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Aclarion, Inc.

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Business Summary

Aclarion, Inc. is a healthcare technology company that leverages Magnetic Resonance Spectroscopy (MRS) and proprietary biomarkers to optimize clinical treatments, primarily addressing the $134.5 billion U.S. low back and neck pain market, which a 2020 JAMA article identified as the most costly healthcare condition in the United States . The company's core technology, NOCISCAN®, is a software application that uses existing MRS capabilities of commercially available MRI scanners to non-invasively analyze the chemical makeup of intervertebral discs. This technology aims to assist surgeons in determining optimal surgical procedures for chronic discogenic low back pain (DLBP) by identifying discs consistent with pain, and it is also being developed to support treatment decisions for patients undergoing conservative or regenerative therapies . Aclarion is also exploring the use of Artificial Intelligence (AI) to enhance quality control processes for spectroscopy data and to associate MRS data with clinical outcomes, with aspirations to expand into the diagnosis of brain, breast, and prostate tumors .

The company's business model revolves around providing a software-as-a-service (SaaS) platform, NOCISCAN, which includes two main software products: NOCICALC® and NOCIGRAM®. NOCICALC® receives raw MRS exam data, post-processes it into final spectra, and performs degenerative pain biomarker calculations for each disc examined . It is registered as a Class I Medical Device with the FDA . NOCIGRAM® further processes NOCICALC® results into individual NOCISCORES on a 0-10 scale, correlating high/low scores to painful (NOCI+) versus non-painful (NOCI-) discs, and provides a diagnostic report to physicians . NOCIGRAM® is considered "Clinical Decision Support Software" under the 21st Century Cures Act and is not regulated by the FDA . The company generates revenue from the delivery of these Nociscan reports to medical professionals . Currently, the majority of its revenue is generated in the United Kingdom, where three insurance providers reimburse for the NOCISCAN scan, and in the United States through direct patient payments .

Aclarion's intellectual property portfolio includes 28 U.S. Patents, 24 Foreign Patents, 7 pending U.S. patent applications, and 12 pending Foreign patent applications as of December 31, 2025 . These include patents and applications exclusively licensed from the Regents of the University of California, San Francisco (UCSF) . The company pays a royalty fee of 4% of net sales of licensed products or technology and 10% of gross revenues from sub-licensees, affiliates, or joint venture partners, with a minimum annual royalty fee of $50,000 . The patents subject to this License Agreement expire between 2026 and 2037 . The patent portfolio is divided into four groups, with the first group focused on signal processing techniques for MRS-based chemical biomarker measurements (12 issued U.S. patents, 2 pending U.S. applications, 5 issued foreign patents, 3 pending foreign applications, expiring between October 14, 2029, and March 15, 2033) . The second group covers diagnostic systems and methods using MRS-based chemical biomarkers (9 issued U.S. patents, 1 pending U.S. application, 14 issued foreign patents, 4 pending foreign applications, expiring between January 30, 2026, and June 16, 2037) . The third group relates to enhancing MRS exam efficiency and reliability (1 pending U.S. application, 3 issued U.S. patents expiring November 23, 2031, and international/U.S. applications that, if issued, would expire October 16, 2044) . The fourth group covers other novel diagnostic systems and methods, including molecular imaging and gene expression testing (4 issued U.S. patents, 5 issued foreign patents, expiring between September 21, 2026, and May 29, 2029) .

For the fiscal year ended December 31, 2025, Aclarion reported total revenues of $75,730 , an increase of $30,006 or 65.6% from $45,724 in 2024. Cost of revenue decreased by $15,756 or 18.6% to $68,902 in 2025 from $84,658 in 2024. This resulted in a gross profit of $6,828 in 2025, a significant improvement from a gross loss of $(38,934) in 2024. Operating expenses totaled $7,059,219 in 2025, up from $5,474,113 in 2024, leading to a loss from operations of $(7,052,391) in 2025 compared to $(5,513,047) in 2024. The net loss for 2025 was $(7,233,629) , an increase of $240,702 or 3.4% from the net loss of $(6,992,927) in 2024. Diluted EPS was $(13.61) in 2025, compared to $(7,478.90) in 2024, based on weighted average shares outstanding of 532,036 and 943 , respectively. As of December 31, 2025, the company had cash and cash equivalents and restricted cash of $12,040,789 and total liabilities of $837,287 . The accumulated deficit stood at $58,495,940 .

The increase in revenue was primarily driven by the growing volume of NOCISCAN® reports sold into the UK market following recent local coverage decisions . The decrease in cost of revenue was due to a reduced allocation of hosting fees and a change in revenue mix that reduced partner fees . Sales and marketing expenses increased by $924,044 or 94.6% to $1,900,598 in 2025, mainly due to higher post-clearance clinical services ($606,838 in 2025 vs. $300,794 in 2024) related to the initiation of the CLARITY Trial, expanded product marketing consulting ($362,640 in 2025 vs. $85,230 in 2024), and increased salaries and benefits ($542,515 in 2025 vs. $323,946 in 2024) due to incentive accruals and hiring . Research and development expenses rose by $145,023 or 16.3% to $1,033,789 in 2025, primarily from higher patent maintenance fees ($52,141 in 2025 vs. $0 in 2024), increased bonus expense ($85,771 in 2025 vs. $27,758 in 2024), and higher quality system and regulatory consulting expenses ($210,032 in 2025 vs. $173,068 in 2024) . General and administrative expenses increased by $516,039 or 14.3% to $4,124,832 in 2025, driven by higher incentive bonus program accruals ($357,902 in 2025 vs. $216,409 in 2024), increased D&O insurance expenses ($372,588 in 2025 vs. $289,798 in 2024), and higher litigation ($100,534 ) and financial accounting advisory expenses ($383,793 ) . These increases were partially offset by a decrease of $118,182 in stock-based compensation expense . The company also recorded $411,061 in interest income in 2025, up from $318 in 2024, reflecting interest on money market deposits from fundraising .

During 2025, Aclarion redeemed all Series B Preferred Stock and related accrued dividends with a cash payment of $1,213,590 . The company also settled a dispute under an investment banking agreement's "fee tail" provision for $687,500 , partially offset by a $14,875 favorable accounts payable settlement, resulting in penalties and settlements expense of $672,625 . The company completed a 1:335 reverse stock split on January 30, 2025, and a 1:27 reverse stock split on March 28, 2025 .

Business Outlook

Aclarion believes its current cash and cash equivalents and restricted cash of $12,040,789 will fund its operating expenses and capital expenditure requirements into the first quarter of 2028 . This estimate is based on assumptions that may prove incorrect, and the company could exhaust its capital sooner than expected . To finance operations beyond Q1 2028, additional capital will be required, which cannot be assured .

The primary near-term growth strategy is to secure payer contracts that provide coverage for the company's Category III CPT codes . Over time, Aclarion intends to pursue conversion of these codes to Category I CPT codes . The company believes that favorable payer coverage decisions may enhance its ability to market its technology more effectively to spine surgeons and imaging centers and support broader adoption . The company is prioritizing commercialization efforts in the NYC Metropolitan Area, San Francisco and Southern, CA, Chicago, IL, Phoenix, AZ, Miami, FL, Denver & Colorado Springs, CO, Detroit, MI, Indianapolis, IN, and London, United Kingdom, based on KOL surgeons and physician engagement . Once a positive local payment decision is secured in a geographic area, Aclarion plans to deploy business development professionals to expand physician support and secure favorable coverage decisions from additional payers .

Aclarion plans to expand the application of its technology beyond surgical decisioning to help manage large segments of low back pain patients from initial MRI through episode resolution . This expansion is expected to support treatment decisions for chronic low back pain patients undergoing conservative therapies like physical therapy or biologic and cell therapies aimed at regenerating lumbar discs . The company also plans to expand beyond the lumbar spine to address neck pain populations, though this will require overcoming technical challenges associated with securing adequate MRS data from the smaller cervical disc . The ultimate objective for NOCISCAN is to address the entire low back and neck pain market, which is estimated at $134.5 billion annually . To achieve this, current algorithms will need to expand to include advanced machine learning techniques incorporating multiple data inputs beyond disc chemical composition, all correlated to clinical outcomes for various treatments .

Operational outlook includes continued investment in clinical studies, sales, marketing, and engineering resources . Sales and marketing expenses are expected to continue increasing due to continued enrollment in the CLARITY Trial and planned hiring of additional sales and marketing personnel in the United States and the United Kingdom . Research and development expenses are also expected to increase with the continued development of the Nociscan 3.0 product . The company is building clinical registries to track NOCISCAN patients across various treatment paths (conservative, regenerative, surgical) to correlate MRS findings with outcomes, which will be used to train AI models to associate spectroscopy signals with optimal treatment pathways .

Aclarion plans to enhance its multi-tiered sales/marketing/branding campaign targeting referring physicians, MR imaging providers, DLBP patients, spine implant equipment suppliers, injectable biologics and cell therapy providers, MR scanner vendors, third-party payors, and employers . The company aims to increase third-party payer reimbursement coverage through reimbursement code utilization, payer negotiations, and growing its clinical evidence dossier via published registry studies and Randomized Control Trials (RCTs), including the CLARITY Trial, to convert temporary Category III CPT codes into permanent Category I codes . Aclarion also plans to expand MR scanner compatibility to additional models from Siemens and Philips, as well as other manufacturers . In Q1 2025, the company engaged its first customer using PHILIPS MRS capabilities with NOCISCAN, exemplifying this strategy . International market expansion is also a growth strategy .

Planned capital allocation includes funding market development and clinical evidence, product development and quality, and general and administration support, and other general corporate purposes from the net proceeds of recent offerings . The company's expenses are expected to increase substantially as it invests in clinical studies, sales, marketing, and engineering resources .

Structural headwinds and execution risks include the practical limitations to market opportunity due to the lack of widespread deployment of spectroscopy software across existing MRIs worldwide and the compatibility of NOCISCAN with only certain MR scanner models . For compatible MRI sites without spectroscopy software, the one-time cost ranges from $25,000 to $50,000 . Currently, NOCISCAN is compatible with certain Siemens and Philips MR scanner models, with an estimated 1,500 in the U.S. and 4,320 worldwide . There is no assurance that the company will be successful in marketing its products, regardless of the estimated market size . The company also faces the risk that the FDA could disagree with its self-classification of NOCIGRAM as non-medical device software, which would severely negatively impact the business . Furthermore, there is no assurance that Category III CPT codes will be converted to Category I CPT codes, and any delay or lack of conversion would materially adversely affect the business .

Risk Factors

Aclarion faces several material risks, including the potential inability to maintain compliance with Nasdaq listing rules, which could lead to delisting, reduced stock liquidity, increased volatility, and hindered capital raising . The company identified a material weakness in internal control over financial reporting as of December 31, 2024, which was remediated in fiscal 2025, but failure to maintain effective controls could erode investor confidence and impact stock price . Aclarion will require additional funding beyond Q1 2028 , and failure to secure it on acceptable terms could force delays or termination of product development and operations . Raising capital may dilute existing stockholders or impose restrictive covenants . The company's MR data post-processing products currently depend on compatibility with a limited number of Siemens and Philips MR scanners, and changes to these scanners or their install base could adversely affect the business . Commercial success hinges on significant market acceptance by physicians, surgeons, patients, clinicians, and imaging facilities, which is not assured . Negative clinical data or perceptions could harm sales and financial results . Inadequate reimbursement for procedures using its technology or for ongoing patient care could diminish sales . Failure to convert Category III CPT codes to Category I codes at adequate reimbursement levels would severely limit marketing ability and revenue . Improper use of the technology due to inadequate training could lead to negative patient outcomes and harm the business . The company expects to increase its organizational size, and difficulties in managing this growth could harm future revenue and operating results . Maintaining satisfactory pricing and margins for NOCISCAN products is uncertain due to potential price competition and reimbursement pressures . Inaccurate forecasting of customer demand could lead to financial write-downs or lost sales and reputational damage . Aclarion's operations are subject to pervasive FDA regulatory requirements, and non-compliance could lead to enforcement actions, fines, or inability to market products . The FDA could disagree with the company's self-classification of NOCIGRAM as non-medical device software, severely impacting the business . Delays or termination of clinical studies, including the CLARITY Trial, could increase expenses and delay reimbursement coverage or label expansion . The company is subject to foreign regulatory requirements, including the EU MDR, and failure to obtain re-certification by December 31, 2028, could result in loss of the CE mark and inability to sell products in the EU/UK . Non-compliance with fraud and abuse laws (e.g., Anti-Kickback Statute, False Claims Act, HIPAA, CCPA, GDPR) could lead to substantial penalties and harm business operations . Financial relationships with healthcare providers could be deemed conflicts of interest, leading to enforcement actions . Cybersecurity threats, including breaches or failures of IT systems, could result in unauthorized use or disclosure of patient personal information, fraudulent activity, and significant financial and reputational harm . The company carries product liability insurance of $5 million in aggregate, but this may not be adequate to cover all potential liabilities . The company relies on a license from the Regents of the University of California for key intellectual property, and loss of this license would materially negatively affect its business . Patents could be found invalid or unenforceable if challenged, and the medical device industry is characterized by extensive patent litigation, which could be costly and divert management attention .

Management Priorities

Management's message to shareholders emphasizes Aclarion's position as a healthcare technology company leveraging MRS, proprietary signal processing, biomarkers, and augmented intelligence to optimize clinical treatments, initially focusing on the chronic low back pain market with NOCISCAN . They highlight the platform's ability to noninvasively help physicians distinguish between painful and nonpainful discs, providing critical insights to optimize treatment strategies . Management explicitly states that current cash and cash equivalents and restricted cash of $12,040,789 are believed to be sufficient to fund operating expenses and capital expenditure requirements into the first quarter of 2028 . The three strategic priorities emphasized for the period ahead are: first, securing payer contracts to cover Category III CPT codes and pursuing their conversion to Category I CPT codes to enhance market adoption ; second, expanding the application of their technology beyond surgical decisioning to manage broader segments of low back and neck pain patients, including those undergoing conservative and regenerative therapies, and potentially into other clinical explorations like tumor diagnosis ; and third, continuing to invest in clinical studies, including the CLARITY Trial, and R&D for the Nociscan 3.0 product, while also expanding MR scanner compatibility and international market presence . Management acknowledges the need for substantial additional funding beyond Q1 2028 to support continuing operations and growth strategy, which may involve equity sales, debt financings, or strategic collaborations .

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 1, Business — Overview
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  7. [7] Item 1, Business — Overview
  8. [8] Item 1, Business — Products and Solutions
  9. [9] Item 1, Business — Government Regulation
  10. [10] Item 1, Business — Products and Solutions
  11. [11] Item 1, Business — Government Regulation
  12. [12] Item 7, MD&A — Revenue Recognition
  13. [13] Item 1, Business — Plan of Operation and Growth Strategies
  14. [14] Item 1, Business — Intellectual Property - Licenses, Patents and Trademarks
  15. [15] Item 1, Business — Overview
  16. [16] Item 1, Business — License Agreement with the Regents of the University of California
  17. [17] Item 1, Business — License Agreement with the Regents of the University of California
  18. [18] Item 1, Business — Intellectual Property - Licenses, Patents and Trademarks
  19. [19] Item 1, Business — Intellectual Property - Licenses, Patents and Trademarks
  20. [20] Item 1, Business — Intellectual Property - Licenses, Patents and Trademarks
  21. [21] Item 1, Business — Intellectual Property - Licenses, Patents and Trademarks
  22. [22] Item 7, MD&A — Results of Operations
  23. [23] Item 7, MD&A — Total revenues
  24. [24] Item 7, MD&A — Total revenues
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  26. [26] Item 7, MD&A — Cost of Revenue
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  30. [30] Item 7, MD&A — Results of Operations
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  40. [40] Item 7, MD&A — Results of Operations
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  42. [42] Item 7, MD&A — Results of Operations
  43. [43] Item 7, MD&A — Results of Operations
  44. [44] Item 7, MD&A — Liquidity and Capital Resources
  45. [45] Item 8, Balance Sheets
  46. [46] Item 7, MD&A — Overview
  47. [47] Item 7, MD&A — Total revenues
  48. [48] Item 7, MD&A — Cost of Revenue
  49. [49] Item 7, MD&A — Sales and Marketing
  50. [50] Item 7, MD&A — Sales and Marketing
  51. [51] Item 7, MD&A — Sales and Marketing
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  58. [58] Item 7, MD&A — Sales and Marketing
  59. [59] Item 7, MD&A — Research and Development
  60. [60] Item 7, MD&A — Research and Development
  61. [61] Item 7, MD&A — Research and Development
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  69. [69] Item 7, MD&A — General and Administrative
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  80. [80] Item 7, MD&A — General and Administrative
  81. [81] Item 7, MD&A — Interest Income
  82. [82] Item 7, MD&A — Interest Income
  83. [83] Item 7, MD&A — Interest Income
  84. [84] Item 7, MD&A — Redemption Of Series B Preferred Stock
  85. [85] Item 7, MD&A — Penalties and Settlements
  86. [86] Item 7, MD&A — Penalties and Settlements
  87. [87] Item 7, MD&A — Penalties and Settlements
  88. [88] Item 7, MD&A — Penalties and Settlements
  89. [89] Item 1, Note 1 — 2025 Reverse Stock Splits
  90. [90] Item 7, MD&A — Liquidity and Capital Resources
  91. [91] Item 7, MD&A — Liquidity and Capital Resources
  92. [92] Item 7, MD&A — Liquidity and Capital Resources
  93. [93] Item 7, MD&A — Liquidity and Capital Resources
  94. [94] Item 1, Business — Plan of Operation and Growth Strategies
  95. [95] Item 1, Business — Plan of Operation and Growth Strategies
  96. [96] Item 1, Business — Plan of Operation and Growth Strategies
  97. [97] Item 1, Business — Plan of Operation and Growth Strategies
  98. [98] Item 1, Business — Plan of Operation and Growth Strategies
  99. [99] Item 1, Business — Overview
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  102. [102] Item 1, Business — Market Opportunity
  103. [103] Item 1, Business — Market Opportunity
  104. [104] Item 1, Business — Market Opportunity
  105. [105] Item 7, MD&A — Overview
  106. [106] Item 7, MD&A — Sales and Marketing
  107. [107] Item 7, MD&A — Research and Development
  108. [108] Item 1, Business — Research and Development
  109. [109] Item 1, Business — Plan of Operation and Growth Strategies
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  112. [112] Item 1, Business — Market Opportunity
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  114. [114] Item 7, MD&A — October 2025 Registered Direct Public Offering
  115. [115] Item 7, MD&A — Overview
  116. [116] Item 1, Business — Market Opportunity
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  118. [118] Item 1, Business — Overview
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  120. [120] Item 1, Business — Market Opportunity
  121. [121] Item 1, Business — Market Opportunity
  122. [122] Item 1, Business — Government Regulation
  123. [123] Item 1, Business — Reimbursement
  124. [124] Item 1A, Risk Factors — Risks Related To Our Nasdaq Listing
  125. [125] Item 1A, Risk Factors — We identified a material weakness in our internal control over financial reporting as of December 31, 2024, which was remediated in fiscal 2025.
  126. [126] Item 7, MD&A — Liquidity and Capital Resources
  127. [127] Item 1A, Risk Factors — We will need additional funding, which may not be available on acceptable terms, or at all.
  128. [128] Item 1A, Risk Factors — Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our technologies and product candidates.
  129. [129] Item 1A, Risk Factors — Our MR data post-processing products currently depend on compatible use with only a limited number of MR scanners that are provided only by one manufacturer of MR devices.
  130. [130] Item 1A, Risk Factors — Our commercial success will continue to depend on attaining significant market acceptance of our technology among physicians, surgeons, patients, clinicians and imaging facilities, and increasing the number of patients diagnosed by our technology.
  131. [131] Item 1A, Risk Factors — Adoption of our technology depends on positive clinical data as well as clinician acceptance of the data and our products, and negative clinical data or perceptions among these clinicians would harm our sales, business, financial condition, and results of operations.
  132. [132] Item 1A, Risk Factors — If adequate reimbursement is not available for the procedures implementing our technology, or for clinicians to provide ongoing care for patients diagnosed with our technology, it could diminish our sales or affect our ability to sell our technology.
  133. [133] Item 1A, Risk Factors — If adequate reimbursement for our temporary Category III CMS Code designation for our products cannot be obtained or we are not successful in obtaining conversion to permanent Category I codes at an adequate reimbursement level, it would diminish our sales and would affect our ability to market our technology.
  134. [134] Item 1A, Risk Factors — Use of our technology requires appropriate training for proper use of our products, and inadequate training may lead to negative patient outcomes, which could harm our business, financial condition, and results of operations.
  135. [135] Item 1A, Risk Factors — We expect to increase the size of our organization in the future, and we may experience difficulties in managing this growth.
  136. [136] Item 1A, Risk Factors — We may not be able to achieve or maintain satisfactory pricing and margins for our NOCISCAN disc MRS diagnostic software products and related services, which could harm our business and results of operations.
  137. [137] Item 1A, Risk Factors — Our results of operations may be harmed if we are unable to accurately forecast customer demand for our technology.
  138. [138] Item 1A, Risk Factors — Our operations and technology are subject to pervasive and continuing FDA regulatory requirements, and failure to comply with these requirements could harm our business, financial condition and results of operations.
  139. [139] Item 1A, Risk Factors — Our operations and technology are subject to pervasive and continuing FDA regulatory requirements, and failure to comply with these requirements could harm our business, financial condition and results of operations.
  140. [140] Item 1A, Risk Factors — Our current CLARITY Trial or other future clinical studies may be delayed, suspended or terminated for many reasons.
  141. [141] Item 1A, Risk Factors — We may experience difficulties outside the US in obtaining or maintaining regulatory clearance or approval, or exemptions therefrom, or in successfully gaining third-party reimbursement or marketing our technology, even if approved or otherwise legally marketed.
  142. [142] Item 1A, Risk Factors — If we fail to comply with fraud and abuse and other healthcare laws and regulations in the U.S. and internationally including those relating to kickbacks and false claims for reimbursement, we could face substantial penalties and our business, financial condition and results of operations could be harmed.
  143. [143] Item 1A, Risk Factors — We have financial relationships with certain physicians and health care providers, research investigators, and authors for our clinical or scientific publications that may be deemed a conflict of interest and may be subject to certain statutory or regulatory requirements, under which a failure to comply could lead to enforcement actions against us and other negative consequences for our business.
  144. [144] Item 1A, Risk Factors — Significant disruptions in our information technology systems, whether through breaches or failures of our technology, unauthorized access or otherwise, may result in both an adverse impact to our products, as well as the unauthorized use, disclosure, modification or misappropriation of patient personal information, the occurrence of fraudulent activity, or other data security-related incidents, all of which could have a material and adverse impact on our business, financial condition and results of operations.
  145. [145] Item 1A, Risk Factors — If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit or halt the marketing and sale of our technology.
  146. [146] Item 1A, Risk Factors — If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit or halt the marketing and sale of our technology.
  147. [147] Item 1A, Risk Factors — If we are unable to obtain, maintain, protect, enforce and defend patents or other intellectual property protection for our technology, or if the scope of our patents and other intellectual property protections is not sufficiently broad, or as a result of our existing or any future out-licenses of our intellectual property, our competitors could develop and commercialize products similar to or competitive with our products and services, our ability to continue to commercialize our technology, or our other products and services, may be harmed.
  148. [148] Item 1A, Risk Factors — The medical device industry is characterized by patent litigation and in the future we could become subject to actual or threatened patent or other intellectual property litigation alleging our products or services infringe or misappropriate third party rights.
  149. [149] Item 7, MD&A — Overview
  150. [150] Item 7, MD&A — Overview
  151. [151] Item 7, MD&A — Liquidity and Capital Resources
  152. [152] Item 7, MD&A — Liquidity and Capital Resources
  153. [153] Item 7, MD&A — Overview
  154. [154] Item 1, Business — Overview
  155. [155] Item 1, Business — Plan of Operation and Growth Strategies
  156. [156] Item 7, MD&A — Overview

Analysis on 5/19/2026