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Item 1A. Risk Factors

2026-03-27 compared with 2025-03-26 · 1514 added, 1536 removed, 320 unchanged (91% of the section changed)

is subject to many risks and uncertainties, which may affect our future financial performance.

business is subject to many risks and uncertainties, which may affect our future financial performance.

If any of the events or circumstances

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investment decision.

If any of the adverse developments described in the following risk factors actually occurs, our business, financial

If any of the adverse developments described in the following risk factors actually occur, our business, financial

condition, or results of operations could be harmed.

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in our securities may lose all or part of their investment.

Risks Related to Our Business and

We have incurred losses in the

past, our financial statements have been prepared on a going concern basis and we may be unable to achieve or sustain profitability in

To date, we have

financed our operations primarily through the issuance of public and private equity and convertible notes.

We have devoted substantially

all of our resources to research and development, creating the infrastructure for a publicly traded medical device company, preparing

for our national commercial launch, and clinical and regulatory matters for our products.

There can be no assurances that we will be

able to generate sufficient revenue from our existing products or from any future product candidates to transition to profitability and

generate consistent positive cash flows.

We expect that our operating expenses will continue to increase as we continue to build our

commercial infrastructure, develop, enhance, and commercialize our existing and new products and incur additional operating and reporting

Related to Our Business and Operations

have incurred losses in the past, our financial statements have been prepared on a going concern basis and we may be unable to achieve

or sustain profitability in the future.

date, we have financed our operations primarily through the issuance of public and private equity and convertible notes.

We have devoted

substantially all of our resources to research and development, creating the infrastructure for a publicly traded medical device company,

preparing for our national commercial launch, and clinical and regulatory matters for our products.

There can be no assurances that we

will be able to generate sufficient revenue from our existing products or from any future product candidates to transition to profitability

and generate consistent positive cash flows.

We expect that our operating expenses will continue to increase as we continue to build

our commercial infrastructure, develop, enhance, and commercialize our existing and new products and incur additional operating and reporting

costs associated with being a public company.

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strategic objectives.

Our recurring losses

from operations and negative cash flows raise substantial doubt about our ability to continue as a going concern.

As a result, our independent

registered public accounting firm included an explanatory paragraph in its report on our financial statements for the fiscal year ended,

December 31, 2024, describing the existence of substantial doubt about our ability to continue as a going concern.

future capital requirements may depend on many factors including expanding our clinician base, increasing the rate at which we train

clinicians, the number of additional clinical papers initiated, and the timing and extent of spending on the development of our technology

to increase our product offerings.

We may need additional funding to fund our operations but additional funds may not be available to

us on acceptable terms on a timely basis, if at all.

We may seek funds through borrowings or through additional rounds of financing,

including private or public equity or debt offerings.

If we raise additional funds by issuing equity securities, our stockholders may

experience dilution.

recurring losses from operations and negative cash flows raise substantial doubt about our ability to continue as a going concern.

a result, our independent registered public accounting firm included an explanatory paragraph in its report on our financial statements

for the fiscal year ended, December 31, 2025, describing the existence of substantial doubt about our ability to continue as a going

Our expected future capital requirements may depend on many factors including expanding our clinician base, increasing the rate

at which we train clinicians, the number of additional clinical papers initiated, and the timing and extent of spending on the development

of our technology to increase our product offerings.

We may need additional funding to fund our operations, but additional funds may

not be available to us on acceptable terms on a timely basis, if at all.

We may seek funds through borrowings or through additional rounds

of financing, including private or public equity or debt offerings.

If we raise additional funds by issuing equity securities, our stockholders

may experience dilution.

Any future debt financing into which we enter may impose upon us additional covenants that restrict our operations,

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on our business plan and continue operations.

If hospitals,

clinicians, and other healthcare providers are unable to obtain coverage and reimbursement from third-party payors for procedures performed

using our products, adoption of our products may be delayed, and it is unlikely that they will gain further acceptance.

Growing sales of

our product depends on the availability of adequate coverage and reimbursement from third-party payors, including government programs

such as Medicare and Medicaid, private insurance plans, and managed care programs.

Hospitals, clinicians, and other healthcare providers

that purchase or use medical devices generally rely on third-party payors to pay for all or part of the costs and fees associated with

the procedures performed with these devices.

Adequate coverage

and reimbursement for procedures performed with our products is central to the acceptance of our current and future products.

be unable to sell our products on a profitable basis if third-party payors deny coverage, continue to deny coverage or reduce their current

levels of payment, or if our costs for the product increase faster than increases in reimbursement levels.

Many private payors

refer to coverage decisions and payment amounts determined by the Centers for Medicare and Medicaid Services, or CMS, which administers

the Medicare program, as guidelines for setting their coverage and reimbursement policies.

By June 30, 2016, all Medicare Administrative

Contractors were regularly reimbursing for minimally invasive and/or open SI-Joint fusion.

Private payors that do not follow the Medicare

guidelines may adopt different coverage and reimbursement policies for procedures performed with our products.

Private commercial payors

have been slower to adopt positive coverage policies for minimally invasive and/or open SI-Joint fusion, and many private payors still

have policies that treat the procedure as experimental or investigational and do not regularly reimburse for the procedure.

Future action

by CMS or third-party payors may further reduce the availability of payments to physicians, outpatient surgery centers, and/or hospitals

for procedures using our products.

The healthcare

industry in the United States has experienced a trend toward cost containment as government and private insurers seek to control healthcare

Payors are imposing lower payment rates and negotiating reduced contract rates with service providers and being increasingly selective

about the technologies and procedures they choose to cover.

hospitals, clinicians, and other healthcare providers are unable to obtain coverage and reimbursement from third-party payors for procedures

performed using our products, adoption of our products may be delayed, and it is unlikely that they will gain further acceptance.

sales of our products depend on the availability of adequate coverage and reimbursement from third-party payors, including government

programs such as Medicare and Medicaid, private insurance plans, and managed care programs.

Hospitals, clinicians, and other healthcare

providers that purchase or use medical devices generally rely on third-party payors to pay for all or part of the costs and fees associated

with the procedures performed with these devices.

coverage and reimbursement for procedures performed with our products is central to the acceptance of our current and future products.

We may be unable to sell our products on a profitable basis if third-party payors deny coverage, continue to deny coverage or reduce

their current levels of payment, or if our costs for the products increase faster than increases in reimbursement levels.

private payors refer to coverage decisions and payment amounts determined by the Centers for Medicare and Medicaid Services, or CMS,

which administers the Medicare program, as guidelines for setting their coverage and reimbursement policies.

By June 30, 2016, all

Medicare Administrative Contractors were regularly reimbursing for minimally invasive and/or open SI Joint fusion.

Private payors that

do not follow the Medicare guidelines may adopt different coverage and reimbursement policies for procedures performed with our products.

Private commercial payors have been slower to adopt positive coverage policies for minimally invasive and/or open SI Joint fusion, and

many private payors still have policies that treat the procedure as experimental or investigational and do not regularly reimburse for

the procedure.

Future action by CMS or third-party payors may further reduce the availability of payments to physicians, outpatient surgery

centers, and/or hospitals for procedures using our products.

healthcare industry in the United States has experienced a trend toward cost containment as government and private insurers seek to control

healthcare costs.

Payors are imposing lower payment rates and negotiating reduced contract rates with service providers and being increasingly

selective about the technologies and procedures they choose to cover.

There can be no guarantee that we will be able to provide the scientific

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will cover those products or the procedures in which they are used.

If the reimbursement

provided by third-party payors to hospitals, clinicians, and other healthcare providers for procedures performed using our products is

insufficient, adoption and use of our products and the prices paid for our implants may decline.

When a Tenon procedure

utilizing The Catamaran System is performed, both the clinician and the healthcare facility, a hospital (inpatient or outpatient

clinic), 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.

must also pay for its own fixed costs of operation, including certain operating room personnel involved in the procedure, 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 ranges from approximately $25,661 to approximately $46,437 depending on the procedural approach

and the presence of Complication and Comorbidity (CC)/Major Complication and Comorbidity ( MCC ) .

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.

However, there can be no guarantee that these facility payments will not decline

in the future.

The number of procedures performed, and the prices paid for our implants may in the future decline if payments

to facilities for SI-Joint fusions decline.

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

The Medicare 2022 national average

payment for CPT® 27279 is $807 and $1,325 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 as well.

We believe that

some clinicians view the current Medicare reimbursement amount as insufficient for the procedure, 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

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.

The perception by physicians that the reimbursement

for SI-Joint fusion is insufficient to compensate them for the work required, including diagnosis, documentation, obtaining payor approval

for the procedure, and burden on their office staff, may negatively affect the number of procedures performed and may therefore impede

the growth of our revenues or cause them to decline.

be able to convince physicians that The Catamaran System is an attractive alternative to our competitors’ products and that our

procedure is an attractive alternative to existing surgical and non-surgical treatments of the SI-Joint.

Clinicians play

the primary role in determining the course of treatment in consultation with their patients and, ultimately, the product that will be

used to treat a patient.

In order for us to sell The Catamaran System successfully, we must convince clinicians through education and

training that treatment with The Catamaran System is beneficial, safe, and cost-effective for patients as compared to our competitors’

If we are not successful in convincing clinicians of the merits of The Catamaran System, they may not use our product, and

we will be unable to increase our sales and achieve or grow profitability.

Historically, most

spine clinicians did not include SI-Joint pain in their diagnostic work-up because they did not have an adequate surgical procedure to

perform for patients diagnosed with the condition.

the reimbursement provided by third-party payors to hospitals, clinicians, and other healthcare providers for procedures performed using

our products is insufficient, adoption and use of our products and the prices paid for our implants may decline.

a Tenon procedure utilizing The Catamaran System or The SImmetry + System is performed, both the clinician and the healthcare

facility, a hospital (inpatient or outpatient clinic), 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, 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 or The SImmetry + System, to perform the procedure.

Medicare 2025 national average hospital outpatient clinic payment is $17,914.

We believe that insurer payments to facilities are generally

adequate for these facilities to offer The Catamaran System and The SImmetry + System.

However, there can be no guarantee that

these facility payments will not decline in the future.

The number of procedures performed, and the prices paid for our implants

may decline in the future if payments to facilities for SI Joint fusions decline.

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 and The SImmetry +

System procedures may be reported by the clinician using CPT® codes 27279 and 27280.

The Medicare 2026 payment rates for CPT®

codes 27279 and 27280 are $759 and $1,284, respectively.

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 as well.

believe that some clinicians view the current Medicare reimbursement amount as insufficient for the procedure, 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.

The perception by physicians

that the reimbursement for SI Joint fusion is insufficient to compensate them for the work required, including diagnosis, documentation,

obtaining payor approval for the procedure, and burden on their office staff, may negatively affect the number of procedures performed

and may therefore impede the growth of our revenues or cause them to decline.

may not be able to convince physicians that The Catamaran System and The SImmetry + System are attractive alternatives to our

competitors’ products and that our procedures are an attractive alternative to existing surgical and non-surgical treatments of

the SI Joint.

play the primary role in determining the course of treatment in consultation with their patients and, ultimately, the product that will

be used to treat a patient.

In order for us to sell The Catamaran System and The SImmetry + System successfully, we must convince

clinicians through education and training that treatment with The Catamaran System and The SImmetry + System is beneficial,

safe, and cost-effective for patients as compared to our competitors’ products.

If we are not successful in convincing clinicians

of the merits of The Catamaran System and The SImmetry + System, they may not use our product, and we will be unable to increase

our sales and achieve or grow profitability.

Historically,

most spine clinicians did not include SI Joint pain in their diagnostic work-up because they did not have an adequate surgical procedure

to perform for patients diagnosed with the condition.

As a result, some patients with lower back pain resulting from SI Joint dysfunction

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We believe that educating clinicians and other healthcare professionals about the clinical merits and patient benefits

of The Catamaran System is an important element of our growth.

If we fail to effectively educate clinicians and other medical professionals,

they may not include a SI-Joint evaluation as part of their diagnosis and, as a result, those patients may continue to receive unnecessary

or only non-surgical treatment.

Clinicians may also hesitate to change

their medical treatment practices for other reasons, including the following:

● lack of experience with minimally

invasive procedures;

● perceived liability risks generally

associated with the use of new products and procedures;

● costs associated with the purchase

of new products;

● time commitment that may be

required for training.

Furthermore, we

believe clinicians may not widely adopt The Catamaran System unless they determine, based on experience, clinical data, and published

peer-reviewed publications, that surgical intervention provides benefits or is an attractive alternative to non-surgical treatments of

SI-Joint dysfunction.

In addition, we believe support of our products relies heavily on long-term data showing the benefits of using

of The Catamaran System and The SImmetry + System is an important element of our growth.

If we fail to effectively educate

clinicians and other medical professionals, they may not include a SI Joint evaluation as part of their diagnosis and, as a result, those

patients may continue to receive unnecessary or only non-surgical treatment.

may also hesitate to change their medical treatment practices for other reasons, including the following:

of experience with minimally invasive procedures;

liability risks generally associated with the use of new products and procedures;

associated with the purchase of new products;

commitment that may be required for training.

we believe clinicians may not widely adopt The Catamaran System or The SImmetry + System unless they determine, based on experience,

clinical data, and published peer-reviewed publications, that surgical intervention provides benefits or is an attractive alternative

to non-surgical treatments of SI Joint dysfunction.

In addition, we believe support of our products relies heavily on long-term data

showing the benefits of using our product.

If we are unable to provide that data, clinicians may not use our product.

In such circumstances, we may not achieve expected

sales and may be unable to achieve profitability.

In such circumstances,

we may not achieve expected sales and may be unable to achieve profitability.

and payors may not find our clinical evidence to be compelling, which could limit our sales, and on-going and future research may prove

our product to be less safe and effective than initially anticipated.

All of the component

parts of The Catamaran System have either received premarket clearance under Section 510(k) of the U.S.

federal Food, Drug, and

Cosmetic Act, or FDCA, or are exempt from premarket review.

The 510(k) clearance process of the U.S.

Food and Drug Administration, or

FDA, requires us to document that our product is “substantially equivalent” to another 510(k) -cleared product.

process is shorter and typically requires the submission of less supporting documentation than other FDA approval processes, such as

a premarket approval, or PMA, and does not usually require pre-clinical or clinical studies.

Additionally, to date, we have not been

required to complete clinical studies in connection with the sale of our product.

For these reasons, clinicians may be slow to adopt

our product, third-party payors may be slow to provide coverage, and we may be subject to greater regulatory and product liability risks.

Further, future patient studies or clinical experience may indicate that treatment with our product does not improve patient outcomes.

Such results would slow the adoption of our product by clinicians, significantly reduce our ability to achieve expected sales, and could

prevent us from achieving profitability.

Moreover, if future results and experience indicate that our product causes unexpected or serious

complications or other unforeseen negative effects, we could be subject to mandatory product recalls, suspension, or withdrawal of FDA

Pricing pressure

from our competitors, changes in third-party coverage and reimbursement, healthcare provider consolidation, payor consolidation and the

proliferation of “physician-owned distributorships” may impact our ability to sell our product at prices necessary to support

our current business strategies.

If competitive

forces drive down the prices we are able to charge for our product, our profit margins will shrink, which will adversely affect our ability

to invest in and grow our business.

our products to be less safe and effective than initially anticipated.

of the component parts of The Catamaran System and The SImmetry + System have either received premarket clearance under Section 510(k)

Federal Food, Drug, and Cosmetic Act, or FDCA, or are exempt from premarket review.

The 510(k) clearance process of the FDA

requires us to document that our products are “substantially equivalent” to another 510(k) -cleared product.

The 510(k) process

is shorter and typically requires the submission of less supporting documentation than other FDA approval processes, such as a premarket

approval, or PMA, and does not usually require pre-clinical or clinical studies.

Additionally, to date, we have not been required to

complete clinical studies in connection with the sale of our product.

For these reasons, clinicians may be slow to adopt our product,

third-party payors may be slow to provide coverage, and we may be subject to greater regulatory and product liability risks.

future patient studies or clinical experience may indicate that treatment with our products does not improve patient outcomes.

would slow the adoption of our products by clinicians, significantly reduce our ability to achieve expected sales, and could prevent

us from achieving profitability.

Moreover, if future results and experience indicate that our products cause unexpected or serious complications

or other unforeseen negative effects, we could be subject to mandatory product recalls, suspension, or withdrawal of FDA clearance.

pressure from our competitors, changes in third-party coverage and reimbursement, healthcare provider consolidation, payor consolidation

and the proliferation of “physician-owned distributorships” may impact our ability to sell our products at prices necessary

to support our current business strategies.

competitive forces drive down the prices we are able to charge for our products, our profit margins will shrink, which will adversely

affect our ability to invest in and grow our business.

The SI Joint fusion market has attracted numerous new companies and technologies.

As a result of

this increased competition, we believe there will be continued and increased pricing pressure, resulting in lower gross margins, with

respect to our product.

Even to the extent

our product and procedures using our product are currently covered and reimbursed by third-party private and public payors, adverse changes

in coverage and reimbursement policies that affect our product, discounts, and number of implants used may also drive our prices down

and harm our ability to market and sell our product.

We are unable to

predict what changes will be made to the reimbursement methodologies used by third-party payors.

We cannot be certain that under current

and future payment systems, in which healthcare providers may be reimbursed a set amount based on the type of procedure performed, such

as those utilized by Medicare and in many privately managed care systems, the cost of our product will be justified and incorporated

into the overall cost of the procedure.

In addition, to the extent there is a shift from inpatient setting to outpatient settings, we

may experience pricing pressure and a reduction in the number of The Catamaran System procedures performed.

Consolidation in

the healthcare industry, including both third-party payors and healthcare providers, could lead to demands for price concessions or to

the exclusion of some suppliers from certain of our markets, which could have an adverse effect on our business, results of operations,

As a result of this increased competition, we believe there will be continued and increased pricing pressure, resulting in lower gross

margins, with respect to our product.

to the extent our products and procedures using our products are currently covered and reimbursed by third-party private and public payors,

adverse changes in coverage and reimbursement policies that affect our product, discounts, and number of implants used may also drive

our prices down and harm our ability to market and sell our product.

are unable to predict what changes will be made to the reimbursement methodologies used by third-party payors.

We cannot be certain that

under current and future payment systems, in which healthcare providers may be reimbursed a set amount based on the type of procedure

performed, such as those utilized by Medicare and in many privately managed care systems, the cost of our products will be justified

and incorporated into the overall cost of the procedure.

In addition, to the extent there is a shift from inpatient setting to outpatient

settings, we may experience pricing pressure and a reduction in the number of The Catamaran System procedures performed.

Consolidation

in the healthcare industry, including both third-party payors and healthcare providers, could lead to demands for price concessions or

to the exclusion of some suppliers from certain of our markets, which could have an adverse effect on our business, results of operations,

or financial condition.

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coverage and reimbursement procedures and policies in those markets.

in a very competitive business environment and if we are unable to compete successfully against our existing or potential competitors,

operate in a very competitive business environment and if we are unable to compete successfully against our existing or potential competitors,

our sales and operating results may be negatively affected and we may not grow.

The Catamaran System

is subject to intense competition.

Many of our competitors are major medical device companies that have substantially greater financial,

technical, and marketing resources than we do, and they may succeed in developing products that would render our product obsolete or

non-competitive.

In addition, many of these competitors have significantly longer operating histories and more established reputations

Our field is intensely competitive, subject to rapid change and highly sensitive to the introduction of new products or other

market activities of industry participants.

Our ability to compete successfully will depend on our ability to develop proprietary products

that reach the market in a timely manner, receive adequate coverage and reimbursement from third-party payors, and are safer, less invasive,

and more effective than alternatives available for similar purposes as demonstrated in peer-reviewed clinical publications.

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

In the United States,

we believe that our primary competitors are currently SI-bone, Inc., Globus Medical, Inc., Medtronic plc, XTant Medical Holdings, Inc.,

and RTI Surgical, Inc.

At any time, these or other industry participants may develop alternative treatments, products or procedures for

the treatment of the SI-Joint that compete directly or indirectly with our product.

If alternative treatments are, or are perceived to

be, superior to our product, sales of our product and our results of operations could be negatively affected.

Some of our larger competitors

are either publicly traded or divisions or subsidiaries of publicly traded companies.

These competitors may enjoy several competitive

advantages over us, including:

● greater financial, human, and

other resources for product research and development, sales and marketing, and legal matters;

● significantly greater name

● established relationships with

clinicians, hospitals, and other healthcare providers;

● large and established sales

and marketing and distribution networks;

● greater experience in obtaining

and maintaining domestic and international regulatory clearances or approvals, or CE Certificates of Conformity for products and product

enhancements;

● more expansive portfolios of

intellectual property rights;

● greater ability to cross-sell

their products or to incentivize hospitals or clinicians to use their products.

New participants

have increasingly entered the medical device industry.

Many of these new competitors specialize in a specific product or focus on a particular

market segment, making it more difficult for us to increase our overall market position.

The frequent introduction by competitors of

products that are or claim to be superior to our product or that are alternatives to our existing or planned products may make it difficult

to differentiate the benefits of our product over competing products.

In addition, the entry of multiple new products and competitors

may lead some of our competitors to employ pricing strategies that could adversely affect the pricing of our product and pricing in the

market generally.

As a result, without

the timely introduction of new products and enhancements, our product may become obsolete over time.

If we are unable to develop innovative

new products, maintain competitive pricing, and offer products that clinicians and other physicians perceive to be as reliable as those

of our competitors, our sales or margins could decrease, thereby harming our business.

manufacture (through third parties) and sell products used in a single procedure, which could negatively affect our operations and financial

Presently we do

not sell any products other than The Catamaran System and related tools and instruments.

Therefore, we are solely dependent on widespread

market adoption of The Catamaran System and we will continue to be dependent on the success of this single product for the foreseeable

There can be no assurance that The Catamaran System will gain a substantial degree of market acceptance among clinicians, patients

or healthcare providers.

Our failure to successfully increase sales of The Catamaran System or any other event impeding our ability to

sell The Catamaran System, would result in a material adverse effect on our results of operations, financial condition and continuing

limited operating history and may face difficulties encountered by early-stage companies in new and rapidly evolving markets.

Even though we

were formed in 2012 we have just built the infrastructure necessary to commercially launch The Catamaran System.

Accordingly, we have

a limited operating history upon which to base an evaluation of our business and prospects.

In assessing our prospects, you must consider

the risks and difficulties frequently encountered by early-stage companies in new and rapidly evolving markets, particularly companies

engaged in the development and sales of medical devices.

Company’s products are subject to intense competition.

Many of our competitors are major medical device companies that have substantially

greater financial, technical, and marketing resources than we do, and they may succeed in developing products that would render our products

obsolete or non-competitive.

In addition, many of these competitors have significantly longer operating histories and more established

reputations than we do.

Our field is intensely competitive, subject to rapid change and highly sensitive to the introduction of new products

or other market activities of industry participants.

Our ability to compete successfully will depend on our ability to develop proprietary

products that reach the market in a timely manner, receive adequate coverage and reimbursement from third-party payors, and are safer,

less invasive, and more effective than alternatives available for similar purposes as demonstrated in peer-reviewed clinical publications.

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

the United States, we believe that our primary competitors are currently SI-bone, Inc., Globus Medical, Inc., Medtronic plc, XTant Medical

Holdings, Inc., and RTI Surgical, Inc.

At any time, these or other industry participants may develop alternative treatments, products

or procedures for the treatment of the SI Joint that compete directly or indirectly with our product.

If alternative treatments are,

or are perceived to be, superior to our product, sales of our products and our results of operations could be negatively affected.

of our larger competitors are either publicly traded or divisions or subsidiaries of publicly traded companies.

These competitors may

enjoy several competitive advantages over us, including:

financial, human, and other resources for product research and development, sales and marketing,

and legal matters;

● significantly

greater name recognition;

● established

relationships with clinicians, hospitals, and other healthcare providers;

and established sales and marketing and distribution networks;

experience in obtaining and maintaining domestic and international regulatory clearances

or approvals, or CE Certificates of Conformity for products and product enhancements;

expansive portfolios of intellectual property rights;

ability to cross-sell their products or to incentivize hospitals or clinicians to use their

participants have increasingly entered the medical device industry.

Many of these new competitors specialize in a specific product or

focus on a particular market segment, making it more difficult for us to increase our overall market position.

The frequent introduction

by competitors of products that are or claim to be superior to our products or that are alternatives to our existing or planned products

may make it difficult to differentiate the benefits of our products over competing products.

In addition, the entry of multiple new products

and competitors may lead some of our competitors to employ pricing strategies that could adversely affect the pricing of our products

and pricing in the market generally.

a result, without the timely introduction of new products and enhancements, our products may become obsolete over time.

If we are unable

to develop innovative new products, maintain competitive pricing, and offer products that clinicians and other physicians perceive to

be as reliable as those of our competitors, our sales or margins could decrease, thereby harming our business.

currently manufacture (through third parties) and sell products used in a single procedure, which could negatively affect our operations

and financial condition.

we do not sell any products other than The Catamaran System, The SImmetry + System, and related tools and instruments.

we are solely dependent on widespread market adoption of these products and we will continue to be dependent on the success of these

products for the foreseeable future.

There can be no assurance that either system will gain a substantial degree of market acceptance

among clinicians, patients or healthcare providers.

Our failure to successfully increase sales of these products or any other event impeding

our ability to sell them, would result in a material adverse effect on our results of operations, financial condition and continuing

have a limited operating history and may face difficulties encountered by early-stage companies in new and rapidly evolving markets.

though we were formed in 2012, we have recently built the infrastructure necessary to commercialize The Catamaran System and The SImmetry +

Accordingly, we have a limited operating history upon which to base an evaluation of our business and prospects.

our prospects, you must consider the risks and difficulties frequently encountered by early-stage companies in new and rapidly evolving

markets, particularly companies engaged in the development and sales of medical devices.

These risks include our inability to:

● obtain coverage by third-party,

private, and government payors;

● establish and increase awareness

of our brand and strengthen customer loyalty;

● attract and retain qualified

● find and develop relationships

with contract manufacturers that can manufacture the necessary volume of product;

● manage our independent sales

representatives to achieve our sales growth objectives;

● commercialize new products

and enhance our existing product;

● manage rapidly changing and

expanding operations;

● implement and successfully

execute our business and marketing strategy;

● respond effectively to competitive

pressures and developments.

We can also be

negatively affected by general economic conditions.

Because of our limited operating history, we may not have insight into trends that

could emerge and negatively affect our business.

As a result of these or other risks, our business strategy might not be successful.

volumes and our operating results may fluctuate over the course of the year.

Since we had our

first sales in April 2021 and our official national launch commenced in October 2022, we have limited history with respect to how rapidly

adoption of The Catamaran System will occur.

coverage by third-party, private, and government payors;

and increase awareness of our brand and strengthen customer loyalty;

and retain qualified personnel;

and develop relationships with contract manufacturers that can manufacture the necessary

volume of product;

our independent sales representatives to achieve our sales growth objectives;

● commercialize

new products and enhance our existing product;

rapidly changing and expanding operations;

and successfully execute our business and marketing strategy;

effectively to competitive pressures and developments.

can also be negatively affected by general economic conditions.

Because of our limited operating history, we may not have insight into

trends that could emerge and negatively affect our business.

As a result of these or other risks, our business strategy might not be

sales volumes and our operating results may fluctuate over the course of the year.

we had our first sales of the Catamaran System in April 2021, our official national launch of the Catamaran System in October 2022 and

acquired The SImmetry + System in August 2025, we have limited history with respect to how rapidly adoption of our products

Sales growth could be slower than we have projected.

Our sales and results of operations

will be affected by numerous factors, including, among other things:

● payor coverage and reimbursement;

● maintaining our training schedule

with clinicians;

● the number of procedures performed

in the quarter and our ability to drive increased sales of our product;

● our ability to identify and

sign-up independent sales representatives and their performance;

● pricing pressure applicable

to our product, including adverse third-party coverage and reimbursement outcomes;

● timing of new product offerings,

acquisitions, licenses or other significant events by us or our competitors;

● our ability to find and develop

relationships with contract manufacturers and their ability to timely provide us with an adequate supply of products;

● the evolving product offerings

of our competitors;

● the demand for, and pricing

of, our product and the products of our competitors;

● factors that may affect the

sale of our product, including seasonality and budgets of our customers;

● interruption in the manufacturing

or distribution of our product;

● the effect of competing technological,

industry and market developments;

● our ability to expand the geographic

reach of our sales and marketing efforts;

● the costs of maintaining adequate

insurance coverage, including product liability insurance;

● the availability and cost of

components and materials needed by our contract manufacturers;

● the number of selling days

in the quarter;

● impairment and other special

Some of the products

we may seek to develop and introduce in the future will require FDA clearance or approval before commercialization in the United States.

Our sales and results of operations will be affected by numerous factors,

including, among other things:

coverage and reimbursement;

● maintaining

our training schedule with clinicians;

number of procedures performed in the quarter and our ability to drive increased sales of

ability to identify and sign-up independent sales representatives and their performance;

pressure applicable to our product, including adverse third-party coverage and reimbursement

of new product offerings, acquisitions, licenses or other significant events by us or our

ability to find and develop relationships with contract manufacturers and their ability to

timely provide us with an adequate supply of products;

evolving product offerings of our competitors;

demand for, and pricing of, our products and the products of our competitors;

that may affect the sale of our product, including seasonality and budgets of our customers;

● interruption

in the manufacturing or distribution of our product;

effect of competing technological, industry and market developments;

ability to expand the geographic reach of our sales and marketing efforts;

costs of maintaining adequate insurance coverage, including product liability insurance;

availability and cost of components and materials needed by our contract manufacturers;

number of selling days in the quarter;

and other special charges.

of the products we may seek to develop and introduce in the future will require FDA clearance or approval before commercialization in

the United States.

As a result, it will be difficult for us to forecast demand for these products with any degree of certainty.

In addition, we will be

increasing our operating expenses as we expand our commercial capabilities.

we will be increasing our operating expenses as we expand our commercial capabilities.

Accordingly, we may experience significant, unanticipated

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and should not be relied upon as an indication of our future performance.

not successfully implement our business strategy, our business and results of operations will be adversely affected.

Our business strategy

was based on assumptions about the market that might prove wrong.

We believe that various demographics and industry-specific trends will

help drive growth in the market and our business, but these demographics and trends have been and will continue to be uncertain.

demand for our product could differ materially from projected demand if our assumptions regarding these factors prove to be incorrect

or do not materialize, or if alternative treatments to those offered by our product gains widespread acceptance.

we do not successfully implement our business strategy, our business and results of operations will be adversely affected.

business strategy was based on assumptions about the market that might prove wrong.

We believe that various demographics and industry-specific

trends will help drive growth in the market and our business, but these demographics and trends have been and will continue to be uncertain.

Actual demand for our products could differ materially from projected demand if our assumptions regarding these factors prove to be incorrect

or do not materialize, or if alternative treatments to those offered by our products gain widespread acceptance.

Also, our strategy of

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Moreover, we may decide to alter or discontinue aspects of our business strategy and may adopt different strategies due

to business or competitive factors not currently foreseen, such as new medical technologies that would make our product obsolete.

to business or competitive factors not currently foreseen, such as new medical technologies that would make our products obsolete.

failure to implement our business strategy may adversely affect our business, results of operations, and financial condition.

could suffer if we lose the services of key members of our senior management, key advisors or personnel.

We are dependent

upon the continued services of key members of our senior management and a number of key advisors and personnel.

The loss of members of

our senior management team, key advisors or personnel, or our inability to attract or retain other qualified personnel or advisors, could

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

We do not maintain “key person”

insurance for any of our executives or employees.

In addition, several of the members of our executive management team are not subject

to non-competition agreements that restrict their ability to compete with us.

Accordingly, the adverse effect resulting from the loss

of certain executives could be compounded by our inability to prevent them from competing with us.

Various factors

outside our direct control may adversely affect manufacturing and distribution of our product.

The manufacture

and distribution of our product is challenging.

Changes that our contract manufacturers may make outside the purview of our direct control

can have an impact on our processes, quality of our product, and the successful delivery of products to our customers.

Mistakes and mishandling

are not uncommon and can affect supply and delivery.

business could suffer if we lose the services of key members of our senior management, key advisors or personnel.

are dependent upon the continued services of key members of our senior management and a number of key advisors and personnel.

of members of our senior management team, key advisors or personnel, or our inability to attract or retain other qualified personnel

or advisors, could have a material adverse effect on our business, results of operations, and financial condition.

We do not maintain

“key person” insurance for any of our executives or employees.

In addition, several of the members of our executive management

team are not subject to non-competition agreements that restrict their ability to compete with us.

Accordingly, the adverse effect resulting

from the loss of certain executives could be compounded by our inability to prevent them from competing with us.

factors outside our direct control may adversely affect manufacturing and distribution of our product.

manufacture and distribution of our products is challenging.

Changes that our contract manufacturers may make outside the purview of

our direct control can have an impact on our processes, quality of our product, and the successful delivery of products to our customers.

Mistakes and mishandling are not uncommon and can affect supply and delivery.

Some of these risks include:

failure to manufacture in compliance with the required regulatory standards;

transportation risk;

the cost and availability of components and supplies required by our

contract manufacturers to manufacture our products;

delays in analytical results or failure of analytical techniques that

we will depend on for quality control and release of products;

natural disasters, labor disputes, financial distress, raw material

availability, issues with facilities and equipment, or other forms of disruption to business operations affecting our manufacturers

to manufacture in compliance with the required regulatory standards;

● transportation

cost and availability of components and supplies required by our contract manufacturers to

manufacture our products;

in analytical results or failure of analytical techniques that we will depend on for quality

control and release of products;

disasters, labor disputes, financial distress, raw material availability, issues with facilities

and equipment, or other forms of disruption to business operations affecting our manufacturers

or their suppliers;

latent defects that may become apparent after products have been released

and that may result in a recall of such products.

If any of these

risks were to materialize, our ability to provide our product to customers on a timely basis would be adversely impacted.

We are dependent

on a limited number of contract manufacturers, some of them single-source and some of them in single locations, for our product, and

the loss of any of these contract manufacturers, or their inability to provide us with an adequate supply of products in a timely and

cost-effective manner, could materially adversely affect our business.

We rely on contract

manufacturers to supply our product.

For us to be successful, our contract manufacturers must be able to provide us with product in substantial

quantities, in compliance with regulatory requirements, in accordance with agreed upon specifications, at acceptable prices, and on a

timely basis.

We have a limited history with our current contract manufacturers and do not have long-term supply contracts with them.

defects that may become apparent after products have been released and that may result in

a recall of such products.

any of these risks were to materialize, our ability to provide our products to customers on a timely basis would be adversely impacted.

are dependent on a limited number of contract manufacturers, some of them single-source and some of them in single locations, for our

products, and the loss of any of these contract manufacturers, or their inability to provide us with an adequate supply of products in

a timely and cost-effective manner, could materially adversely affect our business.

rely on contract manufacturers to supply our products.

For us to be successful, our contract manufacturers must be able to provide us

with product in substantial quantities, in compliance with regulatory requirements, in accordance with agreed upon specifications, at

acceptable prices, and on a timely basis.

We have a limited history with our current contract manufacturers and do not have long-term

supply contracts with them.

We are in the process of identifying and evaluating new contract manufacturers for our product.

The inability to find the required contract

manufacturers or the time required to switch contract manufacturers could adversely affect sales.

In addition, our

anticipated growth could strain the ability of our contract manufacturers to deliver an increasingly large supply of product.

manufacturers often experience difficulties in scaling up production, including financial issues, or problems with production yields

and quality control and assurance.

We use a small

number of contract manufacturers for our instruments.

Our dependence on such a limited number of contract manufacturers exposes us to

risks, including, among other things:

contract manufacturers may fail to comply with regulatory requirements

or make errors in manufacturing that could negatively affect the safety or effectiveness of our product or cause delays in shipments

of our product;

some of our contract manufacturers have long lead times of 12 to 16

weeks and we may not be able to respond to unanticipated changes in customer orders, and if orders do not match forecasts, we or

our contract manufacturers may have excess or inadequate inventory of materials and components;

our contract manufacturers may be subject to price fluctuations due

to a lack of long-term supply arrangements for key components;

our contract manufacturers may lose access to critical services and

components, resulting in an interruption in the manufacture, assembly and shipment of our product;

we may experience delays in delivery by our contract manufacturers

due to changes in demand from us or their other customers;

fluctuations in demand for products that our contract manufacturers

manufacture for others may affect their ability or willingness to deliver our product to us in a timely manner;

our contract manufacturers may wish to discontinue supplying products

or services to us for risk management reasons;

we may not be able to find new or alternative contract manufacturers

in a timely manner if our current contract manufacturers stop producing products;

our contract manufacturers may encounter financial hardships unrelated

to our demand, which could inhibit their ability to fulfil our orders and meet our requirements.

If any one or more

of these risks materialize, it could significantly increase our costs and impact our ability to meet demand for our product.

unable to satisfy commercial demand for our product in a timely manner, our ability to generate revenue would be impaired, market acceptance

of our product could be adversely affected, and customers may instead purchase or use our competitors’ products.

Additionally,

we could be forced to seek alternative sources of supply.

Because of the

nature of our internal quality control requirements, regulatory requirements, and the custom and proprietary nature of our product, we

may not be able to quickly engage additional or replacement contract manufacturers for our product and accessories.

We may also be required

to assess any potential new contract manufacturer’s compliance with all applicable regulations and guidelines, which could further

impede our ability to obtain our product in a timely manner.

As a result, we could incur increased product costs, experience delays in

deliveries of our product, suffer damage to our reputation, and experience an adverse effect on our business and financial results.

of any of our contract manufacturers to meet our product demand level would limit our ability to meet our sales commitments to our customers

and could have a material adverse effect on our business.

We may also have

difficulty obtaining similar product from other contract manufacturers that are acceptable to the FDA and the failure of our contract

manufacturers to comply with strictly enforced regulatory requirements could expose us to delays in obtaining clearances or approvals,

regulatory action including warning letters, product recalls, termination of distribution, product seizures, civil, administrative, or

criminal penalties.

The inability

to find the required contract manufacturers or the time required to switch contract manufacturers could adversely affect sales.

addition, our anticipated growth could strain the ability of our contract manufacturers to deliver an increasingly large supply of product.

Contract manufacturers often experience difficulties in scaling up production, including financial issues, or problems with production

yields and quality control and assurance.

use a small number of contract manufacturers for our instruments.

Our dependence on such a limited number of contract manufacturers exposes

us to risks, including, among other things:

manufacturers may fail to comply with regulatory requirements or make errors in manufacturing

that could negatively affect the safety or effectiveness of our products or cause delays

in shipments of our product;

of our contract manufacturers have long lead times of 12 to 16 weeks and we may not be able

to respond to unanticipated changes in customer orders, and if orders do not match forecasts,

we or our contract manufacturers may have excess or inadequate inventory of materials and

contract manufacturers may be subject to price fluctuations due to a lack of long-term supply

arrangements for key components;

contract manufacturers may lose access to critical services and components, resulting in

an interruption in the manufacture, assembly and shipment of our product;

may experience delays in delivery by our contract manufacturers due to changes in demand

from us or their other customers;

● fluctuations

in demand for products that our contract manufacturers manufacture for others may affect

their ability or willingness to deliver our products to us in a timely manner;

contract manufacturers may wish to discontinue supplying products or services to us for risk

management reasons;

may not be able to find new or alternative contract manufacturers in a timely manner if our

current contract manufacturers stop producing products;

contract manufacturers may encounter financial hardships unrelated to our demand, which could

inhibit their ability to fulfil our orders and meet our requirements.

any one or more of these risks materialize, it could significantly increase our costs and impact our ability to meet demand for our product.

If we are unable to satisfy commercial demand for our products in a timely manner, our ability to generate revenue would be impaired,

market acceptance of our products could be adversely affected, and customers may instead purchase or use our competitors’ products.

Additionally, we could be forced to seek alternative sources of supply.

of the nature of our internal quality control requirements, regulatory requirements, and the custom and proprietary nature of our product,

we may not be able to quickly engage additional or replacement contract manufacturers for our products and accessories.

We may also be

required to assess any potential new contract manufacturer’s compliance with all applicable regulations and guidelines, which could

further impede our ability to obtain our products in a timely manner.

As a result, we could incur increased product costs, experience

delays in deliveries of our product, suffer damage to our reputation, and experience an adverse effect on our business and financial

Failure of any of our contract manufacturers to meet our product demand level would limit our ability to meet our sales commitments

to our customers and could have a material adverse effect on our business.

may also have difficulty obtaining similar product from other contract manufacturers that are acceptable to the FDA and the failure of

our contract manufacturers to comply with strictly enforced regulatory requirements could expose us to delays in obtaining clearances

or approvals, regulatory action including warning letters, product recalls, termination of distribution, product seizures, civil, administrative,

or criminal penalties.

We could incur delays while we locate and engage qualified alternative contract manufacturers, and we may be unable

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efforts and adversely affect our ability to generate sales.

In addition, we

expect that most of our contract manufacturers will operate at a facility in a single location and substantially all their inventory

of component supplies and finished goods will be held at these locations.

We, and our contract manufacturers, will take precautions to

safeguard facilities, including acquiring insurance, adopting health and safety protocols, and utilizing off-site storage of computer

addition, we expect that most of our contract manufacturers will operate at a facility in a single location and substantially all their

inventory of component supplies and finished goods will be held at these locations.

We, and our contract manufacturers, will take precautions

to safeguard facilities, including acquiring insurance, adopting health and safety protocols, and utilizing off-site storage of computer

However, vandalism, terrorism, or a natural or other disaster, such as an earthquake, fire, or flood, could damage or destroy equipment

5 unchanged sentences

operating results.

grow, our contract manufacturers may encounter problems or delays in the manufacturing of our product or fail to meet certain regulatory

requirements which could result in an adverse effect on our business and financial results.

To become profitable,

our contract manufactures must manufacture our product in adequate quantities in compliance with regulatory requirements and at an acceptable

Increasing their capacity to manufacture and inspect our product may require them to improve internal efficiencies or require us

to re-design or change the specifications of our product.

Our contract manufacturers may encounter several difficulties in increasing

this capacity, including:

managing production yields;

maintaining quality control and assurance;

providing component and service availability;

maintaining adequate control policies and procedures;

hiring and retaining qualified personnel;

complying with state, federal, and foreign regulations.

If we are unable

to satisfy commercial demand for The Catamaran System due to our contract manufacturer’s inability to manufacture and inspect our

product, our ability to generate revenue would be impaired, market acceptance of our product could be adversely affected and customers

our sales grow, our contract manufacturers may encounter problems or delays in the manufacturing of our products or fail to meet certain

regulatory requirements which could result in an adverse effect on our business and financial results.

become profitable, our contract manufactures must manufacture our products in adequate quantities in compliance with regulatory requirements

and at an acceptable cost.

Increasing their capacity to manufacture and inspect our products may require them to improve internal efficiencies

or require us to re-design or change the specifications of our product.

Our contract manufacturers may encounter several difficulties

in increasing this capacity, including:

production yields;

● maintaining

quality control and assurance;

component and service availability;

● maintaining

adequate control policies and procedures;

and retaining qualified personnel;

with state, federal, and foreign regulations.

we are unable to satisfy commercial demand for our products due to our contract manufacturer’s inability to manufacture and inspect

our products, our ability to generate revenue would be impaired, market acceptance of our products could be adversely affected and customers

may instead purchase or use our competitors’ products.

and future growth in the market for the SI-Joint fixation market have not been established based on market reports and our estimates

size and future growth in the market for the SI Joint fixation market have not been established based on market reports and our estimates

are based on our own review and analysis of public information and may be smaller than we estimate, possibly materially.

our estimates of cost savings to the economy and healthcare system as a result of The Catamaran System procedure are based on our internal

estimates and market research and could also be smaller than we estimate, possibly materially.

If our estimates and projections overestimate

the size of this market or cost savings, our sales growth may be adversely affected.

We are not aware

of an independent third-party study that reliably reports the potential market size for the SI-Joint fixation market.

Therefore, our

estimates of the size and future growth in the market for The Catamaran System product, including cost savings to the economy overall,

including patients and employers, and to the healthcare system and the number of people currently suffering from lower back pain who

may benefit from and be amenable to our procedure, is based on a number of internal and third-party studies, surveys, reports, and estimates.

While we believe these factors have historically provided and may continue to provide us with effective tools in estimating the total

market for our product and procedures and health cost savings, these estimates may not be correct and the conditions supporting our estimates

our estimates of cost savings to the economy and healthcare system as a result of our products are based on our internal estimates and

market research and could also be smaller than we estimate, possibly materially.

If our estimates and projections overestimate the size

of this market or cost savings, our sales growth may be adversely affected.

are not aware of an independent third-party study that reliably reports the potential market size for the SI Joint fixation market.

our estimates of the size and future growth in the market for our products, including cost savings to the economy overall, including

patients and employers, and to the healthcare system and the number of people currently suffering from lower back pain who may benefit

from and be amenable to our procedure, is based on a number of internal and third-party studies, surveys, reports, and estimates.

we believe these factors have historically provided and may continue to provide us with effective tools in estimating the total market

for our products and procedures and health cost savings, these estimates may not be correct and the conditions supporting our estimates

may change at any time, thereby reducing the predictive accuracy of these underlying factors.

4 unchanged sentences

The actual incidence

of lower back pain, and the actual demand for our product or competitive products, could differ materially from our projections if our

of lower back pain, and the actual demand for our products or competitive products, could differ materially from our projections if our

assumptions and estimates are incorrect.

As a result, our estimates of the size and future growth in the market for our product may prove

to be incorrect.

In addition, actual health cost savings to the healthcare system as a result of The Catamaran System procedure may materially

differ from those presented in this report.

If the actual number of people with lower back pain who would benefit from The Catamaran

System and the size and future growth in the market and related costs savings to the healthcare system is smaller than we have estimated,

it may impair our projected sales growth and have an adverse impact on our business.

In the future

our product may become obsolete, which would negatively affect operations and financial condition.

The medical device

industry is characterized by rapid and significant change.

There can be no assurance that other companies will not succeed in developing

or marketing devices, and products that are more effective than The Catamaran System or that would render The Catamaran System obsolete

or non-competitive.

Additionally, new surgical procedures, medications and other therapies could be developed that replace or reduce

the importance of our product.

Accordingly, our success will depend in part on our ability to respond quickly to medical and changes

through the development and introduction of new products.

Product development involves a high degree of risk and there can be no assurance

that our new product development efforts will result in any commercially successful products.

If we experience

significant disruptions in our information technology systems , our business, results of operations, and financial condition

could be adversely affected.

The efficient operation

of our business depends on our information technology systems.

We will rely on our information technology systems to effectively manage:

sales and marketing, accounting, and financial functions;

inventory management;

engineering and product development tasks;

our research and development data.

Our information

technology systems are vulnerable to damage or interruption from:

earthquakes, fires, floods, and other natural disasters;

terrorist attacks and attacks by computer viruses or hackers;

power losses;

computer systems, or Internet, telecommunications, or data network

The failure of

our information technology systems to perform as we anticipate or our failure to effectively implement new systems could disrupt our

entire operation and could result in decreased sales, increased overhead costs, excess inventory and product shortages, and legal liability

issues, all of which could have a material adverse effect on our reputation, business, results of operations, and financial condition.

to grow our business through acquisitions of or investments in new or complementary businesses, products or technologies, and the failure

to manage acquisitions or investments, or the failure to integrate them with our existing business, could have a material adverse effect

From time to time,

we expect to consider opportunities to acquire or make investments in other technologies, products, and businesses that may enhance our

capabilities, complement our current product, or expand the breadth of our markets or customer base.

Potential and completed acquisitions

and strategic investments involve numerous risks, including:

problems assimilating the purchased technologies, products, or business

issues maintaining uniform standards, procedures, controls, and policies;

unanticipated costs and liabilities associated with acquisitions;

diversion of management’s attention from our core business;

adverse effects on existing business relationships with suppliers and

risks associated with entering new markets in which we have limited

or no experience;

potential loss of key employees of acquired businesses;

increased legal and accounting compliance costs.

We have no current

commitments with respect to any acquisition or investment.

We do not know if we will be able to identify acquisitions, we deem suitable,

whether we will be able to successfully complete any such acquisitions on favorable terms or at all, or whether we will be able to successfully

integrate any acquired business, product, or technology into our business or retain any key personnel, suppliers, or distributors.

ability to successfully grow through acquisitions depends upon our ability to identify, negotiate, complete, and integrate suitable target

businesses and to obtain any necessary financing.

These efforts could be expensive and time consuming and may disrupt our ongoing business

and prevent management from focusing on our operations.

If we are unable to successfully integrate any acquired businesses, products,

or technologies effectively, our business, results of operations, and financial condition will be materially adversely affected.

into collaborations, in-licensing arrangements, joint ventures, strategic alliances, or partnerships with third-parties that may not

result in the development of commercially viable products or the generation of significant future revenue.

In the ordinary

course of our business, we may enter into collaborations, in-licensing arrangements, joint ventures, strategic alliances, partnerships,

or other arrangements to develop products and to pursue new markets.

We have not entered into any collaboration arrangements to date.

Proposing, negotiating, and implementing collaborations, in-licensing arrangements, joint ventures, strategic alliances, or partnerships

may be a lengthy and complex process.

Other companies, including those with substantially greater financial, marketing, sales, technology,

or other business resources, may compete with us for these opportunities or arrangements.

We may not identify, secure, or complete any

such transactions or arrangements in a timely manner, on a cost-effective basis, on acceptable terms or at all.

We have limited institutional

knowledge and experience with respect to these business development activities, and we may also not realize the anticipated benefits

of any such transaction or arrangement.

These collaborations may not result in the development of products that achieve commercial success

or result in significant revenue and could be terminated prior to developing any products.

Additionally, we

may not be able to exercise sole decision-making authority regarding the transaction or arrangement, which could create the potential

As a result, our estimates of the size and future growth in the market for our products may

prove to be incorrect.

In addition, actual health cost savings to the healthcare system as a result of our products may materially differ

from those presented in this report.

If the actual number of people with lower back pain who would benefit from our products and the

size and future growth in the market and related costs savings to the healthcare system is smaller than we have estimated, it may impair

our projected sales growth and have an adverse impact on our business.

the future our products may become obsolete, which would negatively affect operations and financial condition.

medical device industry is characterized by rapid and significant change.

There can be no assurance that other companies will not succeed

in developing or marketing devices, and products that are more effective than The Catamaran System or The SImmetry+ System or that would

render them obsolete or non-competitive.

Additionally, new surgical procedures, medications and other therapies could be developed that

replace or reduce the importance of our product.

Accordingly, our success will depend in part on our ability to respond quickly to medical

and changes through the development and introduction of new products.

Product development involves a high degree of risk and there can

be no assurance that our new product development efforts will result in any commercially successful products.

we experience significant disruptions in our information technology systems , our business, results of operations, and financial

condition could be adversely affected.

efficient operation of our business depends on our information technology systems.

We will rely on our information technology systems

to effectively manage:

and marketing, accounting, and financial functions;

● engineering

and product development tasks;

research and development data.

information technology systems are vulnerable to damage or interruption from:

● earthquakes,

fires, floods, and other natural disasters;

attacks and attacks by computer viruses or hackers;

systems, or Internet, telecommunications, or data network failures.

failure of our information technology systems to perform as we anticipate or our failure to effectively implement new systems could disrupt

our entire operation and could result in decreased sales, increased overhead costs, excess inventory and product shortages, and legal

liability issues, all of which could have a material adverse effect on our reputation, business, results of operations, and financial

may seek to grow our business through acquisitions of or investments in new or complementary businesses, products or technologies, and

the failure to manage acquisitions or investments, or the failure to integrate them with our existing business, could have a material

adverse effect on us.

August 2025, we acquired substantially all of the assets of SiVantage, Inc.

and SIMPL Medical, LLC, including The SImmetry+ System.

time to time, we expect to consider further opportunities to acquire or make investments in other technologies, products, and businesses

that may enhance our capabilities, complement our current product, or expand the breadth of our markets or customer base.

Potential and

completed acquisitions and strategic investments involve numerous risks, including:

assimilating the purchased technologies, products, or business operations;

maintaining uniform standards, procedures, controls, and policies;

● unanticipated

costs and liabilities associated with acquisitions;

of management’s attention from our core business;

effects on existing business relationships with suppliers and customers;

associated with entering new markets in which we have limited or no experience;

loss of key employees of acquired businesses;

legal and accounting compliance costs.

have no current commitments with respect to any such acquisition or investment.

We do not know if we will be able to identify acquisitions,

we deem suitable, whether we will be able to successfully complete any such acquisitions on favorable terms or at all, or whether we

will be able to successfully integrate any acquired business, product, or technology into our business or retain any key personnel, suppliers,

or distributors.

Our ability to successfully grow through acquisitions depends upon our ability to identify, negotiate, complete, and

integrate suitable target businesses and to obtain any necessary financing.

These efforts could be expensive and time consuming and may

disrupt our ongoing business and prevent management from focusing on our operations.

If we are unable to successfully integrate any acquired

businesses, products, or technologies effectively, our business, results of operations, and financial condition will be materially adversely

may enter into collaborations, in-licensing arrangements, joint ventures, strategic alliances, or partnerships with third-parties that

may not result in the development of commercially viable products or the generation of significant future revenue.

the ordinary course of our business, we may enter into collaborations, in-licensing arrangements, joint ventures, strategic alliances,

partnerships, or other arrangements to develop products and to pursue new markets.

We have not entered into any collaboration arrangements

Proposing, negotiating, and implementing collaborations, in-licensing arrangements, joint ventures, strategic alliances, or

partnerships may be a lengthy and complex process.

Other companies, including those with substantially greater financial, marketing,

sales, technology, or other business resources, may compete with us for these opportunities or arrangements.

We may not identify, secure,

or complete any such transactions or arrangements in a timely manner, on a cost-effective basis, on acceptable terms or at all.

limited institutional knowledge and experience with respect to these business development activities, and we may also not realize the

anticipated benefits of any such transaction or arrangement.

These collaborations may not result in the development of products that

achieve commercial success or result in significant revenue and could be terminated prior to developing any products.

Additionally,

we may not be able to exercise sole decision-making authority regarding the transaction or arrangement, which could create the potential

risk of creating impasses on decisions, and our future collaborators may have economic or business interests or goals that are, or that

7 unchanged sentences

collaborators devote to our or their future products.

Disputes between

us and our collaborators may result in litigation or arbitration which would increase our expenses and divert the attention of our management.

Further, these transactions and arrangements will be contractual in nature and will generally be terminable under the terms of the applicable

agreements and, in such event, we may not continue to have rights to the products relating to such transaction or arrangement or may

need to purchase such rights at a premium.

If we enter into in-bound intellectual property license agreements, we may not be able to

fully protect the licensed intellectual property rights or maintain those licenses.

Future licensors could retain the right to prosecute

and defend the intellectual property rights licensed to us, in which case we would depend on the ability of our licensors to obtain,

maintain and enforce intellectual property protection for the licensed intellectual property.

These licensors may determine not to pursue

litigation against other companies or may pursue such litigation less aggressively than we would.

Further, entering into such license

agreements could impose various diligence, commercialization, royalty, or other obligations on us.

Future licensors may allege that we

have breached our license agreement with them, and accordingly seek to terminate our license, which could adversely affect our competitive

business position and harm our business prospects.

We are increasingly

dependent on information technology, and our systems and infrastructure face certain risks, including cybersecurity and data leakage

Significant disruptions

to our information technology systems or breaches of information security could adversely affect our business.

In the ordinary course

of business, we will collect, store and transmit large amounts of confidential information, and it is critical that we do so in a secure

manner to maintain the confidentiality and integrity of such information.

We have also outsourced significant elements of our information

technology infrastructure;

as a result, we manage independent vendor relationships with third parties who are responsible for maintaining

significant elements of our information technology systems and infrastructure and who may or could have access to our confidential information.

The size and complexity of our information technology systems, and those of our third-party vendors, make such systems potentially vulnerable

to service interruptions and security breaches from inadvertent or intentional actions by our employees, partners or vendors.

These systems

are also vulnerable to attacks by malicious third parties and may be susceptible to intentional or accidental physical damage to the

infrastructure maintained by us or by third parties.

Maintaining the secrecy of confidential, proprietary and/or trade secret information

is important to our competitive business position.

While we have taken steps to protect such information and have invested in systems

and infrastructures to do so, there can be no guarantee that our efforts will prevent service interruptions or security breaches in our

systems or the unauthorized or inadvertent wrongful use or disclosure of confidential information that could adversely affect our business

operations or result in the loss, dissemination or misuse of critical or sensitive information.

The increasing sophistication and frequency

of cybersecurity threats, including targeted data breaches, ransomware attacks designed to encrypt our data for ransom and other malicious

cyber activities, pose a significant risk to the integrity and confidentiality of our data systems.

A breach our security measures or

the accidental loss, inadvertent disclosure, unapproved dissemination, misappropriation or misuse of trade secrets, proprietary information

or other confidential information, whether as a result of theft, hacking, fraud, trickery or other forms of deception, or for any other

cause, could enable others to produce competing products, use our proprietary technology or information, and/or adversely affect our

business position.

Further, any such interruption, security breach, loss or disclosure of confidential information could result in financial,

legal, business and reputational harm to us and could have a material adverse effect on our business, financial position, results of

operations and/or cash flow.

between us and our collaborators may result in litigation or arbitration which would increase our expenses and divert the attention of

our management.

Further, these transactions and arrangements will be contractual in nature and will generally be terminable under the

terms of the applicable agreements and, in such event, we may not continue to have rights to the products relating to such transaction

or arrangement or may need to purchase such rights at a premium.

If we enter into in-bound intellectual property license agreements,

we may not be able to fully protect the licensed intellectual property rights or maintain those licenses.

Future licensors could retain

the right to prosecute and defend the intellectual property rights licensed to us, in which case we would depend on the ability of our

licensors to obtain, maintain and enforce intellectual property protection for the licensed intellectual property.

These licensors may

determine not to pursue litigation against other companies or may pursue such litigation less aggressively than we would.

Further, entering

into such license agreements could impose various diligence, commercialization, royalty, or other obligations on us.

Future licensors

may allege that we have breached our license agreement with them, and accordingly seek to terminate our license, which could adversely

affect our competitive business position and harm our business prospects.

are increasingly dependent on information technology, and our systems and infrastructure face certain risks, including cybersecurity

and data leakage risks.

disruptions to our information technology systems or breaches of information security could adversely affect our business.

In the ordinary

course of business, we will collect, store and transmit large amounts of confidential information, and it is critical that we do so in

a secure manner to maintain the confidentiality and integrity of such information.

We have also outsourced significant elements of our

information technology infrastructure;

as a result, we manage independent vendor relationships with third parties who are responsible

for maintaining significant elements of our information technology systems and infrastructure and who may or could have access to our

confidential information.

The size and complexity of our information technology systems, and those of our third-party vendors, make such

systems potentially vulnerable to service interruptions and security breaches from inadvertent or intentional actions by our employees,

partners or vendors.

These systems are also vulnerable to attacks by malicious third parties and may be susceptible to intentional or

accidental physical damage to the infrastructure maintained by us or by third parties.

Maintaining the secrecy of confidential, proprietary

and/or trade secret information is important to our competitive business position.

While we have taken steps to protect such information

and have invested in systems and infrastructures to do so, there can be no guarantee that our efforts will prevent service interruptions

or security breaches in our systems or the unauthorized or inadvertent wrongful use or disclosure of confidential information that could

adversely affect our business operations or result in the loss, dissemination or misuse of critical or sensitive information.

The increasing

sophistication and frequency of cybersecurity threats, including targeted data breaches, ransomware attacks designed to encrypt our data

for ransom and other malicious cyber activities, pose a significant risk to the integrity and confidentiality of our data systems.

breach our security measures or the accidental loss, inadvertent disclosure, unapproved dissemination, misappropriation or misuse of

trade secrets, proprietary information or other confidential information, whether as a result of theft, hacking, fraud, trickery or other

forms of deception, or for any other cause, could enable others to produce competing products, use our proprietary technology or information,

and/or adversely affect our business position.

Further, any such interruption, security breach, loss or disclosure of confidential information

could result in financial, legal, business and reputational harm to us and could have a material adverse effect on our business, financial

position, results of operations and/or cash flow.

conditions, including trade disputes and direct or indirect acts of war or terrorism, could have an adverse effect on our operations

and financial results.

Our operations

could be disrupted by geopolitical conditions, political and social instability, acts of war, terrorist activity or other similar events.

operations could be disrupted by geopolitical conditions, political and social instability, acts of war, terrorist activity or other

similar events.

In February 2022, Russia initiated significant military action against Ukraine.

In response, the U.S.

and certain other countries imposed

significant sanctions and export controls against Russia, Belarus and certain individuals and entities connected to Russian or Belarusian

political, business, and financial organizations, and the U.S.

and certain other countries could impose further sanctions, trade restrictions,

and other retaliatory actions should the conflict continue or worsen.

It is not possible to predict the broader consequences of the conflict,

including related geopolitical tensions, and the measures and retaliatory actions taken by the U.S.

and other countries in respect thereof

as well as any counter measures or retaliatory actions by Russia or Belarus in response, including, for example, potential cyberattacks

or the disruption of energy exports, is likely to cause regional instability, geopolitical shifts, and could materially adversely affect

global trade, currency exchange rates, regional economies and the global economy.

In addition, the ongoing conflicts in the Middle East

may further impact global economic conditions and market sentiments.

This, in turn, could adversely affect the trading price of our shares

of common stock and investor interest in us.

The outcome of the Russia-Ukraine war and conflicts in the Middle East remain uncertain,

and while it is difficult to predict the impact of any of the foregoing, the conflict and actions taken in response to the conflict could

increase our costs, disrupt our supply chain, reduce our sales and earnings, impair our ability to raise additional capital when needed

on acceptable terms, if at all, or otherwise adversely affect our business, financial condition, and results of operations.

and certain other

countries imposed significant sanctions and export controls against Russia, Belarus and certain individuals and entities connected to

Russian or Belarusian political, business, and financial organizations, and the U.S.

and certain other countries could impose further

sanctions, trade restrictions, and other retaliatory actions should the conflict continue or worsen.

On February 28, 2026, the U.S.

Israel launched joint strikes against Iran, killing Iran’s supreme leader and several additional government officials.

Iran launched

retaliatory missiles and drones targeting Israel and a number of countries that host United States military bases, including Bahrain,

the United Arab Emirates, Kuwait, Qatar, and Saudi Arabia, with Hezbollah firing additional projectiles towards Israel.

These current

military conflicts, as well as the armed conflicts in Israel and the Gaza Strip, could disrupt or otherwise adversely impact our operations

and those of third parties upon which we rely.

is not possible to predict the broader consequences of these conflicts, including related geopolitical tensions, and the measures and

retaliatory actions taken by the U.S.

and other countries in respect thereof as well as any counter measures or retaliatory actions in

response, including, for example, potential cyberattacks or the disruption of energy exports, is likely to cause regional instability,

geopolitical shifts, and could materially adversely affect global trade, currency exchange rates, regional economies and the global economy.

These conflicts may impact our business costs, including, but not limited to, the costs of freight and energy.

In addition, the ongoing

conflicts in the Middle East may further impact global economic conditions and market sentiments.

This, in turn, could adversely affect

the trading price of our shares of common stock and investor interest in us.

The outcome of the Russia-Ukraine war and conflicts in the

Middle East remain uncertain, and while it is difficult to predict the impact of any of the foregoing, the conflict and actions taken

in response to the conflict could increase our costs, disrupt our supply chain, reduce our sales and earnings, impair our ability to

raise additional capital when needed on acceptable terms, if at all, or otherwise adversely affect our business, financial condition,

and results of operations.

may adversely affect our operations and financial results.

In periods of rising

inflation, the cost of raw materials, components and labor essential for manufacturing The Catamaran System may increase and as a consequence,

our overall profit margin may be adversely affected.

In addition, inflation may result in limitations on healthcare spending, specifically

for procedures that are deemed elective or non-critical, which may include treatments utilizing The Catamaran System.

A decrease in demand

for these procedures may significantly impact our financial condition and results of operations.

Risks Related

to Our Legal and Regulatory Environment

contract manufacturers are subject to extensive governmental regulation both in the United States and abroad, and failure to comply with

applicable requirements could cause our business to suffer.

The medical device

industry is regulated extensively by governmental authorities, principally the FDA and corresponding state and foreign regulatory agencies.

periods of rising inflation, the cost of raw materials, components and labor essential for manufacturing our products may increase and

as a consequence, our overall profit margin may be adversely affected.

In addition, inflation may result in limitations on healthcare

spending, specifically for procedures that are deemed elective or non-critical, which may include treatments utilizing our products.

A decrease in demand for these procedures may significantly impact our financial condition and results of operations.

Related to Our Legal and Regulatory Environment

and our contract manufacturers are subject to extensive governmental regulation both in the United States and abroad, and failure to

comply with applicable requirements could cause our business to suffer.

medical device industry is regulated extensively by governmental authorities, principally the FDA and corresponding state and foreign

regulatory agencies.

The FDA and other U.S.

and foreign governmental agencies regulate, among other things, with respect to medical devices:

design, development, and manufacturing;

testing, labeling, content, and language of instructions for use and

clinical trials;

product safety;

marketing, sales, and distribution;

premarket clearance and approval;

conformity assessment procedures;

record keeping procedures;

advertising and promotion;

compliance with good manufacturing practices requirements;

recalls and field safety corrective actions;

post-market surveillance, including reporting of deaths or serious

injuries and malfunctions that, if they were to recur, could lead to death or serious injury;

post-market approval studies;

product import and export.

The regulations

to which we are subject are complex and have tended to become more stringent over time.

Regulatory changes could result in restrictions

on our ability to carry on or expand our operations, difficulties achieving new product clearances, higher than anticipated costs or

lower than anticipated sales.

Before we can market

or sell a new regulated product or make a significant modification to an existing product in the United States, with very limited exception,

we must obtain either clearance under Section 510(k) of the FDCA for Class II devices or approval of a premarket approval application

from the FDA for a Class III device.

development, and manufacturing;

labeling, content, and language of instructions for use and storage;

sales, and distribution;

clearance and approval;

assessment procedures;

keeping procedures;

● advertising

and promotion;

with good manufacturing practices requirements;

and field safety corrective actions;

● post-market

surveillance, including reporting of deaths or serious injuries and malfunctions that, if

they were to recur, could lead to death or serious injury;

● post-market

approval studies;

import and export.

regulations to which we are subject are complex and have tended to become more stringent over time.

Regulatory changes could result in

restrictions on our ability to carry on or expand our operations, difficulties achieving new product clearances, higher than anticipated

costs or lower than anticipated sales.

we can market or sell a new regulated product or make a significant modification to an existing product in the United States, with very

limited exception, we must obtain either clearance under Section 510(k) of the FDCA for Class II devices or approval of a premarket approval

application from the FDA for a Class III device.

In the 510(k) clearance process, the FDA must determine that a proposed device is “substantially

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and we may not be able to obtain these clearances or approvals on a timely basis, if at all.

In the United States,

all of the components to The Catamaran System have either received premarket clearance under Section 510(k) of the FDCA or are exempt

from premarket review.

If the FDA requires us to go through a lengthier, more rigorous examination for future products or modifications

to existing products than we had expected, our product introductions or modifications could be delayed or canceled, which could cause

our sales to decline.

In addition, the FDA may determine that future products will require the more costly, lengthy, and uncertain PMA

Although we do not currently market any devices under PMA, the FDA may demand that we obtain a PMA prior to marketing certain

of our future products.

In addition, if the FDA disagrees with our determination that a product, we currently market is subject to an

exemption from premarket review, the FDA may require us to submit a 510(k) or PMA in order to continue marketing the product.

even with respect to those future products where a PMA is not required, we cannot assure you that we will be able to obtain the 510(k)

clearances with respect to those products.

The FDA can delay,

limit or deny clearance or approval of a device for many reasons, including:

we may not be able to demonstrate to the FDA’s satisfaction that

our product is safe and effective for their intended users;

the data from our pre-clinical studies and clinical trials may be insufficient

to support clearance or approval, where required;

the manufacturing process or facilities we use may not meet applicable

requirements.

In addition, the

FDA may change its clearance and approval policies, adopt additional regulations or revise existing regulations, or take other actions

which may prevent or delay clearance or approval of our product under development or impact our ability to modify our currently approved

or cleared product on a timely basis.

Any delay in, or

failure to receive or maintain, clearance or approval for our product under development could prevent us from generating revenue from

these products or achieving profitability.

In addition, even

after we have obtained the proper regulatory clearance or approval to market a product, the FDA has the power to require us to conduct

post-market surveillance on our product.

the United States, all of the components to The Catamaran System and The SImmetry+ System have either received premarket clearance under

Section 510(k) of the FDCA or are exempt from premarket review.

If the FDA requires us to go through a lengthier, more rigorous examination

for future products or modifications to existing products than we had expected, our product introductions or modifications could be delayed

or canceled, which could cause our sales to decline.

In addition, the FDA may determine that future products will require the more costly,

lengthy, and uncertain PMA process.

Although we do not currently market any devices under PMA, the FDA may demand that we obtain a PMA

prior to marketing certain of our future products.

In addition, if the FDA disagrees with our determination that a product, we currently

market is subject to an exemption from premarket review, the FDA may require us to submit a 510(k) or PMA in order to continue marketing

Further, even with respect to those future products where a PMA is not required, we cannot assure you that we will be able

to obtain the 510(k) clearances with respect to those products.

FDA can delay, limit or deny clearance or approval of a device for many reasons, including:

may not be able to demonstrate to the FDA’s satisfaction that our products are safe

and effective for their intended users;

data from our pre-clinical studies and clinical trials may be insufficient to support clearance

or approval, where required;

manufacturing process or facilities we use may not meet applicable requirements.

addition, the FDA may change its clearance and approval policies, adopt additional regulations or revise existing regulations, or take

other actions which may prevent or delay clearance or approval of our products under development or impact our ability to modify our

currently approved or cleared products on a timely basis.

delay in, or failure to receive or maintain, clearance or approval for our products under development could prevent us from generating

revenue from these products or achieving profitability.

addition, even after we have obtained the proper regulatory clearance or approval to market a product, the FDA has the power to require

us to conduct post-market surveillance on our product.

These studies can be very expensive and time consuming to conduct.

Failure to comply with those

studies in a timely manner could result in the revocation of the 510(k) clearance for a product that is subject to such surveillance

and the recall or withdrawal of the product, which could prevent us from generating sales from that product in the United States.

Additionally, as

part of the conformity assessment process, medical device manufacturers must carry out a clinical evaluation of their medical devices

comply with those studies in a timely manner could result in the revocation of the 510(k) clearance for a product that is subject to

such surveillance and the recall or withdrawal of the product, which could prevent us from generating sales from that product in the

United States.

Additionally,

as part of the conformity assessment process, medical device manufacturers must carry out a clinical evaluation of their medical devices

to verify that they comply with the relevant Essential Requirements covering safety and performance.

6 unchanged sentences

(ii) scientific literature from similar devices whose equivalence with the assessed device can be demonstrated;

or (iii) both

clinical studies and scientific literature.

The FDA and other

regulatory authorities have broad enforcement powers.

Regulatory enforcement or inquiries, or other increased scrutiny on us, could dissuade

some clinicians from using our product and adversely affect our reputation and the perceived safety and effectiveness of our product.

Failure to comply

with applicable regulations could jeopardize our ability to sell our product and result in enforcement actions such as:

warning letters;

civil penalties;

termination of distribution;

recalls or seizures of products;

delays in the introduction of products into the market;

total or partial suspension of production;

facility closures;

refusal of the FDA other regulators to grant future clearances or approvals;

in the most serious cases, criminal penalties.

Adverse action

by an applicable regulatory agency the FDA could result in inability to produce our product in a cost-effective and timely manner, or

at all, decreased sales, higher prices, lower margins, additional unplanned costs or actions, damage to our reputation, and could have

material adverse effect on our reputation, business, results of operations, and financial condition.

independent sales representatives must comply with U.S.

or (iii) both clinical

studies and scientific literature.

FDA and other regulatory authorities have broad enforcement powers.

Regulatory enforcement or inquiries, or other increased scrutiny

on us, could dissuade some clinicians from using our products and adversely affect our reputation and the perceived safety and effectiveness

of our product.

to comply with applicable regulations could jeopardize our ability to sell our products and result in enforcement actions such as:

● injunctions;

● termination

of distribution;

or seizures of products;

in the introduction of products into the market;

or partial suspension of production;

of the FDA other regulators to grant future clearances or approvals;

the most serious cases, criminal penalties.

action by an applicable regulatory agency the FDA could result in inability to produce our products in a cost-effective and timely manner,

or at all, decreased sales, higher prices, lower margins, additional unplanned costs or actions, damage to our reputation, and could

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

and our independent sales representatives must comply with U.S.

federal and state fraud and abuse laws, including those relating to physician

kickbacks and false claims for reimbursement.

Healthcare providers,

distributors, physicians, and third-party payors play a primary role in the distribution, recommendation, ordering, and purchasing of

any implant or other medical device for which we have or obtain marketing clearance or approval.

providers, distributors, physicians, and third-party payors play a primary role in the distribution, recommendation, ordering, and purchasing

of any implant or other medical device for which we have or obtain marketing clearance or approval.

Through our arrangements with customers

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despite our good faith efforts to comply.

There are numerous

are numerous U.S.

federal and state laws pertaining to healthcare fraud and abuse, including anti-kickback and false claims laws.

Our relationships

with clinicians, other healthcare professionals, and hospitals are subject to scrutiny under these laws.

Healthcare fraud

and abuse laws and related regulations are complex, and even minor irregularities can potentially give rise to claims that a statute

relationships with clinicians, other healthcare professionals, and hospitals are subject to scrutiny under these laws.

fraud and abuse laws and related regulations are complex, and even minor irregularities can potentially give rise to claims that a statute

or prohibition has been violated.

The laws that may affect our ability to operate include:

the federal Anti-Kickback Statute, which prohibits, among other things,

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, such as the Medicare and Medicaid programs;

the federal False Claims Act, which prohibits, among other things,

individuals or entities from knowingly presenting, or causing to be presented, false or fraudulent claims for payment of government

knowingly making, using, or causing to be made or used, a false record or statement to get a false claim paid or 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 federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act.

There are also

criminal penalties for making or presenting a false or fictitious or fraudulent claim to the federal government;

the federal Health Insurance Portability and Accountability Act of

1996, which imposes criminal and civil liability for, among other actions, knowingly and willfully executing, or attempting to execute,

a scheme to defraud any healthcare benefit program including private third-party payors, or knowingly and willfully falsifying, concealing,

or covering up a material fact or making a materially false, fictitious, or fraudulent statement or representation, or making or

using any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry

in connection with the delivery of or payment for healthcare benefits, items, or services;

the federal Physician Payment Sunshine Act, which 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 the Centers for Medicare & Medicaid Services 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;

analogous state law equivalents of each of the above federal laws,

such as anti-kickback and false claims laws, which may apply to items or services reimbursed by any third-party payor, including

federal Anti-Kickback Statute, which prohibits, among other things, 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, such as the Medicare and Medicaid programs;

federal False Claims Act, which prohibits, among other things, individuals or entities from

knowingly presenting, or causing to be presented, false or fraudulent claims for payment

of government funds;

knowingly making, using, or causing to be made or used, a false record

or statement to get a false claim paid or 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 federal Anti-Kickback Statute constitutes a false or fraudulent claim for

purposes of the False Claims Act.

There are also criminal penalties for making or presenting

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

federal Health Insurance Portability and Accountability Act of 1996, which imposes criminal

and civil liability for, among other actions, knowingly and willfully executing, or attempting

to execute, a scheme to defraud any healthcare benefit program including private third-party

payors, or knowingly and willfully falsifying, concealing, or covering up a material fact

or making a materially false, fictitious, or fraudulent statement or representation, or making

or using any false writing or document knowing the same to contain any materially false,

fictitious, or fraudulent statement or entry in connection with the delivery of or payment

for healthcare benefits, items, or services;

federal Physician Payment Sunshine Act, which 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 the Centers for Medicare & Medicaid Services

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;

state law equivalents of each of the above federal laws, such as anti-kickback and false

claims laws, which may apply to items or services reimbursed by any third-party payor, including

commercial insurers;

state laws that require device companies to comply with the industry’s voluntary compliance guidelines

and the applicable compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare

providers and other potential referral sources;

state beneficiary inducement laws, and state laws that require device manufacturers

to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing

expenditures, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance

If we or our employees

are found to have violated any of the above laws we may be subjected to administrative, civil and criminal penalties, including imprisonment,

exclusion from participation in federal healthcare programs, such as Medicare and Medicaid, and significant fines, monetary penalties

and damages, and damage to our reputation.

state laws that require device companies to comply with the industry’s

voluntary compliance guidelines and the applicable compliance guidance promulgated by the

federal government or otherwise restrict payments that may be made to healthcare providers

and other potential referral sources;

state beneficiary inducement laws, and state laws that

require device manufacturers to report information related to payments and other transfers

of value to physicians and other healthcare providers or marketing expenditures, many of

which differ from each other in significant ways and may not have the same effect, thus complicating

compliance efforts.

we or our employees are found to have violated any of the above laws we may be subjected to administrative, civil and criminal penalties,

including imprisonment, exclusion from participation in federal healthcare programs, such as Medicare and Medicaid, and significant fines,

monetary penalties and damages, and damage to our reputation.

Additional information about these laws is provided in “ Business—Regulation .”

We have entered

into consulting agreements with clinicians who are also customers.

We anticipate entering into additional agreements with clinicians

who use our product as we continue to commercialize our product.

The primary mission of these clinician advisors is research and development

and clinician education.

Medical device technology development requires thoughtful clinician input from experienced healthcare professionals.

Medical device clinician education requires experienced faculty for didactic and anatomic lab activities in a peer-to-peer setting.

believe these engagements will allow us to successfully meet the expectations of the physician community.

In addition, a small number

of clinicians (which are or may become customers) own less than 1.0% of our stock, or were granted stock options which they either purchased

in an arm’s length transaction on terms identical to those offered to others or received from us as fair market value consideration

for consulting services performed.

While all of these transactions were structured with the intention of complying with all applicable

laws, including the federal Anti-Kickback Statute, state anti-kickback laws and other applicable laws, to the extent applicable, it is

possible that regulatory agencies may view these transactions as prohibited arrangements that must be restructured, or discontinued,

or for which we could be subject to significant penalties.

We would be materially and adversely affected if regulatory agencies interpret

our financial relationships with clinicians who order our product to be in violation of applicable laws and we were unable to comply

with such laws, which could subject us to, among other things, monetary penalties for non-compliance, the cost of which could be substantial.

In certain cases,

federal and state authorities pursue actions for false claims on the basis that manufacturers and distributors are promoting unapproved,

or “off-label” uses of their products.

Pursuant to FDA regulations, we can only market our product for cleared or approved

Although clinicians are permitted to use medical devices for indications other than those cleared or approved by the FDA, we are

prohibited from promoting products for “off-label” uses.

We market our product and provide promotional materials and training

programs to clinicians regarding the use of our product.

If it is determined that our marketing, promotional materials or training programs

constitute promotion of unapproved uses, we could be subject to significant fines in addition to regulatory enforcement actions, including

the issuance of a warning letter, injunction, seizure, criminal penalty, and damage to our reputation.

Federal and state authorities

also pursue actions for false claims based upon improper billing and coding advice or recommendations, as well as decisions related to

the medical necessity of procedures, including the site-of-service where procedures are performed.

Actions under the federal False Claims

Act may also be brought by whistleblowers under its qui tam provisions.

To enforce compliance

with the federal laws, the U.S.

Department of Justice has increased its scrutiny of interactions between healthcare companies and healthcare

providers, which has led to a number of investigations, prosecutions, convictions and settlements in the healthcare industry.

with investigations can be time and resource consuming and can divert management’s attention from the business.

Additionally, if

a healthcare company settles an investigation with the Department of Justice or other law enforcement agencies, it may need to agree

to additional onerous compliance and reporting requirements as part of a consent decree or corporate integrity agreement.

Any such investigation

or settlement could increase our costs or otherwise have an adverse effect on our business.

Even if we are not determined to have violated

these laws, government investigations into these issues typically require the expenditure of significant resources and generate negative

publicity, which could harm our financial condition and divert resources and the attention of our management from operating our business.

The scope and enforcement

of these laws is uncertain and subject to rapid change.

The shifting compliance environment and the need to build and maintain robust

and expandable systems to comply with different compliance and/or reporting requirements in multiple jurisdictions increase the possibility

that we may run afoul of one or more of the requirements or that federal or state regulatory authorities might challenge our current

or future activities under these laws.

Additionally, we cannot predict the impact of any changes in these laws, whether or not retroactive.

to adequately protect personal information in compliance with evolving legal requirements could harm our business.

In the ordinary

course of our business, we plan to collect and store sensitive data, including legally protected personally identifiable information.

We may collect this kind of information during the course of future clinical trials and for possible post-marketing safety vigilance,

helping enable clinicians and their patients to pursue claims for reimbursement for procedures using The Catamaran System and servicing

potential warranty claims.

There are a number

of state, federal, and international laws protecting the privacy and security of health information and personal data.

These data protection

and privacy-related laws and regulations are evolving and may result in ever-increasing regulatory and public scrutiny of companies’

data practices and escalating levels of enforcement and sanctions.

As part of the American Recovery and Reinvestment Act 2009, or ARRA,

Congress amended the privacy and security provisions of the Health Insurance Portability and Accountability Act, or HIPAA.

HIPAA imposes

certain requirements regarding the privacy, security, use, and disclosure of an individual’s protected health information, or PHI,

by certain health care providers, health care clearinghouses, and health insurance plans, collectively referred to as “covered

entities,” and their “business associates,” or subcontractors who provide services to covered entities that involve

the creation, use, maintenance, or disclosure of PHI.

ARRA included significant increases in the penalties for improper use or disclosure

of an individual’s PHI under HIPAA and extended enforcement authority to state attorneys general.

The amendments also created notification

requirements applicable to covered entities and business associates in certain cases when PHI in their control has been inappropriately

accessed or disclosed.

In the case of a breach of unsecured PHI, covered entities may be required to provide notification to individuals

affected by the breach, federal regulators, and, in some cases, local and national media.

In addition to HIPAA, most states have laws

requiring notification of affected individuals and state regulators in the event of a breach of “personal information,” which

is a broader class of information than the PHI protected by HIPAA.

Certain states also have data privacy requirements applicable to individually

identifiable health information.

Privacy laws in different states may contain different requirements, and such laws may not be pre-empted

by HIPAA, which could complicate our efforts to comply.

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

have entered into consulting agreements with clinicians who are also customers.

We anticipate entering into additional agreements with

clinicians who use our products as we continue to commercialize our product.

The primary mission of these clinician advisors is research

and development and clinician education.

Medical device technology development requires thoughtful clinician input from experienced healthcare

professionals.

Medical device clinician education requires experienced faculty for didactic and anatomic lab activities in a peer-to-peer

We believe these engagements will allow us to successfully meet the expectations of the physician community.

In addition, a

small number of clinicians (which are or may become customers) own less than 1.0% of our stock, or were granted stock options which they

either purchased in an arm’s length transaction on terms identical to those offered to others or received from us as fair market

value consideration for consulting services performed.

While all of these transactions were structured with the intention of complying

with all applicable laws, including the federal Anti-Kickback Statute, state anti-kickback laws and other applicable laws, to the extent

applicable, it is possible that regulatory agencies may view these transactions as prohibited arrangements that must be restructured,

or discontinued, or for which we could be subject to significant penalties.

We would be materially and adversely affected if regulatory

agencies interpret our financial relationships with clinicians who order our products to be in violation of applicable laws and we were

unable to comply with such laws, which could subject us to, among other things, monetary penalties for non-compliance, the cost of which

could be substantial.

certain cases, federal and state authorities pursue actions for false claims on the basis that manufacturers and distributors are promoting

unapproved, or “off-label” uses of their products.

Pursuant to FDA regulations, we can only market our products for cleared

or approved uses.

Although clinicians are permitted to use medical devices for indications other than those cleared or approved by the

FDA, we are prohibited from promoting products for “off-label” uses.

We market our products and provide promotional materials

and training programs to clinicians regarding the use of our product.

If it is determined that our marketing, promotional materials or

training programs constitute promotion of unapproved uses, we could be subject to significant fines in addition to regulatory enforcement

actions, including the issuance of a warning letter, injunction, seizure, criminal penalty, and damage to our reputation.

state authorities also pursue actions for false claims based upon improper billing and coding advice or recommendations, as well as decisions

related to the medical necessity of procedures, including the site-of-service where procedures are performed.

Actions under the federal

False Claims Act may also be brought by whistleblowers under its qui tam provisions.

enforce compliance with the federal laws, the U.S.

Department of Justice has increased its scrutiny of interactions between healthcare

companies and healthcare providers, which has led to a number of investigations, prosecutions, convictions and settlements in the healthcare

Dealing with investigations can be time and resource consuming and can divert management’s attention from the business.

Additionally, if a healthcare company settles an investigation with the Department of Justice or other law enforcement agencies, it may

need to agree to additional onerous compliance and reporting requirements as part of a consent decree or corporate integrity agreement.

Any such investigation or settlement could increase our costs or otherwise have an adverse effect on our business.

Even if we are not

determined to have violated these laws, government investigations into these issues typically require the expenditure of significant

resources and generate negative publicity, which could harm our financial condition and divert resources and the attention of our management

from operating our business.

scope and enforcement of these laws is uncertain and subject to rapid change.

The shifting compliance environment and the need to build

and maintain robust and expandable systems to comply with different compliance and/or reporting requirements in multiple jurisdictions

increase the possibility that we may run afoul of one or more of the requirements or that federal or state regulatory authorities might

challenge our current or future activities under these laws.

Additionally, we cannot predict the impact of any changes in these laws,

whether or not retroactive.

developments or changes in national laws or policies to protect or promote domestic interests and/or address foreign competition can

have an adverse effect on our business and financial statements.

developments or changes in national laws or policies to protect or promote domestic interests and/or address foreign competition, including

laws and policies in areas such as trade, manufacturing, government purchasing, healthcare, intellectual property, regulatory enforcement

and investment/development, can adversely affect our business and financial statements.

has announced and/or implemented significant

new tariffs on imports from a wide range of countries, which has prompted retaliatory tariffs by a number of countries and a cycle of

retaliatory tariffs by both the U.S.

and other countries.

Subsequently, actions have been taken by the U.S.

and certain other countries

to modify certain of these tariffs and/or delay their effective dates, and the U.S.

has entered into trade agreements with certain countries

implementing new tariffs.

In February 2026, the U.S.

Supreme Court ruled that the International Emergency Economic Powers Act (“IEEPA”),

which the U.S.

administration relied on to impose certain tariffs, does not authorize the administration to impose tariffs.

the administration announced plans to implement new tariffs under alternative statutory authority.

The full impact of the U.S.

Court’s ruling and the administration’s response remain uncertain;

as of the date of this Annual Report, a number of tariffs

issued by the United States and other countries remain in effect.

materials that we use in research and development and manufacturing of our products have exposure to tariff impacts.

To date such impact

has been immaterial.

However, collectively, these tariffs may increase the cost to us of supplies and components we import, which in

turn has required and will require us to implement surcharges and/or increase the price of certain of our products, among other countermeasures;

can increase the cost to our customers of certain of our finished products, which together with the surcharges and price increases noted

above can adversely impact demand for our products and our competitive positioning;

could adversely impact the availability to us of

certain products in certain countries and disrupt our supply chains, with related impacts to our operations;

and could exacerbate inflation,

diminish investment and result in broader negative impacts including increased political and economic instability and capital markets

dislocation that may adversely impact demand for our products.

addition, whenever we are unable to fully recover higher costs, or whenever there is a time delay between the increase in costs and our

ability to recover these costs, our margins and profitability are adversely affected.

The full impact of the U.S.

Supreme Court’s

February 2026 ruling and the administration’s response remain uncertain, the U.S.

may implement additional tariffs and other measures,

further retaliatory tariffs and other retaliatory actions may follow and the risks and adverse effects noted above may increase.

the risks identified above in certain cases have already adversely impacted parts of our business, so far such impact has been immaterial.

The full impact of these tariffs and other actions on the Company and on our business partners remains highly uncertain and subject to

rapid change.

failure to adequately protect personal information in compliance with evolving legal requirements could harm our business.

the ordinary course of our business, we plan to collect and store sensitive data, including legally protected personally identifiable

We may collect this kind of information during the course of future clinical trials and for possible post-marketing safety

vigilance, helping enable clinicians and their patients to pursue claims for reimbursement for procedures using The Catamaran System

and servicing potential warranty claims.

are a number of state, federal, and international laws protecting the privacy and security of health information and personal data.

data protection and privacy-related laws and regulations are evolving and may result in ever-increasing regulatory and public scrutiny

of companies’ data practices and escalating levels of enforcement and sanctions.

As part of the American Recovery and Reinvestment

Act 2009, or ARRA, Congress amended the privacy and security provisions of the Health Insurance Portability and Accountability Act, or

HIPAA imposes certain requirements regarding the privacy, security, use, and disclosure of an individual’s protected health

information, or PHI, by certain health care providers, health care clearinghouses, and health insurance plans, collectively referred

to as “covered entities,” and their “business associates,” or subcontractors who provide services to covered

entities that involve the creation, use, maintenance, or disclosure of PHI.

ARRA included significant increases in the penalties for

improper use or disclosure of an individual’s PHI under HIPAA and extended enforcement authority to state attorneys general.

amendments also created notification requirements applicable to covered entities and business associates in certain cases when PHI in

their control has been inappropriately accessed or disclosed.

In the case of a breach of unsecured PHI, covered entities may be required

to provide notification to individuals affected by the breach, federal regulators, and, in some cases, local and national media.

to HIPAA, most states have laws requiring notification of affected individuals and state regulators in the event of a breach of “personal

information,” which is a broader class of information than the PHI protected by HIPAA.

Certain states also have data privacy requirements

applicable to individually identifiable health information.

Privacy laws in different states may contain different requirements, and

such laws may not be pre-empted by HIPAA, which could complicate our efforts to comply.

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.

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

Our failure to

comply with applicable laws and regulations, or to protect such data, could result in enforcement actions against us, including fines,

imprisonment of company officials and public censure, claims for damages by end-customers, and other affected individuals, and the imposition

of integrity obligations and agency oversight, damage to our reputation, and loss of goodwill, any of which could harm on our operations,

financial performance, and business.

Evolving and changing definitions of personal data and personal information, within the United States,

and elsewhere, may limit or inhibit our ability to operate or expand our business, including limiting strategic partnerships that may

involve the sharing of data.

Moreover, if the relevant laws and regulations change, or are interpreted and applied in a manner that is

inconsistent with our data practices or the operation of our product, or if we expand into new regions and are required to comply with

new requirements, we may need to expend resources in order to change our business operations, data practices, or the manner in which

our product operates.

Even the perception of privacy concerns, whether or not valid, may harm our reputation and inhibit adoption of

our product is approved by regulatory authorities if our contract manufacturers fail to comply with ongoing FDA, or if we experience

unanticipated problems with our products, these products could be subject to restrictions or withdrawal from the market.

Any product for

which we obtain regulatory clearance or approval, and the manufacturing processes, reporting requirements, post-approval clinical data,

and promotional activities for such product, will be subject to continued regulatory review, oversight and periodic inspections by the

FDA and other domestic bodies.

In particular, we and our contract manufacturers are required to comply with FDA’s Quality System

Regulations (“QSR”) for the manufacture of our product and other regulations which cover the methods and documentation of

the design, testing, production, control, quality assurance, labeling, packaging, storage, and shipping of any product for which we obtain

regulatory clearance or approval.

The failure by

us or one of our contract manufacturers to comply with applicable statutes and regulations, or the failure to timely and adequately respond

to any adverse inspectional observations or product safety issues, could result in, among other things, any of the following enforcement

untitled letters, warning letters, fines, injunctions, consent, and

civil penalties;

unanticipated expenditures to address or defend such actions;

customer notifications for repair, replacement, refunds;

recall, detention, or seizure of our product;

operating restrictions or partial suspension or total shutdown of production;

refusing or delaying our requests for 510(k) clearance or premarket

approval and conformity assessments of new products or modified products;

limitations on the intended uses for which the product may be marketed;

operating restrictions;

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

criminal prosecution.

In addition, we

may be required to conduct costly post-market testing and surveillance to monitor the safety or effectiveness of our product, and we

must comply with medical device reporting requirements, including the reporting of adverse events and malfunctions related to our product.

Later discovery of previously unknown problems with our product, including unanticipated adverse events or adverse events of unanticipated

severity or frequency, manufacturing problems, or failure to comply with regulatory requirements such as QSR, may result in changes to

labeling, restrictions on such products or manufacturing processes, withdrawal of the products from the market, voluntary or mandatory

recalls, a requirement to repair, replace, or refund the cost of any medical device we manufacture or distribute, fines, suspension,

variation, or withdrawal of regulatory approvals product seizures, injunctions, or the imposition of civil, administrative, or criminal

penalties which would adversely affect our business, operating results, and prospects.

If the FDA determines

that our promotional materials, labeling, training or other marketing or educational activities constitute promotion of an unapproved

use, it could request that we cease or modify our training or promotional materials or subject us to regulatory enforcement actions.

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

promotional 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 or fraudulent claims for payment of government funds.

If any of these

actions were to occur it would harm our reputation and cause our product sales and profitability to suffer and may prevent us from generating

Furthermore, our key component suppliers may not currently be or may not continue to be in compliance with all applicable regulatory

requirements, which could result in our failure to produce our product on a timely basis and in the required quantities, if at all.

not yet inspected our facility, but we expect an inspection in the future.

Our employees,

independent contractors, consultants, contract manufacturers, and our independent sales representatives may engage in misconduct or other

improper activities, relating to regulatory standards and requirements.

We are exposed

to the risk that our employees, independent contractors, consultants, contract manufacturers, and our independent sales representatives

failure to comply with applicable laws and regulations, or to protect such data, could result in enforcement actions against us, including

fines, imprisonment of company officials and public censure, claims for damages by end-customers, and other affected individuals, and

the imposition of integrity obligations and agency oversight, damage to our reputation, and loss of goodwill, any of which could harm

on our operations, financial performance, and business.

Evolving and changing definitions of personal data and personal information,

within the United States, and elsewhere, may limit or inhibit our ability to operate or expand our business, including limiting strategic

partnerships that may involve the sharing of data.

Moreover, if the relevant laws and regulations change, or are interpreted and applied

in a manner that is inconsistent with our data practices or the operation of our product, or if we expand into new regions and are required

to comply with new requirements, we may need to expend resources in order to change our business operations, data practices, or the manner

in which our products operate.

Even the perception of privacy concerns, whether or not valid, may harm our reputation and inhibit adoption

of our product.

our products are approved by regulatory authorities, if our contract manufacturers fail to comply with ongoing FDA requirements, or if

we experience unanticipated problems with our products, these products could be subject to restrictions or withdrawal from the market.

product for which we obtain regulatory clearance or approval, and the manufacturing processes, reporting requirements, post-approval

clinical data, and promotional activities for such product, will be subject to continued regulatory review, oversight and periodic inspections

by the FDA and other domestic bodies.

In particular, we and our contract manufacturers are required to comply with FDA’s Quality

System Regulations (“QSR”) for the manufacture of our products and other regulations which cover the methods and documentation

of the design, testing, production, control, quality assurance, labeling, packaging, storage, and shipping of any product for which we

obtain regulatory clearance or approval.

failure by us or one of our contract manufacturers to comply with applicable statutes and regulations, or the failure to timely and adequately

respond to any adverse inspectional observations or product safety issues, could result in, among other things, any of the following

enforcement actions:

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

● unanticipated

expenditures to address or defend such actions;

notifications for repair, replacement, refunds;

detention, or seizure of our product;

restrictions or partial suspension or total shutdown of production;

or delaying our requests for 510(k) clearance or premarket approval and conformity assessments

of new products or modified products;

● limitations

on the intended uses for which the product may be marketed;

restrictions;

● withdrawing

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

addition, we may be required to conduct costly post-market testing and surveillance to monitor the safety or effectiveness of our product,

and we must comply with medical device reporting requirements, including the reporting of adverse events and malfunctions related to

Later discovery of previously unknown problems with our product, including unanticipated adverse events or adverse events

of unanticipated severity or frequency, manufacturing problems, or failure to comply with regulatory requirements such as QSR, may result

in changes to labeling, restrictions on such products or manufacturing processes, withdrawal of the products from the market, voluntary

or mandatory recalls, a requirement to repair, replace, or refund the cost of any medical device we manufacture or distribute, fines,

suspension, variation, or withdrawal of regulatory approvals, product seizures, injunctions, or the imposition of civil, administrative,

or criminal penalties which would adversely affect our business, operating results, and prospects.

the FDA determines that our promotional materials, labeling, training or other marketing or educational activities constitute promotion

of an unapproved use, it could request that we cease or modify our training or promotional materials or subject us to regulatory enforcement

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

or other promotional 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 or fraudulent claims for payment of government funds.

any of these actions were to occur it would harm our reputation and cause our product sales and profitability to suffer and may prevent

us from generating revenue.

Furthermore, our key component suppliers may not currently be or may not continue to be in compliance with

all applicable regulatory requirements, which could result in our failure to produce our products on a timely basis and in the required

quantities, if at all.

FDA has not yet inspected our facility, but we expect an inspection in the future.

employees, independent contractors, consultants, contract manufacturers, and our independent sales representatives may engage in misconduct

or other improper activities, relating to regulatory standards and requirements.

are exposed to the risk that our employees, independent contractors, consultants, contract manufacturers, and our independent sales representatives

may engage in fraudulent conduct or other illegal activity.

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our operations.

subject to enforcement action, including fines, penalties or injunctions, if we are determined to be engaging in the off-label promotion

of our product.

Our promotional

materials and training methods must comply with FDA and other applicable laws and regulations, including the prohibition of the promotion

of off-label use.

Physicians may use our product off-label, as the FDA does not restrict or regulate a physician’s choice of treatment

within the practice of medicine.

may be subject to enforcement action, including fines, penalties or injunctions, if we are determined to be engaging in the off-label

promotion of our product.

promotional materials and training methods must comply with FDA and other applicable laws and regulations, including the prohibition

of the promotion of off-label use.

Physicians may use our products off-label, as the FDA does not restrict or regulate a physician’s

choice of treatment within the practice of medicine.

In the United States, the full indication for The Catamaran System is:

“The Tenon Catamaran Sacroiliac

Joint Fixation System (CAT SIJ Fixation System) is intended for sacroiliac joint fusion for conditions including sacroiliac joint disruptions

and degenerative sacroiliitis.” Contraindications are patients with the following conditions:

Tenon Medical Catamaran SI Joint Fusion System is intended for sacroiliac joint fusion for conditions including:

Sacroiliac joint disruptions

and degenerative sacroiliitis and to augment immobilization and stabilization of the sacroiliac joint in skeletally mature patients undergoing

sacropelvic fixation as part of a lumbar or thoracolumbar fusion.” The full indication for The SImmetry+System is “The SImmetry

Sacroiliac Joint Fusion System is intended for sacroiliac joint fusion for conditions including sacroiliac joint disruptions and degenerative

sacroiliitis.” Contraindications are patients with the following conditions:

skeletally immature spines;

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morbid obesity, tumor resection and active infection at treatment site.

We believe that

the specific surgical procedures for which our product are marketed fall within the scope of the surgical applications that have been

cleared by the FDA.

However, if the FDA determines that our promotional materials or training constitutes promotion of an off-label use,

it could request that we modify our training or promotional materials, require us to stop promoting our product for those specific procedures

until we obtain FDA clearance or approval for them, or subject us to regulatory or enforcement actions, including the issuance of an

untitled letter, a warning letter, injunction, seizure, civil fines, and 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 or fraudulent claims for payment of government fund.

In that event, our reputation could be damaged, and adoption of the product

would be impaired.

Although our policy is to refrain from statements that could be considered off-label promotion of our product, the

FDA or another regulatory agency could disagree and conclude that we have engaged in off-label promotion.

In addition, the off-label

use of our product may increase the risk of injury to patients, and, in turn, the risk of product liability claims.

Product liability

claims are expensive to defend and could divert our management’s attention, result in substantial damage awards against us and

harm our reputation.

We are required

to report certain malfunctions, deaths, and serious injuries associated with our product, which can result in voluntary corrective actions

or agency enforcement actions.

Further, under

the FDA’s medical device reporting regulations, we are required to report to the FDA any information that our product may have

caused or contributed to a death or serious injury or in which our product malfunctioned and, if the malfunction were to recur, would

believe that the specific surgical procedures for which our products are marketed fall within the scope of the surgical applications

that have been cleared by the FDA.

However, if the FDA determines that our promotional materials or training constitutes promotion of

an off-label use, it could request that we modify our training or promotional materials, require us to stop promoting our products for

those specific procedures until we obtain FDA clearance or approval for them, or subject us to regulatory or enforcement actions, including

the issuance of an untitled letter, a warning letter, injunction, seizure, civil fines, and 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 or fraudulent claims for payment of government fund.

In that event, our reputation could be damaged, and adoption of

our products would be impaired.

Although our policy is to refrain from statements that could be considered off-label promotion of our

product, the FDA or another regulatory agency could disagree and conclude that we have engaged in off-label promotion.

In addition, the

off-label use of our products may increase the risk of injury to patients, and, in turn, the risk of product liability claims.

liability claims are expensive to defend and could divert our management’s attention, result in substantial damage awards against

us and harm our reputation.

are required to report certain malfunctions, deaths, and serious injuries associated with our products, which can result in voluntary

corrective actions or agency enforcement actions.

the FDA’s medical device reporting regulations, we are required to report to the FDA any information that our products may have

caused or contributed to a death or serious injury or in which our products malfunctioned and, if the malfunction were to recur, would

likely cause or contribute to death or serious injury.

1 unchanged sentence

at all, FDA could take enforcement action against us.

Any such adverse event involving our product or repeated product malfunctions may

result in a voluntary or involuntary corrective actions, such as recalls or customer notifications, or agency action, such as inspection

Any such adverse event involving our products or repeated product malfunctions

may result in a voluntary or involuntary corrective actions, such as recalls or customer notifications, or agency action, such as inspection

or enforcement action.

Any corrective action, whether voluntary or involuntary, as well as defending ourselves in a lawsuit could divert

managerial and financial resources, impair our ability to manufacture our product in a cost-effective and timely manner, and have an

managerial and financial resources, impair our ability to manufacture our products in a cost-effective and timely manner, and have an

adverse effect on our reputation, results of operations, and financial condition.

Any adverse event

involving our product in the United States could result in future voluntary corrective actions, such as recalls, including corrections,

or customer notifications, or agency action, such as inspection or enforcement actions.

If malfunctions do occur, we may be unable to

correct the malfunctions adequately or prevent further malfunctions, in which case we may need to cease manufacture and distribution

of the affected products, initiate voluntary recalls, and redesign the products.

Regulatory authorities may also take actions against

us, such as ordering recalls, imposing fines, or seizing the affected products.

adverse event involving our products in the United States could result in future voluntary corrective actions, such as recalls, including

corrections, or customer notifications, or agency action, such as inspection or enforcement actions.

If malfunctions do occur, we may

be unable to correct the malfunctions adequately or prevent further malfunctions, in which case we may need to cease manufacture and

distribution of the affected products, initiate voluntary recalls, and redesign the products.

Regulatory authorities may also take actions

against us, such as ordering recalls, imposing fines, or seizing the affected products.

Any corrective action, whether voluntary or involuntary,

1 unchanged sentence

financial results.

of our product, either voluntarily or at the direction of the FDA or the discovery of serious safety issues or malfunctions with our

product, can result in voluntary corrective actions or agency enforcement actions, which could have a significant adverse impact on us.

The FDA has the

authority to require the recall of commercialized products in the event of material deficiencies or defects in design or manufacture

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

Manufacturers may, under their own initiative, recall a product

if any material deficiency in a device is found.

In the case of

the FDA, the authority to require a recall must be based on an FDA finding that there is an unreasonable risk of substantial public harm.

In addition, foreign governmental bodies have the authority to require the recall of our product in the event of material deficiencies

or defects in design or manufacture.

recall of our products, either voluntarily or at the direction of the FDA or the discovery of serious safety issues or malfunctions with

our products, can result in voluntary corrective actions or agency enforcement actions, which could have a significant adverse impact

FDA has the authority to require the recall of commercialized products in the event of material deficiencies or defects in design or

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

Manufacturers may, under their own initiative, recall

a product if any material deficiency in a device is found.

the case of the FDA, the authority to require a recall must be based on an FDA finding that there is an unreasonable risk of substantial

In addition, foreign governmental bodies have the authority to require the recall of our products in the event of material

deficiencies or defects in design or manufacture.

A government-mandated or voluntary recall by us or one of the independent sales representatives

1 unchanged sentence

deficiencies and issues.

Recalls of any of our product would divert managerial and financial resources and have an adverse effect on

our reputation, results of operations, and financial condition, which could impair our ability to produce our product in a cost-effective

Recalls of any of our products would divert managerial and financial resources and have an adverse effect on

our reputation, results of operations, and financial condition, which could impair our ability to produce our products in a cost-effective

and timely manner in order to meet our customers’ demands.

1 unchanged sentence

may have a negative impact on our future sales and our ability to generate profits.

The FDA requires

that certain classifications of recalls be reported to FDA within 10 working days after the recall is initiated.

Companies are required

to maintain certain records of recalls, even if they are not reportable to the FDA.

We may initiate voluntary recalls involving our product

in the future that we determine do not require notification of the FDA.

If the FDA disagrees with our determinations, they could require

us to report those actions as recalls.

A future recall announcement could harm our reputation with customers and negatively affect our

FDA requires that certain classifications of recalls be reported to FDA within 10 working days after the recall is initiated.

are required to maintain certain records of recalls, even if they are not reportable to the FDA.

We may initiate voluntary recalls involving

our products in the future that we determine do not require notification of the FDA.

If the FDA disagrees with our determinations, they

could require us to report those actions as recalls.

A future recall announcement could harm our reputation with customers and negatively

affect our sales.

In addition, the FDA could take enforcement action for failing to report the recalls when they were conducted.

Modifications

to our product may require new 510(k) clearances or premarket approvals may require us to cease marketing or recall the product until

Any modification

to a 510(k)-cleared device that could significantly affect its safety or effectiveness, or that would constitute a major change in its

intended use, design, or manufacture, requires a new 510(k) clearance or, possibly, a PMA.

The FDA requires every manufacturer make and

document this determination in the first instance.

A manufacturer may determine that a modification could not significantly affect safety

or effectiveness and does not represent a major change in its intended use, so that no new 510(k) clearance is necessary.

FDA may review

any manufacturer’s decision and may not agree with our decisions regarding whether new clearances or approvals are necessary.

FDA may also on its own initiative determine that a new clearance or approval is required.

We have modified

our product and have determined based on our review of the applicable FDA guidance that a new 510(k) clearances or PMAs is not required.

If the FDA disagrees with our determination and requires us to submit new 510(k) clearances or PMAs for modifications to our previously

cleared products for which we have concluded that new clearances or approvals are unnecessary, we may be required to cease marketing

or to recall the modified product until we obtain clearance or approval, and we may be subject to significant enforcement action, regulatory

fines, or penalties.

If a manufacturer

determines that a modification to an FDA-cleared device could significantly affect its safety or effectiveness or would constitute a

major change in its intended use, then the manufacturer must file for a new 510(k) clearance or possibly a premarket approval application.

Where we determine that modifications to our product require a new 510(k) clearance or premarket approval application, we may not be

able to obtain those additional clearances or approvals for the modifications or additional indications in a timely manner, or at all.

FDA’s ongoing review of the 510(k) programs may make it more difficult for us to make modifications to our previously cleared products,

either by imposing more strict requirements on when a new 510(k) for a modification to a previously cleared product must be submitted

or applying more onerous review criteria to such submissions.

Clinical trials

necessary to support a 510(k) or reimbursement may require the enrollment of large numbers of patients, and suitable patients may be

difficult to identify and recruit.

Delays or failures in our clinical trials could affect third party reimbursement as many of the payors

want to see peer reviewed articles to maintain coverage and lack of changes in reimbursement could materially slow down our commercial

efforts and affect our revenue projections.

to our products may require new 510(k) clearances or premarket approvals may require us to cease marketing or recall the products until

clearances are received.

modification to a 510(k)-cleared device that could significantly affect its safety or effectiveness, or that would constitute a major

change in its intended use, design, or manufacture, requires a new 510(k) clearance or, possibly, a PMA.

The FDA requires every manufacturer

make and document this determination in the first instance.

A manufacturer may determine that a modification could not significantly

affect safety or effectiveness and does not represent a major change in its intended use, so that no new 510(k) clearance is necessary.

FDA may review any manufacturer’s decision and may not agree with our decisions regarding whether new clearances or approvals are

The FDA may also on its own initiative determine that a new clearance or approval is required.

have modified our products and have determined based on our review of the applicable FDA guidance that a new 510(k) clearances or PMAs

is not required.

If the FDA disagrees with our determination and requires us to submit new 510(k) clearances or PMAs for modifications

to our previously cleared products for which we have concluded that new clearances or approvals are unnecessary, we may be required to

cease marketing or to recall the modified products until we obtain clearance or approval, and we may be subject to significant enforcement

action, regulatory fines, or penalties.

a manufacturer determines that a modification to an FDA-cleared device could significantly affect its safety or effectiveness or would

constitute a major change in its intended use, then the manufacturer must file for a new 510(k) clearance or possibly a premarket approval

Where we determine that modifications to our products require a new 510(k) clearance or premarket approval application,

we may not be able to obtain those additional clearances or approvals for the modifications or additional indications in a timely manner,

FDA’s ongoing review of the 510(k) programs may make it more difficult for us to make modifications to our previously

cleared products, either by imposing more strict requirements on when a new 510(k) for a modification to a previously cleared product

must be submitted or applying more onerous review criteria to such submissions.

trials necessary to support a 510(k) or reimbursement may require the enrollment of large numbers of patients, and suitable patients

may be difficult to identify and recruit.

Delays or failures in our clinical trials could affect third party reimbursement as many of

the payors want to see peer reviewed articles to maintain coverage and lack of changes in reimbursement could materially slow down our

commercial efforts and affect our revenue projections.

of our clinical trials may not support our product candidate claims or may result in the discovery of adverse side effects.

If our clinical

trials are completed as planned, we cannot be certain that their results will support our product marketing claims or third party reimbursors

will agree with our conclusions regarding them.

The clinical trial process may fail to demonstrate efficacy and cost effectiveness of

our product and may hinder the adoption of our product or ability to obtain payor coverage.

It is also possible that patients enrolled

in clinical trials will experience adverse side effects that are not currently part of the product candidate’s profile.

product liability losses, and insurance coverage may be inadequate or unavailable to cover these losses.

Our business exposes

us to potential product liability claims that are inherent in the testing, design, manufacture, and sale of medical devices for SI-Joint

surgery procedures.

SI-Joint surgery involves significant risk of serious complications, including bleeding, nerve injury, paralysis,

and even death.

In addition, if longer-term patient results and experience indicates that our product or any component of such product

cause tissue damage, motor impairment, or other adverse effects, we could be subject to significant liability.

Clinicians may misuse

or ineffectively use our product, which may result in unsatisfactory patient outcomes or patient injury.

We could become the subject

of product liability lawsuits alleging that component failures, manufacturing flaws, design defects, or inadequate disclosure of product-related

risks or product-related information resulted in an unsafe condition or injury to patients.

Product liability lawsuits and claims, safety

alerts, or product recalls, regardless of their ultimate outcome, could have a material adverse effect on our business and reputation,

our ability to attract and retain customers and our results of operations or financial condition.

Although we maintain

third-party product liability insurance coverage, it is possible that claims against us may exceed the coverage limits of our insurance

policies or cause us to record a self-insured loss.

Even if any product liability loss is covered by an insurance policy, these policies

typically have substantial retentions or deductibles that we are responsible for.

Product liability claims in excess of applicable insurance

coverage could have a material adverse effect on our business, results of operations, and financial condition.

In addition, any

product liability claim brought against us, with or without merit, could result in an increase of our product liability insurance rates.

Insurance coverage varies in cost and can be difficult to obtain, and we cannot guarantee that we will be able to obtain insurance coverage

in the future on terms acceptable to us or at all.

We are subject

to environmental laws and regulations that can impose significant costs and expose us to potential financial liabilities.

Our business and

facility and those of our contract manufacturer are subject to foreign, federal, state, and local laws and regulations relating to the

protection of human health and the environment, including those governing the use, manufacture, storage, handling, and disposal of, and

exposure to, such materials and wastes.

In addition, under some environmental laws and regulations, we could be held responsible for

costs relating to any contamination at our past or present facilities and at third-party waste disposal sites even if such contamination

our clinical trials are completed as planned, we cannot be certain that their results will support our product marketing claims or third

party reimbursors will agree with our conclusions regarding them.

The clinical trial process may fail to demonstrate efficacy and cost

effectiveness of our products and may hinder the adoption of our products or ability to obtain payor coverage.

It is also possible that

patients enrolled in clinical trials will experience adverse side effects that are not currently part of the product candidate’s

may incur product liability losses, and insurance coverage may be inadequate or unavailable to cover these losses.

business exposes us to potential product liability claims that are inherent in the testing, design, manufacture, and sale of medical

devices for SI Joint surgery procedures.

SI Joint surgery involves significant risk of serious complications, including bleeding, nerve

injury, paralysis, and even death.

In addition, if longer-term patient results and experience indicates that our products or any component

of such products cause tissue damage, motor impairment, or other adverse effects, we could be subject to significant liability.

may misuse or ineffectively use our product, which may result in unsatisfactory patient outcomes or patient injury.

We could become the

subject of product liability lawsuits alleging that component failures, manufacturing flaws, design defects, or inadequate disclosure

of product-related risks or product-related information resulted in an unsafe condition or injury to patients.

Product liability lawsuits

and claims, safety alerts, or product recalls, regardless of their ultimate outcome, could have a material adverse effect on our business

and reputation, our ability to attract and retain customers and our results of operations or financial condition.

we maintain third-party product liability insurance coverage, it is possible that claims against us may exceed the coverage limits of

our insurance policies or cause us to record a self-insured loss.

Even if any product liability loss is covered by an insurance policy,

these policies typically have substantial retentions or deductibles that we are responsible for.

Product liability claims in excess of

applicable insurance coverage could have a material adverse effect on our business, results of operations, and financial condition.

addition, any product liability claim brought against us, with or without merit, could result in an increase of our product liability

insurance rates.

Insurance coverage varies in cost and can be difficult to obtain, and we cannot guarantee that we will be able to obtain

insurance coverage in the future on terms acceptable to us or at all.

are subject to environmental laws and regulations that can impose significant costs and expose us to potential financial liabilities.

business and facility and those of our contract manufacturer are subject to foreign, federal, state, and local laws and regulations relating

to the protection of human health and the environment, including those governing the use, manufacture, storage, handling, and disposal

of, and exposure to, such materials and wastes.

In addition, under some environmental laws and regulations, we could be held responsible

for costs relating to any contamination at our past or present facilities and at third-party waste disposal sites even if such contamination

was not caused by us.

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Any such expenses or liability could have a significant negative impact on our business, results of operations, and financial condition.

legislation may materially affect our financial condition, results of operations and cash flows.

The Tax Cuts and

Jobs Act (the “Tax Act”) has significantly changed the U.S.

tax legislation may materially affect our financial condition, results of operations and cash flows.

Tax Cuts and Jobs Act (the “Tax Act”) has significantly changed the U.S.

federal income taxation of U.S.

businesses, including by reducing

corporate income tax rate, limiting interest deductions, permitting immediate expensing of certain capital expenditures, modifying

or repealing many business deductions and credits.

The Coronavirus

Aid, Relief, and Economic Security Act (the “CARES Act”) modifies certain provisions of the Tax Act, including increasing

the amount of interest expense that may be deducted.

The Tax Act as

modified by the CARES Act is unclear in many respects and could be subject to potential amendments and technical corrections, as well

as interpretations and implementing regulations by the Treasury and IRS, any of which could lessen or increase certain adverse impacts

of the legislation.

businesses, including

by reducing the U.S.

corporate income tax rate, limiting interest deductions, permitting immediate expensing of certain capital expenditures,

modifying or repealing many business deductions and credits.

Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) modifies certain provisions of the Tax Act, including

increasing the amount of interest expense that may be deducted.

Tax Act as modified by the CARES Act is unclear in many respects and could be subject to potential amendments and technical corrections,

as well as interpretations and implementing regulations by the Treasury and IRS, any of which could lessen or increase certain adverse

impacts of the legislation.

In addition, it is unclear how these U.S.

federal income tax changes will affect state and local taxation, which

often uses federal taxable income as a starting point for computing state and local tax liabilities.

federal income tax changes will affect state and local taxation,

which often uses federal taxable income as a starting point for computing state and local tax liabilities.

Our analysis and interpretation

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While some of the changes made by the tax legislation may adversely affect us, other changes may be beneficial.

continue to work with our tax advisors to determine the full impact that the recent tax legislation as a whole will have

We urge our investors to consult with their legal and tax advisors with respect to such legislation and its potential effect on

an investment in our common stock.

Risks Related

to Our Intellectual Property

to protect our intellectual property and proprietary technology is uncertain.

We rely primarily on patent, copyright, trademark and trade secret

laws, as well as confidentiality and non- disclosure agreements and other methods, to protect our proprietary technologies and know-how.

As of March 26, 2025, we owned 12 issued patents (eight domestic and four foreign), 23 pending patent applications (21 domestic and two

foreign), thirteen registered trademarks (seven domestic and six foreign) and twelve pending domestic trademark applications.

We have applied

for patent protection relating to certain existing and proposed products and processes.

While we generally apply for patents in those

countries where we intend to make, have made, use, or sell patented products, we may not accurately predict all the countries where patent

protection will ultimately be desirable.

If we fail to timely file a patent application in any such country, we may be precluded from

doing so later.

continue to work with our tax advisors to determine the full impact that the recent tax legislation as a whole will have on us.

our investors to consult with their legal and tax advisors with respect to such legislation and its potential effect on an investment

in our common stock.

Related to Our Intellectual Property

ability to protect our intellectual property and proprietary technology is uncertain.

rely primarily on patent, copyright, trademark and trade secret laws, as well as confidentiality and non- disclosure agreements and other

methods, to protect our proprietary technologies and know-how.

As of March 27, 2026, we owned 40 issued patents (31 domestic and 9 foreign),

32 pending patent applications (21 domestic and 19 foreign), 20 registered trademarks (21 domestic and 6 foreign) and 1 pending domestic

trademark application.

have applied for patent protection relating to certain existing and proposed products and processes.

While we generally apply for patents

in those countries where we intend to make, have made, use, or sell patented products, we may not accurately predict all the countries

where patent protection will ultimately be desirable.

If we fail to timely file a patent application in any such country, we may be precluded

from doing so later.

Furthermore, we cannot assure you that any of our patent applications will be approved.

The rights granted to us under

our patents, including prospective rights sought in our pending patent applications, may not be meaningful or provide us with any commercial

In addition, those rights could be opposed, contested, or circumvented by our competitors or be declared invalid or unenforceable

in judicial or administrative proceedings.

The failure of our patents to adequately protect our technology might make it easier for our

competitors to offer the same or similar products or technologies.

Competitors may be able to design around our patents or develop products

that provide outcomes which are comparable to ours without infringing on our intellectual property rights.

Due to differences between

foreign and U.S.

patent laws, our patented intellectual property rights may not receive the same degree of protection in foreign countries

as they would in the United States.

Even if patents are granted outside the United States, effective enforcement in those countries may

not be available.

Since most of our issued patents are for the United States only, we lack a corresponding scope of patent protection

in other countries.

In countries where we do not have significant patent protection, we may not be able to stop a competitor from marketing

products in such countries that are the same as or similar to our product.

We plan to rely

on our trademarks, trade names and brand names to distinguish our product from the products of our competitors and have registered or

applied to register many of these trademarks.

The rights granted to us

under our patents, including prospective rights sought in our pending patent applications, may not be meaningful or provide us with any

commercial advantage.

In addition, those rights could be opposed, contested, or circumvented by our competitors or be declared invalid

or unenforceable in judicial or administrative proceedings.

The failure of our patents to adequately protect our technology might make

it easier for our competitors to offer the same or similar products or technologies.

Competitors may be able to design around our patents

or develop products that provide outcomes which are comparable to ours without infringing on our intellectual property rights.

differences between foreign and U.S.

patent laws, our patented intellectual property rights may not receive the same degree of protection

in foreign countries as they would in the United States.

Even if patents are granted outside the United States, effective enforcement

in those countries may not be available.

Since most of our issued patents are for the United States only, we lack a corresponding scope

of patent protection in other countries.

In countries where we do not have significant patent protection, we may not be able to stop

a competitor from marketing products in such countries that are the same as or similar to our product.

plan to rely on our trademarks, trade names and brand names to distinguish our products from the products of our competitors and have

registered or applied to register many of these trademarks.

We cannot assure you that our trademark applications will be approved.

Third parties may

also oppose our trademark applications, or otherwise challenge our use of the trademarks.

In the event that our trademarks are successfully

challenged, we could be forced to rebrand our product, which could result in loss of brand recognition, and could require us to devote

resources to advertising and marketing new brands.

Further, we cannot assure you that competitors will not infringe upon our trademarks,

or that we will have adequate resources to enforce our trademarks.

We also rely on

trade secrets, know-how, and technology, which are not protected by patents, to maintain our competitive position.

We try to protect

this information by entering into confidentiality and intellectual property assignment agreements with parties that develop intellectual

property for us and/or have access to it, such as our officers, employees, consultants, contract manufacturers and advisors.

in the event of unauthorized use or disclosure or other breaches of such agreements, we may not be provided with meaningful protection

for our trade secrets or other proprietary information.

parties may also oppose our trademark applications, or otherwise challenge our use of the trademarks.

In the event that our trademarks

are successfully challenged, we could be forced to rebrand our product, which could result in loss of brand recognition, and could require

us to devote resources to advertising and marketing new brands.

Further, we cannot assure you that competitors will not infringe upon

our trademarks, or that we will have adequate resources to enforce our trademarks.

also rely on trade secrets, know-how, and technology, which are not protected by patents, to maintain our competitive position.

to protect this information by entering into confidentiality and intellectual property assignment agreements with parties that develop

intellectual property for us and/or have access to it, such as our officers, employees, consultants, contract manufacturers and advisors.

However, in the event of unauthorized use or disclosure or other breaches of such agreements, we may not be provided with meaningful

protection for our trade secrets or other proprietary information.

In addition, our trade secrets may otherwise become known or be independently

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our business, financial condition, and results of operations could be materially adversely affected.

In the future,

we may enter into licensing agreements to maintain our competitive position.

If we enter into in-bound intellectual property license

agreements, we may not be able to fully protect the licensed intellectual property rights or maintain those licenses.

Future licensors

could retain the right to prosecute and defend the intellectual property rights licensed to us, in which case we would depend on the

ability of our licensors to obtain, maintain, and enforce intellectual property protection for the licensed intellectual property.

licensors may determine not to pursue litigation against other companies or may pursue such litigation less aggressively than we would.

Further, entering into such license agreements could impose various diligence, commercialization, royalty, or other obligations on us.

Future licensors may allege that we have breached our license agreement with them, and accordingly seek damages or to terminate our license,

which could adversely affect our competitive business position and harm our business prospects.

If a competitor

infringes upon one of our patents, trademarks, or other intellectual property rights, enforcing those patents, trademarks, and other

rights may be difficult and time consuming.

Even if successful, litigation to defend our patents and trademarks against challenges or

to enforce our intellectual property rights could be expensive and time consuming and could divert management’s attention from

the future, we may enter into licensing agreements to maintain our competitive position.

If we enter into in-bound intellectual property

license agreements, we may not be able to fully protect the licensed intellectual property rights or maintain those licenses.

licensors could retain the right to prosecute and defend the intellectual property rights licensed to us, in which case we would depend

on the ability of our licensors to obtain, maintain, and enforce intellectual property protection for the licensed intellectual property.

These licensors may determine not to pursue litigation against other companies or may pursue such litigation less aggressively than we

Further, entering into such license agreements could impose various diligence, commercialization, royalty, or other obligations

Future licensors may allege that we have breached our license agreement with them, and accordingly seek damages or to terminate

our license, which could adversely affect our competitive business position and harm our business prospects.

a competitor infringes upon one of our patents, trademarks, or other intellectual property rights, enforcing those patents, trademarks,

and other rights may be difficult and time consuming.

Even if successful, litigation to defend our patents and trademarks against challenges

or to enforce our intellectual property rights could be expensive and time consuming and could divert management’s attention from

managing our business.

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that we make, have made, use, or sell, it may be impractical for us to enforce this intellectual property against those third parties.

subject to damages resulting from claims that we, our employees, or independent distributors along with their independent sales representatives

have wrongfully used or disclosed alleged trade secrets of our competitors or are in breach of non-competition or non-solicitation agreements

with our competitors.

Many of our employees

were previously employed at other medical device companies, including our competitors or potential competitors, in some cases until recently.

Some independent distributors and their independent sales representatives sell, or in the past have sold, products of our competitors.

We may be subject to claims that we, our employees or independent sales personnel have inadvertently or otherwise used or disclosed trade

secrets or other proprietary information of these former employers or competitors.

In addition, we have been and may in the future be

subject to claims that we caused an employee to breach the terms of his or her non-competition or non-solicitation agreement.

we are successful in defending against these claims, litigation could result in substantial costs, divert the attention of management

from our core business and harm our reputation.

If our defense to those claims fails, in addition to paying monetary damages, we may

lose valuable intellectual property rights or personnel.

There can be no assurance that this type of litigation will not continue, and

any future litigation or the threat thereof may adversely affect our ability to hire additional direct sales representatives.

may be subject to damages resulting from claims that we, our employees, or independent distributors along with their independent sales

representatives have wrongfully used or disclosed alleged trade secrets of our competitors or are in breach of non-competition or non-solicitation

agreements with our competitors.

of our employees were previously employed at other medical device companies, including our competitors or potential competitors, in some

cases until recently.

Some independent distributors and their independent sales representatives sell, or in the past have sold, products

of our competitors.

We may be subject to claims that we, our employees or independent sales personnel have inadvertently or otherwise

used or disclosed trade secrets or other proprietary information of these former employers or competitors.

In addition, we have been

and may in the future be subject to claims that we caused an employee to breach the terms of his or her non-competition or non-solicitation

Even if we are successful in defending against these claims, litigation could result in substantial costs, divert the attention

of management from our core business and harm our reputation.

If our defense to those claims fails, in addition to paying monetary damages,

we may lose valuable intellectual property rights or personnel.

There can be no assurance that this type of litigation will not continue,

and any future litigation or the threat thereof may adversely affect our ability to hire additional direct sales representatives.

of key personnel or their work product could hamper or prevent our ability to commercialize product candidates, which could have an adverse

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

device industry is characterized by patent litigation, and we could become subject to litigation that could be costly, result in the

diversion of management’s time and efforts, require us to pay damages, and/or prevent us from developing or marketing our existing

or future products.

Our commercial

success will depend in part on not infringing the patents or violating the other proprietary rights of third parties.

Significant litigation

regarding patent rights exists in our industry.

medical device industry is characterized by patent litigation, and we could become subject to litigation that could be costly, result

in the diversion of management’s time and efforts, require us to pay damages, and/or prevent us from developing or marketing our

existing or future products.

commercial success will depend in part on not infringing the patents or violating the other proprietary rights of third parties.

litigation regarding patent rights exists in our industry.

Our competitors in both the United States and abroad, many of which have substantially

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required to pay substantial damages, including treble, or triple, damages if an infringement is found to be willful, and/or royalties

and could be prevented from selling our product unless we obtain a license or are able to redesign our product to avoid infringement.

and could be prevented from selling our products unless we obtain a license or are able to redesign our products to avoid infringement.

Any such license may not be available on reasonable terms, if at all, and there can be no assurance that we would be able to redesign

our product in a way that would not infringe the intellectual property rights of others.

If we fail to obtain any required licenses or

make any necessary changes to our product or technologies, we may have to withdraw our existing product from the market or may be unable

to commercialize one or more of our future products, all of which could have a material adverse effect on our business, results of operations,

and financial condition.

our products in a way that would not infringe the intellectual property rights of others.

If we fail to obtain any required licenses

or make any necessary changes to our products or technologies, we may have to withdraw our existing products from the market or may be

unable to commercialize one or more of our future products, all of which could have a material adverse effect on our business, results

of operations, and financial condition.

If passed into law, patent reform legislation currently pending in the U.S.

Congress could significantly change

the risks associated with bringing or defending a patent infringement lawsuit.

For example, fee shifting legislation could require a

non-prevailing party to pay the attorney fees of the prevailing party in some circumstances.

are limited, and we may not be able to effectively protect our product and business.

Patents have a

limited lifespan.

Congress could significantly

change the risks associated with bringing or defending a patent infringement lawsuit.

For example, fee shifting legislation could require

a non-prevailing party to pay the attorney fees of the prevailing party in some circumstances.

terms are limited, and we may not be able to effectively protect our products and business.

have a limited lifespan.

In the U.S., the natural expiration of a patent is generally 20 years after it is filed.

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patent law could diminish the value of patents in general, thereby impairing our ability to protect our product.

As is the case

with other medical devices companies, our success is heavily dependent on intellectual property, particularly patents.

Obtaining and

enforcing patents in the medical devices industry involves both technological and legal complexity.

is the case with other medical devices companies, our success is heavily dependent on intellectual property, particularly patents.

and enforcing patents in the medical devices industry involves both technological and legal complexity.

Therefore, obtaining and enforcing

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that we might obtain in the future.

be able to protect our intellectual property rights throughout the world.

Filing, prosecuting,

and defending patents on product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual

property rights in some countries outside the U.S.

may not be able to protect our intellectual property rights throughout the world.

prosecuting, and defending patents on product candidates in all countries throughout the world would be prohibitively expensive, and

our intellectual property rights in some countries outside the U.S.

can be less extensive than those in the U.S.

In addition, the laws of some foreign

countries do not protect intellectual property rights to the same extent as federal and state laws in the U.S.

Competitors may use our

technologies in jurisdictions where we have not obtained patent protection to develop their own products and may also export otherwise

infringing products to territories where we have patent protection, but enforcement is not as strong as that in the U.S.

These products

may compete with our product and our patents or other intellectual property rights may not be effective or sufficient to prevent them

from competing.

Many companies

have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.

The legal systems

of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets and other intellectual

property protection, particularly those relating to biotechnology products, which could make it difficult for us to stop the infringement

of our patents or marketing of competing products in violation of our proprietary rights generally.

Proceedings to enforce our patent

rights in foreign jurisdictions, whether or not successful, could result in substantial costs and divert our efforts and attention from

other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications

at risk of not issuing and could provoke third parties to assert claims against us.

We may not prevail in any lawsuits that we initiate,

and the damages or other remedies awarded, if any, may not be commercially meaningful.

Accordingly, our efforts to enforce our intellectual

property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we

develop or license.

unable to protect the confidentiality of our trade secrets, our business and competitive position could be harmed.

In addition to

patent protection, we also rely upon copyright and trade secret protection, as well as non-disclosure agreements and invention assignment

agreements with our employees, consultants, contract manufacturers and third parties, to protect our confidential and proprietary information.

In addition to contractual measures, we try to protect the confidential nature of our proprietary information using commonly accepted

physical and technological security measures.

Such measures may not, for example, in the case of misappropriation of a trade secret by

an employee or third party with authorized access, provide adequate protection for our proprietary information.

Our security measures

may not prevent an employee or consultant from misappropriating our trade secrets and providing them to a competitor, and recourse we

take against such misconduct may not provide an adequate remedy to protect our interests fully.

In addition, the laws

of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the U.S.

may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and may also export

otherwise infringing products to territories where we have patent protection, but enforcement is not as strong as that in the U.S.

products may compete with our products and our patents or other intellectual property rights may not be effective or sufficient to prevent

them from competing.

companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.

legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets

and other intellectual property protection, particularly those relating to biotechnology products, which could make it difficult for

us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally.

to enforce our patent rights in foreign jurisdictions, whether or not successful, could result in substantial costs and divert our efforts

and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our

patent applications at risk of not issuing and could provoke third parties to assert claims against us.

We may not prevail in any lawsuits

that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful.

Accordingly, our efforts to

enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual

property that we develop or license.

we are unable to protect the confidentiality of our trade secrets, our business and competitive position could be harmed.

addition to patent protection, we also rely upon copyright and trade secret protection, as well as non-disclosure agreements and invention

assignment agreements with our employees, consultants, contract manufacturers and third parties, to protect our confidential and proprietary

In addition to contractual measures, we try to protect the confidential nature of our proprietary information using commonly

accepted physical and technological security measures.

Such measures may not, for example, in the case of misappropriation of a trade

secret by an employee or third party with authorized access, provide adequate protection for our proprietary information.

measures may not prevent an employee or consultant from misappropriating our trade secrets and providing them to a competitor, and recourse

we take against such misconduct may not provide an adequate remedy to protect our interests fully.

Unauthorized parties may also attempt

to copy or reverse engineer certain aspects of our product that we consider proprietary.

to copy or reverse engineer certain aspects of our products that we consider proprietary.

Enforcing a claim that a party illegally disclosed

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

Third parties

may assert that our employees or consultants have wrongfully used or disclosed confidential information or misappropriated trade secrets.

We employ individuals

who previously worked with other companies, including our competitors or potential competitors.

Although we try to ensure that our employees

and consultants do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we

or our employees, consultants or independent contractors have inadvertently or otherwise used or disclosed intellectual property, including

trade secrets or other proprietary information, of a former employer or other third party.

Litigation may be necessary to defend against

these claims.

If we fail in defending any such claims or settling those claims, in addition to paying monetary damages or a settlement

payment, we may lose valuable intellectual property rights or personnel.

Even if we are successful in defending against such claims,

litigation could result in substantial costs and be a distraction to management and other employees.

Risks Related

to the Ownership of our Common Stock and Warrants

trading market for our shares may not be sustained.

Although our shares

are listed on The Nasdaq Stock Market LLC, the market for our shares has demonstrated varying levels of trading activity.

level of trading may not be sustained in the future.

The lack of an active market for our shares may impair investors’ ability

to sell their shares at the time they wish to sell them or at a price that they consider reasonable, may reduce the fair market value

of their shares and may impair our ability to raise capital to continue to fund operations by selling shares and may impair our ability

to acquire additional intellectual property assets by using our shares as consideration.

of substantial amounts of our common stock could adversely affect the market price of our common stock.

We may choose to raise additional capital due

to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans.

If additional capital is raised through the sale of equity or convertible debt securities, or perceptions that those sales could occur,

the issuance of these securities could result in further dilution to investors purchasing our common stock in this offering or result

in downward pressure on the price of our common stock, and our ability to raise capital in the future.

We currently have an equity financing

facility with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which we may sell up to $10 million in shares of

common stock to Lincoln Park, all of which are covered by an effective registration statement that we have filed with the SEC.

26, 2025, we have issued and sold 48,848 shares to Lincoln Park and may further sell approximately $9.7 million in additional shares to

Lincoln Park.

We have effected

one for eight and a one for ten reverse stock splits in the last two years and we may not be able to cure a Nasdaq listing deficiency

if our stock price falls below $0.32 per share.

Under Nasdaq rules,

a reverse stock split taken together with all other reverse stock splits that are effected in a two year period that is in excess of

one for two hundred fifty (1:250) will not be accepted by Nasdaq as a method to regain compliance with the Bid Price Rule.

Since November

2, 2023, we have affected two reverse stock splits which collectively are considered to have a ratio of one for eighty (1:80).

until November 3, 2025, Nasdaq will not accept additional reverse stock splits effected by us with a ratio greater than 1:3.125 as a

method to regain compliance with the Bid Price Rule.

Accordingly, until November 3, 2025, a reverse stock split acceptable to Nasdaq

would likely not cure noncompliance with the Bid Price Rule if our stock was trading at or about $0.32 per share.

If such an event were

to occur, there is no certainty that any corporate action we could take or any event would occur that would result in an increase in

our stock price necessary for us to regain compliance prior or allow for a reverse stock split with a ratio of 1:3.125 or less to result

in compliance prior to a delisting of our common stock.

A delisting of

our common stock and our inability to list on another national securities market could negatively impact us by:

(i) reducing the liquidity

and market price of our common stock;

(ii) reducing the number of investors willing to hold or acquire our common stock, which could

negatively impact our ability to raise equity financing;

(iii) limiting our ability to use certain registration statements to offer and

sell freely tradable securities, thereby limiting our ability to access the public capital markets;

and (iv) impairing our ability to

provide equity incentives to our employees.

price of our common stock has been and is likely to continue to be highly volatile and could be subject to wide fluctuations in response

to various factors, some of which are beyond our control.

Our share price

is highly volatile.

During the period from January 1, 2023, to March 26, 2025 the closing price of our common stock ranged from a high

of $208.80 per share to a low of $0.98 per share.

The stock market in general has experienced extreme volatility that has often been

unrelated to the operating performance of particular companies.

As a result of this volatility, you may not be able to sell your common

stock at or above the public offering price and you may lose some or all of your investment.

A Preferred Stock and Series B Preferred Stock rank senior to our common stock.

Our Series A Preferred

Stock and Series B Preferred Stock rank, with respect to rights on the distribution of assets on any voluntary or involuntary liquidation,

dissolution or winding up of the affairs of our company, and redemption rights, senior to our common stock and each other class or series

of securities now existing or hereafter authorized classified or reclassified, the terms of which do not expressly provide that such

class or series ranks on a parity basis with or senior to the Series A Preferred Stock and Series B Preferred Stock as to rights on the

distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of our company, and redemption

of Series A Preferred Stock, the Series B Preferred Stock or the exercise of the Tradeable Warrants, Note Warrants, the Series A Warrants,

the Series B Warrants, the New Warrants may cause significant dilution to our stockholders.

As of March 26, 2025, we have issued 256,968 shares of Series A Preferred

Stock, which are convertible into 788,587 shares of common stock;

86,454 shares of Series B Preferred Stock, which are convertible into

108,074 shares of common stock;

Tradeable Warrants with 250,000 underlying shares of common stock;

Note Warrants with 5,625 underlying

shares of common stock;

Series A Warrants with 48,187 underlying shares of common stock, Series B Warrants with 16,214 underlying shares

of common stock and New Warrants with 3,668,550 underlying shares of common stock.

The issuance of shares of common stock upon the conversion

of such shares of preferred stock or exercise of any of such warrants would dilute the percentage ownership interest of holders of our

common stock, dilute the book value per share of our common stock, and increase the number of our publicly traded shares, which could

further depress the market price of our common stock.

In addition, the

Series A Warrants, Series B Warrants and the Note Warrants contain weighted average anti-dilution provisions which, subject to limited

exceptions, would increase the number of shares issuable upon exercise of such securities (by reducing the exercise price) in the event

that we in the future issue common stock, or securities convertible into or exercisable to purchase common stock, at a price per share

lower than the exercise price then in effect.

If securities

or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading

volume could decline.

The trading market

for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business.

If too few securities or industry analysts provide coverage or if one or more of the analysts who cover us downgrade our stock or publish

inaccurate or unfavorable research about our business, the price of our stock would likely decline.

If one or more of these analysts

cease coverage of us or fail to publish reports on us regularly, demand for our stock could decrease, which might cause the price of

our stock and trading volume to decline.

of our common stock may be volatile, and you may be unable to resell your shares at or above the price paid.

The trading price

of our common stock may fluctuate substantially.

The market price of our common stock may fluctuate higher or lower, depending on many

factors, some of which are beyond our control and may not be related to our operating performance.

These fluctuations could cause you

to lose all or part of your investment in our common stock.

parties may assert that our employees or consultants have wrongfully used or disclosed confidential information or misappropriated trade

employ individuals who previously worked with other companies, including our competitors or potential competitors.

Although we try to

ensure that our employees and consultants do not use the proprietary information or know-how of others in their work for us, we may be

subject to claims that we or our employees, consultants or independent contractors have inadvertently or otherwise used or disclosed

intellectual property, including trade secrets or other proprietary information, of a former employer or other third party.

may be necessary to defend against these claims.

If we fail in defending any such claims or settling those claims, in addition to paying

monetary damages or a settlement payment, we may lose valuable intellectual property rights or personnel.

Even if we are successful in

defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.

Related to the Ownership of our Common Stock and Warrants

active trading market for our shares may not be sustained.

our shares are listed on The Nasdaq Stock Market LLC, the market for our shares has demonstrated varying levels of trading activity.

The current level of trading may not be sustained in the future.

The lack of an active market for our shares may impair investors’

ability to sell their shares at the time they wish to sell them or at a price that they consider reasonable, may reduce the fair market

value of their shares and may impair our ability to raise capital to continue to fund operations by selling shares and may impair our

ability to acquire additional intellectual property assets by using our shares as consideration.

sales of substantial amounts of our common stock could adversely affect the market price of our common stock.

may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds

for our current or future operating plans.

If additional capital is raised through the sale of equity or convertible debt securities,

or perceptions that those sales could occur, the issuance of these securities could result in further dilution to investors purchasing

our common stock in this offering or result in downward pressure on the price of our common stock, and our ability to raise capital in

are currently listed on The Nasdaq Capital Market.

Failure to maintain our compliance with Nasdaq’s continued listing standards

or other requirements could result in our common stock being delisted from Nasdaq, which could adversely affect our liquidity and the

trading volume and market price of our common stock and decrease or eliminate your investment.

common stock is currently listed on the Nasdaq Capital Market on Nasdaq under the symbol “TNON.” Nasdaq requires listed issuers

to comply with certain standards in order to remain listed on its exchange.

We must meet certain standards of the Nasdaq Stock Market

LLC (“Nasdaq”) including, but not limited to financial and liquidity criteria, to maintain the listing of our common stock

If we violate the maintenance requirements for continued listing of our common stock, our common stock may be delisted.

addition, our board of directors may determine that the cost of maintaining our listing on a national securities exchange outweighs the

benefits of such listing.

A delisting of our common stock from Nasdaq for any reason may materially impair our stockholders’ ability

to buy and sell our common stock and could have an adverse effect on the market price of, and the efficiency of the trading market for,

our common stock.

In addition, the delisting of our common stock could significantly impair our ability to raise capital.

February 25, 2026, we received a letter (the “Notification Letter”) from the Nasdaq Listing Qualifications Staff of Nasdaq

stating that for the 30 consecutive business day period between January 9, 2026 and February 24, 2026, our common stock had not maintained

a minimum closing bid price of $1.00 per share which is required for continued listing on Nasdaq.

We were provided an initial period

of 180 calendar days, or until August 24, 2026 (the “Compliance Period”), to regain compliance with the Bid Price Rule.

regain compliance, the closing bid price of the our common stock must be at least $1.00 per share for a minimum of 10 consecutive business

days during the Compliance Period.

we do not regain compliance with the Bid Price Rule by August 24, 2026, we may be eligible for an additional 180-day period to regain

To qualify, the we would have to meet the continued listing requirement for market value of publicly held shares and all

other initial listing standards for Nasdaq, with the exception of the Bid Price Rule, and would need to provide written notice of its

intention to cure the bid price deficiency during the second compliance period, by effecting a reverse stock split, if necessary.

we cannot regain compliance during the Compliance Period or any subsequently granted compliance period, our common stock will be subject

to delisting.

At that time, we may appeal the delisting determination to a Nasdaq hearings panel.

notice from Nasdaq has no immediate effect on the listing of our common stock, which will continue to be listed Nasdaq under the symbol

“TNON.” We are currently evaluating our options for regaining compliance with the Bid Price Rule.

There can be no assurance

that we will regain compliance with the Bid Price Rule or maintain compliance with any of the other Nasdaq continued listing requirements.

Additionally, in January 2026, Nasdaq proposed a rule change that would

require companies listed on the Nasdaq Global and Capital Markets to maintain a minimum market value of listed securities (“MVLS”)

of at least $5 million.

If adopted, this requirement would represent an additional continued listing standard applicable to our common

Under the proposed rule, if a company’s MVLS falls below $5 million for 30 consecutive business days, Nasdaq would immediately

suspend trading and delist the company’s securities, with no compliance or cure period.

Unlike some other Nasdaq listing deficiencies,

the proposed rule would not provide an opportunity to regain compliance prior to suspension, and a hearing request would not stay the

suspension of trading.

market value of our common stock may fluctuate significantly due to a number of factors, many of which are outside of our control, including

market conditions, investor sentiment toward small-cap companies, our operating performance, and general economic conditions.

we may be unable to maintain the required MVLS threshold at all times.

If this proposed rule is approved and adopted, any sustained decline in our MVLS below $5 million could result

in the immediate suspension and delisting of our common stock from Nasdaq.

delisting of our common stock and our inability to list on another national securities market could negatively impact us by:

the liquidity and market price of our common stock;

(ii) reducing the number of investors willing to hold or acquire our common stock,

which could negatively impact our ability to raise equity financing;

(iii) limiting our ability to use certain registration statements

to offer and sell freely tradable securities, thereby limiting our ability to access the public capital markets;

and (iv) impairing our

ability to provide equity incentives to our employees.

delisting determination by Nasdaq could seriously decrease or eliminate the value of an investment in our common stock and other securities

linked to our common stock.

While a listing on an over-the-counter exchange could maintain some degree of a market in our common stock,

we could face substantial material adverse consequences, including, but not limited to, the following:

availability for market quotations for our common stock;

liquidity with respect to and decreased trading prices of our common stock;

determination that shares of our common stock are “penny stock” under SEC rules,

subjecting brokers trading our common stock to more stringent rules on disclosure and the

class of investors to which the broker may sell the common stock;

news and analyst coverage for our Company, in part due to the “penny stock” rules;

ability to issue additional securities or obtain additional financing in the future;

breaches under or terminations of our agreements with current or prospective large stockholders,

strategic investors and banks.

perception among investors that we are at heightened risk of delisting could also negatively affect the market price of our securities

and trading volume of our common stock.

on March 26, 2026, the closing price of our common stock was $0.7342 per share.

Pursuant to Nasdaq Rule 5810(c)(3)(A)(iii), if the closing price

of our common stock is $0.10 or less for 10 consecutive trading days, we will be issued a Staff Delisting Determination by Nasdaq.

we receive a Staff Delisting Determination Letter resulting from our common stock trading at or below $0.10 for 10 consecutive trading

days, we will have 7 calendar days to request a hearing before a Nasdaq hearings panel to review the Staff Delisting Determination, which

will determine the delisting of our common stock by Nasdaq.

A hearing would then take place within 45 days of the hearing request to

determine whether or not our common stock would be delisted.

If, in the future, we receive a Staff Delisting Determination there can

be no assurance that we would be successful in preventing a determination by the Nasdaq hearing panel that our stock will be delisted.

trading price of our common stock has been and is likely to continue to be highly volatile and could be subject to wide fluctuations

in response to various factors, some of which are beyond our control.

share price is highly volatile.

During the period from January 1, 2024, to March 27, 2026 the closing price of our common stock ranged

from a high of $12.80 per share to a low of $0.6659 per share.

The stock market in general has experienced extreme volatility that has

often been unrelated to the operating performance of particular companies.

As a result of this volatility, you may not be able to sell

your common stock at or above the public offering price and you may lose some or all of your investment.

Series A Preferred Stock and Series B Preferred Stock rank senior to our common stock.

Series A Preferred Stock and Series B Preferred Stock rank, with respect to rights on the distribution of assets on any voluntary or

involuntary liquidation, dissolution or winding up of the affairs of our company, and redemption rights, senior to our common stock and

each other class or series of securities now existing or hereafter authorized classified or reclassified, the terms of which do not expressly

provide that such class or series ranks on a parity basis with or senior to the Series A Preferred Stock and Series B Preferred Stock

as to rights on the distribution of assets on any voluntary or involuntary liquidation, dissolution or winding up of the affairs of our

company, and redemption rights.

of Series A Preferred Stock, Series B Preferred Stock or the Convertible Promissory Notes or the exercise of the Offering Warrants, Note

Warrants, Series A Warrants, Series B Warrants, Series C Warrants, Series D Warrants (as defined below), Series E Warrants (as defined

below) or PIPE Warrants may cause significant dilution to our stockholders.

of March 27, 2026, we have issued 204,159 shares of Series A Preferred Stock, which are convertible into 1,553,456 shares of common stock,

86,454 shares of Series B Preferred Stock, which are convertible into 268,624 shares of common stock and $5.16 million of Convertible

Promissory Notes, which are convertible into up to 32,929,164 shares of our common stock.

We also have the following outstanding warrants:

June 2023, in connection with a registered offering of stock, we issued warrants to purchase

a total of 250,000 shares of our common stock at an exercise price which was reset on July

16, 2023 to $25.168 per share (the “Offering Warrants”).

The Offering Warrants

were exercisable upon issuance and will expire five years from the date of issuance.

to purchase a total of 207,484 are outstanding at March 27, 2026.

November 2023, in connection with the issuance of convertible notes, we issued warrants to

purchase a total of 5,625 shares of our common stock at an exercise price equal to $15.52

per share (the “Note Warrants”).

The Note Warrants expire five years from the

issuance date.

February 20, 2024, in connection with the issuance of Series A Preferred Stock, we issued

warrants to purchase a total of 51,937 shares of our common stock at an exercise price equal

to $4.28 per share (the “Series A Warrants”).

The Series A Warrants were exercisable

upon issuance and expire five years from the date of issuance.

September 5, 2024, in connection with the issuance of Series B Preferred Stock, we issued

warrants to purchase a total of 16,214 shares of our common stock at an exercise price equal

to $4.28 per share (the “Series B Warrants”).

The Series B Warrants were exercisable

upon issuance and expire five years from the date of issuance.

March 11, 2025, in connection with a warrant inducement agreement, we issued unregistered

five-year warrants to purchase up to an aggregate of 2,445,700 shares of our common stock

at an exercise price of $1.25 per share and unregistered three-year warrants to purchase

up to an aggregate of 1,222,850 shares of common stock at an exercise price of $1.25 per

share (the “Series C Warrants”).

The Series C Warrants were exercisable and their

exercise period commenced when approval by our stockholders was received on September 18,

March 26, 2025, in connection with a securities purchase agreement, we issued warrants to

purchase up to 733,500 shares of our common stock at an exercise price of $2.00 per share

(the “Series D Warrants”), which were exercisable upon issuance, and will expire

five years following the date of issuance.

March 27, 2025, in connection with a securities purchase agreement, we issued warrants to

purchase up to 1,271,500 shares of our common stock at an exercise price of $2.00 per share

(the “Series E Warrants”), which were exercisable upon issuance, and will expire

five years following the date of issuance.

November 11, 2025, in connection with the PIPE, we issued warrants to purchase 2,217,904

shares of our common stock at an exercise price of $1.16 per share, with an expiration date

of 3 years from the date of issuance (the “PIPE Warrants”).

issuance of shares of common stock upon the conversion of such shares of preferred stock or exercise of any of our outstanding warrants

would dilute the percentage ownership interest of holders of our common stock, dilute the book value per share of our common stock, and

increase the number of our publicly traded shares, which could further depress the market price of our common stock.

addition, the Series A Preferred Stock, the Series B Preferred Stock, the Series A Warrants, the Series B Warrants and the Note Warrants

contain weighted average anti-dilution provisions which, subject to limited exceptions, would increase the number of shares issuable

upon exercise of such securities (by reducing the exercise price) in the event that we in the future issue common stock, or securities

convertible into or exercisable to purchase common stock, at a price per share lower than the exercise price then in effect.

securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price

and trading volume could decline.

trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about

us or our business.

If too few securities or industry analysts provide coverage or if one or more of the analysts who cover us downgrade

our stock or publish inaccurate or unfavorable research about our business, the price of our stock would likely decline.

If one or more

of these analysts cease coverage of us or fail to publish reports on us regularly, demand for our stock could decrease, which might cause

the price of our stock and trading volume to decline.

price of our common stock may be volatile, and you may be unable to resell your shares at or above the price paid.

trading price of our common stock may fluctuate substantially.

The market price of our common stock may fluctuate higher or lower, depending

on many factors, some of which are beyond our control and may not be related to our operating performance.

These fluctuations could cause

you to lose all or part of your investment in our common stock.

Factors that could cause fluctuations in the trading price of our common

stock include the following:

actual or anticipated fluctuations in our financial condition and operating results;

actual or anticipated changes in our growth rate relative to our competitors;

commercial success and market acceptance of our product;

success of our competitors in developing or commercializing products;

ability to commercialize or obtain regulatory approvals for our product, or delays in commercializing

or anticipated fluctuations in our financial condition and operating results;

or anticipated changes in our growth rate relative to our competitors;

success and market acceptance of our product;

of our competitors in developing or commercializing products;

to commercialize or obtain regulatory approvals for our product, or delays in commercializing

or obtaining regulatory approvals;

strategic transactions undertaken by us;

additions or departures of key personnel;

product liability claims;

prevailing economic conditions;

disputes concerning our intellectual property or other proprietary rights;

FDA or other U.S.

transactions undertaken by us;

or departures of key personnel;

liability claims;

economic conditions;

concerning our intellectual property or other proprietary rights;

or other U.S.

or foreign regulatory actions affecting us or the healthcare industry;

healthcare reform measures in the United States;

sales of our common stock by our officers, directors or significant stockholders;

future sales or issuances of equity or debt securities by us;

business disruptions caused by earthquakes, fires or other natural disasters;

the exercise and sale of any outstanding warrants or options;

issuance of new or changed securities analysts’ reports or recommendations regarding us;

changes in our capital structure, such as future issuances of debt or equity securities;

short sales, hedging and other derivative transactions involving our capital stock;

general economic and geopolitical conditions, including the current or anticipated impact of military

conflict and related sanctions imposed on Russia by the United States and other countries due to Russia’s recent invasion of

In addition, if

the market for medical device or healthcare stocks or the stock market, in general, experience a loss of investor confidence, the trading

price of our common stock could decline for reasons unrelated to our business, results of operations, or financial condition.

price of our common stock might also decline in reaction to events that affect other companies in our industry even if these events do

not directly affect us.

reform measures in the United States;

of our common stock by our officers, directors or significant stockholders;

sales or issuances of equity or debt securities by us;

disruptions caused by earthquakes, fires or other natural disasters;

exercise and sale of any outstanding warrants or options;

of new or changed securities analysts’ reports or recommendations regarding us;

in our capital structure, such as future issuances of debt or equity securities;

sales, hedging and other derivative transactions involving our capital stock;

economic and geopolitical conditions, including the current or anticipated impact of military

conflict and related sanctions imposed on Russia by the United States and other countries

due to Russia’s invasion of Ukraine.

addition, if the market for medical device or healthcare stocks or the stock market, in general, experience a loss of investor confidence,

the trading price of our common stock could decline for reasons unrelated to our business, results of operations, or financial condition.

The trading price of our common stock might also decline in reaction to events that affect other companies in our industry even if these

events do not directly affect us.

In the past, following periods of volatility in the market price of a company’s securities, securities

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This could have a material adverse effect on our business, results of operations, and financial condition.

Our failure to maintain effective

internal controls over financial reporting could have an adverse impact on us .

We are required

to establish and maintain appropriate internal controls over financial reporting.

Failure to establish those controls, or any failure

of those controls once established, could adversely impact our public disclosures regarding our business, financial condition, or results

of operations.

In addition, management’s assessment of internal controls over financial reporting may identify weaknesses and conditions

that need to be addressed in our internal controls over financial reporting or other matters that may raise concerns for investors.

actual or perceived weaknesses and conditions that need to be addressed in our internal control over financial reporting, disclosure

of management’s assessment of our internal controls over financial reporting or disclosure of our public accounting firm’s

attestation to our report on management’s assessment of our internal controls over financial reporting may have an adverse impact

failure to maintain effective internal control over financial reporting could have an adverse impact on us .

are required to establish and maintain appropriate internal control over financial reporting.

Failure to establish those controls, or

any failure of those controls once established, could adversely impact our public disclosures regarding our business, financial condition,

or results of operations.

In addition, management’s assessment of internal control over financial reporting may identify weaknesses

and conditions that need to be addressed in our internal control over financial reporting or other matters that may raise concerns for

Any actual or perceived weaknesses and conditions that need to be addressed in our internal control over financial reporting,

disclosure of management’s assessment of our internal control over financial reporting or disclosure of our public accounting firm’s

attestation to our report on management’s assessment of our internal control over financial reporting may have an adverse impact

on the price of our common stock.

A control system,

no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system

In addition, the design of a control system must reflect the fact that there are resource constraints, and the benefit of controls

must be relative to their costs.

Because of the inherent limitations in all control systems, no system of controls can provide absolute

assurance that all control issues and instances of fraud, if any, within our Company have been detected.

These inherent limitations include

the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.

controls can be circumvented by individual acts of some persons, by collusion of two or more persons, or by management override of the

The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events,

and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

time, a control may become inadequate because of changes in conditions or the degree of compliance with policies or procedures may deteriorate.

Because of inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected.

At present, management

has identified a material weakness due to lack of segregation of duties.

The lack of segregation of duties existed as a result of our

having no employees until June 2021.

Management has taken steps to remedy this deficiency by its hiring of a Chief Financial Officer, a

director of SEC reporting and compliance, a senior accountant, a cost accountant and external financial consultants, and plans to continue

to add additional resources, technology and headcount as warranted by our growth.

We are in the process of putting proper policies and

procedures in place to ensure that proper documentation is established and maintained for transactions that we enter into.

2024, it was announced that our Chief Financial Officer was retiring effective July 31, 2024 while continuing to assist us as Chief Financial

Officer Advisor.

On August 27, 2024, we announced the hiring of our new Chief Financial Officer, effective September 3, 2024.

While we believe

these efforts will improve our internal controls and address the underlying causes of the material weakness, such material weakness will

not be remediated until our remediation plan has been fully implemented and we have concluded that our controls are operating effectively

for a sufficient period of time.

We cannot be certain that the steps we are taking will be sufficient to remediate the control deficiencies

that led to our material weakness in our internal control over financial reporting or prevent future material weaknesses or control deficiencies

control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of

the control system are met.

In addition, the design of a control system must reflect the fact that there are resource constraints, and

the benefit of controls must be relative to their costs.

Because of the inherent limitations in all control systems, no system of controls

can provide absolute assurance that all control issues and instances of fraud, if any, within our Company have been detected.

These inherent

limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error

Further, controls can be circumvented by individual acts of some persons, by collusion of two or more persons, or by management

override of the controls.

The design of any system of controls is also based in part upon certain assumptions about the likelihood of

future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Over time, a control may become inadequate because of changes in conditions or the degree of compliance with policies or procedures may

Because of inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may

not be detected.

have put in place policies and procedures to ensure that proper documentation is established and maintained for transactions that we

our management has identified a material weakness due to lack of segregation of duties.

Our size has prevented us from being able to

employ sufficient resources to enable us to have an adequate level of supervision and segregation of duties.

Therefore, it is difficult

to effectively segregate accounting duties which comprises a material weakness in internal controls.

This lack of segregation of duties

leads management to conclude that our disclosure controls and procedures are not effective to give reasonable assurance that the information

required to be disclosed in reports that we file under the Exchange Act is recorded, processed, summarized and reported as and when required.

We have implemented controls using

the resources which we do have in an effort to compensate for the material weakness.

While we believe our efforts have improved our internal

controls, our material weakness will not be completely remediated until we have sufficient resources to enable us to have an adequate

segregation of duties.

We cannot be certain that the steps we are taking will be sufficient to remediate the control deficiencies that

led to our material weakness in our internal control over financial reporting or prevent future material weaknesses or control deficiencies

from occurring.

While we are working to remediate the material weakness as timely and efficiently as possible, at this time we cannot

provide an estimate of costs expected to be incurred in connection with the implementation of this remediation plan, nor can we provide

an estimate of the time it will take to complete this remediation plan.

Even if management does establish effective remedial measures,

we cannot guarantee that those internal controls and disclosure controls that we put in place will prevent all possible errors, mistakes,

or all fraud.

Our financial

controls and procedures may not be sufficient to ensure timely and reliable reporting of financial information, which, as a public company,

could materially harm our stock price.

We will require

significant financial resources to maintain our public reporting status.

We cannot assure you we will be able to maintain adequate resources

to ensure that we will not have any future material weakness in our system of internal controls.

The effectiveness of our controls and

procedures may in the future be limited by a variety of factors including:

faulty human judgment and simple errors, omissions or mistakes;

fraudulent action of an individual or collusion of two or more people;

inappropriate management override of procedures;

the possibility that any enhancements to controls and procedures may

still not be adequate to assure timely and accurate financial information.

Our internal control

over financial reporting will be a process designed to provide reasonable assurance regarding the reliability of financial reporting

and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the

United States of America.

Our internal control over financial reporting includes those policies and procedures that (i) pertain to the

maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the

While we are working to remediate

the material weakness as timely and efficiently as possible, at this time we cannot provide an estimate of costs expected to be incurred

in connection with the implementation of this remediation plan, nor can we provide an estimate of the time it will take to complete this

remediation plan.

Even if management does establish effective remedial measures, we cannot guarantee that those internal controls and

disclosure controls that we put in place will prevent all possible errors, mistakes, or all fraud.

financial controls and procedures may not be sufficient to ensure timely and reliable reporting of financial information, which, as a

public company, could materially harm our stock price.

will require significant financial resources to maintain our public reporting status.

We cannot assure you we will be able to maintain

adequate resources to ensure that we will not have any future material weakness in our system of internal controls.

The effectiveness

of our controls and procedures may in the future be limited by a variety of factors including:

human judgment and simple errors, omissions or mistakes;

action of an individual or collusion of two or more people;

● inappropriate

management override of procedures;

possibility that any enhancements to controls and procedures may still not be adequate to

assure timely and accurate financial information.

internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial

reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles

in the United States of America.

Our internal control over financial reporting includes those policies and procedures that (i) pertain

to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets

of the Company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements

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on the financial statements.

Despite these anticipated

controls, because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.

smaller reporting companies like us face additional limitations.

Smaller reporting companies employ fewer individuals and can find it

difficult to employ resources for complicated transactions and effective risk management.

Additionally, smaller reporting companies tend

to utilize general accounting software packages that lack a rigorous set of software controls.

If we fail to have

effective controls and procedures for financial reporting in place, we could be unable to provide timely and accurate financial information

and be subject to investigation by the SEC and civil or criminal sanctions.

We must implement

additional and expensive procedures and controls in order to grow our business and organization and to satisfy reporting requirements,

which will increase our costs and require additional management resources.

As a public company,

we are required to comply with the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) and the related rules and regulations

of the SEC, including the requirements that we maintain disclosure controls and procedures and adequate internal control over financial

Compliance with the Sarbanes-Oxley Act and other SEC and national exchange requirements will increase our costs and require

additional management resources.

We have begun the process of upgrading our procedures and controls and will need to begin implementing

additional procedures and controls as we grow our business and organization and to satisfy new reporting requirements.

If we are unable

to complete the required assessment as to the adequacy of our internal control over financial reporting, as required by Section 404 of

the Sarbanes-Oxley Act or if we fail to establish and maintain internal control over financial reporting, our ability to produce timely,

accurate and reliable periodic financial statements could be impaired.

If we do not establish

and maintain adequate internal control over financial reporting, investors could lose confidence in the accuracy of our periodic reports

filed under the Exchange Act.

Additionally, our ability to obtain additional financing could be impaired or a lack of investor confidence

in the reliability and accuracy of our public reporting could cause our stock price to decline.

subject to securities litigation, which is expensive and could divert our management’s attention.

The market price

of our securities may be volatile, and in the past companies that have experienced volatility in the market price of their securities

have been subject to securities class action litigation.

these anticipated controls, because of its inherent limitations, internal control over financial reporting may not prevent or detect

misstatements.

Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control

Furthermore, smaller reporting companies like us face additional limitations.

Smaller reporting companies employ fewer individuals

and can find it difficult to employ resources for complicated transactions and effective risk management.

Additionally, smaller reporting

companies tend to utilize general accounting software packages that lack a rigorous set of software controls.

we fail to have effective controls and procedures for financial reporting in place, we could be unable to provide timely and accurate

financial information and be subject to investigation by the SEC and civil or criminal sanctions.

must implement additional and expensive procedures and controls in order to grow our business and organization and to satisfy reporting

requirements, which will increase our costs and require additional management resources.

a public company, we are required to comply with the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) and the related

rules and regulations of the SEC, including the requirements that we maintain disclosure controls and procedures and adequate internal

control over financial reporting.

Compliance with the Sarbanes-Oxley Act and other SEC and national exchange requirements will increase

our costs and require additional management resources.

We have begun the process of upgrading our procedures and controls and will need

to begin implementing additional procedures and controls as we grow our business and organization and to satisfy new reporting requirements.

If we are unable to complete the required assessment as to the adequacy of our internal control over financial reporting, as required

by Section 404 of the Sarbanes-Oxley Act or if we fail to establish and maintain internal control over financial reporting, our ability

to produce timely, accurate and reliable periodic financial statements could be impaired.

we do not establish and maintain adequate internal control over financial reporting, investors could lose confidence in the accuracy

of our periodic reports filed under the Exchange Act.

Additionally, our ability to obtain additional financing could be impaired or a

lack of investor confidence in the reliability and accuracy of our public reporting could cause our stock price to decline.

may be subject to securities litigation, which is expensive and could divert our management’s attention.

market price of our securities may be volatile, and in the past companies that have experienced volatility in the market price of their

securities have been subject to securities class action litigation.

We may be the target of this type of litigation in the future.

Securities litigation

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

“emerging growth company” under the JOBS Act of 2012 and we cannot be certain if the reduced disclosure requirements applicable

to emerging growth companies will make our common stock less attractive to investors.

We are an “emerging

growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and we may take advantage

of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging

growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section

404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements,

and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any

golden parachute payments not previously approved.

We cannot predict if investors will find our common stock less attractive because

we may rely on these exemptions.

If some investors find our common stock less attractive as a result, there may be a less active trading

market for our common stock and our stock price may be more volatile.

In addition, Section

107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period

provided in Section 7(a)(2)(B) of the Securities Act of 1933 (the “Securities Act”) for complying with new or revised accounting

In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those

standards would otherwise apply to private companies.

We are choosing to take advantage of the extended transition period for complying

with new or revised accounting standards.

We will remain

an “emerging growth company” until the last day of the fiscal year following the fifth anniversary of the date of the first

sale of our common stock pursuant to an effective registration statement under the Securities Act, although we will lose that status

sooner if our revenues exceed $1.235 billion, if we issue more than $1 billion in non-convertible debt in a three year period, or we

are deemed to be a large accelerated filer under applicable SEC rules.

as an “emerging growth company” under the JOBS Act may make it more difficult to raise capital as and when we need it.

Because of the

exemptions from various reporting requirements provided to us as an “emerging growth company” and because we will have an

extended transition period for complying with new or revised financial accounting standards, we may be less attractive to investors,

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

are an “emerging growth company” under the JOBS Act of 2012 and we cannot be certain if the reduced disclosure requirements

applicable to emerging growth companies will make our common stock less attractive to investors.

are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”),

and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that

are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation

requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic

reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and

shareholder approval of any golden parachute payments not previously approved.

We cannot predict if investors will find our common stock

less attractive because we may rely on these exemptions.

If some investors find our common stock less attractive as a result, there may

be a less active trading market for our common stock and our stock price may be more volatile.

addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended

transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.

words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise

apply to private companies.

We are choosing to take advantage of the extended transition period for complying with new or revised accounting

will remain an “emerging growth company” until the last day of the fiscal year following the fifth anniversary of the date

of the first sale of our common stock pursuant to an effective registration statement under the Securities Act, although we will lose

that status sooner if our revenues exceed $1.235 billion, if we issue more than $1 billion in non-convertible debt in a three year period,

or we are deemed to be a large accelerated filer under applicable SEC rules.

status as an “emerging growth company” under the JOBS Act may make it more difficult to raise capital as and when we need

of the exemptions from various reporting requirements provided to us as an “emerging growth company” and because we will

have an extended transition period for complying with new or revised financial accounting standards, we may be less attractive to investors,

and it may be difficult for us to raise additional capital as and when we need it.

3 unchanged sentences

and adversely affected.

paid dividends in the past and do not expect to pay dividends in the future, and any return on investment may be limited to the value

of our stock.

We have never paid

cash dividends on our common stock and do not anticipate paying cash dividends on our common stock in the foreseeable future.

intend to retain any future earnings to support the development of our business and do not anticipate paying cash dividends in the foreseeable

Our payment of any future dividends will be at the discretion of our board of directors after taking into account various factors,

including, but not limited to, our financial condition, operating results, cash needs, growth plans and the terms of any credit agreements

that we may be a party to at the time.

In addition, our ability to pay dividends on our common stock may be limited by Delaware state

Accordingly, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way

to realize a return on their investment.

Investors seeking cash dividends should not purchase our common stock.

The elimination

of personal liability against our directors and officers under Delaware law and the existence of indemnification rights held by our directors,

officers and employees may result in substantial expenses.

Our amended and

restated certificate of incorporation, as amended (“Certificate of Incorporation”), and our bylaws (“Bylaws”)

have not paid dividends in the past and do not expect to pay dividends in the future, and any return on investment may be limited to

the value of our stock.

have never paid cash dividends on our common stock and do not anticipate paying cash dividends on our common stock in the foreseeable

We currently intend to retain any future earnings to support the development of our business and do not anticipate paying cash

dividends in the foreseeable future.

Our payment of any future dividends will be at the discretion of our board of directors after taking

into account various factors, including, but not limited to, our financial condition, operating results, cash needs, growth plans and

the terms of any credit agreements that we may be a party to at the time.

In addition, our ability to pay dividends on our common stock

may be limited by Delaware state law.

Accordingly, investors must rely on sales of their common stock after price appreciation, which

may never occur, as the only way to realize a return on their investment.

Investors seeking cash dividends should not purchase our common

elimination of personal liability against our directors and officers under Delaware law and the existence of indemnification rights held

by our directors, officers and employees may result in substantial expenses.

amended and restated certificate of incorporation, as amended (“Certificate of Incorporation”), and our bylaws (“Bylaws”)

eliminate the personal liability of our directors and officers to us and our stockholders for damages for breach of fiduciary duty as

9 unchanged sentences

their fiduciary duties, even if such actions might otherwise benefit our stockholders.

Our Certificate

of Incorporation designates the Court of Chancery of the State of Delaware as the exclusive forum for certain litigation that may be

initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with

Our Certificate

of Incorporation specifies that, except for claims arising under federal securities laws, unless we consent in writing to the selection

of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (a) any derivative

action or proceeding brought on behalf of the Company, (b) any action asserting a claim of breach of a fiduciary duty owed by any director,

officer, employee or agent of the Company to the Company or the Company’s stockholders, (c) any action asserting a claim arising

pursuant to any provision of the Delaware General Corporation Law, our Certificate of Incorporation or Bylaws, or (d) any action asserting

a claim governed by the internal affairs doctrine, in each case subject to said Court of Chancery having personal jurisdiction over the

indispensable parties named as defendants therein.

Any person or entity purchasing or otherwise acquiring any interest in shares of our

capital stock shall be deemed to have notice of and to have consented to the provisions of our Certificate of Incorporation as described

This choice of

forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with

us or any of our directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such claims.

such, stockholders of the Company seeking to bring a claim regarding the internal affairs of the Company may be subject to increased

Certificate of Incorporation designates the Court of Chancery of the State of Delaware as the exclusive forum for certain litigation

that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for

disputes with us.

Certificate of Incorporation specifies that, except for claims arising under federal securities laws, unless we consent in writing to

the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (a) any

derivative action or proceeding brought on behalf of the Company, (b) any action asserting a claim of breach of a fiduciary duty owed

by any director, officer, employee or agent of the Company to the Company or the Company’s stockholders, (c) any action asserting

a claim arising pursuant to any provision of the Delaware General Corporation Law, our Certificate of Incorporation or Bylaws, or (d)

any action asserting a claim governed by the internal affairs doctrine, in each case subject to said Court of Chancery having personal

jurisdiction over the indispensable parties named as defendants therein.

Any person or entity purchasing or otherwise acquiring any interest

in shares of our capital stock shall be deemed to have notice of and to have consented to the provisions of our Certificate of Incorporation

as described above.

choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes

with us or any of our directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such claims.

As such, stockholders of the Company seeking to bring a claim regarding the internal affairs of the Company may be subject to increased

costs associated with litigating in Delaware as opposed to their home state or other forum, precluded from bringing such a claim in a

4 unchanged sentences

which could harm our business, operating results and financial condition.

We believe these

provisions benefit us by providing increased consistency in the application of Delaware law by chancellors particularly experienced in

resolving corporate disputes, efficient administration of cases on a more expedited schedule relative to other forums and protection

against the burdens of multi-forum litigation.

However, the provision may have the effect of discouraging lawsuits against our directors,

officers, employees, and agents as it may limit any stockholder’s ability to bring a claim in a judicial forum that such stockholder

finds favorable for disputes with us or our directors, officers, employees or agents.

The enforceability of similar choice of forum provisions

in other companies’ certificates of incorporation has been challenged in legal proceedings, and it is possible that, in connection

with any applicable action brought against us, a court could find the choice of forum provisions contained in our Certificate of Incorporation

to be inapplicable or unenforceable in such action.

If a court were to find the choice of forum provision contained in our Certificate

of Incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action

in other jurisdictions, which could adversely affect our business, financial condition or results of operations.

believe these provisions benefit us by providing increased consistency in the application of Delaware law by chancellors particularly

experienced in resolving corporate disputes, efficient administration of cases on a more expedited schedule relative to other forums

and protection against the burdens of multi-forum litigation.

However, the provision may have the effect of discouraging lawsuits against

our directors, officers, employees, and agents as it may limit any stockholder’s ability to bring a claim in a judicial forum that

such stockholder finds favorable for disputes with us or our directors, officers, employees or agents.

The enforceability of similar

choice of forum provisions in other companies’ certificates of incorporation has been challenged in legal proceedings, and it is

possible that, in connection with any applicable action brought against us, a court could find the choice of forum provisions contained

in our Certificate of Incorporation to be inapplicable or unenforceable in such action.

If a court were to find the choice of forum provision

contained in our Certificate of Incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated

with resolving such action in other jurisdictions, which could adversely affect our business, financial condition or results of operations.

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

What changed 10-K

Item 1A. Risk Factors