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Item 1. Business

2026-03-25 compared with 2025-03-31 · 1230 added, 1390 removed, 1867 unchanged (58% of the section changed)

We are an Artificial Intelligence (“AI”) company focused

Business Overview.

We are an AI company focused

on predictive medical diagnostics.

Our DeepView System uses proprietary AI algorithms to distinguish between fully damaged, partially

damaged and healthy human tissue characteristics invisible to the naked eye, at the initial time point of wound presentation.

System delivers a binary prediction on the wounds capacity to heal or not-heal by a specified time point in the future.

Our DeepView System’s

output is specifically engineered to assist the physician in making a more accurate, timely and informed decision regarding the treatment

of the patient’s wounds.

Our focus from 2013 through 2021 was on the burn indication.

We were notified that our DeepView System, comprised of the multispectral

imaging (“MSI”) component integrated with the predictive AI-Burn ® software component received United Kingdom

Conformity Assessed (“UKCA”) marking for use in the United Kingdom for burn indications on February 22, 2024.

The UKCA marking

registration was fully completed on March 7, 2024.

We anticipate that our full DeepView System may achieve Class II medical device designation

with the United States Food and Drug Administration (FDA) via a De Novo application.

Subject to our receipt of additional necessary market

authorization, our business will have two revenue streams, a SaaS (software as a service) model component predicated on utilizing the

regulatory method, SaMD (software as a medical device), and the imaging device component.

The SaaS component will feature a software licensing

fee that includes maintenance, image hosting, and access to algorithmic updates.

The proprietary imaging device acquires the images for

the AI algorithms and is a universal platform to house multiple clinical indications including burn wound healing analysis and other tissue

indication assessments.

Pricing for these components will be evaluated and strategically set per country and site-of-service for

heightened customer adoption.

The MSI imaging technology, which comprises one part of the DeepView

System, consists of patented proprietary multi-spectral optics and sensors, capturing injured tissue images ranging from near UV light,

through the human visible wavelengths, all the way into the near infrared range (NIR).

The broad wavelength ranges go beyond what the

human eyes can see and capture what medical professionals cannot observe with their naked eyes.

This wide range of wavelength images contains

wound tissue physiology and captures the viability of various biomarkers within the skin and from the injured tissue spectral signatures.

The imaging technology extracts appropriate clinical data, processes the image data to provide the injured tissue spectral signatures

to the AI model and algorithms.

The AI algorithm classifies various severities of the injuries as (i) fully damaged (non-healing),

(ii) partially damaged or (iii) healthy tissue (healing) and displays a comparison of the original image next to an image with

a color overlay of the non-healing portions of the wound.

The image acquisition takes 0.2 seconds, and all image processing and AI model

classification takes approximately 20 to 25 seconds.

Our DeepView System’s proprietary optics can extract millions of pixels of

data or AI model features from each group of raw images.

This information is then used to advance algorithm optimization, which is trained

and tested against a proprietary and clinically validated database of approximately 340 billion pixels of image data as of December

The DeepView-AI Burns ® software is used with the DeepView SnapShot ® imaging device, and it is

intended to be used as an adjunctive tool to aid health care providers in the assessment of burn wound healing potential by differentiating

non-healing from healing tissue within an image.

Below at Figure 1 is an

example of the DeepView System technological process.

damaged and healthy human tissue characters invisible to the naked eye, at the initial time point of wound presentation.

System delivers a binary prediction on the wound’s capacity to heal or not-heal by a specified time point in the future.

System’s output is specifically engineered to assist the health care professional in making a more accurate, timely and informed

decision regarding the treatment of the patient’s wounds.

Our focus is on our burn indication.

We were notified that our

DeepView System, comprised of the multispectral imaging (“MSI”) component integrated with the predictive AI-Burn ®

software component, received United Kingdom Conformity Assessed (UKCA) marking for use in the United Kingdom for burn indications on February

The UKCA marking registration was fully completed on March 7, 2024.

In 2026, we hope that our full DeepView System may achieve

Class II medical device designation with the United States Food and Drug Administration (FDA) via the De Novo application the Company

submitted in June of 2025.

Subject to our receipt of additional necessary market authorization, our business will have two revenue streams,

a SaaS (software as a service) model component predicated on utilizing the regulatory method, a SaMD (software as a medical device) regulatory

framework, and the imaging device component.

The SaaS component will feature a software licensing fee that includes maintenance, image

hosting, and access to algorithmic updates.

The proprietary imaging device acquires the images for the AI algorithms and is a universal

platform to house multiple clinical indications including burn wound healing analysis and other tissue indication assessments.

for these components will be evaluated and strategically set per country and site-of-service for heightened customer adoption.

The MSI technology, which

comprises one part of the DeepView System, consists of patented proprietary multi-spectral optics and sensors, capturing injured tissue

images ranging from near UV lights, through the human visible wavelengths, into the near infrared range (NIR).

The broad wavelength ranges

go beyond what the human eyes can see and capture what medical professionals cannot observe with their naked eyes.

This wide range of

wavelength images contain wound tissue physiology and captures the viability of various biomarkers within the skin and from the injured

tissue spectral signatures.

The imaging technology extracts appropriate clinical data and processes the image data to provide the injured

tissue spectral signatures to the AI model and algorithms.

The AI algorithm classifies various severities of the injuries as (i) full

damaged (non-healing), or (ii) healthy tissue (healing) and displays a comparison of the original image next to an image with a color

overlay of the non-healing portions of the wound.

The image acquisition takes 0.2 seconds, and all image processing and AI model classification

takes approximately 20 to 25 seconds.

Our DeepView System’s proprietary optics can extract millions of pixels of data or AI model

features from each group of raw images.

This information is then used to advance the algorithm optimization, which is trained and tested

against a proprietary and clinically validated database of over 340 billion pixels of image data.

The DeepView-AI Burns ®

software is used with the DeepView SnapShot ® imaging device, and it is intended to be used as an adjunctive tool to aid

health care providers in the assessment of burn wound healing potential by differentiating non-healing from healing tissue within an image.

Below at Figure 1 is an example

of the DeepView System technological process.

Figure 1 — DeepView Imaging technology

To our knowledge, there

are no comparable digital wound healing predictive medical diagnostic products that provide clinicians with an objective and immediate

assessment of a wound’s future healing potential that benefit from the application of AI.

Currently, healthcare professionals

rely on their experience and subjective assessments to determine if wounds, such as burn injuries, will heal under routine care after

a period of time, typically several weeks, or are in need of advanced wound care products and procedures including surgical interventions.

Our DeepView System allows health care professionals to make a “Day One” assessment of a wound’s healing potential

To our knowledge, there are

no comparable digital wound healing predictive medical diagnostic products that provide clinicians with an objective and immediate assessment

of a wound’s future healing potential that benefit from the application of AI.

Currently, healthcare professionals rely on

their experience and subjective assessments to determine if wounds, such as burn injuries, will heal (a) under routine care after a period

of time, typically several weeks, or (b) following the application of advanced wound care products and procedures including surgical interventions.

Our DeepView System allows health care professionals to make a “Day One” assessment of a wound’s healing potential over

We have received substantial

support from the U.S.

government for our DeepView System’s application for burn wounds, including from agencies such as BARDA,

which is part of the Department of Health and Human Services (“HHS”) Office of the Assistant Secretary for Preparedness and

Response (“ASPR”) in the United States, established to aid in securing the United States from chemical, biological,

financial support from the U.S.

government for our DeepView System’s application for burn wounds, including from agencies such

as BARDA, which is part of the Department of Health and Human Services (“HHS”) Office of the Assistant Secretary for Preparedness

and Response (“ASPR”) in the United States, established to aid in securing the United States from chemical, biological,

radiological, and nuclear threats, as well as from pandemic influenza and emerging infectious diseases.

We have also received funding

from the National Science Foundation (“NSF”), National Institute of Health (“NIH”) and the DHA an agency within

the Department of Defense (“DoD”).

Since 2013, we have been awarded approximately $281.5 million in funding from government

contracts, substantially all of which is from BARDA, which accounts for $272.9 million.

This has allowed us to develop our technology

and advance our clinical trials.

On September 27, 2023, the Company executed a new contract with BARDA, providing the Company with

additional funding of up to $150.0 million, including an initial award of approximately $54.9 million to support the clinical

validation and application for FDA De Novo status of our DeepView AI – Burn software.

This will include the distribution of up to

30 DeepView Systems in various emergency rooms and burn centers to support the clinical validation study.

The contract also includes options,

similar to our prior BARDA contracts, with an additional total value of approximately $95.1 million which can be exercised for additional

product development, procurement and the expanded deployment of DeepView Systems at emergency rooms, trauma and burn centers.

These deployments

will enable the Company to conduct health economic and outcome research to support the broader clinical adoption of the DeepView System.

This grant funding is non-dilutive to our stockholders, and we believe it validates the important nature of our mission and technology.

Subject to our receipt of the necessary regulatory market authorizations,

we intend to initially sell the DeepView System throughout the United States and the UK for its burn indication.

Given our receipt

of the UKCA authorization for our burn indication we anticipate initial sales in UK to begin in 2025.

The sales channel for our burn indication

will be supported by existing and future governmental contracts, primarily from agencies such as BARDA and the DHA.

In the United States,

there are approximately 100 burn centers, 700 trauma centers and 5,400 federal and community hospitals with Emergency Rooms where the

burn patients are most likely to visit upon injury.

The DeepView System provides a quick clinical decision tool to emergency room clinicians.

It can be used to quickly assess the healing potential for burn wounds so decisions regarding whether patients need routine care or should

be transferred to trauma centers or burn centers for advanced care and accurate surgical planning can be made in a much more timely fashion.

In the burn centers, the DeepView System provides an advanced assessment of the non-healing areas of a burn.

Therefore, we plan to target

our sales efforts to these facilities through our highly-trained technical sales support staff that we plan to hire given the nature of

DeepView as a truly disruptive AI driven predictive assistance tool.

For the DeepView System’s burn application and following receipt

of any future contract awards, we plan to partner with the U.S.

governmental agency sponsors to implement the distribution of our

DeepView System throughout the United States into key regions to support the United States’ mass casualty countermeasure directives,

with the goal of making our country better prepared for mass casualty events and saving scarce healthcare resources.

As noted above, subject

to our receipt of the necessary regulatory market authorizations, our business is expected to have two revenue streams, a SaaS model

component predicated on utilizing the regulatory method, SaMD (software as a medical device), and an imaging device component.

component will feature a software licensing fee that includes maintenance, image hosting, and access to algorithmic updates.

sale component will be competitively priced for acceptance into burn centers, independent practices, hospitals and clinics.

Furthermore, we would expect to leverage results from the U.S.

for a simultaneous conformity assessment procedure in the EU to obtain the CE marking of conformity (“CE Mark”), and we would

expect to commence post-market studies in the UK and Germany.

Subject to our receipt of the necessary regulatory market authorization,

we would expect to initiate commercialization in the United States during 2026 and intend to submit for FDA review of the burn application

in 2025 in accordance with the projected timeline for our BARDA contract.

from the National Science Foundation (“NSF”), National Institute of Health (“NIH”) and the Defense Health Agency

(“DHA”) an agency within the Department of Defense (“DoD”).

Since 2013, we have been awarded approximately $282.5 million

in funding from government contracts, substantially all of which is from BARDA, which accounts for $272.9 million.

This has allowed

us to develop our technology and further our clinical trials.

On September 27, 2023, the Company executed a new contract with BARDA,

providing the Company with additional funding of up to $150.0 million, including an initial award of approximately $54.9 million

to support the clinical validation and application for FDA De Novo status of our DeepView AI-Burn software.

The contract also includes

options, similar to our prior BARDA contracts, with an additional total value of approximately $95.1 million which can be exercised

for additional product development, procurement and the expanded deployment of DeepView Systems at emergency rooms, trauma and burn centers.

These deployments will also enable the Company to conduct health economic and outcome research to support the broader clinical adoption

of the DeepView System.

This grant funding is non-dilutive to our stockholders, and we believe it validates the important nature of our

mission and technology.

Subject to our receipt of

the necessary regulatory market authorizations, we intend to initially sell the DeepView System throughout the United States and

the UK for its burn indication.

Given our receipt of the UKCA authorization for our burn indication we anticipate initial sales in UK

to begin in 2026.

The sales channel for our burn indication will be supported by existing and future governmental contracts, primarily

from agencies such as BARDA and the DHA.

In the United States, there are approximately 140 burn centers, 700 trauma centers and 5,400

federal and community hospitals with Emergency Rooms where burn patients are most likely to visit upon injuries.

The DeepView System provides

a quick clinical diagnostic tool to the attending health care professional.

It can be used to quickly assess the healing potential for

burn wounds so decisions regarding whether patients need routine care or should be transferred to trauma centers or burn centers for advanced

care and accurate surgical planning can be made in a much more timely manner.

In the burn centers, the DeepView System provides an advanced

assessment of the non-healing areas of a burn.

Therefore, we plan to target our sales efforts to these facilities through highly-trained

technical sales support staff that we plan to hire given the nature of DeepView as a truly disruptive AI driven predictive assistance

For the DeepView System’s burn application and following receipt of any future contract awards, we plan to partner with the

governmental agency sponsors to implement the distribution of our DeepView System throughout the United States into key

regions to support the United States’ mass casualty countermeasure directives, with the goal of making our country better prepared

for mass casualty events and saving scarce healthcare resources.

As noted above, subject to

our receipt of the necessary regulatory market authorizations, our business is expected to have two revenue streams, a SaaS model component

predicated on utilizing the regulatory method, SaMD regulatory framework, and an imaging device component.

The SaaS component will feature

a software licensing fee that includes maintenance, image hosting, and access to algorithmic updates.

The capital sale component will

be competitively priced for acceptance into burn centers, independent practices, hospitals and clinics.

Furthermore, we would expect

to leverage results from the U.S.

studies for a simultaneous conformity assessment procedure in the EU to obtain the CE marking of

conformity (“CE Mark”), and we would expect to commence post-market studies in the UK.

Subject to our receipt of the necessary

regulatory market authorization, we would expect to initiate commercialization in the United States during 2026, in accordance with

the projected timeline for our BARDA contract.

Burn Indication

The Company has completed

the enrollment of 164 patients, including 49 pediatric subjects, representing the full enrollment requirements in its validation study

for the burn indication.

The DeepView System has shown significant improvement in the sensitivity

assessment of the burn wound and non-inferiority in assessing the specificity of a burn wound with cross-validation from the AI model

for identification of non-healing burn regions.

This represents a significant improvement above the diagnostic performance of burn physicians

assessing the same adult burn patients.

In addition to our validation study, we have conducted three large clinical studies with multiple

sites across the United States, enrolling 413 patients, including 329 adult burn patients and 84 pediatric patients.

Through these

studies we were able to determine burn assessment accuracy in both healing and non-healing wounds.

As of December 31, 2024, our proprietary and clinically validated database

for burns is comprised of approximately 340 billion pixels of image data.

This database presents both a significant barrier to entry to

would-be competitors in wound care healing assessment, and a potential additional commercial opportunity for us to develop further indications

in the future.

As part of the validation

study for our De Novo submission to the FDA, the Company has completed the enrollment of 164 patients, including 49 pediatric subjects.

the validation study, the DeepView System has (a) shown superiority in sensitivity and, (b) with respect to specificity, met the

non-inferiority margin when compared to clinician assessment.

These findings were corroborated by the AI model’s cross-validation

analysis in identifying non-healing burn regions.

These results represent a significant improvement above the diagnostic accuracy

of burn physicians when assessing the same population.

In addition to our validation study, we have conducted three large

clinical studies with multiple sites across the United States, enrolling more than 400 patients, including both adult

and pediatric burn patients.

proprietary and clinically validated database for burns is comprised of over 340 billion pixels of image data.

This database presents

both a significant barrier to entry to would-be competitors in wound care healing assessment, and a potential additional commercial opportunity

for us to develop further in the future.

Other DeepView Programs in Development

Funding from the U.S.

government has also allowed us to develop

additional “Horizon” indication uses of our DeepView System, including DeepView SnapShot ® M, DeepView AI 3-D

wound measurement technology, and other indications, including diabetic foot ulcers which the Company has done significant work on to

We believe that our DeepView System’s use in emergency rooms, trauma and burn centers and other would care facilities should

be expanded to provide greater utility of the DeepView System in such settings.

has also allowed us to develop additional “Horizon” indication uses of our DeepView System, including DeepView Snapshot M,

DeepView AI 3-D wound measurement technology, and other indications.

We believe that our DeepView System’s use in emergency rooms,

trauma and burn centers and other would care facilities should be expanded to provide greater utility of the DeepView System in such settings.

DeepView SnapShot® M

In addition to our DeepView System, our primary additional technology

is the DeepView SnapShot M, a fully handheld, portable, wireless diagnostic tool based on the DeepView System’s AI platform.

DeepView SnapShot M provides a potential enhanced and expanded use for the U.S.

government and emergency care, first responders and

potentially home health care professionals.

On June 23, 2021, we were awarded a two-year, $1.1 million, Sequential Phase II

Small Business Technology Transfer (“STTR”) contract by the DHA within the U.S.

In addition to our DeepView

System, our primary additional technology is the DeepView SnapShot M, a fully handheld, portable, and wireless diagnostic tool based on

the DeepView System’s AI platform.

The DeepView SnapShot M provides a potential enhanced and expanded use for the U.S.

and emergency care, first responders and potentially home health care professionals.

On June 23, 2021, we were awarded a two-year,

$1.1 million, Sequential Phase II STTR contract by the DHA within the U.S.

Department of Defense.

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In April 2023, we were awarded

a $4.0 million grant from the Medical Technology Enterprise Consortium (“MTEC”), a 501(c)(3) biomedical technology

a $4.0 million grant from the Medical Technology Enterprise Consortium (“MTEC”), a 501I(3) biomedical technology

consortium working in partnership with the Department of Defense, to develop our DeepView SnapShot M device in a Phase III feasibility

and commercialization study.

In August 2024, the MTEC award was increased to $4.9 million and is currently intended to run through December

In August 2024, the MTEC award was increased to $4.9 million and was extended to run through December 2025

with funding dependent on various milestones.

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of the handheld device.

In March 2024, we received an additional $0.5 million award from the Defense Health Agency to further this development.

These grants, along with prior awards from DHA, bring our funding total for our DeepView SnapShot M to over $7.2 million.

will be used to support military battlefield burn evaluation using DeepView SnapShot M.

In December 2025, the MTEC contract was amended to provide a no-cost extension to run through June 2026.

2024, we received an additional $0.5 million award from the Defense Health Agency to further this development.

These grants, along with

prior awards from DHA, bring our funding total for our DeepView SnapShot M to over $7.2 million.

The funding will be used to support military

battlefield burn diagnostic evaluations using DeepView SnapShot M.

3-D Wound Measurement Technology

We are also currently developing

3-D software-based wound measurement technology for our DeepView System.

This technology will produce rapid, accurate and easy-to-use

wound size measurement images to produce an accurate 3-D tissue representation from a single image snapshot enabling length, width and

area measurements with sub-millimetric accuracy without reference to any attendant markers or manually placed stickers or multiple images.

We believe this is a significant improvement over current wound size measurement technologies which are limited in their ability to measure

all three wound dimensions (length, width and area) or are otherwise cumbersome, requiring reference markers/stickers or multiple images

to determine would size measurements.

Our 3D wound measurement technology calculates the total body surface area (“TBSA”)

This technology will be integrated into our DeepView System This technology enhancement will not only generate the TBSA measurement,

but will also indicate the “healing” versus “non-healing” burn tissue area.

This is a critical step in assuring

that these alternative medical solutions will be successful in-patient applications.

The 3-D wound size measurement tool has completed

the proof-of-concept phase.

We are currently developing this technology in cooperation with BARDA.

We are also developing three-dimensional

(3D) software-based wound measurement technology for integration into our DeepView System.

This technology is designed to deliver rapid,

accurate wound assessment by generating a three-dimensional representation of burn tissue, enabling high spatial precision in burn area

measurement without the use of externally placed reference markers — an advantage over certain existing technologies that rely on

such markers and may be limited in their ability to accurately assess burn area.

Our 3D wound measurement

technology calculates the percentage of total body surface area affected by burns (%TBSA) by automatically segmenting the burn area, applying

established body surface area estimation formulas, and producing a quantitative measurement output.

In addition to improving %TBSA accuracy,

the technology is designed to enhance our multispectral imaging (MSI)-based capability to differentiate non-healing areas within large

burns, enabling more targeted and precise treatment decisions.

Development of this technology is supported in part by financial funding

from the Biomedical Advanced Research and Development Authority (BARDA).

Business Focus and Milestones

Our current focus is to fulfill our contractual obligations and meet

milestones under our BARDA PBS contract (described in further detail below);

and to pursue other indications for the commercialization

of the DeepView System in the UK, United States and EU.

Our near-term goals related to the BARDA PBS contract are to deliver on the

current phase of the contract (Phase 1a), and to complete the remaining phases of the BARDA PBS contract.

Completion of these contractual

phases support our long-term goal of entering a federal procurement contract with BARDA.

We intend to submit a De

Novo application to the FDA for market authorization of the burn application by the end of the first half of 2025.

In 2023, we received

our ISO 13485:2016 certification for Medical Devices.

Our certification audit was completed in the first quarter of 2024, without any

In parallel, we are in the process of scheduling the DeepView System Technical Documentation audit necessary to obtain the

CE Mark and UKCA certificates to allow market access in the EU and UK, respectively.

In March, Spectral completed its UKCA Mark registration

for the full DeepView System for our burn indication.

Our current focus is to fulfill

our contractual obligations and meet milestones under our BARDA PBS contract (described in further detail below);

and to pursue other

indications for the commercialization of the DeepView System in the UK, United States and EU.

Our near-term goals related to the

BARDA PBS contract are to deliver on the current phase of the contract (Phase 1a), and to complete the remaining phases of the BARDA

PBS contract.

Completion of these contractual phases support our long-term goal of entering a federal procurement contract with BARDA.

We submitted a De Novo application

to the FDA for market authorization of the burn application in June, 2025.

In 2023, we received our ISO 13485:2016 certification for Medical

Our certification audits were completed in the first quarter of 2024 and the third quarter of 2025, without any exceptions.

March 2024, Spectral completed its UKCA Mark registration for the full DeepView System for our burn indication.

DeepView in Practice

DeepView is a predictive analytics platform that combines AI algorithms

and MSI imaging for an assessment of wound healing potential.

It is non-invasive, non-radiation, non-laser and does not require the use

of injectable dye.

DeepView is a predictive

analytics platform that combines AI algorithms and MSI imaging for an assessment of wound healing potential.

It is non-invasive, non-radiation,

non-laser and does not require the use of injectable dye.

This integration can be characterized into four distinct components:

DeepView imaging, data extraction, AI model building

and AI wound healing potential assessment.

The DeepView AI- Burn software is used with the DeepView SnapShot imaging device, and it is

intended to be used as an adjunctive tool to aid health care providers in the assessment of burn wound healing potential by differentiating

non-healing from healing burned tissue within an image.

The DeepView technology

consists of patented proprietary multi-spectral optics and sensors that can classify wound tissue physiology and capture the viability

of various biomarkers within the skin.

The imaging technology extracts appropriate imaging data, processes

the image and displays a comparison of the original image next to an image with a color overlay of the non-healing portions of the wound.

imaging, data extraction, AI model building and AI wound healing potential assessment.

The DeepView AI ® - Burn software

is used with the DeepView SnapShot ® imaging device, and it is intended to be used as an adjunctive tool to aid health care

providers in the assessment of burn wound healing potential by differentiating non-healing from healing burned tissue within an image.

The DeepView technology consists of patented proprietary multi-spectral optics and sensors that can classify wound tissue physiology and capture the viability of various biomarkers within the skin.

The imaging technology extracts appropriate clinical data, processes the image and displays a comparison of the original image next to an image with a color overlay of the non-healing portions of the wound.

The image acquisition takes 0.2 seconds and the output takes approximately 20 to 25 seconds.

DeepView’s proprietary

optics can extract millions of pixels of data or AI model features from each raw image.

This information is then used to build and

continually improve the AI model, which is trained and tested against a proprietary and clinically validated database of approximately

340 billion pixels of image data as of December 31, 2024.

The AI algorithm then seeks

to produce an objective, accurate, and immediate binary wound healing assessment.

This assessment would be graphically represented

to the clinician through a colored overlay of the original image that annotates the portion of the wound that is predicted to be

non-healing over a specified period of time – 21 days (See Figure 2 below).

DeepView’s proprietary optics can extract millions of pixels of data or AI model features from each raw image.

This information is then used to build and continually improve the AI model, which is trained and tested against a proprietary and clinically validated database of over 340 billion pixels of image data.

The AI algorithm then seeks to produce an objective, accurate, and immediate binary wound healing assessment.

This assessment would be graphically represented to the clinician through a colored overlay of the original image that annotates the portion of the wound that is predicted to be non-healing over a specified period of time – 21 days (See Figure 2 below).

Figure 2 — Illustration of DeepView’s

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provides physicians with an immediate assessment of a burn wound’s healing potential with a binary outcome determination.

conducted three large clinical studies with multiple sites across the United States, enrolling 413 patients, including 329

adult burn patients and 84 pediatric burn patients.

Through these studies, we were able to determine burn assessment accuracy in both

surgery and non-surgical treatment.

See the table below for

an analysis of the current DeepView System’s benefits to patient care:

Time to Decision

Estimated Cost savings

System has (a) shown superiority in sensitivity and, (b) with respect to specificity, met the non-inferiority margin when compared

to clinician assessment.

These findings were corroborated by the AI model’s cross-validation analysis in identifying non-healing

burn regions.

These results represent a significant improvement above the diagnostic accuracy of burn physicians when assessing the

same population.

In addition to our validation study, we have conducted three large clinical studies with multiple sites

across the United States, enrolling more than 400 patients, including both adult and pediatric burn patients.

See the table below for an

analysis of the current DeepView System’s benefits to patient care:

Current Time to Decision

DeepView Time to Decision

DeepView Estimated Cost savings

~$24,000 per stay

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Market Leading Technology

We have developed proprietary AI algorithms and imaging technology

to assist clinicians to make more accurate and efficient treatment decisions in managing a patient’s wounds.

This technology is

the result of 13 years of research and development, thousands of hours of user feedback, and most importantly, the continual

commitment to ensuring that the output from DeepView answers a clinical question that is meaningful to physicians.

We own and control

the entirety of our data pipeline.

We only rely on images and data that the DeepView System collects in a controlled clinical environment

and do not rely on stock images or databases for our algorithms.

All optical technology has been developed in-house and is specifically

engineered to collect this imaging data.

We have developed proprietary

AI algorithms and imaging technology to assist clinicians to make more accurate and efficient treatment decisions in managing patient’s

This technology is the result of 13 years of research and development, thousands of hours of user feedback, and most

importantly, the continual commitment to ensuring that the output from DeepView answers a clinical question that is to meaningful physicians.

We own and control the entirety of our data pipeline.

We only rely images and data that the DeepView System collects in a controlled clinical

environment and do not rely on stock images or databases for our algorithms.

All optical technology has been developed in-house and is

specifically engineered to collect this imaging data.

In September 2025, we were named to TIME’s World’s Top HealthTech Companies

A current image of our cart-based DeepView System appears below in Figure 3.

Figure 3 — DeepView Generation 3

Figure 3 — DeepView System

Unmet Clinical Need

The biggest unmet need for clinicians treating burn wounds is the lack

of a diagnostic tool that provides an objective wound healing determination on “Day One.” The treatment pathway for these

wounds can be generally characterized by a subjective initial assessment from the physician followed by multiple weeks of clinical

observation to assess whether or not the wound responded to treatment.

Burn wounds are primarily staged by their penetration depth into

the skin and involvement of tissues below the skin in severe cases.

Burn wounds are diagnosed by expert clinical opinion without the aid

of objective diagnostic tools that provide a wound healing prediction.

Furthermore, the current methods of diagnosis rely on a “wait

and see” approach that results in prolonged hospital stays and costly delays in the delivery of definitive treatment.

to eliminate these costly delays between initial screening and the delivery of a definitive treatment using AI algorithms applied to our

proprietary multispectral wound images.

The biggest unmet need for

clinicians treating burn wounds is the lack of a diagnostic tool that provides an objective wound healing determination on “Day

One.” The current standard of care treatment pathway for these wounds can be generally characterized by a subjective initial assessment

from the physician followed by multiple weeks of clinical observation to assess whether or not the wound responded to treatment.

Burn wounds are primarily staged by their penetration depth into the skin and involvement of tissues below the skin in severe cases.

wounds are diagnosed by expert clinical opinion without the aid of objective diagnostic tools that provide a wound healing prediction.

Furthermore, the current methods of diagnosis rely on a “wait and see” approach that result in prolonged hospital stays and

costly delays in the delivery of definitive treatment.

Our goal is to eliminate these costly delays between initial screening and the

delivery of a definitive treatment using AI algorithms applied to our proprietary multispectral wound images.

Significant Market Opportunity

Geography — DeepView has the potential to service a large total addressable market.

We estimate that there are over 57,000 sites of clinical care in which the technology could be placed in the United States and over

20,000 sites across the UK and EU.

For all geographies, these sites include both acute inpatient hospitals and outpatient sites of care,

in order to include physician offices.

As we expand from the United States into the UK and EU, we will consider follow-on markets

for commercial expansion, including the Middle East, among others.

Pipeline Applications — Though we are currently focused on the burn application for DeepView,

there are other pipeline applications that we are considering for future commercialization.

Geography — DeepView

has the potential to service a large total addressable market.

We estimate that there are over 57,000 sites of clinical care in which

the technology could be placed in the United States and over 20,000 sites across the UK and EU.

For all geographies, these sites

include both acute inpatient hospitals and outpatient sites of care, which include physician offices.

As we expand from the United States

into the UK and EU, we will consider follow-on markets for commercial expansion, including the Middle East, among others.

Pipeline Applications — Though

we are currently focused on the burn application for DeepView, there are other pipeline applications that we are considering for future

commercialization.

As noted above, we have already received U.S.

funding for the development of our DeepView SnapShot ® M fully handheld device for use in combat, military and home health

In connection with our BARDA contract, we are working on expanding the indication usage of the DeepView System to incorporate

a wound and burn measurement tool for clinicians.

We have completed significant work on DFU and will continue to evaluation the predictive

use of the DeepView System for the DFU indication as the Company moves into 2025 and beyond.

We have also explored the technology’s

potential for the assessment of wound bed preparation, critical limb ischemia, level of lower limb amputation selection, post-operative

perfusion assessment for peripheral interventions, and military applications.

For all future pipeline applications we will leverage our

data analytics algorithms to improve predictive analyses.

With any new application, we would need to conduct one or more clinical studies

to collect enough patient data to appropriately support algorithm development for each new application.

These new algorithms could easily

be uploaded onto existing DeepView devices in the future.

From a regulatory perspective, we believe that these follow-on applications

government funding for the development of our DeepView SnapShot

M fully handheld device for use in combat, military and home health care uses.

In connection with our BARDA contract, we are working on

expanding the usage of the DeepView System to incorporate a wound and burn measurement diagnostic tool for clinicians.

explored the technology’s potential for the assessment of in-patient soft tissue indications, wound bed preparedness, critical limb

ischemia, level of lower limb amputation selection, post-operative perfusion assessment for peripheral interventions, and additional military

applications.

For all future pipeline applications, we believe that the foundational technology would remain constant, in that we will

leverage our data analytics algorithms to improve predictive analyses.

With any new application, we would need to conduct one or more

clinical studies to collect enough patient data to appropriately support algorithm development for each new application.

These new algorithms

could easily be uploaded to existing devices in the future.

regulatory perspective, we believe that these follow-on applications

would all follow a 510(k) clearance process although, in some cases, we may need to follow the De Novo classification or premarket

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the Company executed a new contract with BARDA, providing the Company with additional funding of up to $150.0 million, including

an initial award of approximately $54.9 million to support the clinical validation and application for FDA De Novo status of our

DeepView System.

This will include the distribution of up to 30 DeepView Systems in various emergency rooms and burn centers to support

an initial award of approximately $54.9 million to support the clinical validation and application to the FDA for De Novo status

of our DeepView System.

This includes the distribution of up to 30 DeepView Systems in various emergency rooms and burn centers to support

the clinical validation study.

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and we believe it validates the important nature of our mission and technology.

Significant Wound Data Repository from

Artificial Neural Network

As of December 31, 2024,

approximately 340 billion pixels of proprietary image data have been acquired and utilized for the deep learning algorithms training.

This presents a significant barrier to entry to would-be competitors in wound care healing assessments.

The data collection to clinical

output, the flow, quality and control of the data pipeline is managed entirely by us.

Our DeepView System uses deep learning on its wound

data repository to recognize patterns and correlations of injured tissue spectral signatures to produce reliable and reasonable assessment

for clinicians to make accurate and faster treatment decisions.

We believe that our strategic partnerships with various leading medical

institutions and healthcare providers in the United States and Europe will enable us to access high quality image data and build

the world’s leading wound biopsy tissue database.

Our AI algorithms are designed and trained to the clinical “ground truth”

that has been verified and vetted by various U.S.

Significant Wound Data Repository from Artificial

Neural Network

Over 340 billion pixels

of proprietary image data have been acquired and utilized for the deep learning algorithms training.

This presents a significant barrier

to entry to would-be competitors in wound care healing assessments.

The data collection to clinical output, the flow, quality and control

of the data pipeline is managed entirely by us.

Our DeepView System uses deep learning on its wound data repository to recognize patterns

and correlations of injured tissue spectral signatures to produce reliable and reasonable assessment for clinicians to make accurate and

faster treatment decisions.

We believe that our strategic partnerships with various leading medical institutions and healthcare providers

in the United States and Europe will enable us to access high quality image data and build the world’s leading wound biopsy

tissue database.

Our AI algorithms are designed and trained to the clinical “ground truth” that has been verified and vetted

by various U.S.

government agencies and leading clinicians in their respective fields.

not yet been reviewed or cleared by FDA.

They are currently being reviewed, but have

not yet been cleared by FDA.

Strategic Partnerships

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partnerships with multiple clinical and academic partners.

In the United States, we are currently engaged with leading research

hospitals that are enrolling subjects for our Burn AI training study.

In the EU and UK, we have partnered with the Royal College of Surgeons

Ireland, as well as key opinion leaders to provide us with greater knowledge in the wound care sector.

In July 2024, we entered into

a memorandum of understanding with PolyNovo, Ltd.

to assist in the expansion of our DeepView System throughout Australia by utilizing

the Australian Special Access Scheme.

As of December 31, 2024, the Company was accepted into the Special Access Scheme with three hospitals

in Melbourne, Perth and Sydney and anticipates delivering the DeepView Systems to those institutions in the first quarter of 2025.

partnerships with these institutions provide us with the opportunity to collaborate with leading wound care providers to develop effective

early stage wound assessment technology.

We utilize these strategic partnerships to support the ongoing clinical validation studies we

are using to develop our algorithmic model.

Each of our clinical study/trials include certain protocol requirements to ensure a uniform

testing process for our technology.

In the United States, we are currently engaged with leading research hospitals

that are enrolling subjects for our Burn AI training study and are engaged with external consultants to continue to develop our commercialization

In the EU and UK, we have partnered with key opinion leaders to provide us with greater knowledge in the wound care sector.

In July 2024, we entered into a memorandum of understanding with PolyNovo, Ltd.

to assist in the expansion of our DeepView System throughout

Australia by utilizing the Australian Special Access Scheme.

As of December 31, 2025, the Company was accepted into the Special Access

Scheme with and has delivered devices to three hospitals in Melbourne, Perth and Sydney.

Our partnerships with these institutions provide

us with the opportunity to collaborate with leading wound care providers to develop effective early stage wound assessment technology.

We utilize these strategic partnerships to support the ongoing clinical validation studies we are using to develop our algorithmic model.

Each of our clinical study/trials include certain protocol requirements to ensure a uniform testing process for our technology.

Proven Experienced Management Team

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operational acumen, strategic relationships and the ability to understand and navigate the complexities of healthcare.

Our directors

also bring significant expertise from previous public company experience along with financial, governance and technical oversight.

Our directors also

bring significant expertise from previous public company experience along with financial, governance and technical oversight.

Respected Advisory Board

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correlated to predictive wound healing.

Several companies have developed wound imaging systems for wounds;

however, these systems incorporate technology such as spatial frequency domain imaging, thermal imaging, photographic documentation, hyperspectral

imaging, and near-infrared imaging that provide physiologic data to the physician.

Ultimately, this physiologic data appears to only provide

an indirect linkage to wound healing and does not display a binary result of “healing vs.

non-healing.” Furthermore, the majority

of systems in the wound care space are merely documentation tools that record measurements of the wound for health record purposes and

still rely upon subjective clinician opinion for treatment decisions.

The advent of a novel technology such as the DeepView System not

only has the potential to disrupt the therapeutic pathway within the wound care market, but also to create a new diagnostic market for

wound care that did not exist previously for clinics and physicians, subject to successful development of the device and FDA marketing

authorization.

As noted above, although our previous DeepView Systems received 510(k) clearance, and we have received FDA BDD clearance

for our DeepView GEN 3 System, there can be no assurance that we will be able to obtain market authorization in the US or EU, especially

as the Company seeks a De Novo clearance with the FDA.

Several companies have developed

wound imaging systems for wounds;

however, these systems incorporate technology such as spatial frequency domain imaging, thermal imaging,

photographic documentation, hyperspectral imaging, and near-infrared imaging that provide physiologic data to the physician.

this physiologic data appears only to provide an indirect linkage to wound healing and does not display a binary result of “healing

non-healing.” Furthermore, the majority of systems in the wound care space are merely documentation tools that record measurements

of the wound for health record purposes and still rely upon subjective clinician opinion for treatment decisions.

The advent of a novel

technology such as the DeepView System not only has the potential to disrupt the therapeutic pathway within the wound care market, but

also to create a new diagnostic market for wound care that did not exist previously for clinics and physicians, subject to successful

development of the device and FDA marketing authorization.

As noted above, although our previous DeepView Systems received 510(k) clearance,

and we have received FDA Breakthrough Device Designation clearance for our DeepView System, there can be no assurance that we will be

able to obtain market authorization in the US, UK or EU, especially as the Company seeks a De Novo clearance with the FDA.

Commercialization and Revenue Strategy

We intend to pursue the

complete development of our DeepView System and, if marketing authorization is obtained, to commercialize it on our own, or potentially

with a partner, in the United States and other regions.

We currently have no sales, marketing or commercial product distribution capabilities and

have no experience as a company commercializing products.

However, if necessary, we intend to hire appropriately to build the necessary

infrastructure and capabilities over time for the United States, and potentially other regions, following further advancement of

our DeepView System.

We intend to pursue the complete

development of our DeepView System and, if commercialization authorization is obtained from the FDA, to commercialize it on our own, or

potentially with a partner, in the United States and other regions including the UK and Australia.

We intend to continue to expand

our sales and marketing teams and to hire appropriate additional staffing to build the necessary infrastructure and capabilities over

time for the United States, and abroad.

Our sales efforts will begin in the regions where our devices are currently being used and

in concert with the terms of our existing BARDA contract.

We expect to continue to expand our sales and marketing teams as we expand our

commercialization efforts in the near future.

United States

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As noted above, subject to our receipt of the necessary regulatory

marketing authorization, our business is expected to have two revenue streams, a SaaS model component predicated on utilizing the regulatory

method, SaMD (software as a medical device), and an imaging device component.

The SaaS component will feature a software licensing fee

that includes maintenance, image hosting, and access to algorithm updates.

The capital sale component will be competitively priced for

acceptance into independent practices and clinics.

marketing authorization, our business is expected to have two revenue streams, a SaaS (software as a service) model component predicated

on utilizing the regulatory method, SaMD (software as a medical device), and an imaging device component.

The SaaS component will feature

a software licensing fee that includes maintenance, image hosting, and access to algorithm updates.

The capital sale component will be

competitively priced for acceptance into independent practices and clinics.

Given our receipt of the

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States, the Company will continue to perform under its new BARDA contract with respect to the burn indication and will receive significant

governmental funding prior to seeking FDA clearance of the DeepView System in the first half of 2025.

governmental funding prior to the expected receipt of FDA clearance of the DeepView System in the first half of 2026.

Reimbursement

We expect to utilize our post-market

clinical evidence and health economic impact analysis to submit to NHS for reimbursement for its Burn indication in the United Kingdom.

expect to utilize our post-market clinical evidence and health economic impact analysis to submit to NHS for reimbursement for its Burn

indication in the United Kingdom.

Upon more market penetration, we will apply for NICE certification.

In the United States, we expect the DeepView System will be used

in both inpatient and outpatient sites of service.

The process of reimbursement varies greatly between the two.

The DeepView burn indication

will be used both in EDs and Burn Centers.

As clinical evidence is developed and utilization increases over the next several years, we

plan to apply for Current Procedural Terminology (CPT Ò )

In the United States, we expect

the DeepView System will be used in both inpatient and outpatient sites of service.

The process of reimbursement varies greatly between

The DeepView burn indication will be used both in EDs and Burn Centers.

As clinical evidence is developed and utilization increases

over the next several years, we plan to apply for CPT Ò codes.

We view our DeepView technology

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Manufacturing Arrangements

We currently outsource all our manufacturing to a Contract Manufacturer.

Cobalt Product Solutions (“Cobalt”), located in Plano, Texas, is involved with manufacturing the current generation DeepView

System and we anticipate that they will continue to do so for the foreseeable future.

We currently outsource all

our manufacturing to a contract manufacturer.

Cobalt Product Solutions (“Cobalt”), located in Plano, Texas, is involved with

manufacturing the current generation DeepView System and we anticipate that they will continue to do so for the foreseeable future.

In addition to Cobalt, we

partner with several other highly specialized contract manufacturers in the areas of optics, technology design, and electronics.

experienced regulatory and quality control personnel to ensure that our manufacturing processes and quality management systems are in

compliance with FDA and EU regulations and standards.

As we expand into the European market, we will most likely consider manufacturing

devices in the EU in preparation for commercialization.

We do not have any plans to develop our own manufacturing facility at this time.

experienced regulatory and quality control personnel to ensure that our manufacturing processes and quality management systems comply

with FDA and EU regulations and standards.

As we expand into the European market, we will most likely consider manufacturing devices in

the EU in preparation for commercialization.

We do not have any plans to develop our own manufacturing facility currently.

Intellectual Property

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Burn/Wound Classification on MSI and photoplethysmography (“PPG”);

Tissue classification on

Amputation site analysis on MSI, machine learning (“ML”)

and healthcare matrix;

DFU healing potential prediction

and wound assessment on MSI, ML and healthcare matrix;

High-precision, multi-aperture,

MSI snapshot imaging;

Wound assessment based

Burn/histology assessment

based on MSI and ML;

High-precision, single-aperture

MSI snapshot imaging;

Topological characterization

and assessment of tissues using MSI and ML

We have 12 issued and allowed

Tissue classification on MSI and PPG;

Amputation site analysis on MSI, ML and healthcare matrix;

Diabetic foot ulcer (“DFU”) healing potential prediction and wound assessment on MSI, ML and healthcare matrix;

High-precision, multi-aperture, MSI snapshot imaging;

Wound assessment based on MSI;

Burn/histology assessment based on MSI and ML;

High-precision, single-aperture MSI snapshot imaging;

Topological characterization and assessment of tissues using MSI and ML

As of December 31, 2025 we

had 13 issued and allowed U.S.

patents with 5 U.S.

patent applications pending.

We have 18 issued and allowed international patents with 29 foreign and

international patent applications pending.

addition, we support the development of our brand and product offerings through trademark protection at the United States Patent

and Trademark Office.

As of December 31, 2024, we maintain a portfolio of 6 8

trademarks and nine trademark applications pending relating to our DeepView System product offerings.

Our trademarks and pending trademark

applications are spread over nine jurisdictions mostly in the UK the EU and China.

It is our intention to maintain these registrations

indefinitely and to expand the number of jurisdictions in which we have registered trademarks as deemed necessary to protect our freedom

to use the marks and/or block competitors in additional markets.

We will continue to look to protect our intellectual property in the

United States, UK and the EU as those are the first commercial markets for our products and rely on third party experts to assist

in doing this.

We have 21 issued and allowed international

patents with 23 foreign and international patent applications pending.

In addition, we support the

development of our brand and product offerings through trademark protection at the United States Patent and Trademark Office.

of December 31, 2025, we maintain a portfolio of 47 trademarks and 11 trademark applications pending relating to our DeepView System product

Our trademarks and pending trademark applications are spread over nine jurisdictions mostly in the UK the EU and China.

is our intention to maintain these registrations indefinitely and to expand the number of jurisdictions in which we have registered trademarks

as deemed necessary to protect our freedom to use the marks and/or block competitors in additional markets.

We will continue to look to

protect our intellectual property in the United States, UK and the EU as those are the first commercial markets for our products

and rely on third party experts to assist in doing this.

Our corporate headquarters

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Human Capital Resources and Employees

We employ a growing and

highly skilled employee base, including our sales force, and promote a culture of innovation to continuously iterate and enhance our

products, systems and commercial footprint.

Our human capital objectives include, as applicable, identifying, recruiting, retaining,

incentivizing and integrating our existing and additional employees.

We continued to expand our workforce in 2024 as we continue to build

a focused and highly skilled team.

At December 31, 2024 we had 78 full-time employees in the United States and UK.

In 2025, we anticipate

new hires will be made in all areas, in particular in operations, sales, marketing, and government contracts.

This will further enable

us to meet our technology, IP, clinical, regulatory, and commercial goals in 2025 and beyond.

We have designed and implemented our cash and stock compensation programs

to attract, motivate, and retain our employees.

We regularly review our compensation structure to ensure that we remain competitive, reward

top performance, and ensure internal equity, while maintaining proper fiscal governance.

Our compensation packages are designed based

on market benchmarks.

We offer robust benefits package including health (medical, dental and vision) insurance, paid time off, paid parental

leave, a retirement plan and life and disability coverage.

We employ a growing and highly

skilled employee base, including our sales force, and promote a culture of innovation to continuously iterate and enhance our products,

systems and commercial footprint.

Our human capital objectives include, as applicable, identifying, recruiting, retaining, incentivizing

and integrating our existing and additional employees.

We continued to expand our

workforce in 2024 as we continue to build a focused and highly-skilled team.

At December 31, 2025 had 65 full-time employees in the United States

In 2026, we anticipate new hires will be made in all areas, in particular in operations, sales, marketing, and government contracts.

This will further enable us to meet our commercialization, marketing, technology, IP, clinical and regulatory goals in 2026 and beyond.

We have designed and implemented

our cash and stock compensation programs to attract, motivate, and retain our employees.

We regularly review our compensation structure

to ensure that we remain competitive, reward top performance, and ensure internal equity, while maintaining proper fiscal governance.

Our compensation packages are designed based on market benchmarks.

We offer robust benefits package including health (medical, dental

and vision) insurance, paid time off, paid parental leave, a retirement plan and life and disability coverage.

Available Information

Our internet address is

www.spectral-ai.com .

Our internet address is www.spectral-ai.com .

Our website and the information contained therein or linked thereto are not part of this Annual Report.

make available free of charge through our internet website our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports

on Form 8-K, proxy statements, registration statements and amendments to those reports filed or furnished pursuant to the Exchange Act

as soon as reasonably practicable after we electronically file such material with, or furnish them to the SEC.

The SEC maintains a website

that contains reports, proxy statements and other information regarding issuers that file electronically with the SEC.

These materials

may be obtained electronically by accessing the SEC’s website at www.sec.gov .

We make available free of charge

through our internet website our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements,

registration statements and amendments to those reports filed or furnished pursuant to the Exchange Act as soon as reasonably practicable

after we electronically file such material with, or furnish them to the SEC.

The SEC maintains a website that contains reports, proxy

statements and other information regarding issuers that file electronically with the SEC.

These materials may be obtained electronically

by accessing the SEC’s website at www.sec.gov .

Risk Factors.

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inception and may not be able to achieve significant revenues or profitability.

We have incurred substantial net losses since our inception.

ended December 31, 2024 and the year ended December 31, 2023, on a consolidated basis, we incurred a net loss of $15.3 million

and $20.9 million, respectively, and on a consolidated basis our cash balance at December 31, 2024 was $5.2 million.

an accumulated deficit of approximately $48.1 million as of December 31, 2024.

Our losses have resulted primarily from costs incurred

in connection with our design, manufacturing and development activities, research and development activities, building our commercial

infrastructure, legal, and general and administrative expenses associated with our operations.

We have incurred substantial

net losses since our inception.

For the year ended December 31, 2025 and the year ended December 31, 2024, on a consolidated

basis, we incurred a net loss of $7.5 million and $15.1 million, respectively, and on a consolidated basis our cash balance

at December 31, 2025 was $15.4 million.

We had an accumulated deficit of approximately $55.8 million as of December 31, 2025.

Our losses have resulted primarily from costs incurred in connection with our design, manufacturing and development activities, research

and development activities, building our commercial infrastructure, legal, and general and administrative expenses associated with our

On September 27, 2023,

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Company will utilize its existing cash balance and the initial award from BARDA for its near-term liquidity and operating needs.

Company believes that it has sufficient cash and revenue from its BARDA contract to support its operations until it is able to obtain

equity or debt investments on terms acceptable to the Company to meet its expected operating cash-flow needs for its burn, DFU and other

indication research and development.

believes that it has sufficient cash and revenue from its BARDA contract to support its operations until it is able to obtain equity or

debt investments on terms acceptable to the Company to meet its expected operating cash-flow needs for its burn and other indication research

and development.

We do not know whether or

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We may also encounter unforeseen

expenses, difficulties, complications, delays and other known and unknown factors and risks frequently experienced by medical device

companies in rapidly evolving fields.

In addition, the Company’s ability to develop its DeepView System for multiple indications

requires research and development costs that may exceed the Company’s current cash balance.

The Company may need to seek additional

equity or debt investments to meet its projected operating costs for the timely development of the DeepView System.

expenses, difficulties, complications, delays and other known and unknown factors and risks frequently experienced by medical device companies

in rapidly evolving fields.

In addition, the Company’s ability to develop its DeepView System for multiple indications requires

research and development costs that may exceed the Company’s current cash balance.

The Company may need to seek additional equity

or debt investments to meet its projected operating costs for the timely development of the DeepView System.

To the extent additional

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you that we will achieve profitability in the future or that, if we do become profitable, we will sustain profitability.

to achieve and sustain profitability in the future will make it more difficult to finance the capital requirements needed to operate

our business and accomplish our strategic objectives, which would have a material adverse effect on our business, financial condition

and results of operations, and cause the market price of our common stock to decline.

Our failure to

achieve and sustain profitability in the future will make it more difficult to finance the capital requirements needed to operate our

business and accomplish our strategic objectives, which would have a material adverse effect on our business, financial condition and

results of operations, and cause the market price of our common stock to decline.

We are devoting a significant portion of

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our business, prospects, results of operations and financial condition.

We depend on government funding, which

if lost or reduced, could have a material adverse effect on our research and development activities and our ability to commercialize

our DeepView technology.

We depend on government funding, which if

lost or reduced, could have a material adverse effect on our research and development activities and our ability to commercialize our

DeepView technology.

Our largest contract is with BARDA and is the largest single source of revenue for us.

Our BARDA contract is

not guaranteed to be extended.

Our BARDA contract is not

guaranteed to be extended.

We have not made any commercial

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contract, the U.S.

government has the right to terminate the contract for convenience or to terminate for default if we fail to

meet our obligations as set forth in the contract.

While the government has a right to terminate the BARDA contract for convenience,

we believe that the government generally does not terminate funding awards unless there is reason, such as the funding contract becomes

too costly, the agency seeks to avoid a dispute with another branch of government, or the agency decides to restructure its contractual

arrangements and perform work in-house.

government has the right to terminate the contract for convenience or to terminate for default if we fail to meet

our obligations as set forth in the contract.

While the government has a right to terminate the BARDA contract for convenience, we believe

that the government generally does not terminate funding awards unless there is reason, such as the funding contract becomes too costly,

the agency seeks to avoid a dispute with another branch of government, or the agency decides to restructure its contractual arrangements

and perform work in-house.

We believe it is unlikely that BARDA will terminate its contract with us.

However, there can

be no guarantee that the BARDA contract will not be terminated.

However, there can be no guarantee

that the BARDA contract will not be terminated.

If BARDA were to terminate

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impact on our business, prospects, results of operations and financial condition.

We receive funding from

a contract by the DHA within the U.S.

We receive funding from a

contract by the DHA within the U.S.

Department of Defense, which enables us to research and develop a fully portable, handheld version

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a material adverse impact on the Company’s business, prospects, results of operations and financial condition.

Under the terms

of the DHA contract, the U.S.

government has the right to terminate the contract for convenience or to terminate for default if

we fail to meet our obligations as set forth in the contract.

Under the terms of

the DHA contract, the U.S.

government has the right to terminate the contract for convenience or to terminate for default if we fail

to meet our obligations as set forth in the contract.

We also are party to a Research

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pay us a firm fixed fee based upon our achievement of certain milestones (such as development of the image technology in the handheld

device, validation of the design and development of a handheld device from the current cart-based system, completion of verification

testing builds, and development of commercialization plan) through April 5, 2025.

However, there are no assurances that we will

achieve the contract milestones on a timely basis, or at all.

Failure to receive the fee under the contract could have a material adverse

impact on the Company’s business, prospects, results of operations and financial condition.

device, validation of the design and development of a handheld device from the current cart-based system, completion of verification testing

builds, and development of commercialization plan).

In December 2025, the MTEC contract was extended to run through June 2026.

there are no assurances that we will achieve the contract milestones on a timely basis, or at all.

Failure to receive the fee under the

contract could have a material adverse impact on the Company’s business, prospects, results of operations and financial condition.

We may need additional funding to finance

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our products or delay establishment of sales and marketing capabilities or other activities necessary to commercialize our products.

On 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, the Company have the right to sell

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.

Additionally, 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, the “Yorkville Transaction”).

the Company received $12,500,000 of prepaid advances from Yorkville (the “Pre-Paid Advance”) in the form of convertible promissory

notes (the “Convertible Notes”).

On March 24, 2025, the Company

completed an equity financing and entered into a long-term debt financing agreement with Avenue Venture Opportunities Fund II, L.P., a

fund of Avenue Capital Group (the “Avenue Financing”), with an initial draw-down of $8.5 million.

The term of the Avenue

Financing is for three years, with an interest-only payment period of no less than 15 months, which can be extended to 24 months upon

achieving the milestones for the second financing tranche.

The second financing tranche, which includes an additional $6.5 million

in debt financing from Avenue Capital Group is contingent upon;

(i) FDA clearance of the DeepView System and (ii) the Company completing

a $7.0 million equity raise.

The borrowings under the Avenue Financing accrue interest at a variable amount per annum equal to the

greater of (i) the sum of (A) the Prime Rate plus (B) 5.25%, and (ii) 12.75%, and they mature on March 1, 2028 (the

“Maturity Date”).

In addition, on the Maturity Date a final payment of $0.8 million is due to Avenue Capital Group and

is accrued as debt as of September 30, 2025.

The Avenue Financing is described more in depth below.

Based on our current operating

plan, we believe that our cash and cash equivalents, together with the remaining funding available to us under the Purchase Agreement,

the BARDA contract, the MTEC Agreement, and the Yorkville financing will be sufficient to meet our capital requirements and fund our

operations through at least the next 12 months from the release date of the consolidated financial statements included in this annual

However, we have based these estimates on assumptions that may prove to be wrong, and we could utilize our available capital

resources sooner than we currently expect.

Changing circumstances could cause us to consume capital significantly faster than we currently

anticipate, and we may need to raise capital sooner or in greater amounts than currently expected because of circumstances beyond our

plan, we believe that our cash and cash equivalents, together with the remaining funding available to us under the BARDA contract, the

MTEC Agreement, the Avenue Financing, the Yorkville SEPA and other financings completed by the Company will be sufficient to meet our

capital requirements and fund our operations through at least the next 12 months from the release date of the consolidated financial

statements included in this annual report.

However, we have based these estimates on assumptions that may prove to be wrong, and we could

utilize our available capital resources sooner than we currently expect.

Changing circumstances could cause us to consume capital significantly

faster than we currently anticipate, and we may need to raise capital sooner or in greater amounts than currently expected because of

circumstances beyond our control.

We may require additional

capital in the future to fund our operating expenses and to further our product development efforts, including seeking the necessary

regulatory clearances, approvals, De Novo classifications, or certifications (each which cannot be guaranteed and may take longer than

planned) for our DeepView System and growing our sales and marketing organization.

To the extent additional capital is necessary, there

are no assurances that we will be able to raise additional capital on favorable terms or at all, and therefore we may not be able to

execute our business plan.

capital in the future to fund our operating expenses and to further our product development efforts, including seeking the necessary regulatory

clearances, approvals, De Novo classifications, or certifications (each which cannot be guaranteed and may take longer than planned) for

our DeepView System and growing our sales and marketing organization.

To the extent additional capital is necessary, there are no assurances

that we will be able to raise additional capital on favorable terms or at all, and therefore we may not be able to execute our business

Our future funding requirements will depend on many factors, including:

the cost of our research

and development activities;

the scope, rate of progress

and cost of our clinical studies;

the cost and timing of

additional regulatory clearances, approvals, De Novo classifications, or certifications;

the degree and rate of

market acceptance of our DeepView System, assuming we receive the necessary regulatory clearances, approvals, De Novo classifications,

or certifications (each of which cannot be guaranteed and may take longer than planned);

the scope and timing of

investment in our sales force and expansion of our commercial organization;

the costs associated with

manufacturing our DeepView System at increased production levels;

the terms and timing of

any collaborative, licensing and other arrangements that we may establish;

the costs associated with

any product recall that may occur;

the costs of attaining,

defending and enforcing our intellectual property rights;

the emergence of competing

new products or technologies or other adverse market developments;

the impact on our business

from the global COVID-19 pandemic or any other pandemic, epidemic or outbreak of an infectious disease.

the cost of our research and development activities;

the scope, rate of progress and cost of our clinical studies;

the cost and timing of additional regulatory clearances, approvals, De Novo classifications, or certifications;

the degree and rate of market acceptance of our DeepView System, assuming we receive the necessary regulatory clearances, approvals, De Novo classifications, or certifications (each of which cannot be guaranteed and may take longer than planned);

the scope and timing of investment in our sales force and expansion of our commercial organization;

the costs associated with manufacturing our DeepView System at increased production levels;

the terms and timing of any collaborative, licensing and other arrangements that we may establish;

the costs associated with any product recall that may occur;

the costs of attaining, defending and enforcing our intellectual property rights;

the emergence of competing new products or technologies or other adverse market developments;

the impact on our business from any pandemic, epidemic or outbreak of an infectious disease.

We may seek to raise additional

capital through equity offerings or debt financings and such additional financing may not be available to us on acceptable terms, or

capital through equity offerings or debt financings and such additional financing may not be available to us on acceptable terms, or at

In addition, any additional equity or debt financing that we raise may contain terms that are not favorable to us or our stockholders.

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capabilities or other activities necessary to commercialize our products.

If this were to occur, our ability to grow and support our

business and to respond to market challenges could be significantly limited, which could have a material adverse effect on our business,

financial condition and results of operations.

If this were to occur, our ability to grow and support our business

and to respond to market challenges could be significantly limited, which could have a material adverse effect on our business, financial

condition and results of operations.

Risks Related to Product Development and Regulatory

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testing, manufacturing, or marketing.

While preliminary results have been encouraging and indicative of the potential performance of

our DeepView System, data already obtained, or obtained in the future, from clinical studies do not necessarily predict the results that

will be obtained from later clinical studies.

We will be required to incur significant costs in obtaining market authorization, or De

Novo classifications for our DeepView System.

While preliminary results have been encouraging and indicative of the potential performance of our

DeepView System, data already obtained, or obtained in the future, from clinical studies do not necessarily predict the results that will

be obtained from later clinical studies.

We will be required to incur significant costs in obtaining market authorization, or De Novo

classifications for our DeepView System.

In the United States,

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clearance, approval, or certification by regulatory authorities in other countries.

However, failure to obtain or delay in obtaining

authorization, registration, clearance, approval, or certification in one or more regulatory jurisdictions may have a negative effect

on the regulatory process in others.

However, failure to obtain or delay in obtaining authorization,

registration, clearance, approval, or certification in one or more regulatory jurisdictions may have a negative effect on the regulatory

process in others.

We may experience significant delays in

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for several reasons, including:

we may fail to or be unable

to conduct the clinical trials in accordance with regulatory requirements;

selection and onboarding

of clinical sites or a Contract Research Organization (“CRO”) may take longer than anticipated;

sites participating in

a clinical trial may drop out of the trial, which may require us to engage new sites for an expansion of the number of sites that

are permitted to be involved in the trial;

patients may not enroll

in, remain in or complete, clinical trials at the rates we expect;

adverse events or unexpected

developments may occur that affect the patients’ safety;

supply issues may prevent

us from continuing to use our investigational devices in clinical evaluations;

clinical investigators

may not perform our clinical trials on our anticipated schedule or consistent with the clinical trial protocol and good clinical

we may fail to or be unable to conduct the clinical trials in accordance with regulatory requirements;

selection and onboarding of clinical sites or a Contract Research Organization (“CRO”) may take longer than anticipated;

sites participating in a clinical trial may drop out of the trial, which may require us to engage new sites for an expansion of the number of sites that are permitted to be involved in the trial;

patients may not enroll in, remain in or complete, clinical trials at the rates we expect;

adverse events or unexpected developments may occur that affect the patients’ safety;

supply issues may prevent us from continuing to use our investigational devices in clinical evaluations;

clinical investigators may not perform our clinical trials on our anticipated schedule or consistent with the clinical trial protocol and good clinical practices.

In addition, the FDA, applicable

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US, or certification of a device for many reasons, including:

our inability to demonstrate

to the satisfaction of the FDA or the applicable regulatory entity or notified body that our products are (i) substantially equivalent,

in the case of a 510(k) clearance, (ii) safe or effective for their intended uses, in the case of a PMA, or (iii) that general

controls alone or general and special controls together provide reasonable assurance of safety and effectiveness for the intended

use, in the case of De Novo classification;

the disagreement of the

FDA or the applicable foreign regulatory body with the design or implementation of our clinical trials (including, for purposes of

the EU, clinical investigations) or the interpretation of data from pre-clinical studies or clinical trials, as applicable and to

the extent required to support marketing authorization or certification;

our inability to demonstrate

that the clinical and other benefits of the device outweigh the risks;

the manufacturing process

or facilities we use may not meet applicable requirements;

unanticipated discovery

of issues that relate to safety or effectiveness of the device during or after the regulatory review process;

the potential for policies

or regulations of the FDA or applicable foreign regulatory bodies to change significantly in a manner rendering our clinical data,

as applicable, and/or regulatory filings insufficient for market authorization, De Novo classification, or certification.

our inability to demonstrate to the satisfaction of the FDA or the applicable regulatory entity or notified body that our products are (i) substantially equivalent, in the case of a 510(k) clearance, (ii) safe or effective for their intended uses, in the case of a PMA, or (iii) that general controls alone or general and special controls together provide reasonable assurance of safety and effectiveness for the intended use, in the case of De Novo classification;

the disagreement of the FDA or the applicable foreign regulatory body with the design or implementation of our clinical trials (including, for purposes of the EU, clinical investigations) or the interpretation of data from pre-clinical studies or clinical trials, as applicable and to the extent required to support marketing authorization or certification;

our inability to demonstrate that the clinical and other benefits of the device outweigh the risks;

the manufacturing process or facilities we use may not meet applicable requirements;

unanticipated discovery of issues that relate to safety or effectiveness of the device during or after the regulatory review process;

the potential for policies or regulations of the FDA or applicable foreign regulatory bodies to change significantly in a manner rendering our clinical data, as applicable, and/or regulatory filings insufficient for market authorization, De Novo classification, or certification.

If our clinical trials are

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authorizations or certifications to commercialize our products.

We do not have the

ability to independently conduct all of our pre-clinical and clinical trials for our DeepView System and to prepare the associated

regulatory submissions without the participation of third-party research hospitals, burn and wound centers.

We must rely on third

parties such as CROs, medical institutions and clinical investigators to conduct such trials.

If these third parties do not

successfully carry-out their contractual duties or comply with regulatory obligations, including compliance with Good Clinical

Practice (“GCP”) requirements or meet expected deadlines, if these third parties need to be replaced, if the quality or

accuracy of the data they obtain is compromised due to a failure to adhere to our clinical protocols or regulatory requirements or

for other reasons, or if the prepared regulatory submission does not meet the regulatory agencies’ expectations or

requirements, our pre-clinical development activities or clinical trials may be extended, delayed, suspended or terminated.

Furthermore, our third-party clinical trial investigators may be delayed in conducting our clinical trials for reasons outside of

their control, including the COVID-19 pandemic, or another pandemic, epidemic or outbreak of an infectious disease.

In the event of

such extensions, delays, suspensions or terminations, we may not be able to obtain market authorization, De Novo classification,

certification or other required regulatory authorizations or certifications for, or successfully commercialize, our DeepView System

on a timely basis, if at all, and our business, financial condition and results of operations may be adversely affected.

We do not have the ability

to independently conduct all of our pre-clinical and clinical trials for our DeepView System and to prepare the associated regulatory

submissions without the participation of third-party research hospitals, burn and wound centers.

We must rely on third parties such as

CROs, medical institutions and clinical investigators to conduct such trials.

If these third parties do not successfully carry-out their

contractual duties or comply with regulatory obligations, including compliance with Good Clinical Practice (“GCP”) requirements

or meet expected deadlines, if these third parties need to be replaced, if the quality or accuracy of the data they obtain is compromised

due to a failure to adhere to our clinical protocols or regulatory requirements or for other reasons, or if the prepared regulatory submission

does not meet the regulatory agencies’ expectations or requirements, our pre-clinical development activities or clinical trials

may be extended, delayed, suspended or terminated.

Furthermore, our third-party clinical trial investigators may be delayed in conducting

our clinical trials for reasons outside of their control, including any pandemic, epidemic or outbreak of an infectious disease.

event of such extensions, delays, suspensions or terminations, we may not be able to obtain market authorization, De Novo classification,

certification or other required regulatory authorizations or certifications for, or successfully commercialize, our DeepView System on

a timely basis, if at all, and our business, financial condition and results of operations may be adversely affected.

New legislation and regulations and legislative

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For example, it is unclear the extent to which any proposals,

if adopted, could impose additional regulatory requirements on us that could delay our ability to obtain new 510(k) clearances,

increase the costs of compliance, or restrict our ability to maintain our current clearances, or otherwise create competition that may

negatively affect our business.

The FDA regulations and

guidance are often revised or reinterpreted by the FDA in ways that may significantly affect our business.

Any new statutes or regulations

or revisions or reinterpretations of existing statutes or regulations may impose additional costs or lengthen review times or make it

more difficult to obtain market authorization for our DeepView System.

We cannot determine what effect changes in regulations, statutes,

legal interpretation or policies, when and if promulgated, enacted or adopted may have on our business.

Such changes could, among other

things, require:

additional testing prior to obtaining marketing authorization;

if adopted, could impose additional regulatory requirements on us that could delay our ability to obtain new 510(k) clearances, increase

the costs of compliance, or restrict our ability to maintain our current clearances, or otherwise create competition that may negatively

affect our business.

The FDA regulations and guidance

are often revised or reinterpreted by the FDA in ways that may significantly affect our business.

Any new statutes or regulations or revisions

or reinterpretations of existing statutes or regulations may impose additional costs or lengthen review times or make it more difficult

to obtain market authorization for our DeepView System.

We cannot determine what effect changes in regulations, statutes, legal interpretation

or policies, when and if promulgated, enacted or adopted may have on our business.

Such changes could, among other things, require:

testing prior to obtaining marketing authorization;

changes to manufacturing methods;

recall, replacement

or discontinuance of our products;

recall, replacement or discontinuance of our products;

or additional record keeping.

The FDA’s and other

regulatory authorities’ policies may change and additional government regulations may be promulgated that could prevent, limit

or delay regulatory clearance, approval, or De Novo classification of our DeepView System.

We cannot predict the likelihood, nature or

extent of government regulation that may arise from future legislation or administrative action, either in the United States or

If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if

we are not able to maintain regulatory compliance, we may lose any marketing clearance, approval, or De Novo classification that we may

have obtained and we may not achieve or sustain profitability.

regulatory authorities’ policies may change and additional government regulations may be promulgated that could prevent, limit or

delay regulatory clearance, approval, or De Novo classification of our DeepView System.

We cannot predict the likelihood, nature or extent

of government regulation that may arise from future legislation or administrative action, either in the United States or abroad.

If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not

able to maintain regulatory compliance, we may lose any marketing clearance, approval, or De Novo classification that we may have obtained

and we may not achieve or sustain profitability.

In addition, the landscape

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This new regulatory framework for medical devices in the UK is expected to become applicable as from July 2024.

is not clear to what extent the future UK regulatory framework will align with the EU Medical Devices Regulation, which may lead to duplicative

not clear to what extent the future UK regulatory framework will align with the EU Medical Devices Regulation, which may lead to duplicative

or divergent requirements.

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impact our business.

The ability of the FDA,

foreign regulatory agencies and the notified body, to review and clear, approve, certify, or grant De Novo classifications for new

products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key

personnel and accept the payment of user fees and statutory, regulatory and policy changes.

Average review times at these

organizations have fluctuated in recent years as a result.

In addition, government funding of other government agencies that

oversee clearances and approvals and that fund research and development activities is subject to the political process, which is

inherently fluid and unpredictable.

The ability of the FDA, foreign

regulatory agencies and the notified body, to review and clear, approve, certify, or grant De Novo classifications for new products can

be affected by a variety of factors, including government budget, funding shortages, political climate and funding levels, government

shutdowns, ability to hire and retain key personnel and accept the payment of user fees and statutory, regulatory and policy changes.

Average review times at these organizations have fluctuated in recent years as a result.

In addition, government funding of other

government agencies that oversee clearances and approvals and that fund research and development activities is subject to the political

process, which is inherently fluid and unpredictable.

Disruptions at these agencies

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may adopt similar restrictions, inspection priorities, or other policy measures in response to the COVID-19 or any other public health

emergency or revert to relying on remote interactive evaluations, record requests or information from trusted regulatory partners if

on-site inspections are not feasible.

emergency or revert to relying on remote interactive evaluations, record requests or information from trusted regulatory partners if on-site

inspections are not feasible.

In addition, the FDA reallocated

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notified bodies must be officially designated to certify products and services in accordance with the EU Medical Devices Regulation.

While several notified bodies have been designated, the COVID-19 pandemic significantly slowed down their designation process and the

current designated notified bodies are facing a large amount of requests with the new regulation, resulting in longer notified body review

several notified bodies have been designated, the COVID-19 pandemic significantly slowed down their designation process and the current

designated notified bodies are facing a large amount of requests with the new regulation, resulting in longer notified body review times.

This situation could impact our ability to grow our business in the EU and EEA.

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of any other countries in which we receive the necessary regulatory approvals.

These regulations pertain to the design, development,

evaluation, manufacturing, testing, labeling, marketing, sale, advertising, promotion, distribution, shipping and servicing of products.

These entities regulate and oversee record-keeping procedures, safety alerts, recalls, market withdrawals, removals and field corrective

actions, post-market surveillance, including reporting of deaths or serious injuries and malfunctions that, if they were to reoccur,

could lead to death or serious injury, and product import and export.

These regulations pertain to the design, development, evaluation,

manufacturing, testing, labeling, marketing, sale, advertising, promotion, distribution, shipping and servicing of products.

These entities

regulate and oversee record-keeping procedures, safety alerts, recalls, market withdrawals, removals and field corrective actions, post-market

surveillance, including reporting of deaths or serious injuries and malfunctions that, if they were to reoccur, could lead to death or

serious injury, and product import and export.

The regulations to which

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or De Novo classification, under the FDCA and FDA regulations, the scope of marketing claims we can make about cleared or approved devices,

or devices that were granted De Novo classification is limited to the indications that were previously reviewed and permitted by the

Other countries also have similar laws and regulations restricting marketing to such indications.

If a regulatory agency determines

that any of our marketing claims exceed the scope of permitted indications in a particular country, we may be subject to enforcement

action and/or we may be required to cease making the challenged marketing claims, issue corrective communications, pay fines or stop

selling products until the incorrect claims have been corrected.

or devices that were granted De Novo classification is limited to the indications that were previously reviewed and permitted by the FDA.

countries also have similar laws and regulations restricting marketing to such indications.

If a regulatory agency determines that any

of our marketing claims exceed the scope of permitted indications in a particular country, we may be subject to enforcement action and/or

we may be required to cease making the challenged marketing claims, issue corrective communications, pay fines or stop selling products

until the incorrect claims have been corrected.

Sales of our DeepView System

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to market our products or enhancements in certain international markets effectively, or at all.

The DeepView System requires a De Novo

classification.

The DeepView System requires a De Novo classification.

In the United States,

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In addition, if the FDA or the competent

authorities in the EU member states and EEA countries determine that our promotional materials or training constitute promotion of a

use which is unapproved, not cleared, not covered by the De Novo classification order, not covered by a CE mark, or not in compliance

with other regulatory authorities’ requirements, they could request that we modify our training or promotional materials or subject

us to regulatory or enforcement actions, including the issuance of an untitled letter, a warning letter, an injunction, product seizures,

authorities in the EU member states and EEA countries determine that our promotional materials or training constitute promotion of a use

which is unapproved, not cleared, not covered by the De Novo classification order, not covered by a CE mark, or not in compliance with

other regulatory authorities’ requirements, they could request that we modify our training or promotional materials or subject us

to regulatory or enforcement actions, including the issuance of an untitled letter, a warning letter, an injunction, product seizures,

consent decrees, civil fines, criminal penalties, import detention, import refusals, or import alerts.

If our DeepView System is found to cause

or contribute to adverse medical events, this could interrupt, delay, or prevent its continued development, or negatively affect the

market authorization, De Novo classification, or certification.

We may be required to report them to the FDA or comparable regulatory

authority, and if we fail to do so, we could be subject to sanctions that could harm our reputation, business, financial condition and

results of operations, and become subject to further administrative and regulatory enforcement actions.

The discovery of serious safety

issues with our DeepView System, or a recall of our device either voluntarily or at the direction of the FDA or another governmental

authority, could have a negative impact on us.

If our DeepView System

is approved for commercialization, we will be subject to the FDA’s medical device reporting regulations and similar foreign

regulations, which require us to report to the FDA or comparable regulatory authorities when we receive or become aware of

information that reasonably suggests that one or more of our products may have caused or contributed to a death or serious injury or

malfunctioned in a way that, if the malfunction were to recur, it could cause or contribute to a death or serious injury.

investigational devices in clinical evaluation, investigators are required to submit a report of an unanticipated adverse device

effect (“UADE”) to the sponsor within 10 working days after becoming aware of the UADE.

We, as the sponsor,

must evaluate the UADE and report the result of the investigation to FDA, institutional review boards, and all participating

investigators within 10 working days of receiving the notice of the UADE.

In certain cases, we may be required to

terminate the clinical investigation.

The timing of our obligation to report is triggered by the date when we receive the notice or

when we otherwise become aware of the event, as well as the nature of the event.

We may fail to report within the prescribed

timeframe events of which we become aware.

The investigator in the clinical evaluation may not be aware of the reporting or

notification requirements or may otherwise fail to report a UADE.

We may also fail to recognize that a reportable event has

occurred, especially if it is not reported to us as an adverse event or if it is an adverse event that is unexpected or removed in

time from the use of the product.

If we fail to comply with our reporting obligations, the FDA or comparable regulatory authorities

could act, including warning letters, untitled letters, administrative actions, criminal prosecution, imposition of civil monetary

penalties, delay or termination of clinical investigations, revocation of our marketing authorizations, seizure of our products or

delay in obtaining marketing authorizations or certifications for our product candidates.

or contribute to adverse medical events, this could interrupt, delay, or prevent its continued development, or negatively affect the market

authorization, De Novo classification, or certification.

We may be required to report them to the FDA or comparable regulatory authority,

and if we fail to do so, we could be subject to sanctions that could harm our reputation, business, financial condition and results of

operations, and become subject to further administrative and regulatory enforcement actions.

The discovery of serious safety issues with

our DeepView System, or a recall of our device either voluntarily or at the direction of the FDA or another governmental authority, could

have a negative impact on us.

If our DeepView System is

approved for commercialization, we will be subject to the FDA’s medical device reporting regulations and similar foreign regulations,

which require us to report to the FDA or comparable regulatory authorities when we receive or become aware of information that reasonably

suggests that one or more of our products may have caused or contributed to a death or serious injury or malfunctioned in a way that,

if the malfunction were to recur, it could cause or contribute to a death or serious injury.

For investigational devices in clinical evaluation,

investigators are required to submit a report of an unanticipated adverse device effect (“UADE”) to the sponsor within 10

working days after becoming aware of the UADE.

We, as the sponsor, must evaluate the UADE and report the result of the investigation

to FDA, institutional review boards, and all participating investigators within 10 working days of receiving the notice of the UADE.

certain cases, we may be required to terminate the clinical investigation.

The timing of our obligation to report is triggered by the

date when we receive the notice or when we otherwise become aware of the event, as well as the nature of the event.

We may fail to report

within the prescribed timeframe events of which we become aware.

The investigator in the clinical evaluation may not be aware of the reporting

or notification requirements or may otherwise fail to report a UADE.

We may also fail to recognize that a reportable event has occurred,

especially if it is not reported to us as an adverse event or if it is an adverse event that is unexpected or removed in time from the

use of the product.

If we fail to comply with our reporting obligations, the FDA or comparable regulatory authorities could act, including

warning letters, untitled letters, administrative actions, criminal prosecution, imposition of civil monetary penalties, delay or termination

of clinical investigations, revocation of our marketing authorizations, seizure of our products or delay in obtaining marketing authorizations

or certifications for our product candidates.

The FDA and in certain cases,

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in design or manufacture of a product or in the event that a product poses an unacceptable risk to health.

The FDA’s authority

to require a recall must be based on a finding that there is reasonable probability that the device could cause serious injury or death.

The FDA’s authority to

require a recall must be based on a finding that there is reasonable probability that the device could cause serious injury or death.

We may also choose to voluntarily recall a product if we determine that such reasonable probability exists, or otherwise, if any material

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action we take to redress a product’s deficiencies or defects, the FDA or foreign regulatory authorities or bodies may require,

or we may decide, that we need to obtain new clearances, approvals, De Novo classifications, or certifications for the device before

we may market or distribute the corrected device.

Seeking such clearances, approvals, De Novo classifications, or certifications may

delay our ability to replace the recalled devices in a timely manner.

Moreover, if we do not adequately address problems associated with

our devices, we may face additional regulatory enforcement action, including FDA or foreign regulatory bodies’ warning letters,

product seizures, injunctions, administrative penalties or civil or criminal fines.

Quality problems and product liability

claims could lead to recalls or safety alerts, reputational harm, adverse verdicts or costly settlements, and could have a material adverse

effect on our business, results of operations, financial condition, and cash flows.

or we may decide, that we need to obtain new clearances, approvals, De Novo classifications, or certifications for the device before we

may market or distribute the corrected device.

Seeking such clearances, approvals, De Novo classifications, or certifications may delay

our ability to replace the recalled devices in a timely manner.

Moreover, if we do not adequately address problems associated with our

devices, we may face additional regulatory enforcement action, including FDA or foreign regulatory bodies’ warning letters, product

seizures, injunctions, administrative penalties or civil or criminal fines.

Quality problems and product liability claims

could lead to recalls or safety alerts, reputational harm, adverse verdicts or costly settlements, and could have a material adverse effect

on our business, results of operations, financial condition, and cash flows.

Quality is extremely important

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exposes us to potential product liability risks that are inherent in the design, manufacture, and marketing of medical devices.

commercialized, many of our products will be used in settings with seriously ill patients where the devices’ failure may cause

serious adverse effects on the patients.

Component failures, manufacturing non-conformances, design defects, off-label or unapproved

use, insufficient training of healthcare professionals, or inadequate disclosure of product-related risks or product-related information

with respect to our products, if they were to occur, could result in an unsafe condition or injury to a patient.

These problems could

lead to recall of, or issuance of a safety alert relating to, our products, and could result in product liability claims and lawsuits,

including class actions.

If such problems occur during clinical investigations, FDA or other foreign regulatory agencies may refuse to

grant market authorization or a De Novo classification request, or issue certifications for our products.

In addition, negative publicity

resulting from such problems may negatively affect or seriously hinder the sales of our products even after market authorization, De

Novo classification, or certification.

Any of the foregoing problems, including future product liability claims or recalls, regardless

of their ultimate outcome, could harm our reputation and have a material adverse effect on our business, results of operations, financial

condition and cash flows.

Once commercialized,

many of our products will be used in settings with seriously ill patients where the devices’ failure may cause serious adverse effects

on the patients.

Component failures, manufacturing non-conformances, design defects, off-label or unapproved use, insufficient training

of healthcare professionals, or inadequate disclosure of product-related risks or product-related information with respect to our products,

if they were to occur, could result in an unsafe condition or injury to a patient.

These problems could lead to recall of, or issuance

of a safety alert relating to, our products, and could result in product liability claims and lawsuits, including class actions.

problems occur during clinical investigations, FDA or other foreign regulatory agencies may refuse to grant market authorization or a

De Novo classification request, or issue certifications for our products.

In addition, negative publicity resulting from such problems

may negatively affect or seriously hinder the sales of our products even after market authorization, De Novo classification, or certification.

Any of the foregoing problems, including future product liability claims or recalls, regardless of their ultimate outcome, could harm

our reputation and have a material adverse effect on our business, results of operations, financial condition and cash flows.

The FDA and other regulatory enforcement

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improperly promoted off-label or unapproved uses, we may become subject to significant liability.

If we decide to market

any of our products, our marketing practices must stay within the scope of the permitted claims under the market authorization or De

Novo classification order that we may receive in the future.

The FDA and other regulatory enforcement agencies strictly regulate the

promotional claims that may be made about medical devices.

While we cannot restrict or dictate the healthcare professionals’

use of our devices, we cannot market for any off-label uses, or any uses that FDA has not reviewed and permitted.

The use of the

DeepView System for indications other than those for which FDA cleared, approved, or granted De Novo classification requests, or

otherwise were certified by a notified body or foreign regulatory enforcement authority, may not effectively diagnose conditions not

referenced in product indications, which could harm our reputation in the marketplace among clinicians.

If we are found to have

promoted such off-label uses or unapproved uses, we may become subject to significant government fines and other related liability.

For example, if the FDA or any foreign regulatory body determines that our promotional materials or training constitute promotion of

an off-label use, it could request that we modify our training or promotional materials or subject us to regulatory or enforcement

actions, including the issuance or imposition of an untitled letter, which is used for violators that do not necessitate a warning

letter, injunction, seizure, civil fine, or criminal penalties, among others.

It is also possible that other federal, state or

foreign enforcement authorities might take action under other regulatory authority, such as false claims laws, if they consider our

business activities to constitute promotion of an off-label use, which could result in significant penalties, including, but not

limited to, criminal, civil and administrative penalties, damages, fines, disgorgement, exclusion from participation in government

healthcare programs and the curtailment of our operations.

The federal government has levied large civil and criminal fines against

companies for alleged improper promotion and has enjoined several companies from engaging in off-label promotion or promotion of

unapproved uses.

If we decide to market any

of our products, our marketing practices must stay within the scope of the permitted claims under the market authorization or De Novo

classification order that we may receive in the future.

The FDA and other regulatory enforcement agencies strictly regulate the promotional

claims that may be made about medical devices.

While we cannot restrict or dictate the healthcare professionals’ use of our devices,

we cannot market for any off-label uses, or any uses that FDA has not reviewed and permitted.

The use of the DeepView System for indications

other than those for which FDA cleared, approved, or granted De Novo classification requests, or otherwise were certified by a notified

body or foreign regulatory enforcement authority, may not effectively diagnose conditions not referenced in product indications, which

could harm our reputation in the marketplace among clinicians.

If we are found to have promoted such off-label uses or unapproved uses,

we may become subject to significant government fines and other related liability.

For example, if the FDA or any foreign regulatory body

determines that our promotional materials or training constitute promotion of an off-label use, it could request that we modify our training

or promotional materials or subject us to regulatory or enforcement actions, including the issuance or imposition of an untitled letter,

which is used for violators that do not necessitate a warning letter, injunction, seizure, civil fine, or criminal penalties, among others.

It is also possible that other federal, state or foreign enforcement authorities might take action under other regulatory authority, such

as false claims laws, if they consider our business activities to constitute promotion of an off-label use, which could result in significant

penalties, including, but not limited to, criminal, civil and administrative penalties, damages, fines, disgorgement, exclusion from participation

in government healthcare programs and the curtailment of our operations.

The federal government has levied large civil and criminal fines

against companies for alleged improper promotion and has enjoined several companies from engaging in off-label promotion or promotion

of unapproved uses.

The FDA has also requested that companies enter into consent decrees or permanent injunctions under which specified

promotional conduct is changed or curtailed.

In addition, clinicians

may misuse our products or use improper techniques if they are not adequately trained, potentially leading to misdiagnosis, injury, and

an increased risk of product liability.

In addition, clinicians may

misuse our products or use improper techniques if they are not adequately trained, potentially leading to misdiagnosis, injury, and an

increased risk of product liability.

If our device is misused or used with improper technique, we may become subject to costly litigation

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The laws that may affect our practices and arrangements include, but are not limited to:

federal Anti-Kickback

Statute, which prohibits, among other things, persons or entities from knowingly and willfully soliciting, offering, receiving or

paying any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward either the referral

of an individual for, or the purchase, lease, order, or arranging for or recommending the purchase, lease or order of, any good or

service, for which payment may be made, in whole or in part, under federal healthcare programs such as Medicare and Medicaid.

term “remuneration” has been broadly interpreted to include anything of value, and the government can establish a violation

of the Anti-Kickback Statute without proving that a person or entity had actual knowledge of, or a specific intent to violate, the

The Anti-Kickback Statute is subject to evolving interpretations and has been applied by government enforcement officials to

a number of common business arrangements in the medical device industry.

There are a number of statutory exceptions and regulatory

safe harbors protecting some common activities from prosecution;

however, those exceptions and safe harbors are drawn narrowly, and

there is no exception or safe harbor for many common business activities.

Failure to meet all of the requirements of a particular

statutory exception or regulatory safe harbor does not make the conduct per se illegal under the Anti-Kickback Statute, but the legality

of the arrangement will be evaluated on a case-by-case basis based on the totality of the facts and circumstances.

Practices that

involve remuneration to those who prescribe, purchase, or recommend medical device products, including discounts, or engaging individuals

as speakers, consultants, or advisors, may be subject to scrutiny if they do not fit squarely within an exception or safe harbor.

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

The term “remuneration” has been broadly interpreted to include anything of value, and the government can establish a violation of the Anti-Kickback Statute without proving that a person or entity had actual knowledge of, or a specific intent to violate, the law.

The Anti-Kickback Statute is subject to evolving interpretations and has been applied by government enforcement officials to a number of common business arrangements in the medical device industry.

There are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution;

however, those exceptions and safe harbors are drawn narrowly, and there is no exception or safe harbor for many common business activities.

Failure to meet all of the requirements of a particular statutory exception or regulatory safe harbor does not make the conduct per se illegal under the Anti-Kickback Statute, but the legality of the arrangement will be evaluated on a case-by-case basis based on the totality of the facts and circumstances.

Practices that involve remuneration to those who prescribe, purchase, or recommend medical device products, including discounts, or engaging individuals as speakers, consultants, or advisors, may be subject to scrutiny if they do not fit squarely within an exception or safe harbor.

Our practices may not in all cases meet all of the criteria for safe harbor protection from anti-kickback liability;

federal civil

False Claims Act, which prohibits any person from, among other things, knowingly presenting, or causing to be presented false or

fraudulent claims for payment of government funds;

knowingly making, using or causing to be made or used, a false record or statement

material to an obligation to pay money to the government or knowingly and improperly avoiding, decreasing or concealing an obligation

to pay money to the U.S.

federal civil False Claims Act, which prohibits any person from, among other things, knowingly presenting, or causing to be presented false or fraudulent claims for payment of government funds;

knowingly making, using or causing to be made or used, a false record or statement material to an obligation to pay money to the government or knowingly and improperly avoiding, decreasing or concealing an obligation to pay money to the U.S.

federal government.

In addition, any claims submitted as a result of a violation of the federal Anti-Kickback

Statute constitute false claims and are subject to enforcement under the False Claims Act.

Actions under the False Claims Act may

be brought by the government or as a qui tam action by a private individual in the name of the government and to share in any monetary

In addition, any claims submitted as a result of a violation of the federal Anti-Kickback Statute constitute false claims and are subject to enforcement under the False Claims Act.

Actions under the False Claims Act may be brought by the government or as a qui tam action by a private individual in the name of the government and to share in any monetary recovery.

Qui tam actions are filed under seal and impose a mandatory duty on the U.S.

Department of Justice to investigate

such allegations.

False Claims Act liability is potentially significant in the healthcare industry because the statute provides for

treble damages and significant mandatory penalties (adjusted annually for inflation) per false claim or statement for violations.

Because of the potential for large monetary exposure, healthcare companies often resolve allegations without admissions of liability

for significant and sometimes large settlement amounts to avoid the uncertainty of treble damages and per claim penalties that may

be awarded in litigation proceedings.

Many device manufacturers have resolved investigations of alleged improper activities, including

causing false claims to be submitted as a result of the marketing of their products for unapproved and thus non reimbursable uses,

and other interactions with prescribers and others including those that may have affected their billing or coding practices and submission

to the federal government.

Moreover, to avoid the risk of exclusion from federal healthcare programs as a result of a False Claims

Act settlement, companies may enter into corporate integrity agreements with the government, which may impose substantial costs on

companies to ensure compliance.

There are also criminal penalties, including imprisonment and criminal fines, for making or presenting

a false or fictitious or fraudulent claim or statement to the federal government;

criminal healthcare statutes

that were added by the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) and its implementing

regulations, which impose criminal and civil liability for, among other things, knowingly and willfully executing, or attempting

to execute, a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up

a material fact or making any materially false statement, in connection with the delivery of, or payment for healthcare benefits,

items or services by a healthcare benefit program, which includes both government and privately funded benefits programs;

federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific

intent to violate them in order to have committed a violation;

the Eliminating Kickbacks

in Recovery Act (“EKRA”), 18 U.S.C.

§ 220, makes it a federal crime for anyone, with respect to services covered

by a health care benefit program, to knowingly and willfully solicit or receive any remuneration in return for referring a patient

or patronage to a recovery home, clinical treatment facility, or laboratory;

or to pay or offer any remuneration to induce a referral

of an individual to a recovery home, clinical treatment facility, or laboratory;

or in exchange for an individual using the services

of that recovery home, clinical treatment facility, or laboratory.

EKRA applies more broadly than the federal Anti-Kickback Statute,

as “health care benefit program” includes not only state and federal health care programs, but also private health plans.

Department of Justice to investigate such allegations.

False Claims Act liability is potentially significant in the healthcare industry because the statute provides for treble damages and significant mandatory penalties (adjusted annually for inflation) per false claim or statement for violations.

Because of the potential for large monetary exposure, healthcare companies often resolve allegations without admissions of liability for significant and sometimes large settlement amounts to avoid the uncertainty of treble damages and per claim penalties that may be awarded in litigation proceedings.

Many device manufacturers have resolved investigations of alleged improper activities, including causing false claims to be submitted as a result of the marketing of their products for unapproved and thus non reimbursable uses, and other interactions with prescribers and others including those that may have affected their billing or coding practices and submission to the federal government.

Moreover, to avoid the risk of exclusion from federal healthcare programs as a result of a False Claims Act settlement, companies may enter into corporate integrity agreements with the government, which may impose substantial costs on companies to ensure compliance.

There are also criminal penalties, including imprisonment and criminal fines, for making or presenting a false or fictitious or fraudulent claim or statement to the federal government;

criminal healthcare statutes that were added by the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) and its implementing regulations, which impose criminal and civil liability for, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement, in connection with the delivery of, or payment for healthcare benefits, items or services by a healthcare benefit program, which includes both government and privately funded benefits programs;

similar to the U.S.

federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate them in order to have committed a violation;

the Eliminating Kickbacks in Recovery Act (“EKRA”), 18 U.S.C.

§ 220, makes it a federal crime for anyone, with respect to services covered by a health care benefit program, to knowingly and willfully solicit or receive any remuneration in return for referring a patient or patronage to a recovery home, clinical treatment facility, or laboratory;

or to pay or offer any remuneration to induce a referral of an individual to a recovery home, clinical treatment facility, or laboratory;

or in exchange for an individual using the services of that recovery home, clinical treatment facility, or laboratory.

EKRA applies more broadly than the federal Anti-Kickback Statute, as “health care benefit program” includes not only state and federal health care programs, but also private health plans.

EKRA also has fewer statutory safe harbors and no regulatory state harbors.

Violations of this provision may result in substantial

fines and/or imprisonment.

Additional violations that may be imposed include sanctions, licensure revocations, or the exclusion from

participating in governmental healthcare programs;

the Physician Payments

Sunshine Act (the “Sunshine Act”) and its implementing regulations, which requires certain manufacturers of drugs, devices,

biologics and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program to

report annually to the CMS information related to certain payments made in the preceding calendar year and other transfers of value

to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family

Beginning January 1, 2022, manufacturers will also be required to report payments and other transfers of value made

during the prior calendar year to physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists,

and anesthesiology assistants;

foreign and state laws

and regulations, including state payment reporting, anti-kickback and false claims laws, that may apply to items or services reimbursed

by any third-party payor, including private insurers;

foreign and state laws that require medical device companies to comply with

the medical device industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the U.S.

government and other national governments, or otherwise restrict payments that may be made to healthcare providers and other potential

referral sources;

and foreign and state laws and regulations that require drug and device manufacturers to report information related

to payments and other transfers of value to dental practitioners and other healthcare providers or marketing expenditures, many of

which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

Violations of this provision may result in substantial fines and/or imprisonment.

Additional violations that may be imposed include sanctions, licensure revocations, or the exclusion from participating in governmental healthcare programs;

the Physician Payments Sunshine Act (the “Sunshine Act”) and its implementing regulations, which requires certain manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program to report annually to the CMS information related to certain payments made in the preceding calendar year and other transfers of value to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members.

Beginning January 1, 2022, manufacturers will also be required to report payments and other transfers of value made during the prior calendar year to physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, and anesthesiology assistants;

foreign and state laws and regulations, including state payment reporting, anti-kickback and false claims laws, that may apply to items or services reimbursed by any third-party payor, including private insurers;

foreign and state laws that require medical device companies to comply with the medical device industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the U.S.

federal government and other national governments, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources;

and foreign and state laws and regulations that require drug and device manufacturers to report information related to payments and other transfers of value to dental practitioners and other healthcare providers or marketing expenditures, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

The scope and enforcement

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whether or not retroactive.

Because of the breadth of these laws and the narrowness of available statutory and regulatory exemptions

or safe harbors, it is possible that some of our future activities could be subject to challenge under one or more of such laws.

government investigation, even if we are able to successfully defend against it, will require the expenditure of significant resources,

is likely to generate negative publicity, harm our reputation and potentially our financial condition and divert the attention of our

Because of the breadth of these laws and the narrowness of available statutory and regulatory exemptions or

safe harbors, it is possible that some of our future activities could be subject to challenge under one or more of such laws.

Any government

investigation, even if we are able to successfully defend against it, will require the expenditure of significant resources, is likely

to generate negative publicity, harm our reputation and potentially our financial condition and divert the attention of our management.

Moreover, any investigation into our practices could cause adverse publicity and require a costly and time-consuming response.

If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may

be subject to significant civil, criminal and administrative penalties, damages, fines, imprisonment of individuals, exclusion from government

funded healthcare programs, such as Medicare and Medicaid, imposition of compliance obligations and monitoring, and the curtailment or

restructuring of our operations.

operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject

to significant civil, criminal and administrative penalties, damages, fines, imprisonment of individuals, exclusion from government funded

healthcare programs, such as Medicare and Medicaid, imposition of compliance obligations and monitoring, and the curtailment or restructuring

of our operations.

Any of the foregoing consequences could seriously harm our business and our financial results.

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In the United States,

there have been, and we expect there will continue to be, a number of legislative and regulatory changes to the healthcare system in

ways that may harm our future revenues and profitability and the demand for our DeepView System, if it receives the necessary market

authorization.

Federal and state lawmakers regularly propose and, at times, enact legislation that would result in significant changes

to the healthcare system, some of which are intended to contain or reduce the costs of medical products and services.

Current and future

legislative and regulatory proposals to further reform healthcare or reduce healthcare costs may limit coverage of or lower reimbursement

for the procedures associated with the use of our DeepView System.

The cost containment measures that payors and providers are instituting

and the effect of any healthcare reform initiative implemented in the future could impact our revenue from the sale of our DeepView System.

there have been, and we expect there will continue to be, a number of legislative and regulatory changes to the healthcare system in ways

that may harm our future revenues and profitability and the demand for our DeepView System, if it receives the necessary market authorization.

Federal and state lawmakers regularly propose and, at times, enact legislation that would result in significant changes to the healthcare

system, some of which are intended to contain or reduce the costs of medical products and services.

Current and future legislative and

regulatory proposals to further reform healthcare or reduce healthcare costs may limit coverage of or lower reimbursement for the procedures

associated with the use of our DeepView System.

The cost containment measures that payors and providers are instituting and the effect

of any healthcare reform initiative implemented in the future could impact our revenue from the sale of our DeepView System.

The continuing efforts of

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healthcare may harm:

our ability to set a price

that we believe is fair for our DeepView System;

our ability to generate

revenue and achieve or maintain profitability;

our ability to set a price that we believe is fair for our DeepView System;

our ability to generate revenue and achieve or maintain profitability;

the availability of capital.

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or regulation in the United States on our business, financial condition, prospects and results of operations.

Future changes in

healthcare policy could increase our costs and subject us to additional requirements that may interrupt commercialization of our current

and future solutions, decrease our revenue and impact sales of and pricing for our current and future products.

Future changes in healthcare

policy could increase our costs and subject us to additional requirements that may interrupt commercialization of our current and future

solutions, decrease our revenue and impact sales of and pricing for our current and future products.

If our manufacturers fail to comply with

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We currently outsource all

of our manufacturing to a contract manufacturer and as such we are not in direct control of the manufacture of our products and are,

therefore, exposed to the risk of poor product quality, non-adherence to applicable standards, disruptions in supply chain, or other

of our manufacturing to a contract manufacturer and as such we are not in direct control of the manufacture of our products and are, therefore,

exposed to the risk of poor product quality, non-adherence to applicable standards, disruptions in supply chain, or other matters.

Our third-party manufacturers

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In order to mitigate these

risks, we perform regularly scheduled visits with our contract manufacturer and routinely inspect the quality and performance of the

device in accordance with federally mandated standards and certification standards of the International Organization for Standardization

Our current contract manufacturer, Cobalt Product Solutions, is located within a short driving distance from our

headquarters and allows our employees to have hands-on interaction and timely inspections of the device.

However, a future pandemic,

epidemic or other infectious disease outbreak could hinder or prevent continued hands-on and timely inspections of the device and the

risks, we perform regularly scheduled visits with our contract manufacturer and routinely inspect the quality and performance of the device

in accordance with federally mandated standards and certification standards of the International Organization for Standardization (“ISO”).

Our current contract manufacturer, Cobalt Product Solutions, is located within a short driving distance from our headquarters and allows

our employees to have hands-on interaction and timely inspections of the device.

However, a future pandemic, epidemic or other infectious

disease outbreak could hinder or prevent continued hands-on and timely inspections of the device and the facilities.

Actual or perceived failure to comply with

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state, and foreign data protection laws and regulations ( i.e ., laws and regulations that address privacy and data security).

the United States, numerous federal and state laws and regulations, including data breach notification laws, health information

privacy laws, and consumer protection laws and regulations that govern the collection, processing, use, disclosure, and protection of

health-related and other personal information could apply to our operations or the operations of our partners.

For example, HIPAA, as

amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”), and the regulations

implemented thereunder, or collectively, HIPAA, imposes obligations on “covered entities,” including certain health care

providers, health plans, and health care clearinghouses, and their respective “business associates” that create, receive,

maintain or transmit individually identifiable health information (“PHI”) for or on behalf of a covered entity, as well as

their covered subcontractors with respect to safeguarding the privacy, security and transmission of individually identifiable health

Entities that are found to be in violation of HIPAA, whether as the result of a breach of unsecured PHI, a complaint about

privacy practices, or an audit by HHS may be subject to significant civil, criminal, and administrative fines and penalties and/or additional

reporting and oversight obligations if required to enter into a resolution agreement and corrective action plan with HHS to settle allegations

of HIPAA non-compliance.

the United States, numerous federal and state laws and regulations, including data breach notification laws, health information privacy

laws, and consumer protection laws and regulations that govern the collection, processing, use, disclosure, and protection of health-related

and other personal information could apply to our operations or the operations of our partners.

For example, HIPAA, as amended by the

Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”), and the regulations implemented

thereunder, or collectively, HIPAA, imposes obligations on “covered entities,” including certain health care providers, health

plans, and health care clearinghouses, and their respective “business associates” that create, receive, maintain or transmit

individually identifiable health information (“PHI”) for or on behalf of a covered entity, as well as their covered subcontractors

with respect to safeguarding the privacy, security and transmission of individually identifiable health information.

Entities that are

found to be in violation of HIPAA, whether as the result of a breach of unsecured PHI, a complaint about privacy practices, or an audit

by HHS may be subject to significant civil, criminal, and administrative fines and penalties and/or additional reporting and oversight

obligations if required to enter into a resolution agreement and corrective action plan with HHS to settle allegations of HIPAA non-compliance.

Depending on the facts and circumstances, we could be subject to penalties if we violate HIPAA.

Even when HIPAA does not

apply, according to the Federal Trade Commission (the “FTC”), failing to take appropriate steps to keep consumers’

personal information secure may constitute unfair acts or practices in or affecting commerce in violation of the Federal Trade Commission

The FTC expects a company’s data security measures to be reasonable and appropriate in light of the sensitivity and volume

of consumer information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce

vulnerabilities.

apply, according to the Federal Trade Commission (the “FTC”), failing to take appropriate steps to keep consumers’ personal

information secure may constitute unfair acts or practices in or affecting commerce in violation of the Federal Trade Commission Act.

The FTC expects a company’s data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer

information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities.

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

In addition, certain state

laws govern the privacy and security of health-related and other personal information in certain circumstances, some of which may be

more stringent, broader in scope or offer greater individual rights with respect to protected health information than HIPAA, many of

which may differ from each other, thus, complicating compliance efforts.

Such laws and regulations will be subject to interpretation

by various courts and other governmental authorities, thus creating potentially complex compliance issues for us and our future customers

and strategic partners.

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

criminal penalties and private litigation.

Foreign data protection

laws, including the General Data Protection Regulation (the “GDPR”), which went into effect in May 2018, may also apply

to our processing of health-related and other personal data regardless of where the processing in question is carried out.

laws govern the privacy and security of health-related and other personal information in certain circumstances, some of which may be more

stringent, broader in scope or offer greater individual rights with respect to protected health information than HIPAA, many of which

may differ from each other, thus, complicating compliance efforts.

Such laws and regulations will be subject to interpretation by various

courts and other governmental authorities, thus creating potentially complex compliance issues for us and our future customers and strategic

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

and private litigation.

Foreign data protection laws,

including the General Data Protection Regulation (the “GDPR”), which went into effect in May 2018, may also apply to

our processing of health-related and other personal data regardless of where the processing in question is carried out.

The GDPR imposes

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the information provided to the individuals, the transfer of personal data out of the EEA to jurisdictions deemed to have inadequate,

security breach notifications and confidentiality of the personal data and imposition of substantial potential fines for breaches of

the data protection obligations.

Companies that must comply with the GDPR face increased compliance obligations and risk, including more

robust regulatory enforcement of data protection requirements and potential fines for noncompliance of up to €20 million or

4% of the annual global revenues of the noncompliant company, whichever is greater.

security breach notifications and confidentiality of the personal data and imposition of substantial potential fines for breaches of the

data protection obligations.

Companies that must comply with the GDPR face increased compliance obligations and risk, including more robust

regulatory enforcement of data protection requirements and potential fines for noncompliance of up to €20 million or 4% of the

annual global revenues of the noncompliant company, whichever is greater.

Among other requirements,

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Misconduct by these persons could include intentional, reckless and/or negligent conduct or unauthorized activity that

requirements, including those laws requiring the reporting of true, complete and accurate information to the FDA authorities, such as

reporting of UADEs during clinical investigations;

that relate to clinical investigations, including financial disclosure, informed consent and protection of human subjects, and requirements

that relate to investigational device exemptions;

● manufacturing

standards, such as FDA’s Quality System Regulation (“QSR”) requirements;

and state healthcare fraud and abuse laws and regulations;

that require the true, complete and accurate reporting of financial information or data.

FDA requirements, including those laws requiring the reporting of true, complete and accurate information to the FDA authorities, such as reporting of UADEs during clinical investigations;

GCP that relate to clinical investigations, including financial disclosure, informed consent and protection of human subjects, and requirements that relate to investigational device exemptions;

manufacturing standards, such as FDA’s Quality System Regulation (“QSR”) requirements;

federal and state healthcare fraud and abuse laws and regulations;

laws that require the true, complete and accurate reporting of financial information or data.

In particular, sales, marketing

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would increase our operating expenses, which could adversely affect our business, financial condition and results of operation.

Any failure or

perceived failure by us to comply with AI technology-related laws, rules and regulations could result in proceedings or actions

against us by individuals, consumer rights groups, government agencies or others.

We could incur significant costs in investigating

and defending such claims and, if found liable, pay significant damages or fines or be required to make changes to our technology

and business.

Further, any such proceedings and any subsequent adverse outcomes may subject us to significant negative publicity.

any of these events were to occur, our business, results of operations and financial condition could be materially adversely

Any failure or perceived

failure by us to comply with AI technology-related laws, rules and regulations could result in proceedings or actions against us by individuals,

consumer rights groups, government agencies or others.

We could incur significant costs in investigating and defending such claims and,

if found liable, pay significant damages or fines or be required to make changes to our technology and business.

Further, any such proceedings

and any subsequent adverse outcomes may subject us to significant negative publicity.

If any of these events were to occur, our business,

results of operations and financial condition could be materially adversely affected.

We must comply with environmental and occupational

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System for any number of reasons, including:

of experience with our DeepView System and concerns that we are new to market;

liability risk generally associated with the use of our device;

or perceived lack of (i) sufficient clinical evidence regarding our claims of superior diagnostic assessment and (ii) long-term

data, supporting clinical benefits or the cost-effectiveness of our device over existing diagnostic alternatives;

failure of key opinion leaders to provide recommendations regarding our device, or to assure clinicians and healthcare payors of the

benefits of our device as an attractive alternative to other diagnostic options;

● long-standing

relationships with companies and distributors that sell other diagnostic products for wound care assessment;

over the capital investment required to purchase our DeepView System and perform the DeepView procedure;

of availability of adequate third-party payor coverage or reimbursement;

● competitive

response and negative selling efforts from providers of alternative technologies;

to obtain favorable coverage decisions from payors, including, but not limited to, Medicare or Medicaid;

● limitations

or warnings contained in the labeling cleared or approved by the FDA, if approved, or approved or certified by other authorities or bodies.

lack of experience with our DeepView System and concerns that we are new to the market;

perceived liability risk generally associated with the use of our device;

lack or perceived lack of (i) sufficient clinical evidence regarding our claims of superior diagnostic assessment and (ii) long-term data, supporting clinical benefits or the cost-effectiveness of our device over existing diagnostic alternatives;

the failure of key opinion leaders to provide recommendations regarding our device, or to assure clinicians and healthcare payors of the benefits of our device as an attractive alternative to other diagnostic options;

long-standing relationships with companies and distributors that sell other diagnostic products for wound care assessment;

concerns over the capital investment required to purchase our DeepView System and perform the DeepView procedure;

lack of availability of adequate third-party payor coverage or reimbursement;

competitive response and negative selling efforts from providers of alternative technologies;

failure to obtain favorable coverage decisions from payors, including, but not limited to, Medicare or Medicaid;

limitations or warnings contained in the labeling cleared or approved by the FDA, if approved, or approved or certified by other authorities or bodies.

We believe that educating

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subjects us to a number of risks that could impact our ability to manufacture our products and harm our business, including:

● interruption

of supply resulting from modifications to, or discontinuation of, a third party’s operations;

in product shipments resulting from uncorrected defects or errors, reliability issues or a third party’s failure to produce components

that consistently meet our quality specifications;

fluctuations due to a lack of long-term supply arrangements with our third parties for key components;

to obtain adequate supply or services in a timely manner or on commercially reasonable terms;

identifying and qualifying alternative third parties for the supply of components of our products in a timely manner;

of third parties to comply with applicable provisions of the FDA’s QSR or other applicable laws or regulations enforced by the

FDA, state, local and global regulatory authorities;

to ensure the quality of products manufactured by third parties;

and manufacture delays and interruptions caused by the ongoing COVID-19 crisis that we are not able to address, prepare for, or prevent;

delays related to the evaluation and testing of products and services from alternative third parties and corresponding regulatory qualifications;

towards consolidation within the medical device manufacturing supplier industry;

in delivery by our suppliers and service providers.

interruption of supply resulting from modifications to, or discontinuation of, a third party’s operations;

delays in product shipments resulting from uncorrected defects or errors, reliability issues or a third party’s failure to produce components that consistently meet our quality specifications;

price fluctuations due to a lack of long-term supply arrangements with our third parties for key components;

inability to obtain adequate supply or services in a timely manner or on commercially reasonable terms;

difficulty identifying and qualifying alternative third parties for the supply of components of our products in a timely manner;

inability of third parties to comply with applicable provisions of the FDA’s QSR or other applicable laws or regulations enforced by the FDA, state, local and global regulatory authorities;

inability to ensure the quality of products manufactured by third parties;

production delays related to the evaluation and testing of products and services from alternative third parties and corresponding regulatory qualifications;

trends towards consolidation within the medical device manufacturing supplier industry;

delays in delivery by our suppliers and service providers.

In addition, quarantines,

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We also expect

to provide technical and other services beyond the warranty period pursuant to a supplemental service plan that we sell for our DeepView

We have no history of commercial placements from which to judge our rate of warranty claims, and we expect that the number of

warranty claims we receive may increase as we scale our operations and as commercial placements age.

If product returns or warranty claims

are significant or exceed our expectations, we could incur unanticipated reductions in sales or additional operating expenditures for

parts and service.

In addition, our reputation could be damaged and our device may not achieve the level of market acceptance that we

are targeting in order to achieve and maintain profitability.

Unforeseen warranty exposure could negatively impact our business and financial

to provide technical and other services beyond the warranty period pursuant to a supplemental service plan that we will sell with our

DeepView System.

We have no history of commercial placements from which to judge our rate of warranty claims, and we expect that the number

of warranty claims we receive may increase as we scale our operations and as commercial placements age.

If product returns or warranty

claims are significant or exceed our expectations, we could incur unanticipated reductions in sales or additional operating expenditures

for parts and service.

In addition, our reputation could be damaged and our device may not achieve the level of market acceptance that

we are targeting in order to achieve and maintain profitability.

Unforeseen warranty exposure could negatively impact our business and

financial results.

We need to ensure strong product performance

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our product offering.

Any of the foregoing could have a material adverse

effect on our business, financial condition, prospects and results of operations.

Any of the foregoing could have a material adverse effect on our business, financial condition, prospects and results

of operations.

Although we intend to test

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degree on the continued services of our senior management, directors and key personnel.

Their knowledge of both the market and their

skills and experience are critical elements to our success.

Our senior management team, directors and employees are engaged with us on

an ‘at will’ basis, meaning that both they and we are able to terminate the arrangement without notice.

The loss of key personnel

could have an adverse impact on our business, prospects, results of operations and financial condition.

Their knowledge of both the market and their skills

and experience are critical elements to our success.

Our senior management team, directors and employees are engaged with us on an ‘at

will’ basis, meaning that both they and we are able to terminate the arrangement without notice.

The loss of key personnel could

have an adverse impact on our business, prospects, results of operations and financial condition.

If we are not able to attract and retain

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to develop new products and manage our business effectively.

Our growth plans may place a significant strain on our management and

operational, financial and personnel resources.

In order to execute our strategy, we will need to hire additional individuals.

include product management, marketing and highly technical engineering roles.

Furthermore, some of these hires will be in the UK and/or

Europe to support our European strategy.

Though we have never undertaken this level of growth, our management team has instituted a long-term

hiring plan with key dates that ensure the individual is hired and trained months before the strategy must be executed.

our ability to implement our strategy requires effective planning and management control systems.

Therefore, our future growth and prospects

will depend on our ability to manage this growth.

Our growth plans may place

a significant strain on our management and operational, financial and personnel resources.

In order to execute our strategy, we will need

to hire additional individuals.

These hires include product management, marketing and highly technical engineering roles.

some of these hires will be in the UK and/or Europe to support our European strategy.

Though we have never undertaken this level of growth,

our management, including our Human Resources Manager have instituted a long-term hiring plan with key dates that ensure the individual

is hired and trained months before the strategy must be executed.

Furthermore, our ability to implement our strategy requires effective

planning and management control systems.

Therefore, our future growth and prospects will depend on our ability to manage this growth.

We expect to significantly increase the

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disrupt our operations and/or increase our net losses.

As of March 25, 2025, we

had 76 employees.

As of December 31, 2025,

we had 65 employees.

Over the next several years, we expect to experience significant growth in the number of our employees and the

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may fail and such failure could negatively affect our business, financial condition and results of operations.

The continued

development, maintenance and operation of our software and technologies are important factors impacting the success of our products

and level of market acceptance.

These efforts are expensive and complex and may involve unforeseen difficulties, including material

performance problems and undetected defects or other technical or human errors.

We may encounter technical obstacles, and it is

possible that we may discover additional problems that prevent our software and technologies from operating properly.

software or technologies, individually or collectively, do not function reliably or fail to meet clinician or payor expectations of

performance or outcomes, then clinicians may stop using our products and payors could attempt to cancel their contracts with us.

The continued development,

maintenance and operation of our software and technologies are important factors impacting the success of our products and level of market

These efforts are expensive and complex and may involve unforeseen difficulties, including material performance problems and

undetected defects or other technical or human errors.

We may encounter technical obstacles, and it is possible that we may discover additional

problems that prevent our software and technologies from operating properly.

If our software or technologies, individually or collectively,

do not function reliably or fail to meet clinician or payor expectations of performance or outcomes, then clinicians may stop using our

products and payors could attempt to cancel their contracts with us.

Proprietary software development

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to potential financial and reputational harm if we experience a cyber-attack.

Because the techniques

used to obtain unauthorized access to, or to sabotage, systems change frequently and often were not recognized until launched

against a target, we may be unable to anticipate these techniques or implement adequate preventative measures.

experience security breaches that may remain undetected for an extended period.

If our systems are damaged or cease to function

properly due to any number of causes, ranging from catastrophic events to power outages to security breaches, and our business

continuity plans do not effectively compensate timely, we may suffer interruptions in our ability to manage operations, and would

also be exposed to a risk of loss, including financial assets or litigation and potential liability.

To the extent that any

disruption or security breach were to result in a loss of, or damage to, our data or systems or data or systems of our commercial

partners, or inappropriate or unauthorized access to or disclosure or use of confidential, proprietary, or other sensitive,

personal, or health information, we could incur liability and suffer reputational harm.

Failure to maintain or protect our

information technology systems effectively could negatively affect our business, financial condition and results of operations.

Because the techniques used

to obtain unauthorized access to, or to sabotage, systems change frequently and often were not recognized until launched against a target,

we may be unable to anticipate these techniques or implement adequate preventative measures.

We may also experience security breaches

that may remain undetected for an extended period.

If our systems are damaged or cease to function properly due to any number of causes,

ranging from catastrophic events to power outages to security breaches, and our business continuity plans do not effectively compensate

timely, we may suffer interruptions in our ability to manage operations, and would also be exposed to a risk of loss, including financial

assets or litigation and potential liability.

To the extent that any disruption or security breach were to result in a loss of, or damage

to, our data or systems or data or systems of our commercial partners, or inappropriate or unauthorized access to or disclosure or use

of confidential, proprietary, or other sensitive, personal, or health information, we could incur liability and suffer reputational harm.

Failure to maintain or protect our information technology systems effectively could negatively affect our business, financial condition

and results of operations.

There has been a developing

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would be paid out of cash reserves harming our financial condition and adversely affecting our results of operations.

To the extent that

a claim or claims of a significant nature were made against us, we may be required to expend substantial management resources and litigation

costs in defending such claim(s) and such claim(s), if successful, could reduce margins, harm our reputation in the market, and

increase future insurance premiums, the occurrence of each of which could have an adverse impact on our business, prospects, results

of operations and financial condition.

To the extent that a claim

or claims of a significant nature were made against us, we may be required to expend substantial management resources and litigation costs

in defending such claim(s) and such claim(s), if successful, could reduce margins, harm our reputation in the market, and increase

future insurance premiums, the occurrence of each of which could have an adverse impact on our business, prospects, results of operations

and financial condition.

Our insurance policies are expensive and

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our significant repository of proprietary image data.

As of December 31, 2024,

approximately 340 billion pixels of proprietary image data have been acquired and utilized for the deep learning algorithms training.

We believe this presents a significant barrier to entry to would-be competitors in wound care healing assessments.

The data collection

to clinical output, the flow, quality and control of the data pipeline is managed entirely by us.

Our DeepView System uses deep learning

on its wound data repository to recognize patterns and correlations of injured tissue spectral signatures to produce reliable and reasonable

assessment for clinicians to make accurate and efficient treatment decisions.

Over 340 billion pixels

of proprietary image data have been acquired and utilized for the deep learning algorithms training.

We believe this presents a significant

barrier to entry to would-be competitors in wound care healing assessments.

The data collection to clinical output, the flow, quality

and control of the data pipeline is managed entirely by us.

Our DeepView System uses deep learning on its wound data repository to recognize

patterns and correlations of injured tissue spectral signatures to produce reliable and reasonable assessment for clinicians to make accurate

and efficient treatment decisions.

We have developed strategic

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and improve our DeepView algorithms efficiently and effectively.

We believe we have the pre-eminent proprietary clinical wound database.

We believe we have the pre-eminent proprietary clinical burn wound database.

The depth and quality of our proprietary data is critical to developing a leading wound assessment technology with demonstrated clinical

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so, and even if we are, we may not realize the benefits or costs of such relationships.

We have developed

strategic partnerships with multiple clinical and academic partners and, in the future, we may further form or seek strategic

alliances, create joint ventures or collaborations or enter into licensing or partnership arrangements with third parties that we

believe will complement or augment our sales and marketing efforts with respect to our DeepView System or future products.

not be successful in our efforts to establish such collaborations, and we may not achieve the benefits expected from our current

strategic partnerships or future collaborations.

Any of these relationships may require us to incur non-recurring and other charges,

indemnify the counterparty, increase our near and long-term expenditures, issue securities that dilute our existing stockholders or

disrupt our management and business.

In addition, we face significant competition in seeking appropriate strategic partners and the

negotiation process is time-consuming and complex.

Moreover, we may not be successful in our efforts to establish a strategic

alliance or other alternative arrangements for our products.

We cannot be certain that, following a strategic alliance or similar

arrangement, we will achieve the revenue or specific net income that justifies such transaction.

In addition, any potential future

collaborations may be terminable by our collaborators, and we may not be able to adequately protect our rights under these

Any termination of collaborations we enter into in the future, or delays in entering into new strategic partnership

agreements could delay tour sales and marketing efforts, which would harm our business prospects, financial condition and results of

We have developed strategic

partnerships with multiple clinical and academic partners and, in the future, we may further form or seek strategic alliances, create

joint ventures or collaborations or enter into licensing or partnership arrangements with third parties that we believe will complement

or augment our sales and marketing efforts with respect to our DeepView System or future products.

We may not be successful in our efforts

to establish such collaborations, and we may not achieve the benefits expected from our current strategic partnerships or future collaborations.

Any of these relationships may require us to incur non-recurring and other charges, indemnify the counterparty, increase our near and

long-term expenditures, issue securities that dilute our existing stockholders or disrupt our management and business.

In addition, we

face significant competition in seeking appropriate strategic partners and the negotiation process is time-consuming and complex.

we may not be successful in our efforts to establish a strategic alliance or other alternative arrangements for our products.

be certain that, following a strategic alliance or similar arrangement, we will achieve the revenue or specific net income that justifies

such transaction.

In addition, any potential future collaborations may be terminable by our collaborators, and we may not be able to adequately

protect our rights under these agreements.

Any termination of collaborations we enter into in the future, or delays in entering into new

strategic partnership agreements could delay tour sales and marketing efforts, which would harm our business prospects, financial condition

and results of operations.

Additionally, we may not

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Doing business internationally involves a number of risks, including:

● difficulties

in staffing and managing our international operations;

conflicting and changing laws and regulations such as tax laws, privacy laws, export and import restrictions, employment laws, regulatory

requirements and other governmental clearances, approvals, permits and licenses;

or varied protection for intellectual property rights in some countries;

regulatory clearance, approval or certification where required for our products in various countries;

● requirements

to maintain data and the processing of that data on servers located within such countries;

● complexities

associated with managing multiple payor reimbursement regimes, government payors or patient self-pay systems;

on our ability to penetrate international markets if we are required to manufacture our products locally;

risks, such as longer payment cycles, difficulty collecting accounts receivable, foreign tax laws and complexities of foreign value-added

tax systems, the effect of local and regional financial pressures on demand and payment for our products and exposure to foreign currency

exchange rate fluctuations;

● restrictions

on the site-of-service for use of our products and the economics related thereto for clinicians, providers and payors;

disasters, political and economic instability, including wars, terrorism, political unrest, outbreak of disease, boycotts, curtailment

of trade and other market restrictions;

difficulties in staffing and managing our international operations;

multiple, conflicting and changing laws and regulations such as tax laws, privacy laws, export and import restrictions, employment laws, regulatory requirements and other governmental clearances, approvals, permits and licenses;

reduced or varied protection for intellectual property rights in some countries;

obtaining regulatory clearance, approval or certification where required for our products in various countries;

requirements to maintain data and the processing of that data on servers located within such countries;

complexities associated with managing multiple payor reimbursement regimes, government payors or patient self-pay systems;

limits on our ability to penetrate international markets if we are required to manufacture our products locally;

financial risks, such as longer payment cycles, difficulty collecting accounts receivable, foreign tax laws and complexities of foreign value-added tax systems, the effect of local and regional financial pressures on demand and payment for our products and exposure to foreign currency exchange rate fluctuations;

restrictions on the site-of-service for use of our products and the economics related thereto for clinicians, providers and payors;

natural disasters, political and economic instability, including wars, terrorism, political unrest, outbreak of disease, boycotts, curtailment of trade and other market restrictions;

regulatory and compliance risks that relate to maintaining accurate information and control over activities subject to regulation under the United States Foreign Corrupt Practices Act of 1977, or FCPA, U.K.

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and (ix) Topological characterization and assessment of tissues using MSI and ML.

As of the date of this annual report, we have 12 issued and allowed

As of December 31, 2025,

we had 13 issued and allowed U.S.

patents with 5 U.S.

patent applications pending.

We have 18 issued and allowed international patents with 29 foreign and international

patent applications pending.

We had 21 issued and allowed international patents

with 23 foreign and international patent applications pending.

We protect our DeepView System trademarks primarily in four classes:

pre-recorded/downloadable software,

surgical, medical apparatus, computer and scientific services and medical and healthcare services.

As of December 31, 2024, we maintain

a portfolio of 68 trademarks and nine trademark applications pending relating to our DeepView and SnapShot product offerings.

Our trademarks

and pending trademark applications are spread over nine jurisdictions mostly in China, the UK and the EU.

It is our intention to

maintain these registrations indefinitely and to expand the number of jurisdictions in which we have registered trademarks as deemed necessary

to protect our freedom to use the marks and/or block competitors in additional markets.

We will continue to primarily focus on protecting

our intellectual property in the United States, UK and the EU as those represent the first significant commercial markets for our

pre-recorded/downloadable

software, surgical, medical apparatus, computer and scientific services and medical and healthcare services.

As of December 31, 2025,

we maintain a portfolio of 47 trademarks and 11 trademark applications pending relating to our DeepView and SnapShot product offerings.

Our trademarks and pending trademark applications are spread over nine jurisdictions mostly in China, the UK and the EU.

intention to maintain these registrations indefinitely and to expand the number of jurisdictions in which we have registered trademarks

as deemed necessary to protect our freedom to use the marks and/or block competitors in additional markets.

We will continue to primarily

focus on protecting our intellectual property in the United States, UK and the EU as those are the first commercial markets for our

We cannot assure you that

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rules in ways affecting the scope or validity of issued patents.

Even if patents do successfully issue from our patent applications, third

parties may challenge the validity, enforceability, or scope of such patents, which may result in such patents being narrowed, invalidated,

Even if patents are successfully issued from our patent applications,

third parties may challenge the validity, enforceability, or scope of such patents, which may result in such patents being narrowed, invalidated,

or held unenforceable.

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and distribution of those products.

Litigation may also be

necessary to defend infringement claims of third parties or to enforce patent rights we hold or protect trade secrets or techniques

Further, third parties may seek approval to market their own products similar to or otherwise competitive with our products.

In these circumstances, we may need to defend and/or assert our patents, including by filing lawsuits alleging patent infringement.

In any of these types of proceedings, a court or agency with jurisdiction may find our patents invalid, unenforceable, or not

competitors may then be able to market products and use manufacturing and analytical processes that are substantially

similar to ours.

Even if we have valid and enforceable patents, these patents still may not provide protection against competing

products or processes sufficient to achieve our business objectives.

Litigation may also be necessary

to defend infringement claims of third parties or to enforce patent rights we hold or protect trade secrets or techniques we own.

third parties may seek approval to market their own products similar to or otherwise competitive with our products.

In these circumstances,

we may need to defend and/or assert our patents, including by filing lawsuits alleging patent infringement.

In any of these types of proceedings,

a court or agency with jurisdiction may find our patents invalid, unenforceable, or not infringed;

competitors may then be able to market

products and use manufacturing and analytical processes that are substantially similar to ours.

Even if we have valid and enforceable

patents, these patents still may not provide protection against competing products or processes sufficient to achieve our business objectives.

Our success will also depend,

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and results of operations.

interference, derivation, cancellation, and opposition proceedings provoked by third parties or brought by the U.S.

Trademark Office (USPTO) may be necessary to determine priority with respect to our patents, patent applications, trademarks, or

trademark applications.

We may also become involved in other proceedings, such as reexamination, inter partes review, post-grant

review, derivation, interference, supplemental examination, cancellation or opposition proceedings before the USPTO or other

jurisdictional body relating to our intellectual property rights or the intellectual property rights of others.

Such challenges may

result in loss of exclusivity or ability to make, use, and sell our products without infringing third-party intellectual property

rights, or in patent claims being narrowed, invalidated or held unenforceable, in whole or in part, which could limit our ability to

stop others from using or commercializing similar or identical products and techniques without payment to us, or limit the duration

of the patent protection of our technology.

Adverse determinations in a judicial or administrative proceeding or failure to obtain

necessary licenses or rights could prevent us from using, selling, manufacturing, or importing our products or using product names,

which would have a significant adverse impact on our business, financial condition, prospects and results of operations.

Similarly, interference,

derivation, cancellation, and opposition proceedings provoked by third parties or brought by the U.S.

Patent and Trademark Office

(USPTO) may be necessary to determine priority with respect to our patents, patent applications, trademarks, or trademark applications.

We may also become involved in other proceedings, such as reexamination, inter partes review, post-grant review, derivation, interference,

supplemental examination, cancellation or opposition proceedings before the USPTO or other jurisdictional body relating to our intellectual

property rights or the intellectual property rights of others.

Such challenges may result in loss of exclusivity or ability to make, use,

and sell our products without infringing third-party intellectual property rights, or in patent claims being narrowed, invalidated or

held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar or identical

products and techniques without payment to us, or limit the duration of the patent protection of our technology.

Adverse determinations

in a judicial or administrative proceeding or failure to obtain necessary licenses or rights could prevent us from using, selling, manufacturing,

or importing our products or using product names, which would have a significant adverse impact on our business, financial condition,

prospects and results of operations.

Additionally, we may file

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regardless of the merits of these claims.

If any of these claims succeeds or settles, we may be forced to pay damages or settlement payments

If any of these claims succeed or settle, we may be forced to pay damages or settlement payments

on behalf of our customers or may be required to obtain licenses for the products they use.

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with these requirements.

United States Copyright Office (USCO) and various foreign governmental agencies require compliance with a number of procedural,

documentary, fee payment and other similar provisions during the application process.

In addition, periodic maintenance fees,

renewal fees, annuity fees and various other government fees often must be paid to the USPTO, USCO and foreign agencies over the

lifetime of any registered or applied-for intellectual property rights we may obtain in the future.

While an unintentional lapse of

an intellectual property registration or application 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

registration or application, resulting in partial or complete loss of intellectual property rights in the relevant jurisdiction.

Non-compliance events that could result in abandonment or lapse of a registration or application include, but are not limited to,

failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and

submit formal documents.

If we fail to maintain the intellectual property registrations and applications covering our products, we

may not be able to stop a competitor from developing or marketing products that are the same as or similar to our products, which

would have a material adverse effect on our business.

The USPTO, United States

Copyright Office (USCO) and various foreign governmental agencies require compliance with a number of procedural, documentary, fee payment

and other similar provisions during the application process.

In addition, periodic maintenance fees, renewal fees, annuity fees and various

other government fees often must be paid to the USPTO, USCO and foreign agencies over the lifetime of any registered or applied-for intellectual

property rights we may obtain in the future.

While an unintentional lapse of an intellectual property registration or application 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 registration or application, resulting in partial or complete loss of intellectual

property rights in the relevant jurisdiction.

Non-compliance events that could result in abandonment or lapse of a registration or application

include, but are not limited to, failure to respond to official actions within prescribed time limits, non-payment of fees and failure

to properly legalize and submit formal documents.

If we fail to maintain the intellectual property registrations and applications covering

our products, we may not be able to stop a competitor from developing or marketing products that are the same as or similar to our products,

which would have a material adverse effect on our business.

We also have a duty to disclose to the USPTO any prior art known to us that

may be material to the patentability of our patents.

If we failed to submit any such material prior art, a court or administrative

agency may deem one or more of our patents unenforceable.

Additionally, certain of our patent applications relate to software

Software-related patents in general are susceptible to validity or patentability challenges before the USPTO or in other judicial

or quasi-judicial proceedings for being directed to non-statutory subject matter under 35 U.S.C.

If we fail to submit any such material prior art, a court or administrative agency

may deem one or more of our patents unenforceable.

Additionally, certain of

our patent applications relate to software inventions.

Software-related patents in general are susceptible to validity or patentability

challenges before the USPTO or in other judicial or quasi-judicial proceedings for being directed to non-statutory subject matter under

Patent terms may be inadequate to protect

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could diminish the value of patents in general, thereby impairing our ability to protect our existing and future products.

Patent reform

legislation could increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or

defense of issued patents.

Patent reform legislation

could increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of issued

In 2011, the Leahy-Smith America Invents Act (the Leahy-Smith Act) was signed into law.

The Leahy-Smith

Act includes a number of significant changes to U.S.

These include provisions that affect the way patent

applications are prosecuted and also may affect patent litigation.

These also include provisions that switched the

United States from a “first-to-invent” system to a “first-to-file” system, allow third-party submission

of prior art to the USPTO during patent prosecution and set forth additional procedures to attack the validity of a patent by the

USPTO administered post-grant proceedings.

Under a first-to-file system, assuming the other requirements for patentability are met,

the first inventor to file a patent application generally will be entitled to the patent on an invention regardless of whether

another inventor had made the invention earlier.

The USPTO recently developed new regulations and procedures to govern

administration of the Leahy-Smith Act, and many of the substantive changes to patent law associated with the Leahy-Smith Act, and in

particular, the first to file provisions, only became effective in 2013.

A third-party that files a patent application in the USPTO

after March 2013, but before us could therefore be awarded a patent covering an invention of ours even if we had made the

invention before it was made by such third-party.

This will require us to be cognizant of the time from invention to filing of a

patent application.

The Leahy-Smith Act includes a number

of significant changes to U.S.

These include provisions that affect the way patent applications are prosecuted and also

may affect patent litigation.

These also include provisions that switched the United States from a “first-to-invent”

system to a “first-to-file” system, allow third-party submission of prior art to the USPTO during patent prosecution and set

forth additional procedures to attack the validity of a patent by the USPTO administered post-grant proceedings.

Under a first-to-file

system, assuming the other requirements for patentability are met, the first inventor to file a patent application generally will be entitled

to the patent on an invention regardless of whether another inventor had made the invention earlier.

The USPTO recently developed new

regulations and procedures to govern administration of the Leahy-Smith Act, and many of the substantive changes to patent law associated

with the Leahy-Smith Act, and in particular, the first to file provisions, only became effective in 2013.

A third-party that files a patent

application in the USPTO after March 2013, but before us could therefore be awarded a patent covering an invention of ours even if

we had made the invention before it was made by such third-party.

This will require us to be cognizant of the time from invention to filing

of a patent application.

Since patent applications in the United States and most other countries are confidential for a period of

time after filing or until issuance, we cannot be certain that we were the first to file any patent application related to our

products or invent any of the inventions claimed in our patents or patent applications.

time after filing or until issuance, we cannot be certain that we were the first to file any patent application related to our products

or invent any of the inventions claimed in our patents or patent applications.

The Leahy-Smith Act also

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Litigation may be necessary to defend against claims, and it may be necessary or we may desire to enter into a license to settle any such

If we or our licensors

are unsuccessful in any priority, validity (including any patent oppositions), ownership or inventorship disputes to which we or

they are subject, we may lose valuable intellectual property rights through the loss of one or more of our patents, or such patent

claims may be narrowed, invalidated, or held unenforceable, or through loss of exclusive ownership of or the exclusive right to use

our owned or in-licensed patents.

In the event of loss of patent rights as a result of any of these disputes, we may be required to

obtain and maintain licenses from third parties, including parties involved in any such interference proceedings or other priority

or inventorship disputes.

Such licenses may not be available on commercially reasonable terms or at all or may be non-exclusive.

we are unable to obtain and maintain such licenses, we may need to cease the development, manufacture, and commercialization of one

or more of the product candidates we may develop.

An inability to incorporate technologies, features or other intellectual property

that are important or essential to our products could have a material adverse effect on our business and competitive position.

loss of exclusivity or the narrowing of our patent claims could limit our ability to stop others from using or commercializing

similar or identical technology and product candidates.

Even if we are successful in priority, inventorship or ownership disputes,

it could result in substantial costs and be a distraction to management and other employees.

Any litigation or the threat thereof

may adversely affect our ability to hire employees or contract with independent sales representatives.

Any of the foregoing could

result in a material adverse effect on our business, financial condition, prospects and results of operations.

If we or our licensors are

unsuccessful in any priority, validity (including any patent oppositions), ownership or inventorship disputes to which we or they are

subject, we may lose valuable intellectual property rights through the loss of one or more of our patents, or such patent claims may be

narrowed, invalidated, or held unenforceable, or through loss of exclusive ownership of or the exclusive right to use our owned or in-licensed

In the event of loss of patent rights as a result of any of these disputes, we may be required to obtain and maintain licenses

from third parties, including parties involved in any such interference proceedings or other priority or inventorship disputes.

Such licenses

may not be available on commercially reasonable terms or at all or may be non-exclusive.

If we are unable to obtain and maintain such

licenses, we may need to cease the development, manufacture, and commercialization of one or more of the product candidates we may develop.

An inability to incorporate technologies, features or other intellectual property that are important or essential to our products could

have a material adverse effect on our business and competitive position.

The loss of exclusivity or the narrowing of our patent claims

could limit our ability to stop others from using or commercializing similar or identical technology and product candidates.

are successful in priority, inventorship or ownership disputes, it could result in substantial costs and be a distraction to management

and other employees.

Any litigation or the threat thereof may adversely affect our ability to hire employees or contract with independent

sales representatives.

Any of the foregoing could result in a material adverse effect on our business, financial condition, prospects

and results of operations.

We may be subject to claims that our employees,

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assignment agreements with our employees and contractors involved in the development of intellectual property or are unable to protect

the confidentiality of our trade secrets and other proprietary information, the value of our products our business and competitive position

may be harmed.

In addition to patent

protection, we also rely on other proprietary rights, including protection of trade secrets, know-how, and other confidential and

proprietary information that is not patentable or that we elect not to patent.

However, trade secrets can be difficult to protect,

and some courts are less willing or unwilling to protect trade secrets.

To maintain the confidentiality of our trade secrets and

proprietary information, we generally have confidentiality and invention assignment provisions in contracts with our employees,

consultants, suppliers, contract manufacturers, collaborators, and others upon the commencement of their relationship with us.

However, we may not enter into such agreements with each party that may have or have had access to our trade secrets or proprietary

technology and processes.

We may not be able to prevent the unauthorized disclosure or use of our technical knowledge or other trade

secrets by such third parties, despite the existence generally of these confidentiality restrictions.

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 confidential or proprietary information.

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 or proprietary technology and processes will not otherwise become known or independently developed by

We may need to share our proprietary information, including trade secrets, with future business partners,

collaborators, contractors, and others located in countries at heightened risk of theft of trade secrets, including through direct

intrusion by private parties or foreign actors, and those affiliated with or controlled by state actors.

Despite the protections we

do place on our intellectual property or other confidential and 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.

In addition, the laws of many foreign countries will not protect our intellectual

property or other proprietary rights to the same extent as the laws of the United States.

Consequently, we may be unable to

prevent our proprietary technology from being exploited abroad, which could affect our ability to expand to international markets or

require costly efforts to protect our technology.

the confidentiality of our trade secrets and other proprietary information, the value of our products, the value of our business and competitive

position may be harmed.

In addition to patent protection,

we also rely on other proprietary rights, including protection of trade secrets, know-how, and other confidential and proprietary information

that is not patentable or that we elect not to patent.

However, trade secrets can be difficult to protect, and some courts are less willing

or unwilling to protect trade secrets.

To maintain the confidentiality of our trade secrets and proprietary information, we generally

have confidentiality and invention assignment provisions in contracts with our employees, consultants, suppliers, contract manufacturers,

collaborators, and others upon the commencement of their relationship with us.

However, we may not enter into such agreements with each

party that may have or have had access to our trade secrets or proprietary technology and processes.

We may not be able to prevent the

unauthorized disclosure or use of our technical knowledge or other trade secrets by such third parties, despite the existence generally

of these confidentiality restrictions.

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

confidential or proprietary information.

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 or proprietary technology and processes will not otherwise become

known or independently developed by competitors.

We may need to share our proprietary information, including trade secrets, with future

business partners, collaborators, contractors, and others located in countries at heightened risk of theft of trade secrets, including

through direct intrusion by private parties or foreign actors, and those affiliated with or controlled by state actors.

Despite the protections

we place on our intellectual property or other confidential and 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.

In addition, the laws of many foreign countries will not protect our intellectual property or other proprietary

rights to the same extent as the laws of the United States.

Consequently, we may be unable to prevent our proprietary technology

from being exploited abroad, which could affect our ability to expand to international markets or require costly efforts to protect our

To the extent our intellectual

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trademarks, and our patents, trademarks or other intellectual property rights may not be effective or sufficient to prevent them from

Many companies have

encountered significant problems in protecting and defending intellectual property rights in certain foreign jurisdictions.

legal systems of certain countries, particularly certain developing countries, may not favor the enforcement of patents, trademarks,

and other intellectual property protection, which could make it difficult for us to stop the infringement of our patents and

trademarks or marketing of competing products in violation of our proprietary rights generally.

Proceedings to enforce our patent

and trademark rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other

aspects of our business, could put our patents and trademarks at risk of being invalidated or interpreted narrowly, and could

provoke third parties to assert claims against us.

We may not prevail in any lawsuits that we initiate, and the damages or other

remedies awarded, if any, may not be commercially meaningful.

In addition, certain countries in Europe and many other countries,

including India and China, have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third

In those countries, we may have limited remedies if our patents are infringed or if we are compelled to grant a license to

our patents to a third party, which could materially diminish the value of those patents.

This could limit our potential revenue

opportunities.

Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a

significant commercial advantage from the intellectual property that we own or license.

Finally, our ability to protect and enforce

our intellectual property rights may be adversely affected by unforeseen changes in foreign intellectual property laws.

Many companies have encountered

significant problems in protecting and defending intellectual property rights in certain foreign jurisdictions.

The legal systems of certain

countries, particularly certain developing countries, may not favor the enforcement of patents, trademarks, and other intellectual property

protection, which could make it difficult for us to stop the infringement of our patents and trademarks or marketing of competing products

in violation of our proprietary rights generally.

Proceedings to enforce our patent and trademark rights in foreign jurisdictions could

result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents and trademarks

at risk of being invalidated or interpreted narrowly, and could provoke third parties to assert claims against us.

We may not prevail

in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful.

certain countries in Europe and many other countries, including India and China, have compulsory licensing laws under which a patent owner

may be compelled to grant licenses to third parties.

In those countries, we may have limited remedies if our patents are infringed or

if we are compelled to grant a license to our patents to a third party, which could materially diminish the value of those patents.

could limit our potential revenue opportunities.

Accordingly, our efforts to enforce our intellectual property rights around the world

may be inadequate to obtain a significant commercial advantage from the intellectual property that we own or license.

Finally, our ability

to protect and enforce our intellectual property rights may be adversely affected by unforeseen changes in foreign intellectual property

If our trademarks and trade names are not

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third parties on commercially reasonable terms or fail to comply with our obligations under such agreements, our business could be harmed.

It may be necessary for

us to use the patented or proprietary technology of third parties to commercialize our products, in which case we would be required

to obtain a license from these third parties.

The licensing or acquisition of third-party intellectual property rights is a

competitive area, and several more established companies may pursue strategies to license or acquire third-party intellectual

property rights that we may consider attractive or necessary.

These established companies may have a competitive advantage over us

due to their size, capital resources and greater clinical development and commercialization capabilities.

In addition, companies

that perceive us to be a competitor may be unwilling to assign or license rights to us.

If we are unable to license such technology,

or if we are forced to license such technology, on unfavorable terms, our business could be harmed.

If we are unable to obtain a

necessary license, we may be unable to develop or commercialize the affected product candidates, which could harm our business, and

the third parties owning such intellectual property rights could seek either an injunction prohibiting our sales, or, with respect

to our sales, an obligation on our part to pay royalties and/or other forms of compensation.

Even if we are able to obtain a

license, it may be non-exclusive, thereby giving our competitors access to the same technologies licensed to us.

It may be necessary for us

to use the patented or proprietary technology of third parties to commercialize our products, in which case we would be required to obtain

a license from these third parties.

The licensing or acquisition of third-party intellectual property rights is a competitive area, and

several more established companies may pursue strategies to license or acquire third-party intellectual property rights that we may consider

attractive or necessary.

These established companies may have a competitive advantage over us due to their size, capital resources and

greater clinical development and commercialization capabilities.

In addition, companies that perceive us to be a competitor may be unwilling

to assign or license rights to us.

If we are unable to license such technology, or if we are forced to license such technology, on unfavorable

terms, our business could be harmed.

If we are unable to obtain a necessary license, we may be unable to develop or commercialize the

affected product candidates, which could harm our business, and the third parties owning such intellectual property rights could seek

either an injunction prohibiting our sales, or, with respect to our sales, an obligation on our part to pay royalties and/or other forms

of compensation.

Even if we are able to obtain a license, it may be non-exclusive, thereby giving our competitors access to the same technologies

licensed to us.

Moreover, some of our patents

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protect our business or permit us to maintain our competitive advantage.

may be able to make products that are similar to our products or utilize similar technology but that are not covered by the claims of

our patents or that incorporate certain technology in our products that is in the public domain;

or our future licensors or collaborators, might not have been the first to make the inventions covered by the applicable issued patent

or pending patent application that we own now or may own or license in the future;

or our future licensors or collaborators, might not have been the first to file patent applications covering certain of our or their

or our future licensors or collaborators, may fail to meet our obligations to the U.S.

government regarding any future patents and

patent applications funded by U.S.

others may be able to make products that are similar to our products or utilize similar technology but that are not covered by the claims of our patents or that incorporate certain technology in our products that is in the public domain;

we, or our future licensors or collaborators, might not have been the first to make the inventions covered by the applicable issued patent or pending patent application that we own now or may own or license in the future;

we, or our future licensors or collaborators, might not have been the first to file patent applications covering certain of our or their inventions;

we, or our future licensors or collaborators, may fail to meet our obligations to the U.S.

government regarding any future patents and patent applications funded by U.S.

government grants, leading to the loss or unenforceability of patent rights;

may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual

property rights;

is possible that our patents or patent applications omit individuals who should be listed as inventors or include individuals that should

not be listed as inventors, which may cause these patents or patents issuing from these patent applications to be held invalid or unenforceable;

others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights;

it is possible that our patents or patent applications omit individuals who should be listed as inventors or include individuals that should not be listed as inventors, which may cause these patents or patents issuing from these patent applications to be held invalid or unenforceable;

claims of our patents or patent applications, if and when issued, may not cover our products or technologies or competitive products or technologies;

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we have engaged in scientific collaborations in the past and will continue to do so in the future and our collaborators may develop adjacent or competing products that are outside the scope of our patents;

may not develop additional proprietary technologies that are patentable;

patents of others may harm our business;

may choose not to file a patent in order to maintain certain trade secrets or know-how, and a third-party may subsequently file a patent

covering such intellectual property.

we may not develop additional proprietary technologies that are patentable;

the patents of others may harm our business;

we may choose not to file a patent in order to maintain certain trade secrets or know-how, and a third-party may subsequently file a patent covering such intellectual property.

Any of the foregoing could

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limited availability of market quotations for our securities;

liquidity for our securities;

determination that our Common Stock are a “penny stock” which will require brokers trading in our Common Stock to adhere

to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;

limited amount of news and analyst coverage;

decreased ability to issue additional securities or obtain additional financing in the future.

The listing of our securities on Nasdaq

did not benefit from the process undertaken in connection with an underwritten initial public offering.

September 12, 2023, following completion of the Company’s business combination with Rosecliff Acquisition Corp I (the “Business

Combination”) our Common Stock and our Warrants were listed on the Nasdaq under the symbols “MDAI” and “MDAIW,”

respectively.

Unlike an underwritten initial public offering of our securities, the initial listing of our securities as a result of the

Business Combination did not benefit from the following:

book-building process undertaken by underwriters that helps to inform efficient price discovery with respect to opening trades of newly

listed securities;

● underwriter

support to help stabilize, maintain or affect the public price of the new issue immediately after listing;

underwriter liability for material misstatements or omissions of fact in a prospectus used in connection with the securities being offered

or for statements made by the underwriters’ securities analysts or other personnel.

The lack of such a process

in connection with the listing of our securities could result in diminished investor demand, inefficiencies in pricing and a more volatile

public price for our securities in the near future than in connection with an underwritten initial public offering.

The Charter provides that the Court of Chancery

of the State of Delaware will be the sole and exclusive forum 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.

reduced liquidity for our securities;

a determination that our Common Stock are a “penny stock” which will require brokers trading in our Common Stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;

a limited amount of news and analyst coverage;

a decreased ability to issue additional securities or obtain additional financing in the future.

The Company’s Charter provides that

the Court of Chancery of the State of Delaware will be the sole and exclusive forum 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.

The Charter provides that

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price of the Company’s securities may include:

or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar

in the market’s expectations about the Company’s operating results;

of competitors;

public’s reaction to our press releases, other public announcements and filings with the SEC,

results failing to meet the expectations of securities analysts or investors in a particular period;

in financial estimates and recommendations by securities analysts concerning the Company or the industry in which the Company operates

and stock price performance of other companies that investors deem comparable to the Company;

to market new and enhanced products and services on a timely basis;

in laws and regulations affecting our business;

● commencement

of, or involvement in, litigation involving the Company;

in the Company’s capital structure, such as future issuances of securities or the incurrence of additional debt;

volume of shares of the Company’s common stock available for public sale;

major change in the Company’s board or management;

of substantial amounts of the Company’s common stock by our directors, executive officers or significant stockholders or the perception

that such sales could occur;

economic and political conditions such as recessions, changes in interest rates, changes in fuel prices, international currency fluctuations

and acts of war or terrorism.

actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us;

changes in the market’s expectations about the Company’s operating results;

success of competitors;

the public’s reaction to our press releases, other public announcements and filings with the SEC,

operating results failing to meet the expectations of securities analysts or investors in a particular period;

changes in financial estimates and recommendations by securities analysts concerning the Company or the industry in which the Company operates in general;

operating and stock price performance of other companies that investors deem comparable to the Company;

ability to market new and enhanced products and services on a timely basis;

changes in laws and regulations affecting our business;

commencement of, or involvement in, litigation involving the Company;

changes in the Company’s capital structure, such as future issuances of securities or the incurrence of additional debt;

the volume of shares of the Company’s Common Stock available for public sale;

any major change in the Company’s board or management;

sales of substantial amounts of the Company’s Common Stock by our directors, executive officers or significant stockholders or the perception that such sales could occur;

general economic and political conditions such as recessions, changes in interest rates, changes in fuel prices, international currency fluctuations and acts of war or terrorism.

Broad market and industry

7 unchanged sentences

additional financing in the future.

The Company amended the exercise

price of the Company’s publicly-traded warrants from $11.50 to $2.75 per share in November 2024.

The change in the exercise price

may provide incentive to investors to exercise the public warrants.

There can be no assurance that the public warrants will be exercised

in part or in full, nor can there be any assurance that the change in exercise price has any positive impact on the Company’s stock

price or will contribute in any meaningful way in the raising of additional operating capital for the Company from the aggregate exercise

price from the exercise by holders of the public warrants.

Changes in laws, regulations or rules, or

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The Company is subject to

laws, regulations and rules enacted by national, regional and local governments and the Nasdaq.

In particular, Company is required to

comply with certain SEC, Nasdaq and other legal or regulatory requirements.

Compliance with, and monitoring of, applicable laws, regulations

and rules may be difficult, time consuming and costly.

Those laws, regulations or rules and their interpretation and application may also

change from time to time and those changes could have a material adverse effect on Company’s business, investments and results of

In addition, a failure to comply with applicable laws, regulations or rules, as interpreted and applied, could have a material

adverse effect on Company’s business and results of operations.

laws, regulations and rules enacted by national, regional and local governments and the Nasdaq Stock Market.

In particular, the Company

is required to comply with certain SEC, Nasdaq and other legal or regulatory requirements.

Compliance with, and monitoring of, applicable

laws, regulations and rules may be difficult, time consuming and costly.

Those laws, regulations or rules and their interpretation and

application may also change from time to time, and those changes could have a material adverse effect on Company’s business, investments

and results of operations.

In addition, a failure to comply with applicable laws, regulations or rules, as interpreted and applied, could

have a material adverse effect on Company’s business and results of operations.

If we fail to maintain proper and effective

7 unchanged sentences

In addition, any testing by the Company conducted

in connection with Section 404 of the Sarbanes-Oxley Act (“Section 404”) or any subsequent testing by the Company’s

independent registered public accounting firm, may reveal deficiencies in the Company’s internal controls over financial reporting

that are deemed to be material weaknesses or that may require prospective or retroactive changes to the Company’s financial statements

or identify other areas for further attention or improvement.

Inferior internal controls could also cause investors to lose confidence

in the Company’s reported financial information, which could have a negative effect on the trading price of the Company’s

in connection with Section 404 (“Section 404”) of the Sarbanes-Oxley Act of 2002, as amended (“SOX”)

or any subsequent testing by the Company’s independent registered public accounting firm, may reveal deficiencies in the Company’s

internal controls over financial reporting that are deemed to be material weaknesses or that may require prospective or retroactive changes

to the Company’s financial statements or identify other areas for further attention or improvement.

Inferior internal controls could

also cause investors to lose confidence in the Company’s reported financial information, which could have a negative effect on the

trading price of the Company’s Common Stock.

For as long as the Company

is an emerging growth company, its independent registered public accounting firm will not be required to attest to the effectiveness of

its internal controls over financial reporting pursuant to Section 404.

An independent assessment of the effectiveness of the Company’s

internal controls over financial reporting could detect problems that the Company’s management’s assessment might not detect.

Undetected material weaknesses in the Company’s internal controls over financial reporting could lead to restatements of the Company’s

consolidated financial statements and require the Company to incur the expense of remediation.

If the Company is not

able to comply with the requirements of Section 404 in a timely manner or it is unable to maintain proper and effective

internal controls over financial reporting may not be able to produce timely and accurate consolidated financial statements.

result, the Company’s investors could lose confidence in its reported financial information, the market price of the Common

Stock could decline and the Company could be subject to sanctions or investigations by the SEC or other regulatory authorities.

is an emerging growth company or a non-accelerated filer, its independent registered public accounting firm will not be required to attest

to the effectiveness of its internal controls over financial reporting pursuant to Section 404.

An independent assessment of the

effectiveness of the Company’s internal controls over financial reporting could detect problems that the Company’s management’s

assessment might not detect.

Undetected material weaknesses in the Company’s internal controls over financial reporting could lead

to restatements of the Company’s consolidated financial statements and require the Company to incur the expense of remediation.

If the Company is not able

to comply with the requirements of Section 404 in a timely manner or it is unable to maintain proper and effective internal controls

over financial reporting may not be able to produce timely and accurate consolidated financial statements.

As a result, the Company’s

investors could lose confidence in its reported financial information, the market price of the Common Stock could decline, and the Company

could be subject to sanctions or investigations by the SEC or other regulatory authorities.

Our internal controls over financial reporting

currently do not meet all of the standards contemplated by Section 404 of the Sarbanes-Oxley Act of 2002, as amended (“SOX”),

and failure to achieve and maintain effective internal controls over financial reporting in accordance with Section 404 of SOX could impair

our ability to produce timely and accurate financial statements or comply with applicable regulations and have a material adverse effect

on our business.

In the future, our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.

As a public company, we are subject to certain reporting requirements

of the Exchange Act and have significant requirements for enhanced financial reporting and internal controls.

Our disclosure controls

and procedures are designed to reasonably assure that information required to be disclosed by us in reports we file or submit under the

Exchange Act is accumulated and communicated to management, recorded, processed, summarized, and reported within the time periods specified

in the rules and forms of the SEC.

The process of designing and implementing effective internal controls is a continuous effort that requires

us to anticipate and react to changes in our business and the economic and regulatory environments, and to expend significant resources

to maintain a system of internal controls that is adequate to satisfy our reporting obligations as a public company.

If we are unable

to maintain appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations

on a timely basis, result in material misstatements in our consolidated financial statements, and harm our operating results.

that any disclosure controls and procedures or internal controls and procedures, no matter how well conceived and operated, can provide

only reasonable, not absolute, assurance that the objectives of the control system are met.

These inherent limitations include the realities

that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.

Additionally, controls

can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls.

Accordingly, because of the inherent limitations in our control system, misstatements or insufficient disclosures due to error or fraud

may occur and not be detected.

In addition, we are required, pursuant to Section 404 of the Sarbanes–Oxley Act of 2002, as amended

(“SOX”), to furnish a report by management on, among other things, the effectiveness of our internal control over financial

reporting in our Annual Report on Form 10-K.

This assessment includes disclosure of any material weaknesses identified by our management

in our internal control over financial reporting.

The rules governing the standards that must be met for our management to assess our

internal control over financial reporting are complex and require significant documentation, testing, and possible remediation.

and maintaining internal controls may divert management’s attention from other matters that are important to our business.

emerging growth company, our independent registered public accounting firm will not be required to formally attest to the effectiveness

of our internal control over financial reporting pursuant to Section 404 until our annual report for any fiscal year following such date

that we are no longer an emerging growth company.

If we are not able to complete our initial assessment of our internal controls and otherwise

implement the requirements of Section 404 of SOX in a timely manner or with adequate compliance, our independent registered public accounting

currently do not meet all of the standards contemplated by Section 404 of SOX, and failure to achieve and maintain effective internal

controls over financial reporting in accordance with Section 404 of SOX could impair our ability to produce timely and accurate financial

statements or comply with applicable regulations and have a material adverse effect on our business.

In the future, our disclosure controls

and procedures may not prevent or detect all errors or acts of fraud.

As a public company, we are

subject to certain reporting requirements of the Exchange Act and have significant requirements for enhanced financial reporting and internal

Our disclosure controls and procedures are designed to reasonably assure that information required to be disclosed by us in

reports we file or submit under the Exchange Act is accumulated and communicated to management, recorded, processed, summarized, and reported

within the time periods specified in the rules and forms of the SEC.

The process of designing and implementing effective internal controls

is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments,

and to expend significant resources to maintain a system of internal controls that is adequate to satisfy our reporting obligations as

a public company.

If we are unable to maintain appropriate internal financial reporting controls and procedures, it could cause us to

fail to meet our reporting obligations on a timely basis, result in material misstatements in our consolidated financial statements, and

harm our operating results.

We believe that any disclosure controls and procedures or internal controls and procedures, no matter how

well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a

simple error or mistake.

Additionally, controls can be circumvented by the individual acts of some people, by collusion of two or more

people or by an unauthorized override of the controls.

Accordingly, because of the inherent limitations in our control system, misstatements

or insufficient disclosures due to error or fraud may occur and not be detected.

In addition, we are required, pursuant to Section 404

of the Sarbanes–Oxley Act of 2002, as amended (“SOX”), to furnish a report by management on, among other things, the

effectiveness of our internal control over financial reporting in our Annual Report on Form 10-K.

This assessment includes disclosure

of any material weaknesses identified by our management in our internal control over financial reporting.

The rules governing the standards

that must be met for our management to assess our internal control over financial reporting are complex and require significant documentation,

testing, and possible remediation.

Testing and maintaining internal controls may divert management’s attention from other matters

that are important to our business.

As an emerging growth company or a non-accelerated filer, our independent registered public accounting

firm will not be required to formally attest to the effectiveness of our internal control over financial reporting pursuant to Section

404 until our annual report for any fiscal year following such date that we are no longer an emerging growth company.

If we are not able

to maintain the requirements of Section 404 of SOX in a timely manner or with adequate compliance, our independent registered public accounting

firm may not be able to certify as to the adequacy of our internal controls over financial reporting.

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we or our independent registered public accounting firm report a material weakness in our internal controls over financial reporting.

In connection with the preparation of our consolidated financial statements for the year ended December 31, 2024, we identified a material

weakness in our internal control over financial reporting related to deficiencies in our controls over the accounting for complex equity

In connection with the preparation of our consolidated financial statements for the year ended December 31, 2025, we identified material

weaknesses in our internal control over financial reporting related to deficiencies in our controls over the accounting for complex equity

arrangements, financial statement close process and in the design and operation of internal controls involving accruals and unbilled revenue.

We have implemented, and are continuing to implement, measures designed

to improve our internal control over financial reporting to remediate this material weakness.

These measures include formalizing our processes

and internal control documentation, strengthening supervisory reviews by our financial management, engaging financial consultants to enable

the implementation of internal control over financial reporting, and enhancing the functionality of our enterprise resource planning system

to support certain key financial processes and controls and enforce certain segregation of duties through automation and approval workflows.

We expect to incur additional costs to remediate the control deficiencies identified, though there can be no assurance that our efforts

will be successful or avoid potential future material weaknesses.

If we are unable to successfully remediate our existing or any future

material weaknesses in our internal control over financial reporting, or if we identify any additional material weaknesses, the accuracy

and timing of our financial reporting may be adversely affected, we may be unable to maintain compliance with securities law requirements

regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements, investors may lose confidence

in our financial reporting, and our stock price may decline as a result.

We also could become subject to investigations by Nasdaq, the

SEC or other regulatory authorities.

Our internal resources and personnel may in the future be insufficient to avoid accounting errors

and there can be no assurance that we will not have additional material weaknesses in the future.

Any failure to develop or maintain effective

controls or any difficulties encountered implementing required new or improved controls could harm our operating results or cause us to

fail to meet our reporting obligations and may result in a restatement of our consolidated financial statements for prior periods.

failure to implement and maintain effective internal control over financial reporting also could adversely affect the results of periodic

management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our

internal control over financial reporting that we will eventually be required to include in our periodic reports that will be filed with

Ineffective disclosure controls, procedures, and internal control over financial reporting could also cause investors to lose

confidence in our reported financial and other information, which would likely have a negative effect on the trading price of our common

In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on Nasdaq.

We have implemented, and

are continuing to implement, measures designed to improve our internal control over financial reporting to remediate these material weaknesses.

These measures include formalizing our processes and internal control documentation, strengthening supervisory reviews by our financial

management, engaging financial consultants to enable the implementation of internal control over financial reporting, and enhancing the

functionality of our enterprise resource planning system to support certain key financial processes and controls and enforce certain segregation

of duties through automation and approval workflows.

We expect to incur additional costs to remediate the control deficiencies identified,

though there can be no assurance that our efforts will be successful or avoid potential future material weaknesses.

If we are unable to

successfully remediate our existing or any future material weaknesses in our internal control over financial reporting, or if we identify

any additional material weaknesses, the accuracy and timing of our financial reporting may be adversely affected, we may be unable to

maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange

listing requirements, investors may lose confidence in our financial reporting, and our stock price may decline as a result.

We also could

become subject to investigations by Nasdaq, the SEC or other regulatory authorities.

Our internal resources and personnel may in the future

be insufficient to avoid accounting errors and there can be no assurance that we will not have additional material weaknesses in the future.

Any failure to develop or maintain effective controls or any difficulties encountered implementing required new or improved controls could

harm our operating results or cause us to fail to meet our reporting obligations and may result in a restatement of our consolidated financial

statements for prior periods.

Any failure to implement and maintain effective internal control over financial reporting also could adversely

affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding

the effectiveness of our internal control over financial reporting that we will eventually be required to include in our periodic reports

that will be filed with the SEC.

Ineffective disclosure controls, procedures, and internal control over financial reporting could also

cause investors to lose confidence in our reported financial and other information, which would likely have a negative effect on the trading

price of our common stock.

In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on

If securities analysts do not publish research

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in which we operate.

We may be unable or slow to attract new research coverage and if one or more analysts cease coverage of us, the

price and trading volume of our securities would likely be negatively impacted.

If any of the analysts that may cover us change their

recommendation regarding our securities adversely, or provide more favorable relative recommendations about our competitors, the price

of our securities would likely decline.

If any analyst that may cover us ceases covering us or fails to regularly publish reports on

us, we could lose visibility in the financial markets, which could cause the price or trading volume of our securities to decline.

if one or more of the analysts who cover us downgrades our Common Stock, or if our reporting results do not meet their expectations,

the market price of our Common Stock could decline.

We may be unable or slow to attract new research coverage and if one or more analysts cease coverage of us, the price

and trading volume of our securities would likely be negatively impacted.

If any of the analysts that may cover us change their recommendation

regarding our securities adversely, or provide more favorable relative recommendations about our competitors, the price of our securities

would likely decline.

If any analyst that may cover us ceases covering us or fails to regularly publish reports on us, we could lose visibility

in the financial markets, which could cause the price or trading volume of our securities to decline.

Moreover, if one or more of the

analysts who cover us downgrades our Common Stock, or if our reporting results do not meet their expectations, the market price of our

Common Stock could decline.

Sales, or the perception of sales, of our

common stock by us or our existing stockholders in the public market could cause the market price for our common stock to decline.

The sale of substantial

amounts of shares of our common stock in the public market, or the perception that such sales could occur, could harm the prevailing

market price of shares of our Common Stock.

These sales, or the possibility that these sales may occur, also might make it more difficult

for us to sell equity securities in the future at a time and at a price that we deem appropriate.

The sale of substantial amounts

of shares of our Common Stock in the public market, or the perception that such sales could occur, could harm the prevailing market price

of shares of our Common Stock.

These sales, or the possibility that these sales may occur, also might make it more difficult for us to

sell equity securities in the future at a time and at a price that we deem appropriate.

Upon the expiration or waiver

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As restrictions on resale end, the market price of shares

of our Common Stock could drop significantly if the holders of these shares sell them or are perceived by the market as intending to

These factors could also make it more difficult for us to raise additional funds through future offerings of our shares of

Common Stock or other securities.

In addition, the shares

of our Common Stock reserved for future issuance under the Spectral AI, Inc.

2023 Equity Incentive Plan, which was approved and adopted

by the Company at its first annual meeting following the Business Combination (“Equity Incentive Plan”) in May 2024, will

become eligible for sale in the public market once those shares are issued, subject to provisions relating to various vesting agreements,

lock-up agreements and, in some cases, limitations on volume and manner of sale by affiliates under Rule 144, as applicable.

number of shares to be reserved for future issuance under the Equity Incentive Plan is expected to equal approximately 8,000,000 shares.

We have filed a registration

statement on Form S-8 under the Securities Act to register shares of our common stock or securities convertible into or exchangeable

for shares of our common stock issued pursuant to our equity incentive plans.

Form S-8 registration statements automatically become

effective upon filing.

Accordingly, the initial registration statement on Form S-8 covered approximately 5,466,000 shares of our

common stock.

Warrants will become exercisable for Company

common stock, which would increase the number of shares eligible for resale in the public market and result in dilution to our stockholders.

Outstanding warrants to

purchase an aggregate of 8,433,333 shares of Common Stock will become exercisable in accordance with the terms of the Warrant Agreement

governing those securities.

Each warrant originally entitled the registered holder to purchase one share of Common Stock at a price of

$11.50 per full share.

As noted above, in November 2024, the Company reduced the exercise price from $11.50 per full share to $2.75 per

Pursuant to the Warrant Agreement, a holder of Warrants may exercise its Warrants only for a whole number of shares.

means that only a whole warrant may be exercised at any given time by a holder of Warrants.

To the extent such warrants are exercised,

additional shares of the Common Stock will be issued, which will result in dilution to the holders of the Common Stock and increase the

number of shares eligible for resale in the public market.

Sales of substantial numbers of such shares in the public market or the fact

that such warrants may be exercised could adversely affect the market price of the Common Stock.

of our Common Stock could drop significantly if the holders of these shares sell them or are perceived by the market as intending to sell

These factors could also make it more difficult for us to raise additional funds through future offerings of our shares of Common

Stock or other securities.

In addition, the shares of

our Common Stock reserved for future issuance under the Spectral AI, Inc.

2023 Equity Incentive Plan are eligible for sale in the public

market once those shares are issued, subject to provisions relating to various vesting agreements, lock-up agreements and, in some cases,

limitations on volume and manner of sale by affiliates under Rule 144, as applicable.

The number of shares reserved for future issuance

under the Equity Incentive Plan as of December 31, 2025, was 3,730,684 shares.

Warrants are exercisable for Company Common

Stock, which would increase the number of shares eligible for resale in the public market and result in dilution to our stockholders.

Outstanding warrants to purchase

an aggregate of 8,433,333 shares of Common Stock are exercisable in accordance with the terms of the Warrant Agreement governing those

Each warrant originally entitled the registered holder to purchase one share of Common Stock at a price of $11.50 per full

In November 2024, the Company reduced the exercise price from $11.50 per full share to $2.75 per full share.

Pursuant to the Warrant

Agreement, a holder of Warrants may exercise its Warrants only for a whole number of shares.

This means that only a whole warrant may

be exercised at any given time by a holder of Warrants.

To the extent such warrants are exercised, additional shares of the Common Stock

will be issued, which will result in dilution to the holders of the Common Stock and increase the number of shares eligible for resale

in the public market.

Sales of substantial numbers of such shares in the public market or the fact that such warrants may be exercised

could adversely affect the market price of the Common Stock.

Unresolved Staff Comments.

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risk as part of our overall enterprise risk management strategy, which is overseen by the Audit Committee and the Board.

employs robust cybersecurity and data privacy programs to assess, identify and manage material risks from cybersecurity threats.

The Company employs

robust cybersecurity and data privacy programs to assess, identify and manage material risks from cybersecurity threats.

We are constantly evolving

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and exercise team preparedness.

We recognize that third

parties that provide services to the Company can be subject to cybersecurity incidents that could impact the Company.

To manage third-party

risk, we maintain a third-party risk management program,which is designed to assess the security controls of our third parties.

We recognize that third parties

that provide services to the Company can be subject to cybersecurity incidents that could impact the Company.

To manage third-party risk,

we maintain a third-party risk management program, which is designed to assess the security controls of our third parties.

The assessment

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and through the date of this filing, we are not aware of any material cybersecurity incidents that have impacted the Company.

risks of incidents, whether through cyber attacks or cyber intrusions through the Cloud, the Internet, phishing attempts, ransomware

and other forms of malware, computer viruses, email attachments, extortion, and other scams.

Although we make efforts to maintain the

security and integrity of our information technology systems, these systems and the proprietary, confidential and personal information

that resides on or is transmitted through them, are subject to the risk of a cybersecurity incident or disruption, and there can be no

assurance that our security efforts and measures, and those of our third-party vendors, will prevent breakdowns or incidents to our or

our third-party vendors’ systems that could adversely affect our business.

risks of incidents, whether through cyber-attacks or cyber intrusions through the Cloud, the Internet, phishing attempts, ransomware and

other forms of malware, computer viruses, email attachments, extortion, and other scams.

Although we make efforts to maintain the security

and integrity of our information technology systems, these systems and the proprietary, confidential and personal information that resides

on or is transmitted through them, are subject to the risk of a cybersecurity incident or disruption, and there can be no assurance that

our security efforts and measures, and those of our third-party vendors, will prevent breakdowns or incidents to our or our third-party

vendors’ systems that could adversely affect our business.

The Company’s cybersecurity

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and senior management.

The information security team responsible for managing and implementing the Company’s cybersecurity and

data privacy programs has many years of valuable business experience managing risks from cybersecurity threats and data privacy breaches

and developing and implementing cybersecurity and data privacy policies and procedures.

The information security team responsible for managing and implementing the Company’s cybersecurity and data

privacy programs has many years of valuable business experience managing risks from cybersecurity threats and data privacy breaches and

developing and implementing cybersecurity and data privacy policies and procedures.

Our Audit Committee, which

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

What changed 10-K

Item 1. Business