under

the SEPA except in connection with notices that may be submitted by Yorkville, as described in the SEPA.

While the Convertible Notes were outstanding, Yorkville was able to issue share purchase notices, as described in the SEPA.

In connection with the SEPA, and subject to the conditions set forth

therein, Yorkville has agreed to advance to the Company in the form of convertible promissory notes (the “Convertible Notes”)

an aggregate principal amount of up to $12,500,000 million (the “Pre-Paid Advance”), which will be paid in three tranches.

The first Pre-Paid Advance was disbursed on March 20, 2024 in the amount of $5,000,000 with a fixed conversion price of $3.16, the second

Pre-Paid Advance shall be in a principal amount of $5,000,000 and advanced after the earlier of the registration statement registering

the resale of the shares of Common Stock issuable under the SEPA being declared effective and or shareholder approval to exceed the 19.99%

threshold of the aggregate number of shares of Common Stock issued pursuant to the SEPA (the “Exchange Cap”) with a fixed

conversion price equal to 120% of the average VWAP during the three trading days immediately prior to the issuance of the note (the “Second

Pre-Advance Closing”), and the third Pre-Paid Advance shall be in a principal amount of $2,500,000 and advanced sixty days following

the Second Pre-Advance Closing with a fixed conversion price equal to 120% of the average VWAP during the three trading days immediately

prior to the issuance of the note.

The purchase price for the Pre-Paid Advance is 92.0% of the principal amount of the Pre-Paid Advance.

Interest shall accrue on the outstanding balance of any Pre-Paid Advance at an annual rate equal to 0%, subject to an increase to 18%

upon an event of default as described in the Convertible Notes.

The maturity date of the Convertible Note issue in connection with each

Pre-Paid Advance will be 12 months after the issuance date of such Convertible Note.

Beginning on the forty-fifth

(45th) day following the issuance date of Convertible Note issued in connection with the first Pre-Paid Advance, and continuing on the

same day of each successive month thereafter, (each, an “Installment Date”), the Company shall repay a portion of the outstanding

balance of the Pre-Paid Advance in an amount equal to (i) $1,750,000, provided however, in respect of any Installment Date prior to the

closing of the second Pre-Paid Advance, $750,000 (the “Installment Principal Amount”), plus (ii) the a payment premium of

7% of such Installment Principal Amount, and (iii) accrued and unpaid interest hereunder as of each Installment Date.

Riley Committed Equity

December 26, 2023, the Company entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) with B.

Riley Principal

Capital II, LLC (“B.

Riley”), pursuant to which, upon the terms and subject to the satisfaction of the conditions contained

in the Purchase Agreement, we have the right, in our sole discretion, to sell to B.

Riley up to $10,000,000 of shares of the Common Stock

(subject to certain limitations contained in the Purchase Agreement), from time to time during the term of the Purchase Agreement through

a Market Open Purchase or an Intraday Purchase on any Purchase Date (each term as defined in the Purchase Agreement).

Sales of Common

Stock pursuant to the Purchase Agreement, and the timing of any sales, are solely at our option, and we are under no obligation to sell

any securities to B.

therein, Yorkville had previously agreed to advance to the Company, in the form of convertible promissory notes (the “Convertible

Notes”), an aggregate principal amount of up to $12,500,000 million (the “Pre-Paid Advance”), which was paid in three

The first Pre-Paid Advance was disbursed on March 20, 2024 in the amount of $5,000,000 with a fixed conversion price of $3.16.

The Company received $4,600,000 in cash, net of the 8% original issue discount.

On May 14, 2024, the shareholders voted to approve the

reservation and issuance of shares to Yorkville if needed to exceed the beneficial ownership limitation and the second Pre-Paid Advance

was disbursed on May 16, 2024 in the amount of $4,600,000, which was the $5,000,000 second Pre-Paid Advance net of $400,000 of the 8%

original issue discount, with a fixed conversion price of $2.03.

The third Pre-Paid Advance was disbursed on July 17, 2024 in the principal

amount of $2,300,000, which is the $2,500,000 third Pre-Paid Advance net of the $200,000 of the 8% original issue discount, with a fixed

conversion price equal to 120% of the average VWAP during the three trading days immediately prior to the issuance of the note.

price for the Pre-Paid Advance is 92.0% of the principal amount of the Pre-Paid Advance.

Interest shall accrue on the outstanding balance

of any Pre-Paid Advance at an annual rate equal to 0%, subject to an increase to 18% upon an event of default as described in the Convertible

The maturity date of the Convertible Note issue in connection with each Pre-Paid Advance was12 months after the issuance date of

such Convertible Note.

Beginning on the forty-fifth (45th) day following the issuance date

of the Convertible Note issued in connection with the first Pre-Paid Advance, and continuing on the same day of each successive month

thereafter, (each, an “Installment Date”), the Company shall repay a portion of the outstanding balance of the Pre-Paid Advance

in an amount equal to (i) $1,750,000, plus (ii) a payment premium of 7% of such Installment Principal Amount, and (iii) accrued and unpaid

interest hereunder as of each Installment Date, if any.

In October 2024, the Company and Yorkville agreed to amend the Installment Dates

and the allocation of installment amounts to be paid pursuant to the Pre-Paid Advances, such that the outstanding balance of the Pre-Paid

Advances was paid in full on February 17, 2025.

As of December 31, 2024, $7,768,508 of the outstanding balance of the Pre-Paid Advances

was paid in cash and $2,400,000 has been paid in shares of the Company issued under the SEPA.

The Company still has access to the remaining

funds under the SEPA.

The sales of the shares of Common Stock to Yorkville under the SEPA, and the timing of any such sales, are at the

Company’s option.

The Company paid no interest relating to the Convertible Notes.

Riley Committed Equity Facility

On December 26, 2023, the

Company entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) with B.

Riley Principal Capital II, LLC

Riley”), pursuant to which, upon the terms and subject to the satisfaction of the conditions contained in the Purchase

Agreement, we have the right, in our sole discretion, to sell to B.

Riley up to $10,000,000 of shares of the Common Stock (subject to

certain limitations contained in the Purchase Agreement), from time to time during the term of the Purchase Agreement through a Market

Open Purchase or an Intraday Purchase on any Purchase Date (each term as defined in the Purchase Agreement).

Sales of Common Stock pursuant

to the Purchase Agreement, and the timing of any sales, are solely at our option, and we are under no obligation to sell any securities

Riley under the Purchase Agreement (such transaction, the “B.

Riley Transaction”).

We have previously raised $2.7 million

from share issuances under the B.

Riley Transaction.

The Company maintained the right to raise up to $3,000,000 of shares of its Common

Stock from the B.

Riley transaction upon execution of the SEPA with Yorkville.

Use of Proceeds

There has been no material change in the planned use of the proceeds

from the Business Combination, as is described in the Company’s final prospectus (Registration No.

333-275218), as filed with the

SEC on January 2, 2024.

Additionally, there has been no material change in the planned use of proceeds from the B.

Riley Transaction or

the Yorkville Transaction, as is described in the Company’s final prospectus (Registration No.

333-2764-6), as filed with the

SEC on February 1, 2024.

For a description of the use of the proceeds generated from the different financings, see “Item 1.

There has been no material

change in the planned use of the proceeds from the B.

Riley transaction or the Yorkville SEPA, as is described in the Company’s

final prospectuses related to the B.

Riley Transaction (Registration No.

333-276406), as filed with the SEC on January 2, 2024, and the

Yorkville Transaction (Registration No.

333-278610), as filed with the SEC on February 1, 2024.

For a description of the use of the proceeds

generated from the different financings, see “Item 1.

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

What changed 10-K

Item 5. Market for Registrant’s Common Equity