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Item 1. Business

2025-03-26 compared with 2024-03-29 · 797 added, 712 removed, 77 unchanged (95% of the section changed)

Tenon Medical, Inc.

(the “Company”),

was incorporated in the State of Delaware on June 19, 2012 and was headquartered in San Ramon, California until June 2021 when it relocated

to Los Gatos, California.

The Company is a medical device company that has developed The Catamaran™ SI Joint Fusion System (“the

Catamaran System”) that offers a novel, less invasive approach to the sacroiliac joint (the “SI Joint”) using a single,

robust, titanium implant for treatment of the most common types of SI Joint disorders that cause lower back pain.

The Company received

Food and Drug Administration (“FDA”) clearance in 2018 for The Catamaran System and is currently focused on the US market.

Since the national launch of the Catamaran System in October 2022, the Company is focused on three commercial opportunities:

SI Joint procedures, 2) Revision procedures of failed SI Joint implants and 3) SI Joint fusion adjunct to a spine fusion construct.

Tenon Medical,

(the “Company”), was incorporated in the State of Delaware on June 19, 2012 and was headquartered in San Ramon, California

until June 2021 when it relocated to Los Gatos, California.

The Company is a medical device company that has developed The Catamaran™

SI Joint Fusion System (“The Catamaran System”) that offers a novel, less invasive approach to the sacroiliac joint (the

“SI Joint”) using a single, robust, titanium implant for treatment of the most common types of SI Joint disorders that cause

lower back pain.

The Company received U.S.

Food and Drug Administration (“FDA”) clearance in 2018 for The Catamaran System

and is currently focused on the US market.

Since the national launch of The Catamaran System in October 2022, the Company is focused

on three commercial opportunities:

1) Primary SI Joint procedures, 2) Revision procedures of failed SI Joint implants and 3) SI Joint

fusion adjunct to a spine fusion construct.

The Opportunity

We estimate that over 30 million American adults

have chronic lower back pain.

Published clinical studies have shown that 15% to 30% of all chronic lower back pain is associated with

the SI-Joint.

For patients whose chronic lower back pain stems from the Sacroiliac Joint (“SI-Joint”), our experience in both

clinical trials and commercial settings indicates the system to be introduced by Tenon could be beneficial for patients who are properly

diagnosed and screened for surgery by trained healthcare providers.

In 2019, approximately 475,000 patients in the

United States were estimated to have received an aesthetic injection to temporarily alleviate pain emanating from the SI-Joint and/or

to diagnose SI-Joint pain.

Additionally, several non-surgical technologies have been introduced in the past 10 years to address patients

who do not respond to conservative options, including systemic oral medications, opioids, physical therapy and injection therapy.

To date, the penetration of a surgical solution

for this market has been relatively low (5-7%).

We believe this is due to complex surgical approaches and suboptimal implant design of

existing options.

We estimate that

over 30 million American adults have chronic lower back pain.

Published clinical studies have shown that 15% to 30% of all chronic lower

back pain is associated with the SI-Joint.

For patients whose chronic lower back pain stems from the Sacroiliac Joint (“SI-Joint”),

our experience in both clinical trials and commercial settings indicates the system to be introduced by Tenon could be beneficial for

patients who are properly diagnosed and screened for surgery by trained healthcare providers.

In 2019, approximately

475,000 patients in the United States were estimated to have received an aesthetic injection to temporarily alleviate pain emanating

from the SI-Joint and/or to diagnose SI-Joint pain.

Additionally, several non-surgical technologies have been introduced in the past

10 years to address patients who do not respond to conservative options, including systemic oral medications, opioids, physical therapy

and injection therapy.

To date, the penetration

of a surgical solution for this market has been relatively low (5-7%).

We believe this is due to complex surgical approaches and suboptimal

implant design of existing options.

The penetration of this market with an optimized surgical solution is Tenon’s focus.

We believe the SI-Joint is the last major joint

to be successfully addressed by the spine implant industry.

Studies have shown that disability resulting from disease of the SI-Joint

is comparable to the disability associated with a number of other serious spine conditions, such as knee and hip arthritis and degenerative

disc disease, each of which has surgical solutions where an implant is used, and a multi-billion-dollar market exists.

The SI-Joint is a strong weight bearing synovial

joint situated between the lumbar spine and the pelvis and is aligned along the longitudinal load bearing axis of the human spine when

in an upright posture.

It functions as a force transfer conduit where it transfers axial loads bi-directionally from the spine to the

pelvis and lower extremities and allows forces to be transmitted from the extremities to the spine.

It also provides load sharing between

the hip and spine to contribute towards attenuation of impact shock and stress from activities of daily living.

The SI-Joint is a relatively immobile joint that

connects the sacrum (the spinal segment that is attached to the base of the lumbar spine at the L5 vertebra) and the ilium of the pelvis.

We believe the

SI-Joint is the last major joint to be successfully addressed by the spine implant industry.

Studies have shown that disability resulting

from disease of the SI-Joint is comparable to the disability associated with a number of other serious spine conditions, such as knee

and hip arthritis and degenerative disc disease, each of which has surgical solutions where an implant is used, and a multi-billion-dollar

market exists.

The SI-Joint is

a strong weight bearing synovial joint situated between the lumbar spine and the pelvis and is aligned along the longitudinal load bearing

axis of the human spine when in an upright posture.

It functions as a force transfer conduit where it transfers axial loads bi-directionally

from the spine to the pelvis and lower extremities and allows forces to be transmitted from the extremities to the spine.

It also provides

load sharing between the hip and spine to contribute towards attenuation of impact shock and stress from activities of daily living.

The SI-Joint is

a relatively immobile joint that connects the sacrum (the spinal segment that is attached to the base of the lumbar spine at the L5 vertebra)

and the ilium of the pelvis.

Each SI-Joint is approximately 2-4mm wide and irregularly shaped.

Motion of the SI-Joint features vertical shear

and rotation.

Although the rotational forces about the SI-Joint are relatively low, repetitive motions created by daily activities such

as walking, jogging, twisting at the hips, and jumping can increase the stresses on the SI-Joint.

If the SI-Joint is compromised through

injury or degeneration, the load bearing and motion restraints from the surrounding anatomical structures of the SI-Joint will be compromised

resulting in abnormal stress transfers across the joint to these structures, thereby further augmenting the degenerative cascade of the

Eventual pain and cessation of an individual’s normal activities due to a painful and unstable SI-Joint have led to an

increase in the recent development of SI-Joint stabilization devices.

Non-Surgical Treatment of Sacroiliac Joint

Several non-surgical treatments exist for suspected sacroiliac

Motion of the SI-Joint

features vertical shear and rotation.

Although the rotational forces about the SI-Joint are relatively low, repetitive motions created

by daily activities such as walking, jogging, twisting at the hips, and jumping can increase the stresses on the SI-Joint.

If the SI-Joint

is compromised through injury or degeneration, the load bearing and motion restraints from the surrounding anatomical structures of the

SI-Joint will be compromised resulting in abnormal stress transfers across the joint to these structures, thereby further augmenting

the degenerative cascade of the SI-Joint.

Eventual pain and cessation of an individual’s normal activities due to a painful and

unstable SI-Joint have led to an increase in the recent development of SI-Joint stabilization devices.

Non-Surgical Treatment

of Sacroiliac Joint Disease

Several non-surgical treatments

exist for suspected sacroiliac joint pain.

These conservative steps often provide desired relief for the patient.

Non-surgical treatments include:

Non-surgical treatments

● Drug Therapy :

opiates and non-steroidal anti-inflammatory medications.

● Physical Therapy :

can involve exercises as well as massage.

● Intra-Articular Injections

3 unchanged sentences

or the cauterizing of the lateral branches of the sacral nerve roots.

When conservative steps fail to deliver sustained

pain relief and return to quality of life, specific diagnostic protocols are utilized to explore if a surgical option should be considered.

Historically, diagnosing pain from the SI-Joint

was not routinely a focus of orthopedic or neurosurgery training during medical school or residency programs.

Due to its invasiveness,

post-operative pain, and muscle disruption along with a difficult procedure overall, the open SI-Joint fusion procedure was rarely taught

in these settings.

The emergence of various SI-Joint surgical technologies

has generated a renewed discussion of SI-Joint issues.

Of particular focus is the diagnostic protocol utilized to properly select patients

for SI-Joint surgery.

Patients with low back pain typically start with primary care physicians who often refer to pain specialists.

the patient will undergo traditional physical therapy combined with oral medications (anti-inflammatory, narcotic, etc.).

If the patient

fails to respond to these steps the pain specialist may move to therapeutic injections of the SI-Joint.

These injections may serve to

lessen inflammation to the point that the patient is satisfied.

However, the impact from these injections is often transient.

case the patient is often referred to a clinician to determine if the patient may be a candidate for surgical intervention.

provocative tests in clinic, combined with a specific injection protocol to isolate the SI-Joint as the pain generator is then utilized

to confirm the need for surgical intervention.

Published literature has shown this technique to be a very effective step to determine

the best treatment to alleviate pain.

Limitations of Existing Treatment Options

Surgical fixation and fusion of the SI-Joint with

an open surgical technique was first reported in 1908, with further reports in the 1920s.

The open procedure uses plates and screws, requires

a 6 to 12-inch incision and is extremely invasive.

Due to the high invasiveness and associated morbidity, the use

of this procedure is limited to cases involving significant trauma, tumor, etc.

Less invasive surgical options along with implant

design began to emerge over the past 15 years.

These options feature a variety of approaches and implant designs and have been met with

varying degrees of adoption.

Lack of a standard and accepted diagnostic approach, complexity of approach, high morbidity of approach,

abnormally high complication rates and inability to radiographically confirm fusion have all been cited as reasons for low adoption of

these technologies.

conservative steps fail to deliver sustained pain relief and return to quality of life, specific diagnostic protocols are utilized to

explore if a surgical option should be considered.

Historically, diagnosing

pain from the SI-Joint was not routinely a focus of orthopedic or neurosurgery training during medical school or residency programs.

Due to its invasiveness, post-operative pain, and muscle disruption along with a difficult procedure overall, the open SI-Joint fusion

procedure was rarely taught in these settings.

The emergence of

various SI-Joint surgical technologies has generated a renewed discussion of SI-Joint issues.

Of particular focus is the diagnostic protocol

utilized to properly select patients for SI-Joint surgery.

Patients with low back pain typically start with primary care physicians who

often refer to pain specialists.

Here, the patient will undergo traditional physical therapy combined with oral medications (anti-inflammatory,

narcotic, etc.).

If the patient fails to respond to these steps the pain specialist may move to therapeutic injections of the SI-Joint.

These injections may serve to lessen inflammation to the point that the patient is satisfied.

However, the impact from these injections

is often transient.

In this case the patient is often referred to a clinician to determine if the patient may be a candidate for surgical

intervention.

A series of provocative tests in clinic, combined with a specific injection protocol to isolate the SI-Joint as the pain

generator is then utilized to confirm the need for surgical intervention.

Published literature has shown this technique to be a very

effective step to determine the best treatment to alleviate pain.

of Existing Treatment Options

Surgical fixation

and fusion of the SI-Joint with an open surgical technique was first reported in 1908, with further reports in the 1920s.

The open procedure

uses plates and screws, requires a 6 to 12-inch incision and is extremely invasive.

Due to the high invasiveness

and associated morbidity, the use of this procedure is limited to cases involving significant trauma, tumor, etc.

Less invasive surgical

options along with implant design began to emerge over the past 15 years.

These options feature a variety of approaches and implant designs

and have been met with varying degrees of adoption.

Lack of a standard and accepted diagnostic approach, complexity of approach, high

morbidity of approach, abnormally high complication rates and inability to radiographically confirm fusion have all been cited as reasons

for low adoption of these technologies.

Commercialization

Tenon initiated its national commercial launch

of the Catamaran System in October 2022 to address what we believe is a large market opportunity.

The Catamaran System includes instruments

and implants designed to prepare and fixate the SI-Joint for fusion.

The Catamaran System is distinct from other competitive offerings

in the following ways:

Tenon initiated

its national commercial launch of The Catamaran System in October 2022 to address what we believe is a large market opportunity.

Catamaran System includes instruments and implants designed to prepare and fixate the SI-Joint for fusion.

The Catamaran System is distinct

from other competitive offerings in the following ways:

● Transfixes the SI-Joint

● Inferior / Posterior Sacroiliac Fusion Approach

● Inferior / Posterior Sacroiliac

Fusion Approach

● Reduced Approach Morbidity

● Direct And Visualized Approach to the SI-Joint

● Direct And Visualized Approach

to the SI-Joint

● Single Implant Technique

● Insertion Trajectory Away from the Neural Foramen

● Insertion Trajectory Away from Major Lateral Vascular Structures

● Autologous Bone Grafting in the Ilium, Sacrum and Bridge

● Radiographic Confirmation of Bridging Bone Fusion of the

The fixation device and

its key features are shown below:

in the sacrum

and Bridge” filled with autologous bone from drilling process

edge osteotome creates defect and facilitates ease of insertion

The Catamaran System is a singular implant designed

with several proprietary components which allow for it to be explicitly formatted to address the SI-Joint with a single approach and implant.

This contrasts with several competitive implant systems that require multiple approach pathways and implants to achieve fixation.

the inferior-posterior approach is designed to be direct to the joint and through limited anatomical structures which may minimize the

morbidity of the approach.

The implant features a patented dual pontoon open cell design which enables the clinician to pack the pontoons

with the patient’s own autologous bone designed to promote bone fusion across the joint.

The Catamaran System is designed specially

to resist vertical shear and rotation of the joint in which it was implanted, helping stabilize the joint in preparation for eventual

The instruments we have developed are proprietary

to the Catamaran System and specifically designed to transfix the SI-Joint and facilitate an inferior-posterior approach that is unique

to the system.

Tenon also has developed a proprietary 2D placement

protocol as well as a protocol for 3D navigation utilizing the latest techniques in spine surgery.

These Tenon advancements are intended

to further enhance the safety of the procedure and encourage more physicians to adopt the procedure.

In October 2022, we received Institutional Review

Board (“IRB”) approval from WCG IRB for two separate Tenon-sponsored post market clinical studies of the Catamaran System.

The approval by WCG allows designated Catamaran study centers to begin recruiting and enrolling patients into the clinical studies.

first approval from WCG IRB will support a prospective, multi-center, single arm post market study that will evaluate the clinical outcomes

of patients with sacroiliac joint disruptions or degenerative sacroiliitis treated with the Catamaran System.

Patients will be followed

out to 24 months assessing various patient reported outcomes, radiographic assessments, and adverse events.

The second prospective, multi-center,

Catamaran study will evaluate 6-to-12-month radiographic outcomes to assess fusion of patients that have already undergone treatment with

● Insertion Trajectory Away from

the Neural Foramen

● Insertion Trajectory Away from

Major Lateral Vascular Structures

● Autologous Bone Grafting in

the Ilium, Sacrum and Bridge

● Radiographic Confirmation of

Bridging Bone Fusion of the SI-Joint

fixation device and its key features are shown below:

“Pontoon” in the ilium

“Pontoon” in the sacrum

“Pontoons and Bridge”

filled with autologous bone from drilling process

Leading edge osteotome creates defect and facilitates ease of insertion

The Catamaran System

In addition, retrospective and prospective clinical outcomes will be evaluated.

We anticipate completing enrollment

by the end of the second quarter of 2024.

Based on market research and internal estimates,

Tenon believes the potential market for surgical intervention of the SI-Joint to be 279,000 procedures annually in the U.S.

a potential annual market of approximately $2.0 billion.

These estimates are driven by coding data for SI-Joint injections to treat pain

and informed assumptions relative to surgical intervention candidacy

Based on public information, we believe that the

largest clinical device supplier in this market does approximately 16,000 SI-Joint fixations a year representing the largest market share.

The other competitive devices that are offered are all products generally part of much larger companies with a variety of orthopedic devices

and as such do not specifically call out the number of specific SI-Joint procedures performed with their products.

It is our belief that

all other competitive devices represent approximately another 5,000 potential SI-Joint procedures.

Based on this analysis we believe the market is

vastly underserved and only penetrated 5-7%, leaving tremendous upside for a next generation device that meets the needs of this market.

Competitive Landscape

We believe Tenon is the first company to develop

and manufacture a novel Inferior-Posterior approach featuring a dual pontoon fixation technology cleared by the FDA expressly for SI-Joint

The approach, referred to as Inferior Posterior Sacroiliac Fusion is focused on these critical aspects of the surgical procedure:

is a singular implant designed with several proprietary components which allow for it to be explicitly formatted to address the SI-Joint

with a single approach and implant.

This contrasts with several competitive implant systems that require multiple approach pathways and

implants to achieve fixation.

In addition, the inferior-posterior approach is designed to be direct to the joint and through limited

anatomical structures which may minimize the morbidity of the approach.

The implant features a patented dual pontoon open cell design

which enables the clinician to pack the pontoons with the patient’s own autologous bone designed to promote bone fusion across

The Catamaran System is designed specially to resist vertical shear and rotation of the joint in which it was implanted, helping

stabilize the joint in preparation for eventual fusion.

The instruments

we have developed are proprietary to The Catamaran System and specifically designed to transfix the SI-Joint and facilitate an inferior-posterior

approach that is unique to the system.

Tenon also has

developed a proprietary 2D placement protocol as well as a protocol for 3D navigation utilizing the latest techniques in spine surgery.

These Tenon advancements are intended to further enhance the safety of the procedure and encourage more physicians to adopt the procedure.

In October 2022,

we received Institutional Review Board (“IRB”) approval from WCG IRB for two separate Tenon-sponsored post market clinical

studies of The Catamaran System.

The approval by WCG allows designated Catamaran study centers to begin recruiting and enrolling patients

into the clinical studies.

The first approval from WCG IRB supports a prospective, multi-center, single arm post market study that

will evaluate the clinical outcomes of patients with sacroiliac joint disruptions or degenerative sacroiliitis treated with The Catamaran

Patients will be followed out to 24 months assessing various patient reported outcomes, radiographic assessments, and adverse

The second prospective, multi-center, Catamaran study will evaluate 6-to-12-month radiographic outcomes to assess fusion of patients

that have already undergone treatment with The Catamaran System.

In addition, retrospective and prospective clinical outcomes will be

Based on market

research and internal estimates, Tenon believes the potential market for surgical intervention of the SI-Joint to be 279,000 procedures

annually in the U.S.

alone, for a potential annual market of approximately $2.0 billion.

These estimates are driven by coding data for

SI-Joint injections to treat pain and informed assumptions relative to surgical intervention candidacy

Based on public

information, we believe that the largest clinical device supplier in this market does approximately 16,000 SI-Joint fixations a year

representing the largest market share.

The other competitive devices that are offered are all products generally part of much larger

companies with a variety of orthopedic devices and as such do not specifically call out the number of specific SI-Joint procedures performed

with their products.

It is our belief that all other competitive devices represent approximately another 5,000 potential SI-Joint procedures.

Based on this analysis

we believe the market is vastly underserved and only penetrated 5-7%, leaving tremendous upside for a next generation device that meets

the needs of this market.

We believe Tenon

is the first company to develop and manufacture a novel Inferior-Posterior approach featuring a dual pontoon fixation technology cleared

by the FDA expressly for SI-Joint fusion.

The approach, referred to as Inferior Posterior Sacroiliac Fusion is focused on these critical

aspects of the surgical procedure:

Designed for Safety :

1 unchanged sentence

Focus on Efficiency :

the approach is designed to be direct to the SI-Joint, which allows for visualization of the joint and is designed to pass through minimal muscle structures, which may result in a faster and more efficient surgical procedure and reduced post-op pain for the patient.

the approach is designed to be direct to the SI-Joint, which allows for visualization of the joint and is designed to pass through minimal

muscle structures, which may result in a faster and more efficient surgical procedure and reduced post-op pain for the patient.

Targeted Anatomy :

the approach places the implant in the aspect of the SI-Joint with the densest bone, designed to provide maximum fixation and resistance to vertical shear.

This is designed to provide a secure press fit of the implant, reducing the incidence of revision surgery due to implant loosening, which we believe is the reason for many competitive device failures as reported to the FDA Medical Device Reporting (MDR).

Note the trajectory used in the Inferior Posterior

The following are the primary factors on which companies compete in

our industry:

product and clinical procedure effectiveness;

ease of surgical technique and use of associated instruments;

published clinical outcomes and evidence;

sales force knowledge and service levels;

product support and service, and customer service;

comprehensive training, including disease, anatomy, diagnosis, and treatment;

product innovation and the speed of innovation;

approach places the implant in the aspect of the SI-Joint with the densest bone, designed to provide maximum fixation and resistance

to vertical shear.

This is designed to provide a secure press fit of the implant, reducing the incidence of revision surgery due to implant

loosening, which we believe is the reason for many competitive device failures as reported to the FDA Medical Device Reporting (MDR).

Note the trajectory

used in the Inferior Posterior approach:

The following are the primary factors

on which companies compete in our industry:

● product and clinical procedure

effectiveness;

● ease of surgical technique

and use of associated instruments;

● published clinical outcomes

and evidence;

● sales force knowledge and service

● product support and service,

and customer service;

● comprehensive training, including

disease, anatomy, diagnosis, and treatment;

● product innovation and the

speed of innovation;

● intellectual property;

accountability and responsiveness to customers’ demands;

● accountability and responsiveness

to customers’ demands;

● pricing and reimbursement;

● scientific (biomechanics) data;

attracting and retaining key personnel.

Tenon believes that refined approaches and improved

implant design will open the door to enhanced adoption and further penetration of this important market.

The Catamaran™ SI-Joint Fusion System

Until October 2022, Tenon sold the Catamaran

System to a limited number of clinician advisors to refine the product for a full commercial launch.

In October 2022, Tenon initiated

a full commercial launch at the NASS meeting in Chicago.

The Catamaran System includes instruments and implants designed to prepare and

fixate the SI-Joint for fusion.

We believe the Catamaran System will address a large market opportunity with a superior product and is

distinct from other competitive offerings in the following ways:

● attracting and retaining key

Tenon believes

that refined approaches and improved implant design will open the door to enhanced adoption and further penetration of this important

The Catamaran™

SI-Joint Fusion System Solution

Until October 2022,

Tenon sold The Catamaran System to a limited number of clinician advisors to refine the product for a full commercial launch.

2022, Tenon initiated a full commercial launch at the NASS meeting in Chicago.

The Catamaran System includes instruments and implants

designed to prepare and fixate the SI-Joint for fusion.

We believe The Catamaran System will address a large market opportunity with

a superior product and is distinct from other competitive offerings in the following ways:

● Transfixes the SI joint

Inferior-Posterior Sacroiliac Fusion Approach

● Inferior-Posterior Sacroiliac

Fusion Approach

● Reduced Approach Morbidity

Direct And Visualized Approach to the SI-Joint

● Direct And Visualized Approach

to the SI-Joint

● Single Implant Technique

Insertion Trajectory Away from the Neural Foramen

Insertion Trajectory Away from Major Vascular Structures

Autologous Bone Grafting in the Ilium, Sacrum and Bridge

Radiographic Confirmation of Bridging Bone Fusion of the SI-Joint

The fixation device and its key features are shown

● Insertion Trajectory Away from

the Neural Foramen

● Insertion Trajectory Away from

Major Vascular Structures

● Autologous Bone Grafting in

the Ilium, Sacrum and Bridge

● Radiographic Confirmation of

Bridging Bone Fusion of the SI-Joint

The fixation device

and its key features are shown below:

“Pontoon” in the ilium

“Pontoon” in the sacrum

“Pontoons and Bridge” filled with autologous bone from

drilling process

“Pontoons and Bridge”

filled with autologous bone from drilling process

Leading edge osteotome creates defect and facilitates ease of insertion

The Catamaran System is a singular implant designed

with several proprietary components which allow for it to be explicitly formatted to transfix the SI-Joint with a single approach and

This contrasts with several competitive implant systems that require multiple approach pathways and implants to achieve fixation.

In addition, the Inferior-Posterior approach is designed to be direct to the joint and through limited anatomical structures which may

minimize the morbidity of the approach.

The implant features a patented dual pontoon open cell design which enables the clinician to pack

the pontoons with the patient’s own autologous bone designed to promote bone fusion across the joint.

The Catamaran System is designed

specially to resist vertical shear and rotation of the joint in which it was implanted, helping stabilize the joint in preparation for

eventual fusion.

The instruments we have developed are proprietary

to The Catamaran System and specifically designed to facilitate an Inferior Posterior approach that is unique to the system.

Tenon also has developed a proprietary 2D placement

protocol as well as a protocol for 3D navigation utilizing the latest techniques in spine surgery.

These Tenon advancements are intended

to further enhance the safety of the procedure and encourage more physicians to adopt the procedure.

The Catamaran System, as mentioned previously,

is placed in the densest aspect of the SI-Joint as confirmed by the pre-op planning images below:

The Catamaran System

is a singular implant designed with several proprietary components which allow for it to be explicitly formatted to transfix the SI-Joint

with a single approach and implant.

This contrasts with several competitive implant systems that require multiple approach pathways and

implants to achieve fixation.

In addition, the Inferior-Posterior approach is designed to be direct to the joint and through limited

anatomical structures which may minimize the morbidity of the approach.

The implant features a patented dual pontoon open cell design

which enables the clinician to pack the pontoons with the patient’s own autologous bone designed to promote bone fusion across

The Catamaran System is designed specially to resist vertical shear and rotation of the joint in which it was implanted, helping

stabilize the joint in preparation for eventual fusion.

The instruments

we have developed are proprietary to The Catamaran System and specifically designed to facilitate an Inferior Posterior approach that

is unique to the system.

Tenon also has

developed a proprietary 2D placement protocol as well as a protocol for 3D navigation utilizing the latest techniques in spine surgery.

These Tenon advancements are intended to further enhance the safety of the procedure and encourage more physicians to adopt the procedure.

The Catamaran System,

as mentioned previously, is placed in the densest aspect of the SI-Joint as confirmed by the pre-op planning images below:

Surgical Plan Key:

Lateral Pontoon (Ilium)

Medial Pontoon

Pontoon (Ilium)

Medial Pontoon (Sacrum)

Upper Right Quadrant:

The green and purple pontoons represent the placement

in the dense bone inferior – contrasted with the dorsal gap superiorly where competitive systems are most often placed.

and purple pontoons represent the placement in the dense bone inferior – contrasted with the dorsal gap superiorly where competitive

systems are most often placed.

Lower Right Quadrant:

The yellow and purple outlines represent the

Catamaran System pontoons, illustrating the angle of insertion is away from the sacral neuro foramen providing for a much safter

trajectory for device implantation.

and purple outlines represent The Catamaran System pontoons, illustrating the angle of insertion is away from the sacral neuro

foramen providing for a much safter trajectory for device implantation.

The Procedure

We believe the Catamaran System and its differentiated

characteristics allow for an efficient and effective procedure designed to deliver short-term stabilization and long-term fusion that

can be confirmed radiographically.

Shown below is an illustration demonstrating the unique placement of the Catamaran System inserted

Inferior-Posterior and coming directly down to and transfixing the joint

The Catamaran System procedure is typically performed

under general anesthesia using a specially designed instrument set we provide to prepare for the Inferior-Posterior access to the SI-Joint.

Specially designed imaging and navigation protocols are designed to ensure the clinician has the proper entry point, trajectory, angle

and depth so that the pontoons of the Catamaran System are placed for maximum fixation.

The Catamaran System incorporates two pontoons

and is designed so that when the system is impacted into the bone one pontoon is on the Illum side and the other is in the Sacrum side

with the bridge spanning the joint, preventing shear and rotation of the joint.

The device also features an open cell design where the

patient’s own (autologous) bone is packed into the pontoons and the bridge to facilitate fusion across the joint.

The leading edge

of the bridge is designed to act as an osteotome, providing a self-created deficit upon insertion.

These features are designed to create

an ideal environment for bone ingrowth and fusion.

Below is a fluoroscopic image of an implanted Catamaran Fixation Device spanning the

Tenon believes the surgical approach and implant

design it has developed, along with the 2D and 3D protocols for proper implantation will be received well by the clinician community who

have been looking for a next generation device.

Our initial clinical results indicate that the Catamaran System is promoting fusion across

the joint as evidenced by post-op CT scans (the recognized gold standard widely accepted by the Clinical community).

We believe The

Catamaran System and its differentiated characteristics allow for an efficient and effective procedure designed to deliver short-term

stabilization and long-term fusion that can be confirmed radiographically.

Shown below is an illustration demonstrating the unique placement

of The Catamaran System inserted Inferior-Posterior and coming directly down to and transfixing the joint

The Catamaran System

procedure is typically performed under general anesthesia using a specially designed instrument set we provide to prepare for the Inferior-Posterior

access to the SI-Joint.

Specially designed imaging and navigation protocols are designed to ensure the clinician has the proper entry

point, trajectory, angle and depth so that the pontoons of The Catamaran System are placed for maximum fixation.

The Catamaran System

incorporates two pontoons and is designed so that when the system is impacted into the bone one pontoon is on the Illum side and the

other is in the Sacrum side with the bridge spanning the joint, preventing shear and rotation of the joint.

The device also features

an open cell design where the patient’s own (autologous) bone is packed into the pontoons and the bridge to facilitate fusion across

The leading edge of the bridge is designed to act as an osteotome, providing a self-created deficit upon insertion.

features are designed to create an ideal environment for bone ingrowth and fusion.

Below is a fluoroscopic image of an implanted Catamaran

Fixation Device spanning the SI-Joint.

Tenon believes

the surgical approach and implant design it has developed, along with the 2D and 3D protocols for proper implantation will be received

well by the clinician community who have been looking for a next generation device.

Our initial clinical results indicate that The Catamaran

System is promoting fusion across the joint as evidenced by post-op CT scans (the recognized gold standard widely accepted by the Clinical

Post-Op fluoroscopic image of

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bridging bone fusion

A preliminary 18 case series (Michael Joseph Chaparro,

MD, F.A.A.N.S., F.A.C.S.) has documented that the Catamaran System does in fact promote fusion across the SI-Joint, which many of our

competitors have not been able to demonstrate.

While products from some of our competitors use screws and triangular wedges to treat the

SI-Joint, most do not effectively resist the vertical shear and twisting within the joint.

This 18 patient series was presented at the

North American Spine Society Annual Meeting in Chicago, IL in October 2022.

An independent biomechanical study (Lisa Ferrara,

OrthoKinetic Technologies, LLC now part of Element) demonstrated that a single Catamaran SIJ Fixation Device was superior to predicate

device in the areas of Fixation Strength, Shear Stiffness, Dynamic Endurance and Pullout Strength.

We hold issued patents on the Catamaran

System and its unique features including the dual pontoons and the open cell structure for bone graft packing.

We also hold an issued

patent for the method of placing the Catamaran System into the SI-Joint where one pontoon is in the ilium and the other in the sacrum.

The Catamaran System’s unique design has

already demonstrated radiographically confirmed fusion in initial patients.

We believe that this beneficial advantage along with a simpler,

safer, and less painful procedure will make this the procedure of choice for most physicians.

Tenon has initiated post market, IRB controlled

clinical trials to demonstrate this technology delivers on these advantages.

A preliminary 18

case series (Michael Joseph Chaparro, MD, F.A.A.N.S., F.A.C.S.) has documented that The Catamaran System does in fact promote fusion

across the SI-Joint, which many of our competitors have not been able to demonstrate.

While products from some of our competitors use

screws and triangular wedges to treat the SI-Joint, most do not effectively resist the vertical shear and twisting within the joint.

This 18 patient series was presented at the North American Spine Society Annual Meeting in Chicago, IL in October 2022.

An independent

biomechanical study (Lisa Ferrara, Ph.D.

OrthoKinetic Technologies, LLC now part of Element) demonstrated that a single Catamaran SIJ

Fixation Device was superior to predicate device in the areas of Fixation Strength, Shear Stiffness, Dynamic Endurance and Pullout Strength.

We hold issued patents on The Catamaran System and its unique features including the dual pontoons and the open cell structure for bone

graft packing.

We also hold an issued patent for the method of placing The Catamaran System into the SI-Joint where one pontoon is in

the ilium and the other in the sacrum.

The Catamaran System’s

unique design has already demonstrated radiographically confirmed fusion in initial patients.

We believe that this beneficial advantage

along with a simpler, safer, and less painful procedure will make this the procedure of choice for most physicians.

Tenon has initiated

post market, IRB controlled clinical trials to demonstrate this technology delivers on these advantages.

Coverage and Reimbursement

When a Tenon procedure utilizing the Catamaran

System is performed, the healthcare facility, either a hospital (inpatient or outpatient clinic), and the clinician submit claims

for reimbursement to the patient’s insurer.

Generally, the facility obtains a lump sum payment, or facility fee, for SI-Joint fusions.

When a Tenon procedure

utilizing The Catamaran System is performed, the healthcare facility, either a hospital (inpatient or outpatient clinic), and the

clinician submit claims for reimbursement to the patient’s insurer.

Generally, the facility obtains a lump sum payment, or facility

fee, for SI-Joint fusions.

Our products are purchased by the facility, along with other supplies used in the procedure.

The facility must also pay for its own fixed

costs of operation, including certain operating room personnel involved in the procedure, ICD and other medical services care.

costs exceed the facility reimbursement, the facility’s managers may discourage or restrict clinicians from performing the procedure

in the facility or using certain technologies, such as the Catamaran System, to perform the procedure.

The Medicare 2022 national average hospital inpatient

payment for SI-Joint procedures ranges from approximately $25,000 to approximately $59,000 depending on the procedural approach and the

presence of Complication and Comorbidity/Major Complication and Comorbidity.

The Medicare 2022 national average hospital outpatient

clinic payment is $21,897.

We believe that insurer payments to facilities are generally adequate for these facilities to offer the Catamaran

System procedure.

Physicians are reimbursed separately for their

professional time and effort to perform a surgical procedure.

Depending on the surgical approach, the incision size, type and extent

of imaging guidance, indication for procedure, and the insurer, the Catamaran System procedure may be reported by the physician using

any one of the applicable following CPT ® codes 27279, 27280, 27299.

The Medicare 2022 national average payment for CPT ®

27279 is $807 and $1,352 for 27280.

must also pay for its own fixed costs of operation, including certain operating room personnel involved in the procedure, ICD and other

medical services care.

If these costs exceed the facility reimbursement, the facility’s managers may discourage or restrict clinicians

from performing the procedure in the facility or using certain technologies, such as The Catamaran System, to perform the procedure.

The Medicare 2023

national average hospital inpatient payment for SI-Joint procedures ranges from approximately $25,661 to approximately $46,437 depending

on the procedural approach and the presence of Complication and Comorbidity/Major Complication and Comorbidity.

The Medicare 2023

national average hospital outpatient clinic payment is $17,756.

We believe that insurer payments to facilities are generally adequate

for these facilities to offer The Catamaran System procedure.

Physicians are

reimbursed separately for their professional time and effort to perform a surgical procedure.

Depending on the surgical approach, the

incision size, type and extent of imaging guidance, indication for procedure, and the insurer, The Catamaran System procedure may be

reported by the physician using any one of the applicable following CPT® codes 27279, 27280, 27299.

The Medicare 2022 national average

payment for CPT® 27279 is $807 and $1,352 for 27280.

CPT® 27299 has no national valuation.

Clinicians, however, can present a crosswalk

to another procedure believed to be fairly equivalent and/or comparison to a code for which there is an existing valuation.

For some governmental programs, such as Medicaid,

coverage and reimbursement differ from state to state, and some state Medicaid programs may not pay an adequate amount for the procedures

performed with our products, if any payment is made at all.

Similar to Medicaid, many private payors’ coverage and payment may differ

from one payer to another.

We believe that some clinicians view the current

Medicare reimbursement amount as insufficient for current SI-Joint procedures, given the work effort involved with the procedure, including

the time to diagnose the patient and obtain prior authorization from the patient’s health insurer when necessary.

Many private payors

require extensive documentation of a multi-step diagnosis before authorizing SI-Joint fusion for a patient.

We believe that some private

payors apply their own coverage policies and criteria inconsistently, and clinicians may experience difficulties in securing approval

and coverage for sacroiliac fusion procedures.

Additionally, many private payors limit coverage for open SI-Joint fusion to trauma, tumors

or extensive spine fusion procedures involving multiple levels.

We believe the unique design of the Catamaran

System and the fact the Catamaran System may be placed both via an open procedure based on the clinician’s determination of trauma

induced SI-Joint pain or as a minimally invasive approach provides a unique and differentiated approach for the clinician to determine

the reimbursement code that best fits the clinical problem.

We believe this is a significant advantage over competitive devices by providing

the clinician the clinical flexibility of offering the best clinical solution and approach for patients.

Clinicians, however, can present a

crosswalk to another procedure believed to be fairly equivalent and/or comparison to a code for which there is an existing valuation.

For some governmental

programs, such as Medicaid, coverage and reimbursement differ from state to state, and some state Medicaid programs may not pay an adequate

amount for the procedures performed with our products, if any payment is made at all.

Similar to Medicaid, many private payors’

coverage and payment may differ from one payer to another.

We believe that

some clinicians view the current Medicare reimbursement amount as insufficient for current SI-Joint procedures, given the work effort

involved with the procedure, including the time to diagnose the patient and obtain prior authorization from the patient’s health

insurer when necessary.

Many private payors require extensive documentation of a multi-step diagnosis before authorizing SI-Joint fusion

for a patient.

We believe that some private payors apply their own coverage policies and criteria inconsistently, and clinicians may

experience difficulties in securing approval and coverage for sacroiliac fusion procedures.

Additionally, many private payors limit coverage

for open SI-Joint fusion to trauma, tumors or extensive spine fusion procedures involving multiple levels.

We believe the

unique design of The Catamaran System and the fact The Catamaran System may be placed both via an open procedure based on the clinician’s

determination of trauma induced SI-Joint pain or as a minimally invasive approach provides a unique and differentiated approach for the

clinician to determine the reimbursement code that best fits the clinical problem.

We believe this is a significant advantage over competitive

devices by providing the clinician the clinical flexibility of offering the best clinical solution and approach for patients.

Sales and Marketing

We market and sell the Catamaran System primarily

through independent distributors and sales representatives specializing in spine sales.

Our target customer base includes approximately

12,000 physicians who perform spine and/or pelvic surgical procedures.

We provide general sales and marketing training

to our independent sales representative along with comprehensive, hands-on cadaveric and dry-lab training sessions focusing on the clinical

benefits of the Catamaran System and the importance of using the 2D and 3D protocols we have developed.

We believe many clinicians have

already been trained using one of the alternative products but have not been satisfied with the approach and technology.

This provides

Tenon with an opportunity to demonstrate to an already-trained-clinician the unique attributes of the Catamaran System.

Our business objective is to introduce the Next

Generation Implant for SI-Joint Fixation.

The past 10 years has seen an acceleration in recognition and discussion of the SI-Joint as

a cause of pain that can be treated.

However, adoption has been hindered by complexity of the procedure as evidenced by the significant

number of reported Medical Device Records (MDR’s).

The need for multiple implants and resulting post-op pain has also contributed

to low adoption numbers.

Our strategy is to provide a safer, faster, and better surgical experience and a significant pain reduction benefit

for the patient.

We market and sell

The Catamaran System primarily through independent distributors and sales representatives specializing in orthopedics and spine sales.

Our target customer base includes approximately 12,000 physicians who perform spine and/or pelvic surgical procedures.

We provide general

sales and marketing training to our independent sales representative along with comprehensive, hands-on cadaveric and dry-lab training

sessions focusing on the clinical benefits of The Catamaran System and the importance of using the 2D and 3D protocols we have developed.

We believe many clinicians have already been trained using one of the alternative products but have not been satisfied with the approach

and technology.

This provides us with an opportunity to demonstrate to an already-trained-clinician the unique attributes of The Catamaran

Our business objective

is to introduce the Next Generation Implant for SI-Joint Fixation.

The past 10 years has seen an acceleration in recognition and discussion

of the SI-Joint as a cause of pain that can be treated.

However, adoption has been hindered by complexity of the procedure as evidenced

by the significant number of reported Medical Device Records (MDR’s).

The need for multiple implants and resulting post-op pain

has also contributed to low adoption numbers.

Our strategy is to provide a safer, faster, and better surgical experience and a significant

pain reduction benefit for the patient.

Our goals are simple but impactful and as such we plan on the following:

Educate and inform physicians and other healthcare providers, payors, and patients about the growing body of evidence supporting what we believe is the safety, durable clinical effectiveness, economic benefit, and reduction in opioid use associated with SI-Joint fixation and the Catamaran System procedure.

Utilize the most effective means of training via video and in-person labs demonstrating the ease of use with 2D and 3D navigation.

Since many physicians have already been trained but have not incorporated SI-Joint fixation into their practices we will work with these physicians to reengage and train them on the Next Generation of an SI-Joint implant which incorporates a safer and simpler approach.

Utilize the best approaches of direct-to-consumer outreach to educate patients that there is a safe solution to help them improve their quality of life.

Additionally, to reach the broadest physician and patient audience on case study results from around the United States we plan to implement an active social media campaign incorporating Facebook, Instagram, YouTube, etc.

Invest in our independent sales representative network to ensure that all Tenon representatives have the latest in marketing and education tools to reduce the time from training to adoption.

Remain true to our next generation product development strategy by continually bringing out new advancements in and around the SI-Joint and pelvic region.

Continue to grow our existing intellectual property portfolio.

Execute post-market clinical research to confirm the benefits of the distinct approach and implant.

● Educate and inform physicians

and other healthcare providers, payors, and patients about the growing body of evidence supporting what we believe is the safety, durable

clinical effectiveness, economic benefit, and reduction in opioid use associated with SI-Joint fixation and The Catamaran System procedure.

● Utilize the most effective

means of training via video and in-person labs demonstrating the ease of use with 2D and 3D navigation.

Since many physicians have already

been trained but have not incorporated SI-Joint fixation into their practices we will work with these physicians to reengage and train

them on the Next Generation of an SI-Joint implant which incorporates a safer and simpler approach.

● Utilize the best approaches

of direct-to-consumer outreach to educate patients that there is a safe solution to help them improve their quality of life.

Additionally,

to reach the broadest physician and patient audience on case study results from around the United States we plan to implement an active

social media campaign incorporating Facebook, Instagram, YouTube, etc.

● Invest in our independent sales

representative network to ensure that all Tenon representatives have the latest in marketing and education tools to reduce the time from

training to adoption.

● Remain true to our next generation

product development strategy by continually bringing out new advancements in and around the SI-Joint and pelvic region.

● Continue to grow our existing

intellectual property portfolio.

● Execute post-market clinical

research to confirm the benefits of the distinct approach and implant.

Regulatory Status

Tenon has received FDA 510(k) clearance to market

and sell the Catamaran System for sacroiliac joint fusion for conditions including sacroiliac joint disruptions and degenerative sacroiliitis.

We have received

FDA 510(k) clearance to market and sell The Catamaran System for sacroiliac joint fusion for conditions including sacroiliac joint disruptions

and degenerative sacroiliitis.

Research & Development

Our initial development of the Catamaran System

has incorporated several differentiating features which we believe will make an important contribution for many patients suffering from

SI-Joint pain.

Our initial development

of The Catamaran System has incorporated several differentiating features which we believe will make an important contribution for many

patients suffering from SI-Joint pain.

To our knowledge, no other competitive product incorporates these Next Generation features:

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designed for smaller anatomy and/or revision surgery.

The Tenon development plan is to expand the Catamaran

System offering by introducing a series of implant lengths so that the clinician has a full complement of sized implants to choose from

depending on the patient’s anatomy.

These product enhancements will enable the clinician to optimize the size of each implant to

ensure full fixation based on anatomy.

Tenon believes, based on literature searches of prior SI-Joint fixation technologies, that adverse

event incidence where the implant has loosened or been misplaced thereby requiring a revision surgery could reach 20%.

Tenon believes

that its ability to make the Catamaran System a specifically sized fixation device will benefit many patients requiring a revision surgery.

The Catamaran System shown below has been cleared

by the FDA for commercialization.

This patented titanium implant incorporates the Catamaran SI-Joint Fixation Device pontoon design and

the open cell configuration which we believe, when filled with the patient’s autologous bone, promotes fusion.

The two images below

show a comparison of a competitive implant requiring three implants and the Catamaran System unique pontoon design showing the need of

only one implant to cover the same amount of the SI-Joint.

Our development

plan is to expand The Catamaran System offering by introducing a series of progressively longer pontoons so that the clinician has a

full complement of sized implants to choose from depending on the patient’s anatomy.

These product enhancements will enable the

clinician to optimize the size of each implant to ensure full fixation based on anatomy.

We believe, based on literature searches of

prior SI-Joint fixation technologies, that adverse event incidence where the implant has loosened or been misplaced thereby requiring

a revision surgery could reach 20%.

We believe that our ability to make The Catamaran System a specifically sized fixation device will

benefit many patients requiring a revision surgery.

The Catamaran System

shown below has been cleared by the FDA for commercialization.

This patented titanium implant incorporates the Catamaran SI-Joint Fixation

Device pontoon design and the open cell configuration which we believe, when filled with the patient’s autologous bone, promotes

The two images below show a comparison of a competitive implant requiring three implants and The Catamaran System unique pontoon

design showing the need of only one implant to cover the same amount of the SI-Joint.

The Catamaran™ SIJ Fusion

System Single Implant

SI Bone iFuse ® Three Implants

Our mission will be to continue developing enhancements

to the Catamaran System to meet our customers’ changing needs and to improve the surgery’s effectiveness.

This includes revision

surgery options as well as options as an adjunct to long fusion constructs in the lumbar spine.

Additionally, Tenon will initiate various post

marketing clinical studies in accordance with FDA cleared indications for use.

Since we have already received FDA 510(k) clearance to

market the Catamaran System, our clinical study activities will be focused on capturing post-market safety and efficacy data.

received IRB approval for two post-market trials, including a 50 patient, 10 center multi-center trial and a prospective CT trial to demonstrate

fusion in patient who have already been treated with the Catamaran System.

Clinical study endpoints may include but are not limited to;

pain scoring, length of surgical procedure, blood loss, post-op pain, length of stay, duration of non-weight-bearing post-op, radiographic

confirmation of fusion and surgical complication rates.

Statistical analysis plans may be designed to demonstrate non-inferiority to historical

control, as reported in published literature, which may be used for submission to peer reviewed articles / posters / presentations and

Intellectual Property

Developing and maintaining a strong intellectual

property position is an important element of our business.

We maintain the intellectual property through a combination of patent protection,

trademarks, and trade secrets.

We have sought, and will continue to seek, patent protection for our technology, for improvements to our

technology, as well as for any of our other technologies where we believe such protection will be advantageous.

As of March 29, 2024, we own four (4) issued

utility patents, sixteen (16) pending U.S.

utility patent applications, four (4) issued foreign utility patents in Australia, Canada,

Japan and Israel, and two (2) pending foreign utility patent applications in the European Community, Brazil and Japan.

We also have thirteen

(13) registered trademarks (seven (7) U.S.

iFuse® Three Implants

Our mission will

be to continue developing enhancements to The Catamaran System to meet our customers’ changing needs and to improve the surgery’s

effectiveness.

This includes revision surgery options as well as options as an adjunct to long fusion constructs in the lumbar spine.

Additionally, we

will initiate various post marketing clinical studies in accordance with FDA cleared indications for use.

Since we have already received

FDA 510(k) clearance to market The Catamaran System, our clinical study activities will be focused on capturing post-market safety and

efficacy data.

Tenon has received IRB approval for two post-market trials, including a 50 patient, 10 center multi-center trial and a

prospective CT trial to demonstrate fusion in patient who have already been treated with The Catamaran System.

Clinical study endpoints

may include but are not limited to;

pain scoring, length of surgical procedure, blood loss, post-op pain, length of stay, duration of

non-weight-bearing post-op, radiographic confirmation of fusion and surgical complication rates.

Statistical analysis plans may be designed

to demonstrate non-inferiority to historical control, as reported in published literature, which may be used for submission to peer reviewed

articles / posters / presentations and the like.

Developing and

maintaining a strong intellectual property position is an important element of our business.

We maintain the intellectual property through

a combination of patent protection, trademarks, and trade secrets.

We have sought, and will continue to seek, patent protection for our

technology, for improvements to our technology, as well as for any of our other technologies where we believe such protection will be

advantageous.

As of March 26, 2025, we own eight issued U.S.

utility patents, 21

utility patent applications, four issued foreign utility patents in Australia, Canada, Japan and Israel, and two pending

foreign utility patent applications in the European Community, Brazil and Japan.

We also have thirteen registered trademarks (seven U.S.

and six foreign) and twelve pending trademark applications in the U.S.

Our utility patents and patent applications are

directed to several different aspects of our sacroiliac (SI) joint stabilization technology and related patent platform.

By way of example,

our granted patents and pending patent applications cover various structural features of our unique Catamaran SI-Joint prosthesis and

means for employing same to stabilize a dysfunctional SI-Joint.

The term of individual patents depends on the

legal term for patents in the countries in which they are granted.

In most countries, including the United States, the patent term for

a utility patent is generally 20 years from the earliest claimed filing date of a nonprovisional patent application in the applicable

Our utility patents

and patent applications are directed to several different aspects of our sacroiliac (SI) joint stabilization technology and related patent

By way of example, our granted patents and pending patent applications cover various structural features of our unique Catamaran

SI-Joint prosthesis and means for employing same to stabilize a dysfunctional SI-Joint.

The term of individual

patents depends on the legal term for patents in the countries in which they are granted.

In most countries, including the United States,

the patent term for a utility patent is generally 20 years from the earliest claimed filing date of a nonprovisional patent application

in the applicable country.

Our issued U.S.

and foreign utility patents are anticipated to naturally expire around 2031, and our U.S.

pending utility patent

applications, if issued into patents, are similarly anticipated to naturally expire around 2031, excluding any additional patent term

adjustment(s) or extension(s), and assuming payment of all applicable maintenance or annuity fees.

Once a patent expires, patent protection

ends and an invention enters the public domain allowing anyone to commercially exploit the invention without infringing the patent.

We cannot guarantee that patents will be issued

from any of our pending applications or that issued patents will be of sufficient scope or strength to provide meaningful protection for

our technology.

Notwithstanding the scope of the patent protection available to us, a competitor could develop methods or devices that

are not covered by our patents or circumvent these patents.

Furthermore, although, at present, we are unaware of any patent applications

that may result in one or more issued patents that our existing products or technologies may be alleged to infringe, since U.S.

applications can take many months to publish, there may be applications unknown to us that may result in one or more issued patents that

our existing products or technologies may be alleged to infringe.

As of March 29, 2024, we also have priority rights

in and to several significant trademarks that support our products and brand, including seven (7) registered U.S.

trademarks, twelve

trademark applications and six (6) foreign trademark applications in the European Community (excluding the United Kingdom),

Australia and Japan.

Domestic Regulation of Our Products and

Our research, development and clinical programs, as well as our manufacturing and marketing operations, are subject

to extensive regulation in the United States and other countries.

Most notably, all of our products sold in the United States are subject

to the federal Food, Drug and Cosmetic Act (the “FDCA”), as implemented and enforced by the FDA.

The FDA governs the following

activities that we perform or that are performed on our behalf, to ensure that medical products distributed domestically or exported internationally

are safe and effective for their intended uses:

product design, development, and manufacture;

product safety, testing, labeling, and storage;

pending utility patent applications, if issued into patents, are similarly anticipated to naturally expire around 2031, excluding any

additional patent term adjustment(s) or extension(s), and assuming payment of all applicable maintenance or annuity fees.

Once a patent

expires, patent protection ends and an invention enters the public domain allowing anyone to commercially exploit the invention without

infringing the patent.

We cannot guarantee

that patents will be issued from any of our pending applications or that issued patents will be of sufficient scope or strength to provide

meaningful protection for our technology.

Notwithstanding the scope of the patent protection available to us, a competitor could develop

methods or devices that are not covered by our patents or circumvent these patents.

Furthermore, although, at present, we are unaware

of any patent applications that may result in one or more issued patents that our existing products or technologies may be alleged to

infringe, since U.S.

and foreign applications can take many months to publish, there may be applications unknown to us that may result

in one or more issued patents that our existing products or technologies may be alleged to infringe.

As of March 26, 2025, we also have priority rights in and to several

significant trademarks that support our products and brand, including seven registered U.S.

trademarks, twelve U.S.

trademark applications

and six foreign trademark applications in the European Community (excluding the United Kingdom), Australia and Japan.

Regulation of Our Products and Business.

Our research, development and clinical programs, as well as our manufacturing and marketing

operations, are subject to extensive regulation in the United States and other countries.

Most notably, all of our products sold in the

United States are subject to the federal Food, Drug and Cosmetic Act (the “FDCA”), as implemented and enforced by the FDA.

The FDA governs the following activities that we perform or that are performed on our behalf, to ensure that medical products distributed

domestically or exported internationally are safe and effective for their intended uses:

● product design, development,

and manufacture;

● product safety, testing, labeling,

● record keeping procedures;

product marketing, sales, distribution and export;

post-marketing surveillance, complaint handling, medical device reporting, reporting of deaths, serious injuries or device malfunctions, and repair or recall of products.

There are numerous FDA regulatory requirements

governing the clearance or approval and marketing of our products.

● product marketing, sales, distribution

● post-marketing surveillance,

complaint handling, medical device reporting, reporting of deaths, serious injuries or device malfunctions, and repair or recall of products.

There are numerous

FDA regulatory requirements governing the clearance or approval and marketing of our products.

These include:

product listing and establishment registration, which helps facilitate FDA inspections and other regulatory action;

investigational device exemptions to conduct premarket clinical trials, which include extensive monitoring, recordkeeping, and reporting requirements;

QSR, which requires manufacturers, including contract manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the manufacturing process;

labeling regulations and FDA prohibitions against the promotion of products for uncleared, unapproved or off-label use or indication;

● product listing and establishment

registration, which helps facilitate FDA inspections and other regulatory action;

● investigational device exemptions

to conduct premarket clinical trials, which include extensive monitoring, recordkeeping, and reporting requirements;

● QSR, which requires manufacturers,

including contract manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures

during all aspects of the manufacturing process;

● labeling regulations and FDA

prohibitions against the promotion of products for uncleared, unapproved or off-label use or indication;

● clearance of product modifications

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that affect the safety or effectiveness of one of our approved devices;

medical device reporting regulations, which require that manufacturers comply with FDA requirements to report if their device may have caused or contributed to a death or serious injury, or has malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction of the device or a similar device were to recur;

post-approval restrictions or conditions, including post-approval study commitments;

post-market surveillance regulations, which apply when necessary to protect the public health or to provide additional safety and effectiveness data for the device;

the FDA’s recall authority, whereby it can ask, or under certain conditions order, device manufacturers to recall from the market a product that is in violation of governing laws and regulations;

regulations pertaining to voluntary recalls;

● medical device reporting regulations,

which require that manufacturers comply with FDA requirements to report if their device may have caused or contributed to a death or

serious injury, or has malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction of

the device or a similar device were to recur;

● post-approval restrictions

or conditions, including post-approval study commitments;

● post-market surveillance regulations,

which apply when necessary to protect the public health or to provide additional safety and effectiveness data for the device;

● the FDA’s recall authority,

whereby it can ask, or under certain conditions order, device manufacturers to recall from the market a product that is in violation

of governing laws and regulations;

● regulations pertaining to voluntary

● notices of corrections or removals.

The FDA has broad post-market and regulatory enforcement

We and our contract manufacturers are subject to announced and unannounced inspections by the FDA to determine our compliance

with the QSR and other regulations and these inspections may include the manufacturing facilities of our suppliers.

Tenon has a robust

Supplier Qualification and Audit process as part of our quality system that ensures contract manufacturers, and their suppliers meet all

requirements.

An FDA pre-approval inspection is not required

for the Catamaran System due to its lower device classification, class II versus the higher class III.

As is the case for most medical

device firms, Tenon is subject to routine and “for cause” FDA inspections.

Routine inspections are mandated by

law every 2 years for class II and class III device manufacturers and make up the majority of FDA’s inspections.

If a serious public health

risk is identified during a routine inspection, the inspection may convert to a “for cause” inspection.

In the current

environment, FDA has limited compliance resources and has not been able to perform routine inspections in accordance with the 2-year mandate.

FDA uses a risk-based approach when deciding which firms should be selected for a routine inspection.

Using the Establishment Registration

and Device Listing databases, FDA identifies who manufactures and/or distributes which devices.

The firms are then prioritized by risk,

class III > class II > class I.

Firms that have recently introduced a new device to the market also are given higher priority, as

well as those that have had significant prior violations and complaints.

At present, Tenon has not been selected for an FDA inspection.

uses best practices to secure and maintain regulatory compliance by engaging with suppliers and contract manufacturing firms that are

ISO 13485 (or equivalent) compliant and by periodically performing internal, external, and third-party inspections and audits of the facilities

and systems to assess compliance.

FDA Premarket Clearance and Approval Requirements.

Unless an exemption applies, each medical device we wish to commercially distribute in the United States will require either premarket

notification, or 510(k), clearance or approval of a PMA from the FDA.

The FDA classifies medical devices into one of three classes.

deemed to pose lower risks are placed in either Class I or II, which typically requires the manufacturer to submit to the FDA a premarket

notification requesting permission to commercially distribute the device.

The FDA has broad

post-market and regulatory enforcement powers.

We and our contract manufacturers are subject to announced and unannounced inspections

by the FDA to determine our compliance with the QSR and other regulations and these inspections may include the manufacturing facilities

of our suppliers.

Tenon has a robust Supplier Qualification and Audit process as part of our quality system that ensures contract manufacturers,

and their suppliers meet all requirements.

An FDA pre-approval

inspection is not required for The Catamaran System due to its lower device classification, class II versus the higher class III.

is the case for most medical device firms, Tenon is subject to routine and “for cause” FDA inspections.

Routine inspections are

mandated by law every 2 years for class II and class III device manufacturers and make up the majority of FDA’s inspections.

public health risk is identified during a routine inspection, the inspection may convert to a “for cause” inspection.

the current environment, FDA has limited compliance resources and has not been able to perform routine inspections in accordance with

the 2-year mandate.

Therefore, FDA uses a risk-based approach when deciding which firms should be selected for a routine inspection.

Using the Establishment Registration and Device Listing databases, FDA identifies who manufactures and/or distributes which devices.

The firms are then prioritized by risk, class III > class II > class I.

Firms that have recently introduced a new device to the

market also are given higher priority, as well as those that have had significant prior violations and complaints.

At present, Tenon

has not been selected for an FDA inspection.

Tenon uses best practices to secure and maintain regulatory compliance by engaging

with suppliers and contract manufacturing firms that are ISO 13485 (or equivalent) compliant and by periodically performing internal,

external, and third-party inspections and audits of the facilities and systems to assess compliance.

FDA Premarket

Clearance and Approval Requirements.

Unless an exemption applies, each medical device we wish to commercially distribute in the

United States will require either premarket notification, or 510(k), clearance or approval of a PMA from the FDA.

The FDA classifies

medical devices into one of three classes.

Devices deemed to pose lower risks are placed in either Class I or II, which typically

requires the manufacturer to submit to the FDA a premarket notification requesting permission to commercially distribute the device.

This process is generally known as 510(k) clearance.

Some low-risk

devices are exempted from this requirement.

Devices deemed by the FDA to pose the greatest risks, such as life-sustaining, life- supporting

or implantable devices, or devices deemed not substantially equivalent to a previously cleared 510(k) device, are placed in Class III,

requiring a PMA.

If the FDA agrees that the device is substantially equivalent to a predicate device currently on the market, it will

grant 510(k) clearance to commercially market the device.

If the FDA determines that the device is “not substantially equivalent”

to a previously cleared device, the device is automatically designated as a Class III device.

The device sponsor must then fulfill

more rigorous PMA requirements or can request a risk-based classification determination for the device in accordance with the “de

novo” process, which is a route to market for novel medical devices that are low to moderate risk and are not substantially equivalent

to a predicate device.

All of our currently marketed products are Class II devices, subject to 510(k) clearance.

After a device receives 510(k) marketing clearance,

any modification that could significantly affect its safety or effectiveness, or that would constitute a major change or modification

in its intended use, will require a new 510(k) marketing clearance or, depending on the modification, PMA approval.

The determination

as to whether or not a modification could significantly affect the device’s safety or effectiveness is initially left to the manufacturer

using available FDA guidance.

Many minor modifications today are accomplished by a “letter to file” in which the manufacture

documents the rationale for the change and why a new 510(k) is not required.

However, the FDA may review such letters to file to evaluate

the regulatory status of the modified product at any time and may require the manufacturer to cease marketing and recall the modified

device until 510(k) clearance or PMA approval is obtained.

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

Clinical Trials.

Clinical trials

are generally required to support a PMA application and are sometimes required for 510(k) clearance.

Such trials for implanted devices

such as the Catamaran SIJ Fixation Device generally require an investigational device exemption application, or IDE, approved in advance

by the FDA for a specified number of subjects and study sites, unless the product is deemed a nonsignificant risk device eligible for

more abbreviated IDE requirements.

Clinical trials are subject to extensive monitoring, recordkeeping, and reporting requirements.

trials must be conducted under the oversight of an institutional review board, or IRB, for the relevant clinical trial sites and must

comply with FDA regulations, including but not limited to those relating to good clinical practices.

To conduct a clinical trial, we also

are required to obtain the subjects’ informed consent in form and substance that complies with both FDA requirements and state and

federal privacy and human subject protection regulations.

We, the FDA, or the institutional review board, or IRB, could suspend a clinical

trial at any time for various reasons, including a belief that the risks to study subjects outweigh the anticipated benefits.

a trial is completed, the results of clinical testing may not adequately demonstrate the safety and effectiveness of the device or may

otherwise not be sufficient to obtain FDA clearance or approval to market the product in the United States.

Pervasive and Continuing Regulation.

a device is placed on the market, numerous regulatory requirements continue to apply.

These include:

Product listing and establishment registration, which helps facilitate FDA inspections and other regulatory action;

QSR, which requires manufacturers, including contract manufacturers, to follow stringent design, testing, control, documentation, and other quality assurance procedures during all aspects of the manufacturing process;

labeling regulations and FDA prohibitions against the promotion of products for uncleared, unapproved, or off-label use or indication;

clearance of product modifications that could significantly affect safety or effectiveness or that would constitute a major change in intended use of one of our cleared devices;

approval of product modifications that affect the safety or effectiveness of one of our approved devices;

post-approval restrictions or condition, including post-approval study commitments;

post-market surveillance regulations, which apply when necessary to protect the public health or to provide additional safety and effectiveness data for the device;

the FDA’s recall authority, whereby it can ask, or under certain conditions order, device manufacturers to recall from the market a product that is in violation of governing laws and regulations;

regulations pertaining to voluntary recalls;

Some low-risk devices are exempted from this requirement.

Devices deemed by the

FDA to pose the greatest risks, such as life-sustaining, life- supporting or implantable devices, or devices deemed not substantially

equivalent to a previously cleared 510(k) device, are placed in Class III, requiring a PMA.

If the FDA agrees that the device is

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

If the FDA determines that the device is “not substantially equivalent” to a previously cleared device, the device is automatically

designated as a Class III device.

The device sponsor must then fulfill more rigorous PMA requirements or can request a risk-based

classification determination for the device in accordance with the “de novo” process, which is a route to market for novel

medical devices that are low to moderate risk and are not substantially equivalent to a predicate device.

All of our currently marketed

products are Class II devices, subject to 510(k) clearance.

After a device

receives 510(k) marketing clearance, any modification that could significantly affect its safety or effectiveness, or that would constitute

a major change or modification in its intended use, will require a new 510(k) marketing clearance or, depending on the modification,

PMA approval.

The determination as to whether or not a modification could significantly affect the device’s safety or effectiveness

is initially left to the manufacturer using available FDA guidance.

Many minor modifications today are accomplished by a “letter

to file” in which the manufacture documents the rationale for the change and why a new 510(k) is not required.

However, the FDA

may review such letters to file to evaluate the regulatory status of the modified product at any time and may require the manufacturer

to cease marketing and recall the modified device until 510(k) clearance or PMA approval is obtained.

The manufacturer may also be subject

to significant regulatory fines or penalties.

Clinical trials are generally required to support a PMA application and are sometimes required for 510(k) clearance.

Such trials for implanted devices such as the Catamaran SIJ Fixation Device generally require an investigational device exemption application,

or IDE, approved in advance by the FDA for a specified number of subjects and study sites, unless the product is deemed a nonsignificant

risk device eligible for more abbreviated IDE requirements.

Clinical trials are subject to extensive monitoring, recordkeeping, and reporting

requirements.

Clinical trials must be conducted under the oversight of an institutional review board, or IRB, for the relevant clinical

trial sites and must comply with FDA regulations, including but not limited to those relating to good clinical practices.

a clinical trial, we also are required to obtain the subjects’ informed consent in form and substance that complies with both FDA

requirements and state and federal privacy and human subject protection regulations.

We, the FDA, or the institutional review board,

or IRB, could suspend a clinical trial at any time for various reasons, including a belief that the risks to study subjects outweigh

the anticipated benefits.

Even if a trial is completed, the results of clinical testing may not adequately demonstrate the safety and

effectiveness of the device or may otherwise not be sufficient to obtain FDA clearance or approval to market the product in the United

and Continuing Regulation.

After a device is placed on the market, numerous regulatory requirements continue to apply.

● Product listing and establishment

registration, which helps facilitate FDA inspections and other regulatory action;

● QSR, which requires manufacturers,

including contract manufacturers, to follow stringent design, testing, control, documentation, and other quality assurance procedures

during all aspects of the manufacturing process;

● labeling regulations and FDA

prohibitions against the promotion of products for uncleared, unapproved, or off-label use or indication;

● clearance of product modifications

that could significantly affect safety or effectiveness or that would constitute a major change in intended use of one of our cleared

● approval of product modifications

that affect the safety or effectiveness of one of our approved devices;

● post-approval restrictions

or condition, including post-approval study commitments;

● post-market surveillance regulations,

which apply when necessary to protect the public health or to provide additional safety and effectiveness data for the device;

● the FDA’s recall authority,

whereby it can ask, or under certain conditions order, device manufacturers to recall from the market a product that is in violation

of governing laws and regulations;

● regulations pertaining to voluntary

● notices of corrections or removals.

The FDA has broad post-market and regulatory enforcement

We are subject to unannounced inspections by the FDA to determine our compliance with the QSR and other regulations, and these

inspections may include the manufacturing facilities of some of our subcontractors.

Failure by us or by our suppliers to comply with applicable

regulatory requirements can result in enforcement action by the FDA or other regulatory authorities, which may result in sanctions including,

but not limited to:

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

unanticipated expenditures to address or defend such actions

customer notifications for repair, replacement, refunds;

Recall, detention, or seizure of our products;

operating restrictions or partial suspension or total shutdown of production;

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

The FDA has broad

post-market and regulatory enforcement powers.

We are subject to unannounced inspections by the FDA to determine our compliance with

the QSR and other regulations, and these inspections may include the manufacturing facilities of some of our subcontractors.

by us or by our suppliers to comply with applicable regulatory requirements can result in enforcement action by the FDA or other regulatory

authorities, which may result in sanctions including, but not limited to:

● untitled letters, warning letters,

fines, injunctions, consent decrees, and civil penalties;

● unanticipated expenditures

to address or defend such actions

● customer notifications for

repair, replacement, refunds;

● recall, detention, or seizure

of our products;

● operating restrictions or partial

suspension or total shutdown of production;

● refusing or delaying our requests

for 510(k) clearance or PMA approval of new products or modified products;

● operating restrictions;

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

refusal to grant export approval for our products;

● withdrawing 510(k) clearances

or PMA approvals that have already been granted:

● refusal to grant export approval

for our products;

● criminal prosecution.

The FDA has not yet inspected our contract manufacturer’s manufacturing

Promotional Materials “Off-Label”

Advertising and promotion of medical devices, in addition to being regulated by the FDA, are also regulated by the

Federal Trade Commission and by state regulatory and enforcement authorities.

If the FDA determines that our promotional materials or

training constitutes promotion of an unapproved use, it 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, injunction, seizure, civil fine,

or criminal penalties.

It is also possible that other federal, state, or foreign enforcement authorities might take action if they consider

our promotional or training materials to constitute promotion of an unapproved use, which could result in significant fines or penalties

under other statutory authorities, such as laws prohibiting false claims for reimbursement.

In that event, our reputation could be damaged,

and adoption of the products would be impaired.

In addition, under the federal Lanham Act and

similar state laws, competitors, and others can initiate litigation relating to advertising claims.

Healthcare Fraud and Abuse

Federal and state governmental agencies and equivalent

foreign authorities subject the healthcare industry to intense regulatory scrutiny, including heightened civil and criminal enforcement

These laws constrain the sales, marketing and other promotional activities of medical device manufacturers by limiting the kinds

of financial arrangements we may have with hospitals, physicians and other potential purchases of our products.

Federal healthcare fraud

and abuse laws apply to our business when a customer submits a claim for an item or service that is reimbursed under Medicare, Medicaid,

or other federally funded healthcare programs.

Descriptions of some of the laws and regulations that may affect our ability to operate

The federal Anti-Kickback Statute prohibits, among

other things, persons from knowingly and willfully soliciting, receiving, offering, or paying remuneration, directly or indirectly, in

cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, items or services

for which payment may be made, in whole or in part, under federal healthcare programs.

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

There are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution;

those exceptions and safe harbors are drawn narrowly, and there is no exception or safe harbor for many common business activities.

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.

A number of states also have anti-kickback laws that establish similar prohibitions that may apply to items

or services reimbursed by government programs, as well as by any third-party payors, including commercial payors.

The civil False Claims Act prohibits, among other

things, knowingly presenting or causing the presentation of a false or fraudulent claim for payment of federal funds, or knowingly making,

or causing to be made, a false record or statement material to a false or fraudulent claim to avoid, decrease or conceal an obligation

to pay money to the federal government.

A claim including items or services resulting from a violation of the Anti- Kickback Statute constitutes

a false or fraudulent claim for purposes of 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.

Qui tam actions are filed under seal and impose

a mandatory duty on the U.S.

The FDA has not yet inspected our contract

manufacturer’s manufacturing facilities.

Materials “Off-Label” Promotion.

Advertising and promotion of medical devices, in addition to being regulated by

the FDA, are also regulated by the Federal Trade Commission and by state regulatory and enforcement authorities.

If the FDA determines

that our promotional materials or training constitutes promotion of an unapproved use, it 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,

injunction, seizure, civil fine, or criminal penalties.

It is also possible that other federal, state, or foreign enforcement authorities

might take action if they consider our promotional or training materials to constitute promotion of an unapproved use, which could result

in significant fines or penalties under other statutory authorities, such as laws prohibiting false claims for reimbursement.

event, our reputation could be damaged, and adoption of the products would be impaired.

In addition, under

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

Healthcare Fraud

Federal and state

governmental agencies and equivalent foreign authorities subject the healthcare industry to intense regulatory scrutiny, including heightened

civil and criminal enforcement efforts.

These laws constrain the sales, marketing and other promotional activities of medical device

manufacturers by limiting the kinds of financial arrangements we may have with hospitals, physicians and other potential purchases of

our products.

Federal healthcare fraud and abuse laws apply to our business when a customer submits a claim for an item or service that

is reimbursed under Medicare, Medicaid, or other federally funded healthcare programs.

Descriptions of some of the laws and regulations

that may affect our ability to operate follows.

The federal Anti-Kickback

Statute prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering, or paying remuneration,

directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation

of, items or services for which payment may be made, in whole or in part, under federal healthcare programs.

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.

A number of states also have anti-kickback laws that establish similar prohibitions

that may apply to items or services reimbursed by government programs, as well as by any third-party payors, including commercial payors.

The civil False

Claims Act prohibits, among other things, knowingly presenting or causing the presentation of a false or fraudulent claim for payment

of federal funds, or knowingly making, or causing to be made, a false record or statement material to a false or fraudulent claim to

avoid, decrease or conceal an obligation to pay money to the federal government.

A claim including items or services resulting from a

violation of the Anti- Kickback Statute constitutes a false or fraudulent claim for purposes of 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.

Qui tam actions are filed under seal and impose a mandatory duty on the U.S.

Department of Justice to investigate such allegations.

Most private citizen actions are declined by the Department

of Justice or dismissed by federal courts.

However, the investigation costs for a company can be significant and material even if the

allegations are without merit.

There are also criminal penalties, including imprisonment and criminal fines, for making or presenting

a false or fictitious or fraudulent claim to the federal government.

False Claims Act liability is potentially significant

in the healthcare industry because the statute provides for treble damages and mandatory penalties of $11,181 to $22,363 per claim (adjusted

annually for inflation).

Because of the potential for large monetary exposure, healthcare companies often resolve allegations without

admissions of liability for significant and sometimes material amounts to avoid the uncertainty of treble damages and per claim penalties

that may awarded in litigation proceedings.

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.

In addition, HIPAA created federal criminal statutes

that prohibit, among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit

program, including private third-party payors, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully

obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up a material

fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits,

items or services.

The federal Physician Payment Sunshine Act, implemented

by CMS as the Open Payments program, requires manufacturers of drugs, devices, biologics and medical supplies for which payment is available

under Medicare, Medicaid, or the Children’s Health Insurance Program to report annually to CMS information related to payments or

other “transfers of value” made to physicians and teaching hospitals, and requires applicable manufacturers to report annually

to CMS ownership and investment interests held by physicians and their immediate family members and payments or other “transfers

of value” to such physician owners.

Certain states also mandate implementation of

corporate compliance programs, impose restrictions on device manufacturer marketing practices, and/or require tracking and reporting of

gifts, compensation, and other remuneration to healthcare professionals and entities.

The Foreign Corrupt Practices Act and similar

anti-bribery laws in other countries, such as the UK Bribery Act, generally prohibit companies and their intermediaries from making improper

payments to government officials and/or other persons for the purpose of obtaining or retaining business.

Our policies mandate compliance

with these anti-bribery laws.

Violations of these federal and state fraud abuse

laws can subject us to administrative, civil, and criminal penalties, including imprisonment, substantial fines, penalties, damages, and

exclusion from participation in federal healthcare programs, including Medicare and Medicaid.

Data Privacy and Security Laws

HIPAA requires the notification of patients, and

other compliance actions, in the event of a breach of unsecured PHI.

If notification to patients of a breach is required, such notification

must be provided without unreasonable delay and in no event later than 60 calendar days after discovery of the breach.

In addition, if

the PHI of 500 or more individuals is improperly used or disclosed, we could be required to report the improper use or disclosure to the

Department of Health and Human Services, or HHS, which would post the violation on its website, and to the media.

Failure to comply

with the HIPAA privacy and security standards can result in civil monetary penalties up to $55,910 per violation, not to exceed $1.68 million

per calendar year for non-compliance of an identical provision, and, in certain circumstances, criminal penalties with fines up to $250,000

per violation and/or imprisonment.

In addition, even when HIPAA does not apply, according

to the FTC, failing to take appropriate steps to keep consumers’ personal information secure constitutes unfair acts or practices

in or affecting commerce in violation of Section 5(a) of the FTCA, 15 U.S.C § 45(a).

The FTC expects a company’s data

security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and

complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities.

Medical data is considered

sensitive data that merits stronger safeguards.

The FTC’s guidance for appropriately securing consumers’ personal information

is similar to what is required by the HIPAA Security Rule.

We are subject to the supervision of local data

protection authorities in those jurisdictions where we are established or otherwise subject to applicable law.

We depend on a number of

third parties in relation to our provision of our services, a number of which process personal data on our behalf.

With each such provider

we enter into contractual arrangements to ensure that they only process personal data according to our instructions, and that they have

sufficient technical and organizational security measures in place.

Where we transfer personal data outside the EEA, we do so in compliance

with the relevant data export requirements.

We take our data protection obligations seriously, as any improper disclosure, particularly

with regard to our customers’ sensitive personal data, could negatively impact our business and/or our reputation.

Most private citizen actions are declined by the Department of Justice or dismissed by federal courts.

However, the investigation costs

for a company can be significant and material even if the allegations are without merit.

There are also criminal penalties, including

imprisonment and criminal fines, for making or presenting a false or fictitious or fraudulent claim to the federal government.

False Claims Act

liability is potentially significant in the healthcare industry because the statute provides for treble damages and mandatory penalties

of $11,181 to $22,363 per claim (adjusted annually for inflation).

Because of the potential for large monetary exposure, healthcare companies

often resolve allegations without admissions of liability for significant and sometimes material amounts to avoid the uncertainty of

treble damages and per claim penalties that may awarded in litigation proceedings.

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.

In addition, HIPAA

created federal criminal statutes that prohibit, among other actions, knowingly and willfully executing, or attempting to execute, a

scheme to defraud any healthcare benefit program, including private third-party payors, knowingly and willfully embezzling or stealing

from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully

falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection

with the delivery of or payment for healthcare benefits, items or services.

The federal Physician

Payment Sunshine Act, implemented by CMS as the Open Payments program, requires manufacturers of drugs, devices, biologics and medical

supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program to report annually

to CMS information related to payments or other “transfers of value” made to physicians and teaching hospitals, and requires

applicable manufacturers to report annually to CMS ownership and investment interests held by physicians and their immediate family members

and payments or other “transfers of value” to such physician owners.

Certain states

also mandate implementation of corporate compliance programs, impose restrictions on device manufacturer marketing practices, and/or

require tracking and reporting of gifts, compensation, and other remuneration to healthcare professionals and entities.

The Foreign Corrupt

Practices Act and similar anti-bribery laws in other countries, such as the UK Bribery Act, generally prohibit companies and their intermediaries

from making improper payments to government officials and/or other persons for the purpose of obtaining or retaining business.

mandate compliance with these anti-bribery laws.

Violations of these

federal and state fraud abuse laws can subject us to administrative, civil, and criminal penalties, including imprisonment, substantial

fines, penalties, damages, and exclusion from participation in federal healthcare programs, including Medicare and Medicaid.

and Security Laws

HIPAA requires

the notification of patients, and other compliance actions, in the event of a breach of unsecured PHI.

If notification to patients of

a breach is required, such notification must be provided without unreasonable delay and in no event later than 60 calendar days after

discovery of the breach.

In addition, if the PHI of 500 or more individuals is improperly used or disclosed, we could be required to

report the improper use or disclosure to the U.S.

Department of Health and Human Services, or HHS, which would post the violation on

its website, and to the media.

Failure to comply with the HIPAA privacy and security standards can result in civil monetary penalties

up to $55,910 per violation, not to exceed $1.68 million per calendar year for non-compliance of an identical provision, and, in

certain circumstances, criminal penalties with fines up to $250,000 per violation and/or imprisonment.

In addition, even

when HIPAA does not apply, according to the FTC, failing to take appropriate steps to keep consumers’ personal information secure

constitutes unfair acts or practices in or affecting commerce in violation of Section 5(a) of the FTCA, 15 U.S.C § 45(a).

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.

Medical data is considered sensitive data that merits stronger safeguards.

The FTC’s guidance for appropriately securing consumers’

personal information is similar to what is required by the HIPAA Security Rule.

We are subject

to the supervision of local data protection authorities in those jurisdictions where we are established or otherwise subject to applicable

We depend on a number of third parties in relation to our provision of our services, a number of which process personal data on

With each such provider we enter into contractual arrangements to ensure that they only process personal data according to

our instructions, and that they have sufficient technical and organizational security measures in place.

Where we transfer personal data

outside the EEA, we do so in compliance with the relevant data export requirements.

We take our data protection obligations seriously,

as any improper disclosure, particularly with regard to our customers’ sensitive personal data, could negatively impact our business

and/or our reputation.

Manufacturing and Supply

We do not manufacture any products or component

parts and currently use five contract manufacturers to produce all of our instruments, implants and sterilization cases.

of our instruments have a secondary manufacturing supplier, and we continually work with additional manufacturers to establish secondary

manufacturing suppliers.

Our contract manufacturers source and purchase all raw materials used in the manufacture of the Catamaran System

which includes mainly stainless steel and aluminum for our instruments and sterilization cases and titanium for our implants.

We do not currently have manufacturing agreements

with any of our contract manufacturers and orders are controlled through purchase orders.

The Company does not believe its relationship

with any one contract manufacturer is material to its business.

We believe the manufacturing operations of our

contract manufacturers, and those of the suppliers of our manufacturers, comply with regulations mandated by the FDA, as well as Medical

Devices Directive regulations in the EEA.

Manufacturing facilities that produce medical devices or component parts intended for distribution

world-wide are subject to regulation and periodic planned and unannounced inspection by the FDA and other domestic and international regulatory

In the United States, the product we sell is required

to be manufactured in compliance with the QSR, which covers the methods used in, and the facilities used for, the design, testing, control,

manufacturing, labelling, quality assurance, packaging, storage, and shipping.

We are required to demonstrate continuing compliance

with applicable regulatory requirements and will be subject to FDA inspections.

Further, we and certain of our contract manufacturers

are required to comply with all applicable regulations and current good manufacturing practices.

As set forth above, these FDA regulations

cover, among other things, the methods and documentation of the design, testing, production, control, quality assurance, labeling, packaging,

sterilization, storage, and shipping of our products.

Compliance with applicable regulatory requirements is subject to continual review

and is monitored rigorously through periodic inspections.

If we or our manufacturers fail to adhere to current good manufacturing practice

requirements, this could delay production of our products and lead to fines, difficulties in obtaining regulatory approvals, recalls,

enforcement actions, including injunctive relief or consent decrees, or other consequences, which could, in turn, have a material adverse

effect on our financial condition or results of operations.

Product Liability and Insurance

The manufacture and sale of our products subjects

us to the risk of financial exposure to product liability claims.

Our products are used in situations in which there is a risk of serious

injury or death.

We carry insurance policies which we believe to be customary for similar companies in our industry.

We cannot assure

you that these policies will be sufficient to cover all or substantially all losses that we experience.

We endeavor to maintain executive and organization

liability insurance in a form and with aggregate coverage limits that we believe are adequate for our business purposes.

Human Capital Resources

As of March 29, 2024, we have a total of 21 employees,

all of whom are full-time, and 5 senior consulting advisors of various specialty including product development, general administrative

and accounting.

None of our employees is subject to a collective bargaining agreement, and we consider our relationship with our employees

Our human capital resources objectives include,

as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and new employees, advisors and consultants.

The principal purposes of our equity and cash incentive plans are to attract, retain and reward personnel through the granting of stock-based

and cash-based compensation awards, in order to increase stockholder value and the success of our Company by motivating such individuals

to perform to the best of their abilities and achieve our objectives.

We do not manufacture

any products or component parts and currently use five contract manufacturers to produce all of our instruments, implants and sterilization

The majority of our instruments have a secondary manufacturing supplier, and we continually work with additional manufacturers

to establish secondary manufacturing suppliers.

Our contract manufacturers source and purchase all raw materials used in the manufacture

of The Catamaran System which includes mainly stainless steel and aluminum for our instruments and sterilization cases and titanium for

our implants.

We do not currently

have manufacturing agreements with any of our contract manufacturers and orders are controlled through purchase orders.

The Company does

not believe its relationship with any one contract manufacturer is material to its business.

We believe the

manufacturing operations of our contract manufacturers, and those of the suppliers of our manufacturers, comply with regulations mandated

by the FDA, as well as Medical Devices Directive regulations in the EEA.

Manufacturing facilities that produce medical devices or component

parts intended for distribution world-wide are subject to regulation and periodic planned and unannounced inspection by the FDA and other

domestic and international regulatory agencies.

In the United States,

the product we sell is required to be manufactured in compliance with the QSR, which covers the methods used in, and the facilities used

for, the design, testing, control, manufacturing, labelling, quality assurance, packaging, storage, and shipping.

We are required

to demonstrate continuing compliance with applicable regulatory requirements and will be subject to FDA inspections.

Further, we and

certain of our contract manufacturers are required to comply with all applicable regulations and current good manufacturing practices.

As set forth above, these FDA regulations cover, among other things, the methods and documentation of the design, testing, production,

control, quality assurance, labeling, packaging, sterilization, storage, and shipping of our products.

Compliance with applicable regulatory

requirements is subject to continual review and is monitored rigorously through periodic inspections.

If we or our manufacturers fail

to adhere to current good manufacturing practice requirements, this could delay production of our products and lead to fines, difficulties

in obtaining regulatory approvals, recalls, enforcement actions, including injunctive relief or consent decrees, or other consequences,

which could, in turn, have a material adverse effect on our financial condition or results of operations.

Product Liability

and Insurance

The manufacture

and sale of our products subjects us to the risk of financial exposure to product liability claims.

Our products are used in situations

in which there is a risk of serious injury or death.

We carry insurance policies which we believe to be customary for similar companies

in our industry.

We cannot assure you that these policies will be sufficient to cover all or substantially all losses that we experience.

We endeavor to

maintain executive and organization liability insurance in a form and with aggregate coverage limits that we believe are adequate for

our business purposes.

Human Capital

As of March 26, 2025, we have a total of 27 employees, all of whom

are full-time, and four senior consulting advisors of various specialty including product development, general administrative and accounting.

None of our employees is subject to a collective bargaining agreement, and we consider our relationship with our employees to be good.

Our human capital

resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and new employees,

advisors and consultants.

The principal purposes of our equity and cash incentive plans are to attract, retain and reward personnel through

the granting of stock-based and cash-based compensation awards, in order to increase stockholder value and the success of our Company

by motivating such individuals to perform to the best of their abilities and achieve our objectives.

Corporate Information

We were incorporated on June 6, 2012, in Delaware.

Our principal executive offices are located at 104 Cooper Court, Los Gatos, CA 95032 and our telephone number is (408) 649-5760.

website address is www.tenonmed.com.

The information on, or that can be accessed through, our website is not part of this report.

We were incorporated

on June 6, 2012, in Delaware.

Our principal executive offices are located at 104 Cooper Court, Los Gatos, CA 95032 and our telephone

number is (408) 649-5760.

Our website address is www.tenonmed.com.

The information on, or that can be accessed through,

our website is not part of this report.

We have included our website address as an inactive textual reference only.

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