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What changed in LENSAR, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of LENSAR, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+474 added−465 removedSource: 10-K (2026-03-31) vs 10-K (2025-02-27)

Top changes in LENSAR, Inc.'s 2025 10-K

474 paragraphs added · 465 removed · 379 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

95 edited+9 added−32 removed188 unchanged
Biggest changeThe FDA regulates the development, design, non-clinical and clinical research, manufacturing, safety, efficacy, labeling, packaging, storage, installation, servicing, recordkeeping, premarket clearance or approval, adverse event reporting, advertising, promotion, marketing and distribution, and import and export of medical devices to ensure that medical devices distributed domestically are safe and effective for their intended uses and otherwise meet the requirements of the FDCA. 17 FDA Premarket Clearance and Approval Requirements Under the FDCA, medical devices are classified into one of three classes—Class I, Class II or Class III—depending on the degree of risk associated with each medical device and the extent of control needed to ensure safety and effectiveness.
Biggest changeThe FDA regulates the development, design, non-clinical and clinical research, manufacturing, safety, efficacy, labeling, packaging, storage, installation, servicing, recordkeeping, premarket clearance or approval, adverse event reporting, advertising, promotion, marketing and distribution, and import and export of medical devices to ensure that medical devices distributed domestically are safe and effective for their intended uses and otherwise meet the requirements of the FDCA.
Directive 2006/114/EC concerning misleading and comparative advertising and Directive 2005/29/EC on unfair commercial practices, while not specific to the advertising of medical devices, also apply to the advertising thereof and contain general rules, for example, requiring that advertisements are evidenced, balanced and not misleading. Specific requirements are defined at a national level.
Directive 2006/114/EC concerning misleading and comparative advertising and Directive 2005/29/EC on unfair commercial practices, while not specific to the advertising of medical devices, also apply to the advertising thereof and contain general rules, for example, requiring that advertisements are evidenced, balanced and not misleading. Specific requirements are defined at a national level.
EU member states’ laws related to the advertising and promotion of medical devices, which vary between jurisdictions, may limit or restrict the advertising and promotion of products to the general public and may impose limitations on promotional activities with healthcare professionals.
EU member states’ laws related to the advertising and promotion of medical devices, which vary between jurisdictions, may limit or restrict the advertising and promotion of products to the general public and may impose limitations on promotional activities with healthcare professionals.
The key technological features of our system include: • IntelliAxis Refractive Capsulorhexis : Designed to improve precision and accuracy in outcome-based astigmatic cataract procedures, this proprietary technology enables precise marks to be placed on the capsulorhexis on the steep axis using advanced iris registration to guide toric IOL placement and alignment, both during and after the surgical procedure. • Proprietary Robotic Imaging : Our patented robotic imaging technology provides a surgeon with a sophisticated, three-dimensional view of a patient’s eye.
The key technological features of our system include: • IntelliAxis Refractive Capsulorhexis : Designed to improve precision and accuracy in outcome-based astigmatic cataract procedures, this proprietary technology enables precise marks to be placed on the 14 capsulorhexis on the steep axis using advanced iris registration to guide toric IOL placement and alignment, both during and after the surgical procedure. • Proprietary Robotic Imaging : Our patented robotic imaging technology provides a surgeon with a sophisticated, three-dimensional view of a patient’s eye.
We believe this incentivizes the entire employee base in relation to the successful achievement of the Company’s goals. 27 o Annual increases and incentive compensation are based on merit, which is communicated to employees at the time of hiring and documented through our talent management process. o All full-time employees are eligible for health insurance, paid and unpaid leaves, a retirement plan with company match and immediate vesting, and disability insurance.
We believe this incentivizes the entire employee base in relation to the successful achievement of the Company’s goals. o Annual increases and incentive compensation are based on merit, which is communicated to employees at the time of hiring and documented through our talent management process. o All full-time employees are eligible for health insurance, paid and unpaid leaves, a retirement plan with company match and immediate vesting, and disability insurance.
Specifically: o We provide employee wages that we believe are competitive and consistent with employee positions, skill levels, experience, knowledge and geographic location. o We have also engaged outside compensation and benefits consulting firms to help independently evaluate the effectiveness of our executive and benefit programs and to provide benchmarking against our peers within the industry. o We look to align our executives’ long-term equity compensation with our stockholders’ interests.
Specifically: o We provide employee wages that we believe are competitive and consistent with employee positions, skill levels, experience, knowledge and geographic location. o We have also engaged outside compensation and benefits consulting firms to help independently evaluate the effectiveness of our executive and benefit programs and to provide benchmarking against our peers within the industry. 26 o We look to align our executives’ long-term equity compensation with our stockholders’ interests.
In accordance with the EU Medical Devices Regulation’s recently extended transitional provisions, both (i) devices lawfully placed on the market pursuant to the EU Medical Devices Directive prior to May 26, 2021 and (ii) legacy devices lawfully placed on the EU market after May 26, 2021 in accordance with the EU Medical Devices Regulation transitional provisions may generally continue to be made available on the market or put into service, provided that the requirements of the transitional provisions are fulfilled.
In accordance 20 with the EU Medical Devices Regulation’s recently extended transitional provisions, both (i) devices lawfully placed on the market pursuant to the EU Medical Devices Directive prior to May 26, 2021 and (ii) legacy devices lawfully placed on the EU market after May 26, 2021 in accordance with the EU Medical Devices Regulation transitional provisions may generally continue to be made available on the market or put into service, provided that the requirements of the transitional provisions are fulfilled.
We have been able to achieve our success to date with a limited number of regional sales managers in the United States and independent distributors in international markets, growing our business substantially year-over-year in terms of both revenues and number of procedures, with the exception of 2020 due to the impact on our operations of the COVID-19 pandemic.
We have been able to achieve our success to date with a limited number of regional sales managers in the United States and independent distributors in international markets, growing our business substantially year-over-year in terms of both revenues and number of procedures, with the exception of 2020 due to the impact on our operations of 15 the COVID-19 pandemic.
Unless otherwise exempted, manufacturers of certain radiation emitting devices must submit certain reports to FDA, including for new and modified products, for product defects, and annual reports, and comply with recordkeeping requirements. 20 FDA regulations also provide specific certification and labeling requirements, and the labels for these products must contain certain information, such as warnings, declarations, and instructions for use.
Unless otherwise exempted, manufacturers of certain radiation emitting devices must submit certain reports to FDA, including for new and modified products, for product defects, and annual reports, and comply with recordkeeping requirements. FDA regulations also provide specific certification and labeling requirements, and the labels for these products must contain certain information, such as warnings, declarations, and instructions for use.
The EU Medical Devices Regulation requires that before placing a device, other than a custom-made device, on the market, manufacturers (as well as other economic operators such as authorized representatives and importers) must register by submitting identification information to the electronic system (Eudamed), unless they have already registered.
The EU Medical Devices Regulation requires that before placing a device, other than a custom-made device, on the market, manufacturers (as well as other economic operators such as authorized representatives and importers) must register by submitting identification information to the electronic system (Eudamed), unless they have already 21 registered.
Specifically, a manufacturer must demonstrate that the device achieves its intended performance during normal conditions of use, that the known and foreseeable risks, and any adverse events, are minimized and acceptable when weighed against the benefits of its intended performance, and that any claims made about the performance and safety of the device are 21 supported by suitable evidence.
Specifically, a manufacturer must demonstrate that the device achieves its intended performance during normal conditions of use, that the known and foreseeable risks, and any adverse events, are minimized and acceptable when weighed against the benefits of its intended performance, and that any claims made about the performance and safety of the device are supported by suitable evidence.
This not only increases efficiency in removal of the cataract when the surgeon gets to the phacoemulsification, but also provides the surgeon choices in pre-programmed treatment algorithms or their own customized preferences in the energy 14 and fragmentation parameters based on their surgical technique.
This not only increases efficiency in removal of the cataract when the surgeon gets to the phacoemulsification, but also provides the surgeon choices in pre-programmed treatment algorithms or their own customized preferences in the energy and fragmentation parameters based on their surgical technique.
The ALLY System combines all of the features from our LLS with a dual-modality laser, integrated in a small, compact cataract treatment system that is designed to allow surgeons to perform sterile laser-assisted cataract surgery in a single operating room.
The ALLY System combines all of the features from our LLS with a dual-modality laser, integrated in a small, compact cataract treatment system that is designed to allow surgeons to perform sterile cataract surgery in a single operating room.
Additionally, we are aware of a French based 16 company, KeraNova S.A., that is working to develop a product that, if they receive commercial clearance for their device in the future, could potentially be another competitor.
Additionally, we are aware of a French based company, KERANOVA S.A., that is working to develop a product that, if they receive commercial clearance for their device in the future, could potentially be another competitor.
The FDA and the Federal Trade Commission also regulate the advertising and promotion of our products to ensure that the claims we make are consistent with our regulatory clearances, that there is scientific data to substantiate the claims and that our advertising is neither false nor misleading.
The FDA and the Federal Trade Commission (the “FTC”) also regulate the advertising and promotion of our products to ensure that the claims we make are consistent with our regulatory clearances, that there is scientific data to substantiate the claims and that our advertising is neither false nor misleading.
However, certain medical devices in compliance with: (1) the EU Medical Devices Directive can continue to be placed on the Great Britain market until the sooner of 23 certificate expiration or June 30, 2028; or (2) the EU Medical Devices Regulation can continue to be placed on the Great Britain market until the sooner of certificate expiration or June 30, 2030.
However, certain medical devices in compliance with: (1) the EU Medical Devices Directive can continue to be placed on the Great Britain market until the sooner of certificate expiration or June 30, 2028; or (2) the EU Medical Devices Regulation can continue to be placed on the Great Britain market until June 30, 2030.
The use of advanced IOLs designed to improve vision is also not reimbursed by Medicare beyond the standard reimbursement for a monofocal IOL and physicians charge the patient for the difference between the lower reimbursed amount and the cost of the advanced IOL.
The use of advanced IOLs designed to improve vision is also not reimbursed by Medicare beyond the standard reimbursement for a basic monofocal IOL and physicians charge the patient for the difference between the lower reimbursed amount and the cost of the advanced IOL.
In the United States, numerous federal and state laws and regulations, including data breach notification laws, health information privacy and security laws and consumer protection laws and regulations govern the collection, use, disclosure, and protection of health-related and other personal information. 26 In addition, certain foreign laws govern the privacy and security of personal data, including health-related data.
In the United States, numerous federal and state laws and regulations, including data breach notification laws, health information privacy and security laws and consumer protection laws and regulations govern the collection, use, disclosure, and protection of health-related and other personal information. In addition, certain foreign laws govern the privacy and security of personal data, including health-related data.
We believe the ALLY System's surgical efficiencies and combined functions could help drive broader penetration into the overall cataract surgery market and could potentially create a paradigm shift in the treatment of cataracts and management of astigmatism in cataract surgery.
We believe the ALLY System's surgical efficiencies and combined functions could help drive broader penetration into the cataract surgery market and could potentially create a paradigm shift in the treatment of cataracts and management of astigmatism in cataract surgery.
We believe that the ability of our LLS and ALLY System, when used with advanced IOLs to optimize vision results, will encourage surgeons to perform the procedure and their patients to pay the additional out-of-pocket costs. 25 Healthcare Reform The United States and some foreign jurisdictions are considering or have enacted a number of legislative and regulatory proposals to change the healthcare system in ways that could affect our ability to sell our products profitably.
We believe that the ability of our LLS and ALLY System, when used with advanced IOLs to optimize vision results, will encourage surgeons to perform the procedure and their patients to pay the additional out-of-pocket costs. 24 Healthcare Reform The United States and some foreign jurisdictions are considering or have enacted a number of legislative and regulatory proposals to change the healthcare system in ways that could affect our ability to sell our products profitably.
In 2024, Market Scope referenced data from a clinical study of 6,000 patients performed by Warren Hill, MD that estimates that approximately 70 – 90% of cataract patients present with addressable astigmatism prior to cataract surgery. To reduce the need for prescription distance or reading glasses following cataract surgery, it is important that little or no astigmatism remain.
In 2025, Market Scope referenced data from a clinical study of 6,000 patients performed by Warren Hill, MD that estimates that approximately 70 – 90% of cataract patients present with addressable astigmatism prior to cataract surgery. To reduce the need for prescription distance or reading glasses following cataract surgery, it is important that little or no astigmatism remain.
As a result, we believe a significant opportunity exists for laser systems that can improve surgeon precision and assist in achieving targeted visual outcomes in patients with astigmatism. 9 Our Products We believe the inability to achieve the targeted visual outcome is largely due to a failure to appropriately address corneal astigmatism even when using competing laser systems.
As a result, we believe a significant opportunity exists for laser systems that can improve surgeon precision and assist in achieving targeted visual outcomes in patients with astigmatism. 10 Our Products We believe the inability to achieve the targeted visual outcome is largely due to a failure to appropriately address corneal astigmatism even when using competing laser systems.
The overall cost of the ALLY System, may, however, increase due to, among other factors, pricing increases in component parts for our systems resulting from inflationary pressures and macroeconomic conditions. 11 Our Strengths We attribute our current and anticipated future success to the following factors: • Disruptive technology platform providing improved visual outcomes.
The overall cost of the ALLY System, may, however, increase due to, among other factors, pricing increases in component parts for our systems resulting from inflationary pressures and macroeconomic conditions. 12 Our Strengths We attribute our current and anticipated future success to the following factors: • Disruptive technology platform providing improved visual outcomes.
Studies have shown that laser capsulotomies are consistently more round and more precise in sizing to enable better centering and capsulorhexis overlap of the IOL and that IOL positioning is an 8 important factor in determining visual outcomes minimizing the variances associated with manual techniques. • Reduced complications and quicker visual recovery .
Studies have shown that laser capsulotomies are consistently more round and more precise in sizing to enable better centering and capsulorhexis overlap of the IOL and that IOL positioning is an important factor in determining visual outcomes minimizing the variances associated with manual techniques. 9 • Reduced complications and quicker visual recovery .
Our ALLY System received clearance from the FDA in June 2022, and we executed a controlled and targeted initial launch of the ALLY System beginning in August 2022. The ALLY System is available to all U.S. and EU cataract surgeons and has also received regulatory clearance in India, Taiwan, as well as certain other countries.
Our ALLY System received clearance from the FDA in June 2022, and we executed a controlled and targeted initial launch of the ALLY System beginning in August 2022. The ALLY System is available to all U.S. and EU cataract surgeons and has also received regulatory clearance in India, Taiwan, South Korea, as well as certain other countries.
In addition, you may automatically receive email alerts and other information about the Company when you enroll your email address by under the Investor Email Alerts option on the Investor Relations page of our website at www.lensar.com . Our website and the information available through our website are not incorporated into this Annual Report. 28
In addition, you may automatically receive email alerts and other information about the Company when you enroll your email address by under the Investor Email Alerts option on the Investor Relations page of our website at www.lensar.com . Our website and the information available through our website are not incorporated into this Annual Report. 27
Early data suggests performing a sterile robotic laser-assisted cataract surgery, or LACS, procedure using the ALLY System resulted in up to 17-minute time savings for the surgeon, up to 19-minute time savings for the surgical staff, and up to 51-minute savings for the patient, allowing surgeons to shorten their surgery day or treat more patients.
Early data suggests performing a sterile robotic laser cataract surgery procedure using the ALLY System resulted in up to 17-minute time savings for the surgeon, up to 19-minute time savings for the surgical staff, and up to 51-minute savings for the patient, allowing surgeons to shorten their surgery day or treat more patients.
In addition, the MHRA launched a consultation from November 14, 2024 to January 5, 2025 on proposals to update the pre-market requirements for medical devices in Great Britain, covering four topics, namely (1) a new international reliance scheme to enable swifter market access for certain devices that have already been approved in a comparable regulator country; (2) the new UK Conformity Assessed, or UKCA, mark and, in particular, proposals to remove the requirement to place such UKCA marking on devices; (3) conformity assessment procedures for in vitro diagnostic devices; and (4) maintaining in UK law certain pieces of “assimilated” EU law which are due to sunset in 2025.
In addition, the MHRA launched a consultation from November 14, 2024 to January 5, 2025 on proposals to update the pre-market requirements for medical devices in Great Britain, covering four topics, namely (1) a new international reliance scheme to enable swifter market access for certain devices that have already been approved in a comparable regulator country; (2) the new UK Conformity Assessed, or UKCA, mark and, in particular, proposals to remove the requirement to place such UKCA marking on devices; (3) conformity assessment procedures for in vitro diagnostic devices; and (4) maintaining in UK law certain pieces of “assimilated” EU law.
Data presented at the 2023 annual meeting of the American Society of Cataract and Refractive Surgeons demonstrated 99% of patients receiving a toric IOL using the ALLY System, and guided by the IntelliAxis Refractive Casulorhexis feature of the system, achieved refractive correction within 0.5 diopters of target.
Data presented at the 2023 annual meeting of the American Society of Cataract and Refractive Surgeons demonstrated 99% of patients receiving a toric IOL using the ALLY System, and guided by the IntelliAxis Refractive Capsulorhexis feature of the system, achieved refractive correction within 0.5 diopters of target.
We are in varying stages of development in relation to our products and internal business processes involving AI Technologies. 10 We are focused on continuous innovation and continue to develop, and further refine, our proprietary, next-generation robotic laser, the ALLY System.
We are in varying stages of development in relation to our products and internal business processes involving AI Technologies. 11 We are focused on continuous innovation and continue to develop, and further refine, our proprietary, next-generation robotic laser, the ALLY System.
In providing surgical solutions for cataract patients, our primary competitors are Alcon Inc.; Bausch + Lomb, a division of Bausch Health Companies Inc.; and AMO, a division of Johnson & Johnson; and Ziemer Ophthalmic Systems AG, each of which has its own cataract lasers.
In providing surgical solutions for cataract patients, our primary competitors are Alcon Inc.; Bausch + Lomb, a division of Bausch Health Companies Inc.; Carl Zeiss AG; AMO, a division of Johnson & Johnson; and Ziemer Ophthalmic Systems AG, each of which has its own cataract lasers.
In addition, the FDA will conduct a pre-approval inspection of the manufacturing facility to ensure compliance with the QSR, which imposes stringent design development, testing, control, documentation and other quality assurance procedures in the design and manufacturing process.
In addition, the FDA will conduct a pre-approval inspection of the manufacturing facility to ensure compliance with the QMSR, which imposes stringent design development, testing, control, documentation and other quality assurance procedures in the design and manufacturing process.
Class I devices are those for which safety and effectiveness can be assured by adherence to FDA’s general controls for medical devices, or General Controls, which include compliance with the applicable portions of the FDA’s Quality System Regulation, or QSR, facility registration and product listing, reporting of adverse medical events, and appropriate, truthful and non-misleading labeling, advertising, and promotional materials.
Class I devices are those for which safety and effectiveness can be assured by adherence to FDA’s general controls for medical devices, or General Controls, which include compliance with the applicable portions of the FDA’s Quality Management System Regulation, or QMSR, facility registration and product listing, reporting of adverse medical events, and appropriate, truthful and non-misleading labeling, advertising, and promotional materials.
As a manufacturer, we are subject to periodic scheduled or unscheduled inspections by the FDA. Our failure to maintain compliance with the QSR requirements could result in the shut-down of, or restrictions on, our manufacturing operations and the recall or seizure of our products, which would have a material adverse effect on our business.
As a manufacturer, we are subject to periodic scheduled or unscheduled inspections by the FDA. Our failure to maintain compliance with the QMSR requirements 19 could result in the shut-down of, or restrictions on, our manufacturing operations and the recall or seizure of our products, which would have a material adverse effect on our business.
We are also required to register with the FDA as a medical device manufacturer. As such, our manufacturing sites are subject to periodic inspection by the FDA for compliance with the FDA’s QSR.
We are also required to register with the FDA as a medical device manufacturer. As such, our manufacturing sites are subject to periodic inspection by the FDA for compliance with the FDA’s QMSR.
Nearly 35% of employees have been with the Company five or more years, and over 20% have been with the Company 10 or more years. In 2024, we experienced a full-time employee turnover rate of approximately 20%. • Culture : We value our employees and the individual and collective contributions employees make to the Company.
Over 35% of employees have been with the Company five or more years, and over 20% have been with the Company 10 or more years. In 2025, we experienced a full-time employee turnover rate of approximately 10%. • Culture : We value our employees and the individual and collective contributions employees make to the Company.
We designed the ergonomics of the system and its wireless capabilities to enable the system to integrate seamlessly into a surgeon’s existing surgical environment. According to Market Scope’s 2024 annual survey, over 78% of U.S. cataract surgeons, indicated the importance of data transfer between diagnostic devices as ‘required’ to ‘nice to have’.
We designed the ergonomics of the system and its wireless capabilities to enable the system to integrate seamlessly into a surgeon’s existing surgical environment. According to Market Scope’s 2025 annual survey, over 75% of U.S. cataract surgeons, indicated the importance of data transfer between diagnostic devices as ‘required’ to ‘nice to have’.
As of December 31, 2024, we had approximately 140 employees that support our manufacturing, research and development, commercial and administrative functions. Primarily all of our workforce is based at our corporate headquarters in Orlando, Florida except for our commercial organization, which is spread throughout the United States based upon geographic responsibility.
As of December 31, 2025, we had approximately 150 employees that support our manufacturing, research and development, commercial and administrative functions. Primarily all of our workforce is based at our corporate headquarters in Orlando, Florida except for our commercial organization, which is spread throughout the United States based upon geographic responsibility.
We believe that these advanced procedures that include implantation of a premium IOL offer physicians and patients additional benefits and improved outcomes that justify the additional cost. For example, some of the benefits of laser-assisted cataract surgery include: • Improved accuracy .
We believe that these advanced procedures that include implantation of a premium IOL offer physicians and patients additional benefits and improved outcomes that justify the additional cost. For example, some of the benefits of using a laser during cataract surgery include: • Improved accuracy .
In the United States, we sell our products through a direct sales organization that, as of December 31, 2024, consisted of approximately 65 commercial team professionals, including regional sales managers, clinical applications and outcomes specialists, field service, marketing, technical and customer support personnel.
In the United States, we sell our products through a direct sales organization that, as of December 31, 2025, consisted of approximately 70 commercial team professionals, including regional sales managers, clinical applications and outcomes specialists, field service, marketing, technical and customer support personnel.
For most surgeons that also use a laser-assisted system, the laser system is stationed in a separate room from the phacoemulsification system, as the size of most operating rooms will not accommodate placement of all the other necessary equipment, and these two critical pieces of equipment operate independently.
For most surgeons that also use a laser during cataract surgery, the laser system is stationed in a separate room from the phacoemulsification system, as the size of most operating rooms will not accommodate placement of all the other necessary equipment, and these two critical pieces of equipment operate independently.
Standard or traditional cataract surgery does not specifically address the outcomes associated with astigmatism and presbyopia, which may be addressed in an advanced refractive procedure involving laser-assisted cataract removal and implantation of a premium IOL.
Standard or traditional cataract surgery does not specifically address the outcomes associated with astigmatism and presbyopia, which may be addressed in an advanced refractive procedure involving the use of a laser during cataract surgery for cataract removal and implantation of a premium IOL.
Market Overview The global market for the treatment of cataracts is characterized by large patient populations with increases driven by the aging population and the availability of new technologies, such as laser-assisted systems and an influx of new, innovative intraocular lenses, or IOLs, which can improve visual outcomes post-operatively.
Market Overview The global market for the treatment of cataracts is characterized by large patient populations with increases driven by the aging population and the availability of new technologies, such as laser systems used during cataract surgery and an influx of new, innovative intraocular lenses, or IOLs, which can improve visual outcomes post-operatively.
Currently, almost all cataract procedures, whether manual or laser-assisted, involve the use of a phacoemulsification system to fracture and remove the cataract.
Currently, almost all cataract procedures, whether manual or those using a laser, involve the use of a phacoemulsification system to fracture and remove the cataract.
As of December 31, 2024, we owned approximately 247 issued patents and 114 pending patent applications globally. This portfolio 13 covers key aspects of our technology, including the proprietary robotic imaging and processing, iris registration and patient interface features of our system. We have also filed and acquired significant patent rights relating to our next generation cataract treatment system.
As of December 31, 2025, we owned approximately 292 issued patents and 105 pending patent applications globally. This portfolio covers key aspects of our technology, including the proprietary robotic imaging and processing, iris registration and patient interface features of our system. We have also filed and acquired significant patent rights relating to our next generation cataract treatment system.
The following chart shows procedure volume per year from 2020 to 2024: 12 Procedures per Year Source: Management. • Improved visual outcomes that drive more advanced, patient-pay procedures. Standard cataract procedures are generally covered by Medicare and other third-party payors, including commercial health plans.
The following chart shows procedure volume per year from 2021 to 2025: Procedures per Year Source: Management. 13 • Improved visual outcomes that drive more advanced, patient-pay procedures. Standard cataract procedures are generally covered by Medicare and other third-party payors, including commercial health plans.
For example, we have approximately 12 pending US patent applications, 14 issued US patents, 60 pending foreign and PCT applications, and 26 issued foreign patents related to integrated systems. • Proven management team and board of directors. Our senior management team and board of directors consist of seasoned medical device professionals with deep industry experience.
For example, we have approximately 11 pending US patent applications, 19 issued US patents, 60 pending foreign and PCT applications, and 34 issued foreign patents related to integrated systems. • Proven management team and board of directors. Our senior management team and board of directors consist of seasoned medical device professionals with deep industry experience.
However, based on the 2024 Market Scope IOL Market Report, approximately 79% of global patients receiving a standard cataract procedure do not have significant astigmatism addressed surgically and must rely on glasses for distance or near vision. Moreover, surgeon reimbursement for these standard procedures continues to decline.
However, based on the 2025 Market Scope Premium Cataract Surgery Market Report, approximately 91% of global patients receiving a standard cataract procedure do not have significant astigmatism addressed surgically and must rely on glasses for distance or near vision. Moreover, surgeon reimbursement for these standard procedures continues to decline.
These regulations cover the methods and the facilities and controls for the design, manufacture, testing, production, processes, controls, quality assurance, labeling, packaging, distribution, installation and servicing of finished devices intended for human use. The QSR also requires, among other things, maintenance of a device master file, device history file, and complaint files.
These regulations cover the methods and the facilities and controls for the design, manufacture, testing, production, processes, controls, quality assurance, labeling, packaging, distribution, installation and servicing of finished devices intended for human use. The QMSR also requires, among other things, maintenance of a medical device file.
We believe there is significant opportunity for us to expand our presence in these countries and other countries where we have no or only a limited number of installed systems. For the year ended December 31, 2024, one customer accounted for approximately 14% of our revenue and one customer accounted for approximately 12% of our accounts receivable, net.
We believe there is significant opportunity for us to expand our presence in these countries and other countries where we have no or only a limited number of installed systems. For the year ended December 31, 2025, one customer accounted for approximately 13% of our revenue and no customer accounted for more than 10% of our accounts receivable, net.
To achieve their targeted visual outcome, patients may elect to have an advanced procedure that involves use of a laser system and/or implantation of a premium IOL, and/or addresses their pre-existing astigmatism 7 in which case the patient is responsible for the cost differential between the amount reimbursed by a third-party payor and the cost of the advanced procedure.
To achieve their targeted visual outcome, patients may elect to have an advanced procedure that involves use of a laser system and/or implantation of a premium IOL, and/or addresses their pre-existing astigmatism in which case the patient is responsible for the cost differential between the amount reimbursed by a third-party payor and the cost of the advanced procedure. 8 The majority of patients suffering from cataracts also present with visually significant astigmatism.
The aforementioned EU rules are generally applicable in the EEA. 24 Coverage and Reimbursement In the United States and markets in other countries, patients who are prescribed treatments for their conditions and providers performing the prescribed services generally rely on third-party payors to reimburse all or part of the associated healthcare costs.
Reimbursement and Patient Payment In the United States and markets in other countries, patients who are prescribed treatments for their conditions and providers performing the prescribed services generally rely on third-party payors to reimburse all or part of the associated healthcare costs.
As of December 31, 2024, we owned approximately 64 U.S. patents, 31 pending U.S. patent applications, 183 issued foreign patents, and 83 pending foreign and Patent Cooperation Treaty applications. Our patents are expected to expire between 2026 and 2040, with some design patents expiring in 2046.
As of December 31, 2025, we owned approximately 76 U.S. patents, 26 pending U.S. patent applications, 216 issued foreign patents, and 79 pending foreign and Patent Cooperation Treaty applications. Our patents are expected to expire between 2026 and 2040, with some design patents expiring in 2046.
This amendment will come into force on June 16, 2025 and aims to facilitate greater traceability of incidents and trends enabling the MHRA to act swiftly when needed to address safety issues and support the entire health system in better protecting patients.
This amendment also aims to facilitate greater traceability of incidents and trends enabling the MHRA to act swiftly when needed to address safety issues and support the entire health system in better protecting patients.
Based on the 2024 Cataract Surgical Equipment Market Report, it was estimated that we achieved 16.1% market share in laser assisted cataract surgery in 2023 in terms of revenue.
Based on the 2025 Cataract Surgical Equipment Market Report, it was estimated that we achieved 18.0% market share in laser cataract surgery in 2024 in terms of revenue.
In addition, new regulations applicable in Great Britain now require that all medical devices must be registered with the MHRA prior to being placed on the market. Additionally, manufacturers based outside the UK will need to appoint a UK Responsible Person to register devices with the MHRA.
In addition, all medical devices must be registered with the MHRA prior to being placed on the market. Additionally, manufacturers based outside the UK need to appoint a UK Responsible Person to register devices with the MHRA.
The majority of patients suffering from cataracts also present with visually significant astigmatism. Astigmatism is an imperfection in the symmetry of the cornea, creating a different, additional focal plane in a specific axis within the cornea. This causes a distortion of the light as it converges on the retina and causes blurry vision.
Astigmatism is an imperfection in the symmetry of the cornea, creating a different, additional focal plane in a specific axis within the cornea. This causes a distortion of the light as it converges on the retina and causes blurry vision.
The new legislation is expected to be implemented in 2026 and aims to enable greater international collaboration and practices, with more patient-centered, proportionate requirements for medical devices which are responsive to technological advances.
A draft of the new legislation is expected this year and aims to enable greater international collaboration and practices, with more patient-centered, proportionate requirements for medical devices which are responsive to technological advances.
According to the 2024 Cataract Surgical Equipment Market Report, there were an estimated 2,611 cataract laser systems installed at the end of 2024, of which 2,479 were in markets that we service. The number of total cataract laser systems installed is expected to grow to over 3,215 devices by 2029.
According to the 2025 Cataract Surgical Equipment Market Report, there were an estimated 2,085 cataract laser systems installed at the end of 2025, of which 1,960 were in markets that we service. The number of total cataract laser systems installed is expected to grow to over 2,475 devices by 2030.
Laser-assisted cataract surgery involves the same steps as traditional surgery but uses advanced imaging techniques to design a precise surgical plan and a femtosecond laser, the same type of laser engine used to cut the flaps in LASIK corrective procedures, to make the AIs and perform the capsulorhexis.
The use of a laser during cataract surgery allows the surgeon to use advanced imaging techniques to design a precise surgical plan and a femtosecond laser, the same type of laser engine used to cut the flaps in LASIK corrective procedures, to make the AIs and perform the capsulorhexis.
Additionally, when looking at the average procedures per installed device, each of our systems averaged 437 procedures in 2024 compared to the estimated industry average of 385 procedures per year per installed device, based on a 2024 Cataract Surgical Equipment Market Report.
Additionally, when looking at the average procedures per installed device, each ALLY System averaged 624 procedures in 2025 compared to the estimated industry average of 496 procedures per year per installed device, based on a 2025 Cataract Surgical Equipment Market Report.
Manufacturers (and authorized representatives) must also have available within their organization at least one person responsible for regulatory compliance, or PRRC, who possesses the requisite expertise in the field of medical devices.
Manufacturers (and authorized representatives) must also have available within their organization at least one person responsible for regulatory compliance, or PRRC, who possesses the requisite expertise in the field of medical devices. The PRRC is responsible for all aspects of compliance with the requirements of the EU Medical Devices Regulation and in particular compliance with post-market surveillance and vigilance requirements.
Once applicable, it will have a phased implementation depending on the concerned products. The Regulation intends to boost cooperation among EU member states in assessing health technologies, including certain high-risk medical devices, and provide the basis for cooperation at the EU level for joint clinical assessments in these areas.
The Regulation intends to boost cooperation among EU member states in assessing health technologies, including certain high-risk medical devices, and provide the basis for cooperation at the EU level for joint clinical assessments in these areas.
This system is designed to be a significant medical advancement and provide improved efficiency and financial benefit to a surgeon’s practice and to ambulatory surgery centers, or ASCs. The ALLY System received clearance from the U.S. Food and Drug Administration, or FDA, in June 2022, and we began commercialization of the ALLY System in August 2022.
This system is designed to be a significant medical advancement and provide improved efficiency and financial benefit to a surgeon’s practice and to ambulatory surgery centers, or ASCs. The ALLY System received clearance from the U.S.
As of December 31, 2024, we had a total of approximately 385 systems installed in a total of 16 countries, with approximately 50% of those systems in the United States where we have a direct sales relationship with our customers, and with China, South Korea, and Germany representing our largest markets outside the United States, where we sell our products through distributor relationships.
As of December 31, 2025, we had a total of approximately 435 systems installed in a total of 17 countries, with approximately 51% of those systems in the United States where we have a direct sales relationship with our customers, and with Europe and Asia representing our largest markets outside the United States, where we sell our products through distributor relationships.
Companies targeted in such prosecutions have paid substantial fines in the hundreds of millions of dollars or more, have been forced to implement extensive corrective action plans, can be excluded from federal health care programs and become subject to substantial civil and criminal penalties, and have often become subject to consent decrees, settlement agreements or corporate integrity agreements severely restricting the manner in which they conduct their business.
Companies targeted in such prosecutions have paid substantial fines in the hundreds of millions of dollars or more, have been forced to implement extensive corrective action plans, can be excluded from federal health care programs and become subject to substantial civil and criminal penalties, and have often become subject to consent decrees, settlement agreements or corporate integrity agreements severely restricting the manner in which they conduct their business. 23 Because we have commercial operations overseas, we are also subject to the Foreign Corrupt Practices Act, or FCPA, and other countries’ anti-corruption/anti-bribery regimes, such as the U.K.
According to the 2024 Cataract Surgical Equipment Market Report, global estimated cataract surgery and refractive lens exchange surgical procedures (cataract surgery) are expected to grow from 31.9 million in 2024 to 37.8 million in 2029. In the United States, cataract surgery is expected to increase from almost 4.9 million procedures in 2024 to approximately 5.7 million in 2029.
According to the 2025 Cataract Surgical Equipment Market Report, global estimated cataract surgery and refractive lens exchange surgical procedures (cataract surgery) are expected to grow from 33.1 million in 2025 to 39.6 million in 2030. In the United States, cataract surgery is expected to increase from almost 5.1 million procedures in 2025 to approximately 5.9 million in 2030.
We currently have and intend to have long-term supply agreements or sufficient supply of raw material inventory to adequately source the expected near-term demand of our ALLY System.
We currently have and intend to have long-term supply agreements or sufficient supply of raw material inventory to adequately source the expected near-term demand of our ALLY System. We strive to maintain enough inventory of our various component parts to avoid the impact of any supply chain disruptions.
Furthermore, on December 16, 2024, the UK government published an amendment to UK Medical Devices Regulations to clarify and strengthen the post-market surveillance requirements for medical devices in Great Britain.
Furthermore, on June 16, 2025, an amendment to UK Medical Devices Regulations became applicable which aims to clarify and strengthen the post-market surveillance requirements for medical devices in Great Britain.
According to the EU Medical Devices Regulation, only devices that are CE marked may be marketed and advertised in the EU in accordance with their intended purpose.
The advertising and promotion of medical devices is subject to some general principles set forth in the EU legislation. According to the EU Medical Devices Regulation, only devices that are CE-marked may be marketed and advertised in the EU in accordance with their intended purpose.
We strive to maintain enough inventory of our various component parts to avoid the impact of any supply chain disruptions. 15 Intellectual Property We seek patent and trademark protection for our key technology, products and product improvements, both in the United States and in select foreign countries. We plan to continue to enforce and defend our patent and trademark rights.
Intellectual Property We seek patent and trademark protection for our key technology, products and product improvements, both in the United States and in select foreign countries. We plan to continue to enforce and defend our patent and trademark rights.
We believe that the principal competitive factors in our market include: • improved outcomes for patients; • acceptance by surgeons; • ease of use and reliability; • product price and availability of reimbursement; • product bundling and multiple product purchasing agreements; • technical leadership; • effective marketing and distribution; and • speed to market.
We believe that the principal competitive factors in our market include: • improved outcomes for patients; • acceptance by surgeons; • ease of use and reliability; • product price and availability of reimbursement; • product bundling and multiple product purchasing agreements; • technical leadership; • effective marketing and distribution; and • speed to market. 17 Regulation United States We manufacture and market medical devices and, therefore, are subject to extensive regulation by the FDA and other federal and state authorities in the United States, as well as comparable authorities in foreign jurisdictions.
Regulatory authorities have broad compliance and enforcement powers and if such issues cannot be resolved to their satisfaction can take a variety of actions, including untitled or warning letters, fines, consent decrees, injunctions, or civil or criminal penalties.
Regulatory authorities have broad compliance and enforcement powers and if such issues cannot be resolved to their satisfaction can take a variety of actions, including untitled or warning letters, fines, consent decrees, injunctions, or civil or criminal penalties. 22 The aforementioned EU rules are generally applicable in the European Economic Area, or EEA, which consists of the 27 EU member states plus Norway, Liechtenstein and Iceland.
These competitors are focused on bringing new technologies to market and acquiring products and technologies that directly compete with our products or have potential product advantages that could render our products obsolete or noncompetitive.
These competitors are focused on bringing new technologies to market and acquiring products and technologies that directly compete with our products or have potential product advantages that could render our products obsolete or noncompetitive. Bausch + Lomb announced, in November 2025, that they anticipate launching a second-generation femtosecond laser in the second half of 2026.
More recently, and where the magnitude of astigmatism is higher, toric IOLs may be used to both correct the patient’s near or far vision and address any pre-existing astigmatism. Laser-Assisted Cataract Surgery. In the last 10 to 15 years, special laser systems have been developed to assist surgeons in performing or facilitating the various aspects of cataract procedures.
More recently, and where the magnitude of astigmatism is higher, toric IOLs may be used to both correct the patient’s near or far vision and address any pre-existing astigmatism. Use of a laser during cataract surgery.
Sales and Distribution We have built and are continuing to grow our commercial organization, which includes a direct sales force in the United States and third-party distributors in China, South Korea, Germany, India, and other targeted international markets.
Sales and Distribution We have built and are continuing to grow our commercial organization, which includes a direct sales force in the United States and third-party distributors in Europe and Asia, and other targeted international markets. Depending on the dynamics of a particular geographic region, we and our distributors typically market and sell our systems to ASCs, hospitals and physicians.
In August 2024, we obtained certification of our ALLY System under the Medical Devices Regulation in the EU, and we have also received regulatory clearance in India, Taiwan, and certain other countries. In addition, we are pursuing additional marketing or certification applications through our distributors in South Korea and China.
In August 2024, we obtained certification of our ALLY System under the Medical Devices Regulation in the EU, and we have also received regulatory clearance in India, Taiwan, South Korea, and certain other countries. Manufacturing We manufacture our ALLY Systems, and previously manufactured our LLS systems, at a facility in Orlando, Florida.
We have 183 issued foreign patents in a total of 15 countries and regions, including China, Macau, Taiwan, Germany, France, Spain, United Kingdom, Italy, Australia, European Unitary Patent and the European Patent Office.
We do not believe that the expiration of any individual patent will have a material adverse effect on our business, financial condition or results of operations. We have 216 issued foreign patents in a total of 15 countries and regions, including China, Macau, Taiwan, Germany, France, Spain, United Kingdom, Italy, Australia, European Unitary Patent and the European Patent Office.
Our intellectual property portfolio further secures a premier technology position for the development and commercialization of devices that incorporate both a phacoemulsification system and a laser, such as our ALLY System.
Our material registered and unregistered trademarks include: LENSAR, ALLY Robotic Cataract Laser System, INTELLIAXIS, INTELLIAXIS-C, INTELLIAXIS-L, INTELLIAXIS REFRACTIVE CAPSULORHEXIS, STREAMLINE, ALLY Robotic Cataract Laser System, ALLY Robotic Cataract Laser System logo, Robotic Laser Cataract Surgery, the Robotic Laser Cataract Surgery logo, and LENSDOCTOR SOFTWARE. 16 Our intellectual property portfolio further secures a premier technology position for the development and commercialization of devices that incorporate both a phacoemulsification system and a laser, such as our ALLY System.
Data Privacy and Security Numerous state, federal and foreign laws, regulations and standards govern the collection, use, access to, confidentiality and security of health-related and other personal information and could apply now or in the future to our operations or the operations of our partners.
Individual EU member states will continue to be responsible for assessing non-clinical (e.g., economic, social, ethical) aspects of health technology, and making decisions on pricing and reimbursement. 25 Data Privacy and Security Numerous state, federal and foreign laws, regulations and standards govern the collection, use, access to, confidentiality and security of health-related and other personal information and could apply now or in the future to our operations or the operations of our partners.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe EU AI Act, and developing interpretation and application of the GDPR in respect of automated decision making, together with developing guidance and/or decisions in this area, may affect our use of AI Technologies and our ability to provide, improve or commercialize our services, require additional compliance measures and changes to our operations and processes, and result in increased compliance costs and potential increases in civil claims against us, and could adversely affect our business, operations and financial condition.
Biggest changeThe EU AI Act, and developing interpretation and application of the GDPR in respect of automated decision making, together with developing guidance and/or decisions in this area, may affect our use of AI Technologies and our ability to provide, improve or commercialize our services, require additional compliance measures and changes to our operations and processes, and result in increased compliance costs and potential increases in civil claims against us, and could adversely affect our business, operations and financial condition. 68 It is possible that further new laws and regulations will be adopted in the United States and in other non-U.S. jurisdictions, or that existing laws and regulations, including competition and antitrust laws, may be interpreted or enforced in ways that would limit our ability to use AI Technologies for our business, or require us to change the way we use AI Technologies in a manner that negatively affects the performance of our products, services, and business and the way in which we use AI Technologies.
If the level of credit losses we experience in the future exceed our expectations, such losses could have a material adverse effect on our business, financial condition and results of operations or adversely affect our ability to sell such assets as part of our monetization strategy. 36 We may be unable to accurately forecast customer demand and our inventory levels.
If the level of credit losses we experience in the future exceed our expectations, such losses could have a material 36 adverse effect on our business, financial condition and results of operations or adversely affect our ability to sell such assets as part of our monetization strategy. We may be unable to accurately forecast customer demand and our inventory levels.
The FTC has authority to initiate enforcement actions against entities that make deceptive statements about privacy and data sharing in privacy policies, fail to limit third-party use of personal health information, fail to implement policies to protect personal health information or engage in other unfair practices that harm customers.
The FTC has authority to initiate enforcement actions against entities that make deceptive statements about privacy and data sharing in privacy policies, fail to limit third-party use of personal information, fail to implement policies to protect health information or engage in other unfair practices that harm customers.
However, certain medical devices in compliance with: (1) the EU Medical Devices Directive can continue to be placed on the Great Britain market until the sooner of certificate expiration or June 30, 2028; or (2) the EU Medical Devices Regulation can continue to be placed on the Great Britain market until the sooner of certificate expiration or June 30, 2030.
However, certain medical devices in compliance with: (1) the EU Medical Devices Directive can continue to be placed on the Great Britain market until the sooner of certificate expiration or June 30, 2028; or (2) the EU Medical Devices Regulation can continue to be placed on the Great Britain market until June 30, 2030.
We may experience delays in our ongoing clinical trials for a number of reasons, which could adversely affect the costs, timing or successful completion of our clinical trials, including related to the following: • we may be required to submit an Investigational Device Exemption, or IDE, application to FDA, which must become effective prior to commencing certain human clinical trials of medical devices, and FDA may reject our IDE application and notify us that we may not begin clinical trials, and similar risks may apply in foreign jurisdictions; • regulators and other comparable foreign regulatory authorities may disagree as to the design or implementation of our clinical trials; • regulators, Institutional Review Boards, or IRBs, or other reviewing bodies may not authorize us or our investigators to commence a clinical trial, or to conduct or continue a clinical trial at a prospective or specific trial site; • we may not reach agreement on acceptable terms with prospective contract research organizations, or CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; • clinical trials may produce negative or inconclusive results, and we may decide, or regulators or notified bodies may require us, to conduct additional clinical trials or abandon product development programs; • the number of subjects or patients required for clinical trials may be larger than we anticipate, enrollment in these clinical trials may be insufficient or slower than we anticipate, and the number of clinical trials being conducted at any given time may be high and result in fewer available patients for any given clinical trial, or patients may drop out of these clinical trials at a higher rate than we anticipate; • our third-party contractors, including those manufacturing products or conducting clinical trials on our behalf, may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; • we might have to suspend or terminate clinical trials for various reasons, including a finding that the subjects are being exposed to unacceptable health risks; • we may have to amend clinical trial protocols or conduct additional studies to reflect changes in regulatory requirements or guidance, which we may be required to submit to an IRB (or other reviewing bodies), regulatory authorities, or both, for re-examination; • regulators, IRBs, other reviewing bodies, or other parties may require or recommend that we or our investigators suspend or terminate clinical research for various reasons, including safety signals or noncompliance with regulatory requirements; • the cost of clinical trials may be greater than we anticipate; • clinical sites may not adhere to the clinical protocol or may drop out of a clinical trial; • we may be unable to recruit a sufficient number of clinical trial sites; • regulators, IRBs, or other reviewing bodies may fail to approve or subsequently find fault with our manufacturing processes or facilities of third-party manufacturers with which we enter into agreement for clinical and commercial supplies, the supply of devices or other materials necessary to conduct clinical trials may be insufficient, inadequate or not available at an acceptable cost, or we may experience interruptions in supply; • approval or certification policies or regulations of FDA or applicable foreign regulatory agencies may change in a manner rendering our clinical data insufficient for certification or approval; and 52 • our current or future products may have undesirable side effects or other unexpected characteristics.
We may experience delays in our ongoing clinical trials for a number of reasons, which could adversely affect the costs, timing or successful completion of our clinical trials, including related to the following: • we may be required to submit an Investigational Device Exemption, or IDE, application to FDA, which must become effective prior to commencing certain human clinical trials of medical devices, and FDA may reject our IDE application and notify us that we may not begin clinical trials, and similar risks may apply in foreign jurisdictions; • regulators and other comparable foreign regulatory authorities may disagree as to the design or implementation of our clinical trials; • regulators, Institutional Review Boards, or IRBs, or other reviewing bodies may not authorize us or our investigators to commence a clinical trial, or to conduct or continue a clinical trial at a prospective or specific trial site; • we may not reach agreement on acceptable terms with prospective contract research organizations, or CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; • clinical trials may produce negative or inconclusive results, and we may decide, or regulators or notified bodies may require us, to conduct additional clinical trials or abandon product development programs; 52 • the number of subjects or patients required for clinical trials may be larger than we anticipate, enrollment in these clinical trials may be insufficient or slower than we anticipate, and the number of clinical trials being conducted at any given time may be high and result in fewer available patients for any given clinical trial, or patients may drop out of these clinical trials at a higher rate than we anticipate; • our third-party contractors, including those manufacturing products or conducting clinical trials on our behalf, may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; • we might have to suspend or terminate clinical trials for various reasons, including a finding that the subjects are being exposed to unacceptable health risks; • we may have to amend clinical trial protocols or conduct additional studies to reflect changes in regulatory requirements or guidance, which we may be required to submit to an IRB (or other reviewing bodies), regulatory authorities, or both, for re-examination; • regulators, IRBs, other reviewing bodies, or other parties may require or recommend that we or our investigators suspend or terminate clinical research for various reasons, including safety signals or noncompliance with regulatory requirements; • the cost of clinical trials may be greater than we anticipate; • clinical sites may not adhere to the clinical protocol or may drop out of a clinical trial; • we may be unable to recruit a sufficient number of clinical trial sites; • regulators, IRBs, or other reviewing bodies may fail to approve or subsequently find fault with our manufacturing processes or facilities of third-party manufacturers with which we enter into agreement for clinical and commercial supplies, the supply of devices or other materials necessary to conduct clinical trials may be insufficient, inadequate or not available at an acceptable cost, or we may experience interruptions in supply; • approval or certification policies or regulations of FDA or applicable foreign regulatory agencies may change in a manner rendering our clinical data insufficient for certification or approval; and • our current or future products may have undesirable side effects or other unexpected characteristics.
Our intellectual property, including trademarks, could be challenged, invalidated, infringed, and circumvented by third parties, and our trademarks could also be diluted, declared generic or found to be infringing on other marks.
Our intellectual property, including trademarks, could be challenged, invalidated, infringed, or circumvented by third parties, and our trademarks could also be diluted, declared generic or found to be infringing on other marks.
Proceedings challenging our patents could result in either loss of the patent, or denial or the patent application or loss or reduction in the scope of one or more of the claims of the patent or patent application. In addition, such proceedings may be costly. Thus, any patents that we may own may not provide any protection against competitors.
Proceedings challenging our patents could result in either loss of the patent, or denial of the patent application or loss or reduction in the scope of one or more of the claims of the patent or patent application. In addition, such proceedings may be costly. Thus, any patents that we may own may not provide any protection against competitors.
Any litigation or claim against us, even those without merit and even those where we prevail, may cause us to incur substantial costs, and could place a significant strain on our financial resources, divert the attention of management from our core business and harm our reputation.
Any litigation or claim against us, even those without merit or those where we prevail, may cause us to incur substantial costs, and could place a significant strain on our financial resources, divert the attention of management from our core business, and harm our reputation.
If we fail to obtain any required licenses or make any necessary changes to our products or technologies, we may have to withdraw existing products from the market or may be unable to commercialize one or more of our products.
If we fail to obtain any required licenses or fail to make any necessary changes to our products or technologies, we may have to withdraw existing products from the market or may be unable to commercialize one or more of our products.
Proceedings to enforce our patent and trademarks rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents and trademarks in those jurisdictions, as well as elsewhere at risk of being invalidated or interpreted narrowly and our patent or trademark applications at risk, and could provoke third parties to assert claims against us.
Proceedings to enforce our patent and trademarks rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents, patent applications, trademarks, and trademark applications in those jurisdictions, as well as elsewhere, at risk of being invalidated or interpreted narrowly and our patent or trademark applications at risk, and could provoke third parties to assert claims against us.
Using these third parties poses a number of risks, such as: • they may not perform to our standards or legal requirements; • they may not produce reliable results; • they may not perform in a timely manner; • they may not maintain confidentiality of our proprietary information; • disputes may arise with respect to ownership of rights to technology developed with our partners, and those disputes may be resolved against us; and • disagreements could cause delays in, or termination of, the research, development or commercialization of our products or result in litigation or arbitration.
Using these third parties poses a number of risks, such as: • they may not perform to our standards or legal requirements; • they may not produce reliable results or products; • they may not perform in a timely manner; • they may not maintain the confidentiality of our proprietary information; • disputes may arise with respect to ownership of rights to technology developed with our partners, and those disputes may be resolved against us; and • disagreements could cause delays in, or termination of, the research, development or commercialization of our products or result in litigation or arbitration.
The Series A Redeemable Convertible Preferred Stock ranks senior to the common stock as to distributions and payments upon the liquidation, dissolution and winding up of the Company, and holders of Series A Redeemable Convertible Preferred Stock will participate with the holders of the common stock on an as-converted basis to the extent any dividends are declared on common stock.
The Series A Redeemable Convertible Preferred Stock ranks senior to the common stock as to distributions and payments upon the liquidation, dissolution and winding up of the Company, and holders of Series A Redeemable Convertible Preferred Stock will participate with the holders of the common stock on an as-converted basis to the extent any dividends are declared on common stock.
Holders of Series A Redeemable Convertible preferred stock are also entitled to redemption rights under certain circumstances.
Holders of Series A Redeemable Convertible preferred stock are also entitled to redemption rights under certain circumstances.
Our failure to comply with applicable regulatory requirements could result in enforcement action by the FDA, state or foreign regulatory authorities or notified bodies, which may include any of the following sanctions: • untitled letters or warning letters; • fines, injunctions, consent decrees and civil penalties; • recalls, termination of distribution, administrative detention, or seizure of our products; • customer notifications or repair, replacement or refunds; • operating restrictions or partial suspension or total shutdown of production; 48 • delays in or refusal to grant our requests for future clearances, certifications or approvals (including foreign regulatory approvals) of new products, new intended uses, or modifications to existing products; • withdrawals or suspensions of our current 510(k) clearances or certifications, resulting in prohibitions on sales of our products; • FDA refusal to issue certificates to foreign governments needed to export products for sale in other countries; and • criminal prosecution.
Our failure to comply with applicable regulatory requirements could result in enforcement action by the FDA, state or foreign regulatory authorities or notified bodies, which may include any of the following sanctions: • untitled letters or warning letters; • fines, injunctions, consent decrees and civil penalties; • recalls, termination of distribution, administrative detention, or seizure of our products; • customer notifications or repair, replacement or refunds; • operating restrictions or partial suspension or total shutdown of production; • delays in or refusal to grant our requests for future clearances, certifications or approvals (including foreign regulatory approvals) of new products, new intended uses, or modifications to existing products; • withdrawals or suspensions of our current 510(k) clearances or certifications, resulting in prohibitions on sales of our products; • FDA refusal to issue certificates to foreign governments needed to export products for sale in other countries; and • criminal prosecution.
Other factors that may cause fluctuations in our quarterly and annual results include: • fluctuations in the demand for the more advanced, patient-pay procedures in which our Systems are used; • adoption of our LLS and ALLY Systems; • our ability to establish and maintain an effective and dedicated sales organization in the United States and network of independent distributors outside the United States; • pricing pressure applicable to our products from competitor pricing; • results of clinical research and studies on our products or competitive products; • the mix of sales and leases of our Systems; • timing of delivery of Systems, new product offerings, acquisitions, licenses or other significant events by us or our competitors; • decisions by surgeons, hospitals and ASCs to defer acquisitions of Systems in anticipation of the introduction of new products or product enhancements by us or our competitors; • sampling by and additional training requirements for cataract surgeons upon the commercialization of a new product by us or one of our competitors; • regulatory approvals, clearances or certifications and legislative changes affecting the products we may offer or those of our competitors; • interruption in the manufacturing or distribution of our Systems; • delays in, or failure of, component and raw material deliveries by our suppliers; • the ability of our suppliers to timely provide us with an adequate supply of components; • the effect of competing technological, industry and market developments; and 39 • changes in our ability to obtain regulatory clearance, certification or approval for our product candidates.
Other factors that may cause fluctuations in our quarterly and annual results include: • fluctuations in the demand for the more advanced, patient-pay procedures in which our Systems are used; • adoption of our Systems; • our ability to establish and maintain an effective and dedicated sales organization in the United States and network of independent distributors outside the United States; • pricing pressure applicable to our products from competitor pricing; • results of clinical research and studies on our products or competitive products; • the mix of sales and leases of our Systems; • timing of delivery of Systems, new product offerings, acquisitions, licenses or other significant events by us or our competitors; • decisions by surgeons, hospitals and ASCs to defer acquisitions of Systems in anticipation of the introduction of new products or product enhancements by us or our competitors; • sampling by and additional training requirements for cataract surgeons upon the commercialization of a new product by us or one of our competitors; • regulatory approvals, clearances or certifications and legislative changes affecting the products we may offer or those of our competitors; • interruption in the manufacturing or distribution of our Systems; 39 • delays in, or failure of, component and raw material deliveries by our suppliers; • the ability of our suppliers to timely provide us with an adequate supply of components; • the effect of competing technological, industry and market developments; and • changes in our ability to obtain regulatory clearance, certification or approval for our product candidates.
For more information, see “—Legislative or regulatory reforms in the United States or the EU may make it more difficult and costly for us to obtain regulatory clearances, certifications or approvals for our products or to manufacture, market or distribute our products after clearance, certification or approval is obtained.” Our products must be manufactured in accordance with federal, state and foreign regulations, and we or any of our suppliers could be forced to recall products or terminate production if we fail to comply with these regulations.
For more information, see “—Legislative or regulatory reforms in the United States or the EU may make it more difficult and costly for us to obtain regulatory clearances, certifications or approvals for our products or to manufacture, market or distribute our products after clearance, certification or approval is obtained.” 49 Our products must be manufactured in accordance with federal, state and foreign regulations, and we or any of our suppliers could be forced to recall products or terminate production if we fail to comply with these regulations.
Any perception by physicians and other healthcare providers that the reimbursement for procedures using our ALLY System or other future products is inadequate to compensate them for the work required, including diagnosis, documentation, obtaining third-party payor approval for the procedure and other burdens on their office staff or that they may not be reimbursed at all for the procedures using our ALLY System or other future products, may negatively affect the adoption and use of our ALLY System or other future products and technologies, and the prices paid for such products may decline.
Any perception by physicians and other healthcare providers that the reimbursement for procedures using our ALLY System or other future products is inadequate to compensate them for the work required, including diagnosis, documentation, obtaining third-party payor approval for the procedure and other burdens on their office staff or that they may not be reimbursed at all for the procedures using our ALLY System or 37 other future products, may negatively affect the adoption and use of our ALLY System or other future products and technologies, and the prices paid for such products may decline.
Failure to comply with applicable regulations could jeopardize our ability to sell our products and result in enforcement actions such as: warning letters; fines; injunctions; civil penalties; termination of distribution; recalls or seizures of products; 45 delays in the introduction of products into the market; total or partial suspension of production; refusal to grant future clearances, certifications or approvals; withdrawals or suspensions of current approvals or certifications, resulting in prohibitions on sales of our products; and in the most serious cases, criminal penalties.
Failure to comply with applicable regulations could jeopardize our ability to sell our products and result in enforcement actions such as: warning letters; fines; injunctions; 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; refusal to grant future clearances, certifications or approvals; withdrawals or suspensions of current approvals or certifications, resulting in prohibitions on sales of our products; and in the most serious cases, criminal penalties.
The ability of the FDA, foreign regulatory agencies and notified bodies to review and clear, certify or approve new products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory, and policy changes, the FDA’s, foreign regulatory agencies’ and notified bodies’ ability to hire and retain key personnel and accept the payment of user fees, and other events that may otherwise affect the FDA’s, foreign 54 regulatory agencies’ and notified bodies’ ability to perform routine functions.
The ability of the FDA, foreign regulatory agencies and notified bodies to review and clear, certify or approve new products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory, and policy changes, the FDA’s, foreign regulatory agencies’ and notified bodies’ ability to hire and retain key personnel and accept the payment of user fees, and other events that may otherwise affect the FDA’s, foreign regulatory agencies’ and notified bodies’ ability to perform routine functions.
Our amended and restated certificate of incorporation authorizes us to issue, without the approval of our stockholders, one or more series of preferred stock having such designation, powers, privileges, preferences, including preferences over our common stock respecting dividends and distributions, terms of redemption and relative participation, optional, or other rights, if any, of the shares of each such series of preferred stock and any qualifications, limitations or restrictions thereof, as our board of directors may determine.
Our amended and restated certificate of incorporation authorizes us to issue, without the approval of our stockholders, one or more series of preferred stock having such designation, powers, privileges, preferences, including preferences over our common stock respecting dividends and distributions, terms of redemption and relative participation, 69 optional, or other rights, if any, of the shares of each such series of preferred stock and any qualifications, limitations or restrictions thereof, as our board of directors may determine.
Seeking such clearances, certifications or approvals may delay our ability to replace the recalled devices in a timely manner. Moreover, if we do not adequately address problems associated with our devices, we may face additional regulatory enforcement 50 action, including warning letters from the FDA (or foreign regulatory authorities), product seizure, injunctions, administrative penalties or civil or criminal fines.
Seeking such clearances, certifications or approvals may delay our ability to replace the recalled devices in a timely manner. Moreover, if we do not adequately address problems associated with our devices, we may face additional regulatory enforcement action, including warning letters from the FDA (or foreign regulatory authorities), product seizure, injunctions, administrative penalties or civil or criminal fines.
Data breaches could result in a violation of applicable U.S. and 42 international privacy, data protection and other laws, and subject us to individual or consumer class action litigation and governmental investigations and proceedings by federal, state and local regulatory entities in the United States and by international regulatory entities, resulting in exposure to material civil or criminal liability, or both.
Data breaches could result in a violation of applicable U.S. and international privacy, data protection and other laws, and subject us to individual or consumer class action litigation and governmental investigations and proceedings by federal, state and local regulatory entities in the United States and by international regulatory entities, resulting in exposure to material civil or criminal liability, or both.
Furthermore, even if our patents or other intellectual property are found to be valid and infringed, a court may refuse to grant injunctive relief against the infringer and instead grant us monetary damages or ongoing royalties. Such monetary compensation may be 62 insufficient to adequately offset the damage to our business caused by the infringer’s competition in the market.
Furthermore, even if our patents or other intellectual property are found to be valid and infringed, a court may refuse to grant injunctive relief against the infringer and instead grant us monetary damages or ongoing royalties. Such monetary compensation may be insufficient to adequately offset the damage to our business caused by the infringer’s competition in the market.
In addition, so long as NR-GRI and its affiliates collectively beneficially own at least twenty percent of the securities issued pursuant to the SPA, including the Series A Redeemable Convertible Preferred Stock, we may not, without the consent of NR-GRI, liquidate, dissolve, or wind up our affairs or effect a merger or sale of the Company or other Fundamental Transaction (as defined in Note 12, Redeemable Convertible Preferred Stock , included elsewhere in this Annual Report); create, authorize, or issue shares of capital stock that are senior or pari passu to the Series A Redeemable Convertible Preferred Stock; complete an acquisition with consideration above $1.0 million; incur debt in excess of $1.0 million; change our line of business; or enter into certain related-party transactions.
In addition, so long as NR-GRI and its affiliates collectively beneficially own at least twenty percent of the securities issued pursuant to the SPA, including the Series A Redeemable Convertible Preferred Stock, we may not, without the consent of NR-GRI, liquidate, dissolve, or wind up our affairs or effect a merger or sale of the Company or other Fundamental Transaction (as defined in Note 12, Redeemable Convertible Preferred Stock , to our financial statements included elsewhere in this Annual Report); create, authorize, or issue shares of capital stock that are senior or pari passu to the Series A Redeemable Convertible Preferred Stock; complete an acquisition with consideration above $1.0 million; incur debt in excess of $1.0 million; change our line of business; or enter into certain related-party transactions.
In addition, our efforts to enter into confidentiality agreements with our employees, consultants, clients and other vendors who have access to such information, our trade secrets, data and know-how may not prevent unauthorized use, misappropriation, or disclosure to unauthorized parties, and could otherwise become known or be independently discovered by third parties.
In addition, our efforts to enter into confidentiality agreements with our employees, consultants, clients and other vendors who have access to our confidential information, our trade secrets, data and know-how may not prevent unauthorized use, misappropriation, or disclosure to unauthorized parties, and such information could otherwise become known or be independently discovered by third parties.
At times, competitors may adopt trade names or trademarks similar to ours, thereby impeding our ability to build brand identity and possibly leading to market confusion. Certain of our current or future trademarks may become so well known by the public that their use becomes generic and they lose trademark protection.
At times, competitors may adopt trade names or trademarks similar to ours, thereby impeding our ability to build brand identity and possibly leading to market confusion. Additionally, certain of our current or future trademarks may become so well known by the public that their use becomes generic and they lose trademark protection.
In order to generate future sales growth within the United States, we will need to expand the size and geographic scope of our U.S. direct sales organization. Accordingly, our future success will depend largely on our ability to train, retain 31 and motivate skilled regional sales managers and direct sales representatives with significant technical knowledge of our Systems.
In order to generate future sales growth within the United States, we will need to expand the size and geographic scope of our U.S. direct sales organization. Accordingly, our future success will depend largely on our ability to train, retain and motivate skilled regional sales managers and direct sales representatives with significant technical knowledge of our Systems.
It is possible that U.S. and foreign patents and pending patent applications or trademarks controlled by third parties may be alleged to cover our products, or that we may be accused of misappropriating third parties’ trade secrets. Additionally, our products include components that we purchase from vendors, and may include design components that are outside of our direct control.
It is possible that U.S. and foreign patents and pending patent applications or trademarks controlled by third parties may be alleged to cover our products, or that we may be accused of misappropriating third parties’ trade secrets. Additionally, our products include components that we purchase from vendors, and may include 61 design components that are outside of our direct control.
In addition, this may prevent or discourage unsolicited acquisition proposals or offers for our capital stock that stockholders may believe are in their best interest. North Run and its affiliates may also 69 determine to sell substantial amounts of our securities in one or more transactions, including to one or several private parties in negotiated transactions.
In addition, this may prevent or discourage unsolicited acquisition proposals or offers for our capital stock that stockholders may believe are in their best interest. North Run and its affiliates may also determine to sell substantial amounts of our securities in one or more transactions, including to one or several private parties in negotiated transactions.
Any potential intellectual property litigation also could force us to do one or more of the following: • stop making, selling or using products or technologies that allegedly infringe the asserted intellectual property; • lose the opportunity to license our intellectual property to others or to collect royalty payments based upon successful protection and assertion of our intellectual property rights against others; incur significant legal expenses; 61 • pay substantial damages or royalties to the party whose intellectual property rights we may be found to be infringing; • pay the attorney’s fees and costs of litigation to the party whose intellectual property rights we may be found to be infringing; • redesign those products or technologies that contain the allegedly infringing intellectual property, which could be costly and disruptive, and may be infeasible; and • attempt to obtain a license to the relevant intellectual property from third parties, which may not be available on reasonable terms or at all, or from third parties who may attempt to license rights that they do not have.
Any potential intellectual property litigation also could force us to do one or more of the following: • stop making, selling or using products or technologies that allegedly infringe the asserted intellectual property; • lose the opportunity to license our intellectual property to others or to collect royalty payments based upon successful protection and assertion of our intellectual property rights against others; • incur significant legal expenses; • pay substantial damages or royalties to the party whose intellectual property rights we may be found to be infringing; • pay the attorney’s fees and costs of litigation to the party whose intellectual property rights we may be found to be infringing; • redesign those products or technologies that contain the allegedly infringing intellectual property, which could be costly and disruptive, and may be infeasible; and 62 • attempt to obtain a license to the relevant intellectual property from third parties, which may not be available on reasonable terms or at all, or from third parties who may attempt to license rights that they do not have.
In particular, the FDA’s Quality System Regulation, or QSR, which includes FDA’s 34 current Good Manufacturing Practice requirements, or cGMPs, covers the procedures and documentation of the design, testing, production, control, quality assurance, inspection, complaint handling, recordkeeping, management review, labeling, packaging, sterilization, storage and shipping of our device products.
In particular, the FDA’s Quality System Regulation, or QSR, which includes FDA’s current Good Manufacturing Practice requirements, or cGMPs, covers the procedures and documentation of the design, testing, production, control, quality assurance, inspection, complaint handling, recordkeeping, management review, labeling, packaging, sterilization, storage and shipping of our device products.
Specifically, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations 57 intended to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements.
Specifically, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements.
Competitors could purchase our products and attempt to replicate or reverse engineer some or all of the competitive advantages we derive from our development efforts, willfully infringe our intellectual property rights, design around our patents, or develop and obtain patent protection for more effective technologies, designs or methods.
Competitors could purchase our products and attempt to replicate or reverse engineer some or all of the competitive advantages we derive from our development efforts, willfully infringe our intellectual property rights, design around 59 our patents, or develop and obtain patent protection for more effective technologies, designs or methods.
An inability 64 to incorporate technologies or features that are important or essential to our products could have a material adverse effect on our business, financial condition and results of operations, and may prevent us from selling our products. In addition, we may lose valuable intellectual property rights or personnel.
An inability to incorporate technologies or features that are important or essential to our products could have a material adverse effect on our business, financial condition and results of operations, and may prevent us from selling our products. In addition, we may lose valuable intellectual property rights or personnel.
If we are unable to enter into the necessary licenses on acceptable terms or at all, if any necessary licenses are subsequently terminated, if the licensors fail to abide by the terms of the licenses or fail to prevent infringement by third parties, or if the licensed patents or other rights are found to be invalid or 60 unenforceable, our business may suffer.
If we are unable to enter into the necessary licenses on acceptable terms or at all, if any necessary licenses are subsequently terminated, if the licensors fail to abide by the terms of the licenses or fail to prevent infringement by third parties, or if the licensed patents or other rights are found to be invalid or unenforceable, our business may suffer.
The laws of some foreign countries do not protect intellectual property rights including the protection of surgical and medical methods, to the same extent as laws in the United States. Consequently, we may not be able to prevent third parties from utilizing our inventions and trademarks in all countries outside the United States.
The laws of some foreign countries do not protect intellectual property rights including the protection of surgical and medical methods, to the same extent as laws in the United States. Consequently, we may not be able to prevent third parties from utilizing our inventions and trademarks in all 64 countries outside the United States.
A loss of key personnel or their work product could hamper or prevent our ability to commercialize our products, which could have an adverse effect on our business, financial condition and results of operations. The failure of third parties to meet their contractual, regulatory, and other obligations could adversely affect our business.
A loss of key personnel or their work product could hamper or prevent our ability to commercialize our products, which could have an adverse effect on our business, financial condition and results of operations. 65 The failure of third parties to meet their contractual, regulatory, and other obligations could adversely affect our business.
If we or our third-party vendors were to experience a significant cybersecurity breach of our or their information systems or data, the costs associated with the investigation, remediation and potential notification of the breach to counterparties and data subjects could 41 be material. In addition, our remediation efforts may not be successful.
If we or our third-party vendors were to experience a significant cybersecurity breach of our or their information systems or data, the costs associated with the investigation, remediation and potential notification of the breach to counterparties and data subjects could be material. In addition, our remediation efforts may not be successful.
Our clinical studies may produce negative or inconclusive results, and we may decide, or regulators or notified bodies may require us, to conduct additional clinical and non-clinical testing in addition to those we have planned. 51 The initiation and completion of any of clinical studies may be prevented, delayed, or halted for numerous reasons.
Our clinical studies may produce negative or inconclusive results, and we may decide, or regulators or notified bodies may require us, to conduct additional clinical and non-clinical testing in addition to those we have planned. The initiation and completion of any of clinical studies may be prevented, delayed, or halted for numerous reasons.
Our future compliance with the annual internal control report requirement will depend on the effectiveness of our financial reporting and data systems and controls across our 72 operating subsidiaries. We cannot be certain that these measures will ensure that we design, implement and maintain adequate controls over our financial processes and reporting in the future.
Our future compliance with the annual internal control report requirement will depend on the effectiveness of our financial reporting and data systems and controls across our operating subsidiaries. We cannot be certain that these measures will ensure that we design, implement and maintain adequate controls over our financial processes and reporting in the future.
For example, certain statements in our voluntary disclosures may be based on assumptions, estimates, hypothetical expectations, or third-party information. Additionally, expectations around the Company’s management of ESG matters continues to evolve rapidly, in many instances due to factors that are out of our control.
For example, certain statements in our voluntary disclosures may be based on assumptions, estimates, hypothetical expectations, or third-party information. Additionally, expectations around the Company’s management of ESG matters continues to evolve, in many instances due to factors that are out of our control.
The process of obtaining a PMA is much more costly and uncertain than the 510(k) clearance process and generally takes from one to three years, or even longer, from the time the application is filed with the FDA. In addition, a PMA generally requires the performance of one or more clinical trials.
The process of obtaining a PMA is much more 46 costly and uncertain than the 510(k) clearance process and generally takes from one to three years, or even longer, from the time the application is filed with the FDA. In addition, a PMA generally requires the performance of one or more clinical trials.
If we do not adequately protect our intellectual property and proprietary technology, competitors may be able to use our technologies we have acquired in the marketplace and erode or negate any competitive advantage we may have, which could harm our business and ability to achieve profitability.
If 58 we do not adequately protect our intellectual property and proprietary technology, competitors may be able to use our technologies we have acquired in the marketplace and erode or negate any competitive advantage we may have, which could harm our business and ability to achieve profitability.
Our systems 29 are currently used in advanced cataract procedures for which surgeon reimbursement continues to decline and patients pay a significant portion of the cost of the procedure. We cannot predict the extent to which patients will continue to seek out these types of procedures.
Our systems are currently used in advanced cataract procedures for which surgeon reimbursement continues to decline and patients pay a significant portion of the cost of the procedure. We cannot predict the extent to which patients will continue to seek out these types of procedures.
Our current products may not maintain, and our ALLY System or any planned or future products we may develop or market may never gain, broad market acceptance among cataract surgeons and the medical community for the procedures in which they are designed to be used.
Our current products may not maintain, and our ALLY System or any planned or future products we may develop or market may never gain, broad market acceptance among 29 cataract surgeons and the medical community for the procedures in which they are designed to be used.
In 47 particular, no substantial change must be made to the device as such a modification would trigger the obligation to obtain a new certification under the EU Medical Devices Regulation and therefore to have a notified body conducting a new conformity assessment of the devices.
In particular, no substantial change must be made to the device as such a modification would trigger the obligation to obtain a new certification under the EU Medical Devices Regulation and therefore to have a notified body conducting a new conformity assessment of the devices.
Third-party payors are imposing lower payment rates and negotiating reduced contract rates with hospitals, other healthcare facilities, surgeons and 37 other healthcare providers and being increasingly selective about the products, technologies and procedures they chose to cover and provide reimbursement for.
Third-party payors are imposing lower payment rates and negotiating reduced contract rates with hospitals, other healthcare facilities, surgeons and other healthcare providers and being increasingly selective about the products, technologies and procedures they chose to cover and provide reimbursement for.
For example, we have historically experienced seasonal variations in the selling or leasing of our products and procedures involving our products, with our fourth quarter typically being the strongest and the first or third quarter being the slowest. We believe these seasonal changes are consistent across our industry.
For example, we have historically experienced seasonal variations in the selling or leasing of our products and procedures involving our products, with our fourth quarter typically being the strongest and the first quarter being the slowest. We believe these seasonal changes are consistent across our industry.
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.
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 43 security and reduce vulnerabilities.
A product liability claim, recall or other claim with respect to uninsured liabilities or for amounts in excess of insured liabilities could have a material adverse effect on our business, financial condition and results of operations.
A product liability claim, recall or other claim with respect to uninsured liabilities or 38 for amounts in excess of insured liabilities could have a material adverse effect on our business, financial condition and results of operations.
Implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, and we cannot yet determine the impact future laws, regulations, standards, or perception of their requirements may have on our business.
Implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, and we cannot yet 42 determine the impact future laws, regulations, standards, or perception of their requirements may have on our business.
The degree of future protection for our proprietary rights is uncertain, and we cannot ensure that: • any of our patents, or any of our pending patent applications, if issued, will include claims having a scope sufficient to protect our products; • any of our pending patent applications will issue as patents; • we will be able to successfully commercialize our products on a substantial scale, if approved, before our relevant patents we may have expire; • we were the first to make the inventions covered by each of our patents and pending patent applications; • we were the first to file patent applications for these inventions; • others will not develop similar or alternative technologies that do not infringe our patents; • any of our patents will be found to ultimately be valid and enforceable; • any patents issued to us will provide a basis for an exclusive market for our commercially viable products, will provide us with any competitive advantages or will not be challenged by third parties; • we will develop additional proprietary technologies or products that are separately patentable; or 59 • our commercial activities or products will not infringe upon the patents of others.
The degree of future protection for our proprietary rights is uncertain, and we cannot ensure that: • any of our patents, or any of our pending patent applications, if issued, will include claims having a scope sufficient to protect our products; • any of our pending patent applications will issue as patents; • we will be able to successfully commercialize our products on a substantial scale, if approved, before our relevant patents expire; • we were the first to make the inventions covered by each of our patents and pending patent applications; • we were the first to file patent applications for these inventions; • others will not develop similar or alternative technologies that do not infringe our patents; • any of our patents will ultimately be found to be valid and enforceable; • any patents issued to us will provide a basis for an exclusive market for our commercially viable products, will provide us with any competitive advantages or will not be challenged by third parties; • we will develop additional proprietary technologies or products that are separately patentable; or • our commercial activities or products will not infringe upon the patents of others.
Our Systems are ophthalmic surgical lasers indicated for the creation of anterior capsulotomies, use in patients undergoing surgery requiring laser-assisted fragmentation of the cataractous lens, and for creating cuts/incisions in 49 the cornea.
Our Systems are ophthalmic surgical lasers indicated for the creation of anterior capsulotomies, use in patients undergoing surgery requiring laser-assisted fragmentation of the cataractous lens, and for creating cuts/incisions in the cornea.
The time required to obtain registrations, clearances, certifications or approvals, if required by other countries, may be longer than that required for FDA clearance or approval, and requirements for such registrations, clearances, certifications or approvals may significantly differ from FDA requirements.
The time required to obtain registrations, clearances, certifications or approvals, if required by other countries, may 51 be longer than that required for FDA clearance or approval, and requirements for such registrations, clearances, certifications or approvals may significantly differ from FDA requirements.
This situation may impact the way we are conducting our business in the EU and the EEA and the ability of our notified body to timely review and process our regulatory submissions and perform its audits.
This situation may impact the way we 55 are conducting our business in the EU and the EEA and the ability of our notified body to timely review and process our regulatory submissions and perform its audits.
Compliance with these requirements is a prerequisite to be able to affix the European Conformity, or CE, mark to our products, without which they cannot be sold or marketed in the EU.
Compliance with these requirements is a prerequisite to be able to affix 47 the European Conformity, or CE mark, to our products, without which they cannot be sold or marketed in the EU.
We use artificial intelligence, or AI, machine learning, and automated decision-making technologies, including proprietary AI and machine learning algorithms and models, or collectively AI Technologies, throughout our business, and are making significant investments in this area.
We develop and use artificial intelligence, or AI, machine learning, and automated decision-making technologies, including proprietary AI and machine learning algorithms and models, or collectively AI Technologies, throughout our business, and are making significant investments in this area.
In addition, we may commit to certain initiatives or goals and we may not ultimately be able to achieve such commitments or goals due to factors that are within or outside of our 73 control.
In addition, we may commit to certain initiatives or goals and we may not ultimately be able to achieve such commitments or goals due to factors that are within or outside of our control.
If we are found to infringe the intellectual property rights of third parties, we could be required to pay substantial damages, including third-party lost profits, the disgorgement of our profits, or substantial royalties (all of which may be increased, including three times the awarded damages, if we are found to willfully infringe third-party patents or trademarks or to have misappropriated trade secrets) and could be prevented from selling our products unless we obtain a license or are able to redesign our products to avoid infringement.
If we are found to have infringed the intellectual property rights of third parties, we could be required to pay substantial damages, including third-party lost profits, the disgorgement of our profits, or substantial royalties (all of which may be increased, including three times the awarded damages, if we are found to have willfully infringed third-party patents or trademarks or to have misappropriated trade secrets) and could be prevented from selling our products unless we obtain a license or are able to redesign our products to avoid infringement.
Disruptions at the FDA and other government agencies and notified bodies caused by funding shortages or global health concerns could hinder their ability to hire, retain or deploy key leadership and other personnel, or otherwise prevent new or modified products from being developed, cleared or approved or commercialized in a timely manner or at all, which could negatively impact our business.
Disruptions at the FDA and other government agencies and notified bodies caused by funding shortages, staffing limitations, or global health concerns could hinder their ability to hire, retain or deploy key leadership and other personnel, or otherwise prevent new or modified products from being developed, cleared or approved or commercialized in a timely manner or at all, which could negatively impact our business.
In addition to the factors discussed in this “Risk Factors” section of this Annual Report, these factors include: • a shift in our investor base; • actual or anticipated fluctuations in our quarterly financial condition and operating performance; • the operating and stock price performance of similar companies; • introduction of new products by us or our competitors; • success or failure of our business strategy; • our ability to obtain financing as needed; • changes in accounting standards, policies, guidance, interpretations or principles; 71 • the overall performance of the equity markets; • the number of shares of our common stock publicly owned and available for trading; • threatened or actual litigation or governmental investigations; • changes in laws or regulations affecting our business, including tax legislation; • announcements by us or our competitors of significant acquisitions or dispositions; • any major change in our board of directors or management; • changes in earnings estimates by securities analysts or our ability to meet earnings guidance; • publication of research reports about us or our industry or changes in recommendations or withdrawal of research coverage by securities analysts; • large volumes of sales of our shares of common stock by existing stockholders; • short sales of our common stock; • investor perception of us and our industry; and • changes in financial markets or general economic conditions, including the effects of recession or slow economic growth in the U.S. and abroad, interest rates, fuel prices, international currency fluctuations, corruption, political instability, acts of war, including the ongoing war between Russia and Ukraine and the conflicts in the Middle East, acts of terrorism, natural disasters and public health crises or pandemics.
In addition to the factors discussed in this “Risk Factors” section of this Annual Report, these factors include: • a shift in our investor base; • actual or anticipated fluctuations in our quarterly financial condition and operating performance; • the operating and stock price performance of similar companies; • introduction of new products by us or our competitors; • success or failure of our business strategy; • our ability to obtain financing as needed; • changes in accounting standards, policies, guidance, interpretations or principles; • the overall performance of the equity markets; • the number of shares of our common stock publicly owned and available for trading; • threatened or actual litigation or governmental investigations; • changes in laws or regulations affecting our business, including tax legislation; • announcements by us or our competitors of significant acquisitions or dispositions; • any major change in our board of directors or management; • changes in earnings estimates by securities analysts or our ability to meet earnings guidance; 72 • publication of research reports about us or our industry or changes in recommendations or withdrawal of research coverage by securities analysts; • large volumes of sales of our shares of common stock by existing stockholders; • short sales of our common stock; • investor perception of us and our industry; and • changes in financial markets or general economic conditions, including the effects of recession or slow economic growth in the U.S. and abroad, interest rates, tariff and other trade barriers, fuel prices, international currency fluctuations, corruption, political instability, acts of war, including the ongoing war between Russia and Ukraine and the conflicts in the Middle East, acts of terrorism, natural disasters and public health crises or pandemics.
We may need to expend resources to adjust our products or services in certain 67 jurisdictions if the laws, regulations, or decisions are not consistent across jurisdictions.
We may need to expend resources to adjust our products or services in certain jurisdictions if the laws, regulations, or decisions are not consistent across jurisdictions.
The process of applying for and obtaining a patent is expensive, time-consuming and complex, and we may not be able to file, prosecute, maintain, enforce or license all necessary or desirable patent applications at a reasonable cost, in a timely manner, or in all jurisdictions where protection may be commercially advantageous, or we may not be able to 58 protect our proprietary rights at all.
The process of applying for and obtaining a patent is expensive, time-consuming and complex, and we may not be able to file, prosecute, maintain, enforce or license all necessary or desirable patent applications at a reasonable cost, in a timely manner, or in all jurisdictions where protection may be commercially advantageous, or we may not be able to protect our proprietary rights at all in such jurisdictions.
We face significant competition from large multinational medical device companies, as well as smaller, emerging players focused on product innovation. Our primary competitors in providing surgical solutions for cataract patients are Alcon Inc.; Bausch + Lomb Corporation; Johnson & Johnson; Carl Zeiss AG; Zeimer; and KERANOVA S.A.
We face significant competition from large multinational medical device companies, as well as smaller, emerging players focused on product innovation. Our primary competitors in providing surgical solutions for cataract patients are Alcon Inc.; Bausch + Lomb Corporation; Johnson & Johnson; Carl Zeiss AG; Zeimer Ophthalmic Systems AG; and KERANOVA S.A.
Case law from the Court of Justice of the European Union , states that reliance on the standard contractual clauses, or SSCs a standard form of contract approved by the European Commission as an adequate personal data transfer mechanism - alone may not necessarily be sufficient in all circumstances and that transfers must be assessed on a case-by-case basis.
Case law from the Court of Justice of the European Union, states that reliance on the standard contractual clauses, or SCCs, a standard form of contract approved by the European Commission as an adequate personal data transfer mechanism, alone may not necessarily be sufficient in all circumstances and that transfers must be assessed on a case-by-case basis.
The ALLY System, which has received clearance from the FDA, enables cataract surgeons to complete the robotic laser-assisted cataract surgery, or LACS, procedure seamlessly in a single, sterile environment. The ALLY System is available to cataract surgeons in all U.S. and EU jurisdictions and has also received regulatory clearance in India, Taiwan, and certain other countries.
The ALLY System, which has received clearance from the FDA, enables cataract surgeons to complete the robotic laser-assisted cataract surgery, or LACS, procedure seamlessly in a single, sterile environment. The ALLY System is available to cataract surgeons in all U.S. and EU jurisdictions and has also received regulatory clearance in India, Taiwan, South Korea, and certain other countries.
The methods used in, and the facilities used for, the manufacture of our products must comply with the FDA’s QSR, which is a complex regulatory scheme that covers the procedures and documentation of the design, testing, production, process controls, quality assurance, labeling, packaging, handling, storage, distribution, installation, servicing and shipping of medical devices.
The methods used in, and the facilities used for, the manufacture of our products must comply with the FDA’s QMSR, which is a complex regulatory scheme that covers the procedures and documentation of the design, testing, production, process controls, quality assurance, labeling, packaging, handling, storage, distribution, installation, servicing and shipping of medical devices.
Patent and Trademark Office, or USPTO, and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process. In addition, periodic maintenance fees on issued patents often must be paid to the USPTO and foreign patent agencies over the lifetime of the patent.
The U.S. Patent and Trademark Office, or USPTO, and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee-payment, and other similar provisions during the patent application process. In addition, periodic maintenance fees on issued patents often must be paid to the USPTO and foreign patent agencies over the lifetime of the patent.
Further, we may not be able to obtain adequate remedies for any breach. 63 We may not be able to protect our intellectual property rights throughout the world.
Further, we may not be able to obtain adequate remedies for any breach. We may not be able to protect our intellectual property rights throughout the world.
There can be no assurances that the privacy and security-related measures and safeguards we have put in place in relation to these third parties will be effective to protect us and/ or the relevant personal information from the risks associated with the third-party processing of such data.
There can be no assurances that the privacy and security-related measures and safeguards we have put in place in relation to these third parties will be effective to protect us and/or the relevant personal information from the risks associated with the third-party processing, storage, and transmission of such data.
We rely, in part, on our ability to obtain, maintain, expand, enforce, and defend the scope of our intellectual property portfolio or other proprietary rights, including the amount and timing of any payments we may be required to make in connection with the filing, licensing, defending and enforcing of any patents or other intellectual property rights.
We rely, in part, on our ability to obtain, maintain, expand, enforce, and defend the scope of our intellectual property portfolio or other proprietary rights, including the amount and timing of any payments we may be required to make in connection with the filing, licensing, defending, and enforcement of any patents or other intellectual property rights.
Furthermore, we are required to verify that our suppliers maintain facilities, procedures and operations that comply with our quality standards and applicable regulatory requirements. The FDA enforces the QSR through periodic announced or unannounced inspections of medical device manufacturing facilities, which may include the facilities of subcontractors.
Furthermore, we are required to verify that our suppliers maintain facilities, procedures and operations that comply with our quality standards and applicable regulatory requirements. The FDA enforces the QMSR through periodic announced or unannounced inspections of medical device manufacturing facilities, which may include the facilities of subcontractors.
The FDA audits compliance with these regulatory requirements through periodic announced and unannounced inspections of manufacturing and other facilities. If our manufacturing facilities or those of any of our suppliers or contract facilities are found to be in violation of applicable laws and regulations, the FDA could take enforcement action.
The FDA audits compliance with these regulatory requirements through periodically announced and unannounced inspections of manufacturing and other facilities. If our manufacturing facilities or those of any of our suppliers or contract facilities are found to be in violation of applicable laws and regulations, the FDA could take enforcement action.
Should a carrier encounter delivery performance issues such as loss, damage or destruction of any of our products, it would be costly to replace such products in a timely manner and such occurrences may damage our reputation and lead to decreased demand for our products and increased cost and expense to our business.
Should a carrier encounter delivery performance issues such as loss, damage or destruction of any of our products, it could be costly to replace such products in a timely manner and such occurrences may damage our reputation and lead to decreased demand for our products and increased cost and expense to our business.
In the EU, notified bodies must be officially designated to certify products and services in accordance with the EU Medical Devices Regulation. Their designation process, which is significantly stricter under the new Regulation, has experienced considerable delays due to the COVID-19 pandemic.
In the EU, notified bodies must be officially designated to certify products and services in accordance with the EU Medical Devices Regulation. Their designation process, which is significantly stricter under the new Regulation, has experienced considerable delays following the COVID-19 pandemic.
Already, certain existing legal regimes (e.g., relating to data privacy) regulate certain aspects of AI Technologies, and new laws regulating AI Technologies have either entered into force in the United States and the EU in 2024 or are expected to enter into force in 2025.
Already, certain existing legal regimes (e.g., relating to data privacy) regulate certain aspects of AI Technologies, and new laws regulating AI Technologies have either entered into force in the United States and the EU in 2025 or are expected to enter into force in 2026.
Our federal NOL carryforwards are not subject to expiration, but may generally only be used to offset 80% of future taxable income in a given year. Our state NOL carryforwards begin to expire in 2028. Our state NOL carryforwards could expire unused, to the extent subject to expiration, and be unavailable to offset future taxable income.
Our federal NOL carryforwards are not subject to expiration, but may generally only be used to offset 80% of future taxable income in a given year. Certain of our state NOL carryforwards begin to expire in 2028. Our state NOL 74 carryforwards could expire unused, to the extent subject to expiration, and be unavailable to offset future taxable income.
The primary factors determining our cash needs are the funding of operations, which we expect to continue to expand as the business grows, and enhancing our product offerings through the research and development, further regulatory clearances and launch of the ALLY System.
The primary factors determining our cash needs are the funding of operations, which we expect to continue to expand as the business grows, and enhancing our product offerings through research and development, further regulatory clearances and launches of the ALLY System.
Our licensed or acquired technology may lose value or utility or over time. In the past, we have licensed technology from third parties and may choose or need to do so in the future, including to develop or commercialize new products or services.
Our licensed or acquired technology may lose value or utility or over time. In the past, we have licensed the right to use technology from third parties and may choose or need to do so in the future, including to develop or commercialize new products or services.
Our capital requirements will depend on many factors, including, but not limited to: • the revenue generated by the sale, lease or use of our Systems; • the costs associated with expanding our sales and marketing efforts; • the expenses we incur in procuring, manufacturing and selling our Systems, including increased costs, uncertainties, and delays associated with global supply chain disruptions and inflationary pressures; 32 • the costs of commercializing the ALLY System, including increased costs associated with supply chain disruptions and inflationary pressures or other new products or technologies; • the scope, rate of progress and cost of our clinical studies that we are currently conducting or may conduct in the future; • the cost and timing of obtaining and maintaining regulatory approval, certification or clearance of our products and planned or future products; • costs associated with any product recall that may occur; • the costs associated with complying with state, federal and foreign laws and regulations; • the cost of filing and prosecuting patent applications and defending and enforcing our patent and other intellectual property rights; • the cost of defending, in litigation or otherwise, any claims that we infringe third-party patent or other intellectual property rights; • the cost of enforcing or defending against non-competition claims; • the number and timing of acquisitions and other strategic transactions; • the costs associated with increased capital expenditures; • anticipated and unanticipated general and administrative expenses, including expenses related to operating as a public company and insurance expenses; and • costs associated with any adverse market conditions or other macroeconomic factors.
Our capital requirements will depend on many factors, including, but not limited to: • the revenue generated by the sale, lease or use of our Systems; • the costs associated with expanding our sales and marketing efforts; • the expenses we incur in procuring, manufacturing and selling our Systems, including increased costs, uncertainties, and delays associated with global supply chain disruptions and inflationary pressures; 32 • the costs of commercializing the ALLY System, including increased costs associated with supply chain disruptions, inflationary pressures, the impact of increased tariffs or other trade barriers, sales in regions outside the U.S. or other new products or technologies; • the scope, rate of progress and cost of our clinical studies that we are currently conducting or may conduct in the future; • the cost and timing of obtaining and maintaining regulatory approval, certification or clearance of our products and planned or future products; • costs associated with any product recall that may occur; • the costs associated with complying with state, federal and foreign laws and regulations; • the cost of filing and prosecuting patent applications and defending and enforcing our patent and other intellectual property rights; • the cost of defending, in litigation or otherwise, any claims that we infringe third-party patent or other intellectual property rights; • the cost of enforcing or defending against non-competition claims; • the number and timing of acquisitions and other strategic transactions; • the costs associated with increased capital expenditures; • anticipated and unanticipated general and administrative expenses, including expenses related to operating as a public company and insurance expenses; and • costs associated with any adverse market conditions or other macroeconomic factors.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe have not identified cybersecurity threats that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition. For more information, see the section titled “Risk Factor—Risks Related to Our Business— We rely significantly on the use of information technology.
Biggest changeWe have not identified cybersecurity threats that have materially affected us, including our operations, business strategy, results of operations, or financial condition. We face risks from cybersecurity threats that, if realized, are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition.
Key elements of our cybersecurity risk management program include but are not limited to the following: • risk assessments designed to help identify material risks from cybersecurity threats to our critical systems and information; 74 • an information technology team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; • the use of external service providers with subject matter expertise, where appropriate, to assess, test or otherwise assist with aspects of our security processes; • cybersecurity awareness training of our employees, incident response personnel, and senior management; and • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents.
Key elements of our cybersecurity risk management program include but are not limited to the following: • risk assessments designed to help identify material risks from cybersecurity threats to our critical systems and information; • an information technology team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; • the use of external service providers with subject matter expertise, where appropriate, to assess, test or otherwise assist with aspects of our security processes; • cybersecurity awareness training of our employees, incident response personnel, and senior management; and • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents.
Our cybersecurity risk management program is integrated into our overall enterprise risk management program, and shares common methodologies, reporting channels and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas.
Our cybersecurity risk management program is integrated into our overall risk management program, and shares common methodologies, reporting channels and governance processes that apply across the risk management program to other legal, compliance, strategic, operational, and financial risk areas.
Cybersecurity risks – any technology failures causing a material disruption to operational technology or cyber-attacks on our systems affecting our ability to protect the integrity and security of customer and employee information – could harm our reputation and/or could disrupt our operations and negatively impact our business.” Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee oversight of cybersecurity risks, including oversight of management’s implementation of our cybersecurity risk management program.
Cybersecurity risks – any technology failures causing a material disruption to operational technology or cyber-attacks on our systems affecting our ability to protect the integrity and 75 security of confidential customer and employee information – could harm our reputation and/or could disrupt our operations and negatively impact our business.” Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee oversight of cybersecurity risks, including oversight of management’s implementation of our cybersecurity risk management program.
We design and assess our program based on the National Institute of Standards and Technology Cybersecurity Framework, or NIST CSF. This does not imply that we meet any particular technical standards, specifications, or requirements, only that we use the NIST CSF as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business.
This does not imply that we meet any particular technical standards, specifications, or requirements, only that we use the NIST CSF as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business.
Item 1C. Cybersecurity. Cybersecurity Risk Management and Strategy We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information. Our cybersecurity risk management program includes a cybersecurity incident response plan.
Item 1C. Cybersecurity. Cybersecurity Risk Management and Strategy We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information. We design and assess our program based on the National Institute of Standards and Technology Cybersecurity Framework, or NIST CSF.
Added
For more information, see the section titled “Risk Factors—Risks Related to Our Business— We rely significantly on the use of information technology.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeFrom time to time, we may become involved in various legal proceedings relating to matters incidental to the ordinary course of our business, including intellectual property, commercial, product liability, employment, class action, whistleblower and other litigation and claims, and governmental and other regulatory investigations and proceedings. 75 On August 14, 2023, stockholders Ryan Schaper and Christopher P.
Biggest changeItem 3. Legal Proceedings. From time to time, we may become involved in various legal proceedings relating to matters incidental to the Merger and terminated Merger Agreement and in the ordinary course of our business, including intellectual property, commercial, product liability, employment, class action, whistleblower and other litigation and claims, and governmental and other regulatory investigations and proceedings.
Removed
Bolster filed a Verified Amended Class Action Complaint (“Amended Complaint”) against the Company and certain of its officers and members of the board of directors (“Defendants”) in the matter captioned Schaper v. LENSAR, Inc., et al., Case No. 1:23-cv-00692-JLH (D. Del.). On January 12, 2024, Lead Plaintiffs filed a Verified Second Amended Class Action Complaint, or the Second Amended Complaint.
Added
Because litigation is inherently unpredictable, we cannot assure you that the results of any such actions will not have a material adverse effect on our business, results of operations, financial condition or cash flows.
Removed
We as Defendants filed a motion to dismiss on February 26, 2024. On November 18, 2024, the court granted our motion to dismiss; the complaint was dismissed, and the case was closed during the three months ended December 31, 2024. Item 4. Mine Saf ety Disclosure. Not applicable. 76 Part II
Added
For a description of our legal proceedings, refer to Note 11, Commitments and contingencies , to our consolidated financial statements included elsewhere in this Annual Report, which is incorporated herein by reference. Item 4. Mine Saf ety Disclosure. Not applicable. 76 Part II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stoc kholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is traded on The Nasdaq Stock Market under the symbol “LNSR.” Stockholders As of January 31, 2025, there were approximately 80 holders of record of our common stock.
Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stoc kholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock is traded on The Nasdaq Stock Market under the symbol “LNSR.” Stockholders As of February 28, 2026, there were approximately 71 holders of record of our common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe increase was primarily attributable to the number of Systems sales, which have a lower gross margin than procedure licenses, as well as the full costing of raw materials for ALLY Systems in 2024, whereas some raw materials utilized in manufacturing were previously charged to research and development expenses. 82 Cost of service revenue for the year ended December 31, 2024 compared to the year ended December 31, 2023 increased by $1.4 million or 28%.
Biggest changeCost of product revenue for the year ended December 31, 2025 compared to the year ended December 31, 2024 increased by $2.3 million, or 13%. The increase was primarily attributable to the number of Systems sales, which have a lower gross margin than procedure licenses.
Our ability to raise additional funds will depend, among other factors, on financial, economic and market conditions, many of which are outside of our control, and we may be unable to raise financing when needed, or on terms favorable to us.
Our ability to raise additional funds will depend on, among other factors, financial, economic and market conditions, many of which are outside of our control, and we may be unable to raise financing when needed, or on terms favorable to us.
A discussion of the year ended December 31, 2023 compared to the year ended December 31, 2022 has been reported previously in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on March 4, 2024, under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Overview We are a commercial-stage medical device company focused on designing, developing and marketing advanced laser systems for the treatment of cataracts and the management of pre-existing or surgically induced corneal astigmatism.
A discussion of the year ended December 31, 2024 compared to the year ended December 31, 2023 has been reported previously in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on March 4, 2024, under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Overview We are a commercial-stage medical device company focused on designing, developing and marketing advanced laser systems for the treatment of cataracts and the management of pre-existing or surgically induced corneal astigmatism.
Additionally, the extent and duration of the impact that global economic uncertainty may have on our stock price and on those of other companies in our industry is highly uncertain and may make us look less attractive to investors and, 85 as a result, there may be a less active trading market for our common stock, our stock price may be more volatile, and our ability to raise capital could be impaired, which could in the future negatively affect our liquidity and financial position.
Additionally, the extent and duration of the impact that global economic uncertainty may have on our stock price and on those of other companies in our industry is highly uncertain and may make us look less attractive to investors and, as a result, there may be a less active trading market for our common stock, our stock price may be more volatile, and our ability to raise capital could be impaired, which could in the future negatively affect our liquidity and financial position.
We are subject to risks common to medical device companies, including risks inherent in: • our laser system development and commercialization efforts; • clinical studies; • uncertainty of regulatory actions and marketing approvals or certifications; • reliance on a network of international distributors and a network of suppliers; • levels of coverage and reimbursement by government or other third-party payors for procedures using our products; • patients’ willingness and ability to pay for procedures with significant costs not covered by or reimbursable through government or other third-party payors; • enforcement of patent and proprietary rights; • the need for future capital; • all safety requirements and suggestions regarding patient treatment as required or suggested by health care authorities; • clearance or certification by regulatory agencies, including the FDA, or notified bodies for our ALLY System; • supply chain shortages, labor market shifts and price increases resulting from various macroeconomic factors; • competition associated with our products; and • reimbursement practices in jurisdictions where procedures using our Systems are performed, such as South Korea.
We are subject to risks common to medical device companies, including risks inherent in: • our laser system development and commercialization efforts; • clinical studies; • uncertainty of regulatory actions and marketing approvals or certifications; • reliance on a network of international distributors and a network of suppliers; • levels of coverage and reimbursement by government or other third-party payors for procedures using our products; • patients’ willingness and ability to pay for procedures with significant costs not covered by or reimbursable through government or other third-party payors; • enforcement of patent and proprietary rights; • the need for future capital; • all safety requirements and suggestions regarding patient treatment as required or suggested by health care authorities; 79 • clearance or certification by regulatory agencies, including the FDA, or notified bodies for our ALLY System; • supply chain shortages, labor market shifts, tariffs, and price increases resulting from various macroeconomic factors; • competition associated with our products; and • reimbursement practices in jurisdictions where procedures using our Systems are performed, such as South Korea.
The procedure license is downloaded onto the system as required or as purchased by the customer. The system will not perform a procedure without a valid license. We sell licenses individually and also offer licenses in a subscription package with minimum monthly obligations and the ability to increase procedure numbers as the practice grows to address occasional increases in demand.
The procedure license is downloaded onto the system as required or as purchased by the customer. The system will not perform a procedure without a valid license. We sell licenses individually and also offer licenses in a subscription package with minimum monthly obligations and the ability to increase procedure numbers as the practice grows to address increases in demand.
Impairment In April 2024, the Company notified its third-party supplier of the phacoemulsification component in the ALLY System the Company would no longer pursue integration with the supplier’s phacoemulsification unit. This resulted in a triggering event impacting certain acquired technology intangible assets and contract liabilities associated with the phacoemulsification component.
Impairment In April 2024, the Company notified its third-party supplier of the phacoemulsification component in the ALLY System the Company would no longer pursue integration with the supplier’s phacoemulsification unit. This resulted in a triggering event impacting certain acquired technology intangible assets and contract liabilities associated with 81 the phacoemulsification component.
We purchase custom and 78 off-the-shelf components from a number of suppliers, including some single-source suppliers. We purchase the majority of our components and major assemblies through purchase orders with limited long-term supply agreements and generally do not maintain large volumes of finished goods.
We purchase custom and off-the-shelf components from a number of suppliers, including some single-source suppliers. We purchase the majority of our components and major assemblies through purchase orders with limited long-term supply agreements and generally do not maintain large volumes of finished goods.
Research and Development Expense Our research and development expenses consist primarily of engineering, product development, clinical studies to develop and support our products, personnel costs, such as salaries and wages, including stock-based compensation 80 and benefits, regulatory expenses, and other costs associated with products and technologies that are in development.
Research and Development Expense Our research and development expenses consist primarily of engineering, product development, clinical studies to develop and support our products, personnel costs, such as salaries and wages, including stock-based compensation and benefits, regulatory expenses, and other costs associated with products and technologies that are in development.
When a contract contains multiple performance obligations, revenue is allocated to each performance obligation based on its relative standalone selling price. We recognize revenue as the performance obligations are satisfied by transferring control of the product or service to a customer as described below.
When a contract contains multiple performance obligations, revenue is allocated to each performance obligation based on its relative standalone selling price. 88 We recognize revenue as the performance obligations are satisfied by transferring control of the product or service to a customer as described below.
Depreciation expense associated with the leased equipment under operating lease arrangements is reflected in cost of lease in the statements of operations. 88 Lessee leases Lessee operating leases are included in other current liabilities and long-term operating lease liabilities in our balance sheets. We do not have lessee finance leases.
Depreciation expense associated with the leased equipment under operating lease arrangements is reflected in cost of lease in the statements of operations. Lessee leases Lessee operating leases are included in other current liabilities and long-term operating lease liabilities in our balance sheets. We do not have lessee finance leases.
Our current product portfolio includes the LENSAR Laser System, or LLS, and the ALLY Robotic Cataract Laser Treatment System™, or ALLY System, (collectively, the Systems) and its associated consumable components. The consumable portion of the system consists of a disposable patient interface device kit, or PID kit, and the system also requires a procedure license.
Our current product portfolio includes the LENSAR Laser System, or LLS, and the ALLY Robotic Cataract Laser System™, or ALLY System, (collectively, the Systems) and its associated consumable components. The consumable portion of the system consists of a disposable patient interface device kit, or PID kit, and the system also requires a procedure license.
Lease payments are discounted using our incremental borrowing rate as of the commencement date of each lease. Our remaining lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.
Lease payments are discounted using our incremental borrowing rate as of the commencement date of each lease. Our remaining lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that 89 option.
We expect our revenue and expenses to increase in connection with our on-going activities, particularly as we continue to execute on our growth strategy, including expansion of our sales and customer support teams, as well as increasing our fleet of equipment under lease.
We expect our revenue and expenses to increase in connection with our on-going operating activities, particularly as we continue to execute on our growth strategy (including expansion of our sales and customer support teams, as well as increasing our fleet of equipment under lease).
Non-cash charges primarily consisted of depreciation, amortization, impairment of intangible assets, stock-based compensation, and change in fair value of warrant liabilities. Net operating assets decreased due to accounts receivable and inventories offset with accounts payable and accrued liabilities.
Non-cash charges consisted of depreciation, amortization, impairment of intangible assets, stock-based compensation, and change in fair value of warrant liabilities. Net operating assets decreased due to accounts receivable and inventories offset with accounts payable and accrued liabilities.
We strive to maintain enough inventory of our various component parts to avoid the impact of potential disruptions in the supply chain; however, availability of these components can be outside of our control.
We strive to maintain enough inventory of our various 78 component parts to avoid the impact of potential disruptions in the supply chain; however, availability of these components can be outside of our control.
Our ALLY System received clearance from the FDA in June 2022, and we executed a controlled and targeted initial launch of the ALLY System beginning in August 2022. The ALLY System is available to all U.S. and EU cataract surgeons and has also received regulatory clearance in India, Taiwan, as well as certain other countries.
Our ALLY System received clearance from the FDA in June 2022, and we executed a controlled and targeted initial launch of the ALLY System beginning in August 2022. The ALLY System is available to all U.S. and EU cataract surgeons and has also received regulatory clearance in India, Taiwan, South Korea, as well as certain other countries.
Selling, General and Administrative Expense Our selling, general and administrative expenses consist primarily of personnel costs, such as salaries and wages, including stock-based compensation and benefits, professional fees, marketing, insurance, travel and other expenses. We are continuing to grow our sales efforts in the United States.
Selling, General and Administrative Expense Our selling, general and administrative expenses consist primarily of acquisition-related costs, personnel costs, such as salaries and wages, including stock-based compensation and benefits, professional fees, marketing, insurance, travel and other expenses. We are continuing to grow our sales efforts in the United States.
In some situations, we lease our Systems to surgeons, primarily through non-cancellable leases with a fixed lease payment.
In some situations, we lease our Systems to surgeons, primarily through non-cancellable leases with a fixed 80 lease payment.
Our future liquidity needs, and ability to address those needs, will largely be determined by the success of our commercial efforts and those of our distributors; the ongoing impact of global macroeconomic conditions and supply chain issues on our business; and the timing, scope and magnitude of our commercial and development activities.
Our future liquidity needs, and ability to address those needs, will largely be determined by the success of our commercial efforts and those of our distributors; the ongoing impact of global macroeconomic conditions, tariffs and other supply chain issues on our business; and the timing, scope and magnitude of our commercial and development activities.
Non-GAAP Financial Measures We prepare and analyze operating and financial data and non-GAAP measures to assess the performance of our business, make strategic and offering decisions and build our financial projections. The key non-GAAP measures we 83 use, EBITDA and Adjusted EBITDA, are reconciled to net loss below for the years ended December 31, 2024 and 2023.
Non-GAAP Financial Measures We prepare and analyze operating and financial data and non-GAAP measures to assess the performance of our business, make strategic and offering decisions and build our financial projections. The key non-GAAP measures we use, EBITDA and Adjusted EBITDA, are reconciled to net loss below for the years ended December 31, 2025 and 2024.
In the United States, we sell our products through a direct sales organization that, as of December 31, 2024, consisted of approximately 65 commercial professionals, including regional sales managers, clinical applications and outcomes specialists, field service, marketing, technical and customer support personnel. We manufacture our Systems at a facility in Orlando, Florida.
In the United States, we sell our products through a direct sales organization that, as of December 31, 2025, consisted of approximately 70 commercial professionals, including regional sales managers, clinical applications and outcomes specialists, field service, marketing, technical and customer support personnel. We manufacture our Systems at a facility in Orlando, Florida.
We believe Adjusted EBITDA, which is defined as EBITDA and further excluding stock-based compensation expense, change in fair value of warrant liabilities, impairment of intangible assets and the ERC, provides meaningful supplemental information for investors when evaluating our results and comparing us to peer companies, as stock-based compensation expense and change in fair value of warrant liabilities are significant non-cash charges and impairment of intangible assets is a non-cash charge that is not indicative of our core operating results and the ERC is not recurring.
We believe Adjusted EBITDA, which is defined as EBITDA and further excluding stock-based compensation expense, change in fair value of warrant liabilities, acquisition-related costs, and impairment of intangible assets, provides meaningful supplemental information for investors when evaluating our results and comparing us to peer companies, as stock-based compensation expense and change in fair value of warrant liabilities are significant non-cash charges and impairment of intangible assets is a non-cash charge that is not indicative of our core operating results and acquisition-related costs are not recurring.
Global economic uncertainty and other factors have impeded global supply chains, resulted in longer lead times and delays in procuring component parts and raw materials, and resulted in inflationary cost increases in certain raw 79 materials, labor and transportation. We expect these inflationary impacts to continue for the foreseeable future.
Global economic uncertainty and other factors, including tariff policies, have impeded global supply chains, resulted in longer lead times and delays in procuring component parts and raw materials, and resulted in inflationary cost increases in certain raw materials, labor and transportation. We expect these inflationary impacts to continue for the foreseeable future.
Non-Operating Income and Expense, Net Non-operating income and expenses, net for the year ended December 31, 2024 were $20.7 million as compared to $2.2 million for the year ended December 31, 2023. Non-operating income and expenses consisted primarily of the change in fair value of warrant liabilities in each period.
Non-Operating Income and Expense, Net Non-operating income and expenses, net for the year ended December 31, 2025 were $9.7 million as compared to $20.7 million for the year ended December 31, 2024. Non-operating income and expenses consisted primarily of the change in fair value of warrant liabilities in each period.
Cost of lease revenue for the year ended December 31, 2024 compared to the year ended December 31, 2023 increased by $0.8 million, or 40%, primarily due to an increase in the number of newly leased Systems between the years, which have a higher depreciation cost than older and some fully depreciated leased Systems. Operating Expenses Selling, General and Administrative.
Cost of lease revenue for the year ended December 31, 2025 compared to the year ended December 31, 2024 increased by $0.6 million, or 20%, primarily due to an increase in the number of newly leased Systems between the years, which have a higher depreciation cost than older and some fully depreciated leased Systems. Operating Expenses Selling, General and Administrative.
We maintain cash balances with financial institutions in excess of insured limits. As discussed above, ongoing global supply chain disruptions, inflationary pressures and other macroeconomic conditions have negatively affected our capital requirements and more operating capital may be needed to fund our operations in the future.
We maintain cash balances with financial institutions in excess of insured limits. As discussed above, ongoing global supply chain disruptions, inflationary pressures, acquisition-related costs, recently enacted tariffs, and other macroeconomic conditions have negatively affected our capital requirements and more operating capital may be needed to fund our operations in the future.
The change in fair value of warrant liabilities had a significant impact of $(21.4) million on net loss in the twelve months ended December 31, 2024, and it is difficult to predict how the fair value of warrant liabilities will impact our future results.
The change in fair value of warrant liabilities had a significant impact of $(10.3) million on net loss in the twelve months ended December 31, 2025, and it is difficult to predict how the fair value of warrant liabilities will impact our future results.
Amortization of Intangible Assets . Amortization of intangible assets was approximately $1.0 million for the year ended December 31, 2024, which was consistent with the year ended December 31, 2023. Impairment of Intangible Assets.
Amortization of Intangible Assets . Amortization of intangible assets was approximately $0.9 million for the year ended December 31, 2025, which was consistent with the year ended December 31, 2024. Impairment of Intangible Assets.
Our future revenue and cash flows will depend on, among other factors, our installed base of Systems and the timing of and applicable clearances for our ALLY System.
In addition, our future revenue and cash flows will depend on, among other factors, our installed base of Systems, acquisition-related costs, and the timing of and applicable clearances for our ALLY System.
We expect our selling and marketing expenses will continue to increase in the future to support the continued growth in ALLY System placements. Research and Development . Research and development expenses were $5.3 million for the year ended December 31, 2024, a decrease of $0.8 million, or 13%, compared to $6.1 million for the year ended December 31, 2023.
We expect our selling and marketing expenses will continue to increase in the future to support the continued growth in ALLY System placements. 83 Research and Development . Research and development expenses were $5.6 million for the year ended December 31, 2025, an increase of $0.3 million, or 5%, compared to $5.3 million for the year ended December 31, 2024.
Financing Activities Net cash provided by financing activities for the year ended December 31, 2024 was $0.1 million, primarily due to the net proceeds from issuance of common stock under equity incentive plans.
Financing Activities Net cash provided by financing activities for the year ended December 31, 2025 was $10.3 million, consisting primarily of the acquisition-related deposit received from Alcon. Net cash provided by financing activities for the year ended December 31, 2024 was $0.1 million, primarily due to the net proceeds from issuance of common stock under equity incentive plans.
Generally Accepted Accounting Principles, or GAAP, and the discussion and analysis of our financial condition and operating results require our management to make judgments, assumptions and estimates that affect the amounts reported in our financial statements.
Critical Accounting Estimates The preparation of financial statements and related disclosures in conformity with U.S. Generally Accepted Accounting Principles, or GAAP, and the discussion and analysis of our financial condition and operating results 87 require our management to make judgments, assumptions and estimates that affect the amounts reported in our financial statements.
Our liquidity needs will be largely determined by our ability to successfully commercialize our products and the progression, additional regulatory clearances or certifications and launch of the ALLY System in additional jurisdictions in the future. In 2022, we transitioned from manufacturing and selling our LLS to focus on our ALLY System.
Our liquidity needs will be largely determined by our ability to successfully commercialize our products and the progression, additional regulatory clearances or certifications and launch of the ALLY System in additional jurisdictions in the future.
A high rate of inflation in the future may have an adverse effect on our ability to maintain and increase our gross margin or decrease our operating expenses as a percentage of our revenues if our selling prices of our products do not increase as much or more than our increase in costs.
A high rate of inflation in the future, whether due to actual or uncertain impacts from increased tariffs or other trade barriers or other market volatility, may have an adverse effect on our ability to maintain and increase our gross margin or decrease our operating expenses as a percentage of our revenues if our selling prices of our products do not increase as much or more than our increase in costs.
Our revenue increased from $42.2 million for the year ended December 31, 2023 to $53.5 million for the year ended December 31, 2024, representing an increase of 27%. Our net losses were $14.4 million and $31.4 million for the years ended December 31, 2023 and 2024, respectively.
Our revenue increased from $53.5 million for the year ended December 31, 2024 to $58.4 million for the year ended December 31, 2025, representing an increase of 9%. Our net losses were $31.4 million and $34.3 million for the years ended December 31, 2024 and 2025, respectively.
Cash Flows The following table summarizes, for the periods indicated, selected items in our statements of cash flows: Year Ended December 31, (Dollars in thousands) 2024 2023 Net cash used in operating activities $ (2,275 ) $ (9,659 ) Net cash used in investing activities (2,161 ) (4,156 ) Net cash provided by financing activities 78 19,762 Net (decrease) increase in cash and cash equivalents $ (4,358 ) $ 5,947 Operating Activities Net cash used in operating activities for the year ended December 31, 2024 was $2.3 million, consisting primarily of a net loss of $31.4 million and a decrease in net operating assets of $3.0 million, partially offset by non-cash charges of $32.2 million.
Cash Flows The following table summarizes, for the periods indicated, selected items in our statements of cash flows: Year Ended December 31, (Dollars in thousands) 2025 2024 Net cash used in operating activities $ (14,831 ) $ (2,275 ) Net cash provided by (used in) investing activities 1,284 (2,161 ) Net cash provided by financing activities 10,258 78 Net decrease in cash and cash equivalents $ (3,289 ) $ (4,358 ) Operating Activities Net cash used in operating activities for the year ended December 31, 2025 was $14.8 million, consisting primarily of a net loss of $34.3 million and a decrease in net operating assets of $1.1 million, partially offset by non-cash charges of $18.3 million.
Selling, general and administrative expenses for the year ended December 31, 2024 were $26.5 million, an increase of $0.4 million, or 1%, compared to $26.1 million for the year ended December 31, 2023.
Selling, general and administrative expenses for the year ended December 31, 2025 were $45.2 million, an increase of $18.7 million, or 70%, compared to $26.5 million for the year ended December 31, 2024.
Our material contractual obligations and commercial commitments at December 31, 2024 primarily consist of $2.6 million in operating lease liabilities for our facility lease, $0.7 million in lease obligations for additional facility space not recorded on the balance sheet, and $12.2 million in remaining minimum purchase obligations for inventory components for the manufacture and supply of certain components within the next 15 months.
Our material contractual obligations and commercial commitments at December 31, 2025 primarily consist of $2.7 million in operating lease liabilities for our facility lease and $13.9 million in remaining minimum purchase obligations for inventory components for the manufacture and supply of certain components within the next 18 months.
The following table provides information about revenue and revenue attributable to recurring sources, which we consider to be all components of our revenue except for sales of our Systems: Year Ended December 31, (Dollars in thousands) 2024 2023 System $ 13,345 $ 9,561 Recurring source revenue: Procedure 27,720 22,082 Lease 7,532 6,448 Service 4,897 4,073 Total recurring source revenue 40,149 32,603 Total revenue $ 53,494 $ 42,164 Recurring source revenue % 75% 77% Cost of Revenue Total cost of revenue comprises cost of product revenue , cost of lease revenue and cost of service revenue.
The following table provides information about revenue and revenue attributable to recurring sources, which we consider to be all components of our revenue except for sales of our Systems: Year Ended December 31, (Dollars in thousands) 2025 2024 System $ 12,129 $ 13,345 Recurring revenue: Procedure 33,799 27,720 Lease 6,779 7,532 Service 5,728 4,897 Total recurring revenue 46,306 40,149 Total revenue $ 58,435 $ 53,494 Recurring revenue % 79% 75% Cost of Revenue Total cost of revenue comprises cost of product revenue , cost of lease revenue and cost of service revenue.
Net cash used in investing activities for the year ended December 31, 2023 was $4.2 million, which consisted primarily of purchases of investments and capital expenditures for property and equipment.
Investing Activities Net cash provided by investing activities for the year ended December 31, 2025 was $1.3 million, which consisted primarily of purchases and maturities of investments. Net cash used in investing activities for the year ended December 31, 2024 was $2.2 million, which consisted primarily of purchases and maturities of investments.
We will remain an emerging growth company until December 31, 2025 (the fiscal year-end following the fifth anniversary of the completion of the Spin-Off). 89 Recently Issued Accounting Standards See Note 2, Summary of Significant Accounting Policies , to our financial statements included elsewhere in this Annual Report for a discussion of recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted as of December 31, 2024.
Recently Issued Accounting Standards See Note 2, Summary of Significant Accounting Policies , to our financial statements included elsewhere in this Annual Report for a discussion of recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted as of December 31, 2025.
This is because we are able to fulfill each promise in the contract independently of the others and we would be able to fulfill our promise to transfer the system even if the customer did not purchase a PID or procedure license or to fulfill our promise to provide the PID or the procedure license even if the customer acquired the system separately. 87 The extended warranty, unlike our standard product warranty, is a performance obligation because it provides an incremental service that is beyond ensuring the product delivered will be consistent with stated contractual specifications.
This is because we are able to fulfill each promise in the contract independently of the others and we would be able to fulfill our promise to transfer the system even if the customer did not purchase a PID or procedure license or to fulfill our promise to provide the PID or the procedure license even if the customer acquired the system separately.
In addition, if we raise additional capital through collaboration, licensing or other similar arrangements, it may be necessary to relinquish valuable rights to our products, potential products or proprietary technologies, or grant licenses on terms that are not favorable to us.
In addition, if we raise additional capital through collaboration, licensing or other similar arrangements, it may be necessary to relinquish valuable rights to our products, potential products or proprietary technologies, or grant licenses on terms that are not favorable to us. 85 On March 11, 2026, the Company entered into a Priority Credit Line Agreement (the “PCL Agreement”), by and between the Company and Wells Fargo Bank, N.A (“Wells Fargo”).
Year Ended December 31, (Dollars in thousands) 2024 2023 Net loss $ (31,404 ) $ (14,383 ) Less: Interest income (660 ) (698 ) Add: Depreciation expense 2,961 2,418 Add: Amortization expense 970 1,097 EBITDA (28,133 ) (11,566 ) Add: Stock-based compensation expense 2,665 5,539 Add: Change in fair value of warrant liabilities 21,399 2,852 Add: Impairment of intangible assets 3,729 — Less: Employee retention credit — (1,368 ) Adjusted EBITDA $ (340 ) $ (4,543 ) EBITDA is defined as net loss before interest expense, interest income, income tax expense, depreciation and amortization expenses.
Year Ended December 31, (Dollars in thousands) 2025 2024 Net loss $ (34,280 ) $ (31,404 ) Less: Interest income (636 ) (660 ) Add: Depreciation expense 3,581 2,961 Add: Amortization expense 921 970 EBITDA (30,414 ) (28,133 ) Add: Stock-based compensation expense 3,143 2,665 Add: Change in fair value of warrant liabilities 10,338 21,399 Add: Acquisition-related costs 17,141 — Add: Impairment of intangible assets — 3,729 Adjusted EBITDA $ 208 $ (340 ) EBITDA is defined as net loss before interest expense, interest income, income tax expense, depreciation and amortization expenses.
We believe these seasonal variations are consistent across our industry. 81 Results of Operations Comparison of the Years Ended December 31, 2024 and 2023 Year Ended December 31, Change from Prior (Dollars in thousands) 2024 2023 Year % Revenue: Product $ 41,065 $ 31,643 30 % Lease 7,532 6,448 17 % Service 4,897 4,073 20 % Total revenue $ 53,494 $ 42,164 27 % Cost of revenue (excluding intangible amortization): Product $ 18,254 $ 13,902 31 % Lease 2,930 2,091 40 % Service 6,459 5,064 28 % Total cost of revenue $ 27,643 $ 21,057 31 % Revenue Total revenue for the year ended December 31, 2024 was $53.5 million, an increase of 27% when compared to total revenue of $42.2 million for the year ended December 31, 2023.
Results of Operations Comparison of the Years Ended December 31, 2025 and 2024 Year Ended December 31, Change from Prior (Dollars in thousands) 2025 2024 Year % Revenue: Product $ 45,928 $ 41,065 12 % Lease 6,779 7,532 (10 )% Service 5,728 4,897 17 % Total revenue $ 58,435 $ 53,494 9 % Cost of revenue (excluding intangible amortization): Product $ 20,561 $ 18,254 13 % Lease 3,515 2,930 20 % Service 7,237 6,459 12 % Total cost of revenue $ 31,313 $ 27,643 13 % Revenue Total revenue for the year ended December 31, 2025 was $58.4 million, an increase of 9% when compared to total revenue of $53.5 million for the year ended December 31, 2024.
The change in fair value of the warrant liability was a result of an increase in the Company’s stock price of approximately 155% during 2024. We expect to continue to incur losses and operating cash outflows for the near-term future as we continue to build our commercial and clinical infrastructure and pursue further regulatory clearances of our ALLY System.
The change in fair value of the warrant liability was a result of an increase in the Company’s stock price of approximately 34% during 2025. We expect to continue to incur losses and operating cash outflows for the near-term future. In addition, acquisition-related costs have been significant.
The following table provides information about procedure volume: 2024 2023 2022 Q1 39,486 31,600 38,901 Q2 42,203 35,349 33,359 Q3 42,231 32,649 28,453 Q4 45,586 37,414 31,400 Total procedure volume 169,506 137,012 132,113 Service revenue for the year ended December 31, 2024 compared to the year ended December 31, 2023 increased by $0.8 million.
We expect to return to a more normal System placement cadence, but this may take several quarters. 82 The following table provides information about procedure volume: 2025 2024 2023 Q1 52,347 39,486 31,600 Q2 52,100 42,203 35,349 Q3 46,811 42,231 32,649 Q4 54,756 45,586 37,414 Total procedure volume 206,014 169,506 137,012 Service revenue for the year ended December 31, 2025 compared to the year ended December 31, 2024 increased by $0.8 million.
Lease revenue is generated by Systems placements primarily in the United States. Cost of Revenue Total cost of revenue for the year ended December 31, 2024 was $27.6 million, an increase of 31% when compared to total cost of revenue of $21.1 million for the year ended December 31, 2023.
Cost of Revenue Total cost of revenue for the year ended December 31, 2025 was $31.3 million, an increase of 13% when compared to total cost of revenue of $27.6 million for the year ended December 31, 2024.
Net cash used in operating activities for the year ended December 31, 2023 was $9.7 million, consisting primarily of a net loss of $14.4 million and a decrease in net operating assets of $7.8 million, partially offset by non-cash charges of $12.5 million. Non-cash charges consisted of depreciation, amortization, stock-based compensation, and change in fair value of warrant liabilities.
Net cash used in operating activities for the year ended December 31, 2024 was $2.3 million, consisting primarily of a net loss of $31.4 million and a decrease in net operating assets of $3.0 million, partially offset by non-cash charges of $32.2 million.
Seasonality We have historically experienced seasonal variations in the sales and leases of our products, with our fourth quarter typically being the strongest and the first quarter being the slowest.
However, the Company will continue to evaluate their impact of such tax law changes on future periods. Seasonality We have historically experienced seasonal variations in the sales and leases of our products, with our fourth quarter typically being the strongest and the first quarter being the slowest. We believe these seasonal variations are consistent across our industry.
The ALLY System has received regulatory approval in the United States, EU, India, Taiwan, as well as certain other countries. In addition, we are pursuing additional marketing or certification applications through our distributors in South Korea or China, but this process could take multiple years.
The ALLY System has received regulatory approval in the United States, India, Taiwan, South Korea, as well as certain other countries, and certification in the EU.
Geographically, the United States represented 63% and 71% of product and service revenues for the years ended December 31, 2024 and 2023, respectively. Lease revenue for the year ended December 31, 2024 compared to the year ended December 31, 2023 increased by $1.1 million, or 17%, primarily due to increased leased systems.
This increase was primarily attributable to the increased number of Systems placements. Geographically, the United States represented 66% and 63% of product and service revenues for the years ended December 31, 2025 and 2024, respectively.
We have built and are continuing to grow our commercial organization, which includes a direct sales force in the United States and distributors in Germany, China, India, South Korea and other targeted international markets.
Our future revenue and cash flows will depend on, among other factors, our installed base of Systems and the timing of and applicable clearances for our ALLY System. We have built and are continuing to grow our commercial organization, which includes a direct sales force in the United States and distributors in Europe and Asia and other targeted international markets.
Cost of product revenue for the year ended December 31, 2024 compared to the year ended December 31, 2023 increased by $4.4 million, or 31%.
Cost of service revenue for the year ended December 31, 2025 compared to the year ended December 31, 2024 increased by $0.8 million, or 12%. This increase was primarily attributable to the increased number of Systems placements.
Liquidity and Capital Resources Overview For the years ended December 31, 2024 and 2023, we had net losses of $31.4 million and $14.4 million, respectively, and, as of December 31, 2024, we had an accumulated deficit of $143.3 million.
Investors should not consider our non-GAAP financial measures in isolation or as a substitute for an analysis of our results as reported under GAAP. 84 Liquidity and Capital Resources Overview For the years ended December 31, 2025 and 2024, we had net losses of $34.3 million and $31.4 million, respectively, and, as of December 31, 2025, we had an accumulated deficit of $177.6 million.
Product revenue for the year ended December 31, 2024 compared to the year ended December 31, 2023 increased by $9.4 million, or 30%.
Product revenue for the year ended December 31, 2025 compared to the year ended December 31, 2024 increased by $4.9 million, or 12%. The increase was primarily attributable to increased procedure volume, which amounted to a $6.1 million increase, offset by lower Systems sales, which amounted to a $1.2 million decrease, during the year ended December 31, 2025.
In addition, our future revenue and cash flows will depend on, among other factors, our installed base of Systems and the timing of and applicable clearances for our ALLY System. 84 We expect selling, general and administrative expenses to increase from current levels to support the expansion efforts in the U.S. and internationally for the ALLY System.
We expect selling, general and administrative expenses to increase from current levels to support the expansion efforts in the U.S. and internationally for the ALLY System offset by a decrease in acquisition-related costs associated with the terminated Merger Agreement.
Removed
In 2022, we transitioned from manufacturing and selling our LLS to focus on our ALLY System. In addition, we are pursuing additional marketing or certification applications through our distributors in South Korea and China, but this process could take multiple years.
Added
A significant component of our net loss in the years ended December 31, 2025 and 2024 was the change in fair value of warrant liabilities of $10.3 million and $21.4 million, respectively. Our total installed base of LLS and ALLY Systems was approximately 435 as of December 31, 2025.
Removed
Our total installed base of LLS and ALLY Systems was approximately 385 as of December 31, 2024. Factors to Consider We operate in a highly competitive environment that involves a number of risks, some of which are beyond our control.
Added
Termination of Merger Agreement with Alcon On March 23, 2025, we entered into an Agreement and Plan of Merger, or the Merger Agreement, with Alcon Research, LLC, or Alcon and VMI Option Merger Sub, Inc., or Merger Sub, which provided that, subject to the terms and conditions set forth in the Merger Agreement, Merger Sub would merge with and into the Company, which we refer to as the Merger, with the Company continuing as the surviving corporation of the Merger and as a wholly-owned subsidiary of Alcon.
Removed
Beginning in 2022, the Tax Cuts and Jobs Act eliminated the option of expensing all research and development expenditures in the current year, instead requiring amortization over five years for expenditures in the United States and over fifteen years for foreign-based expenditures, pursuant to Section 174 of the Code, or Section 174.
Added
On May 21, 2025, we and Alcon each received a request for additional information and documentary material from the FTC in connection with the FTC’s review of the Merger. Following its investigation, the FTC indicated its intention to seek to enjoin the Merger.
Removed
The impact of Section 174 on the Company’s cash from operations depends primarily on the amount of research and development expenditures incurred. Section 174 has not had a material impact on the Company since its effective date.
Added
On March 16, 2026, we entered into a Termination and Mutual Release Agreement, or the Termination Agreement, with Alcon and Merger Sub, pursuant to which the parties agreed to terminate the Merger Agreement, effective immediately.
Removed
The Company will continue to review the application of Section 174 (together with any relevant Internal Revenue Service guidance, proposed legislation and Treasury Department regulations relevant thereto) and any impact on the Company’s cash from operations, and will adjust the estimates as necessary.
Added
Pursuant to the Termination Agreement, Alcon agreed that we will retain the $10.0 million cash deposit provided to us and being held by us pursuant to the Merger Agreement. The parties also agreed to a mutual release of claims, relating to or arising out of the Merger Agreement and the transactions contemplated therein or thereby.
Removed
The increase was primarily attributable to higher Systems sales (including the ability to sell the ALLY System in the EU beginning in August 2024), which amounted to a $3.8 million increase, and increased procedure volume, which amounted to a $5.6 million increase, during the year ended December 31, 2024.
Added
In connection with the Merger Agreement, we have incurred acquisition-related costs of approximately $17.1 million in the year ended December 31, 2025. Of the $17.1 million in acquisition-related costs incurred, $13.8 million is classified as accounts payable and $0.2 million is classified as accrued liabilities on the balance sheet at December 31, 2025.
Removed
This increase was primarily attributable to the increased number of Systems placements.
Added
Certain amounts of these acquisition-related costs were contingent upon the successful closing of the Merger. During the three months ending March 31, 2026, the Company will reduce acquisition-related costs and accounts payable by approximately $4.3 million.
Removed
General and administrative expenses increased in the period due to recording an Employee Retention Credit, or ERC, of $1.4 million in the year ended December 31, 2023, which significantly reduced expenses in 2023.
Added
Furthermore, during the three months ending March 31, 2026, $5.0 million of accounts payable will be reclassified from current to long-term based upon extended payment terms provided by our acquisition advisers. Factors to Consider We operate in a highly competitive environment that involves a number of risks, some of which are beyond our control.
Removed
Excluding the ERC, selling, general and administrative expenses decreased due to lower stock-based compensation expense and lower cash-based general and administrative expenses partially offset by a 16% increase in selling and marketing expenses in 2024 supporting the continued ALLY System growth in placements and procedures.
Added
On July 4, 2025, new U.S. tax legislation was signed into law (known as the “One Big Beautiful Bill Act” or “OBBBA”) which makes permanent many of the tax provisions enacted in 2017 as part of the Tax Cuts and Jobs Act that were set to expire at the end of 2025.
Removed
Investors should not consider our non-GAAP financial measures in isolation or as a substitute for an analysis of our results as reported under GAAP.
Added
In addition, the OBBBA makes changes to certain U.S. corporate tax provisions, but many are generally not effective until 2026. Based on the Company’s current analysis of the provisions, the Company determined that the tax law changes do not have a material impact on the Company’s 2025 financial statements.
Removed
As of December 31, 2024, we expect our current cash, cash equivalents, and investments, together with cash generated from the future sale and lease of our products, to be sufficient to operate our business.
Added
Placements of our Systems, especially outside the U.S., was negatively impacted by the twelve-month disruption we experienced while operating under the previously contemplated acquisition by Alcon.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

4 edited+0 added−0 removed3 unchanged
Biggest changeOur investments consist primarily of U.S. treasury bills and agency bonds, as well as certificates of deposit. All our investments are classified as available-for-sale.
Biggest changeIn addition, we received a $10.0 million cash deposit associated with the Merger, which is included in our cash and investments and became our property in connection with the termination of the Merger Agreement. Our investments consist primarily of U.S. treasury bills and agency bonds, as well as certificates of deposit. All our 90 investments are classified as available-for-sale.
Management has reviewed the financial situation and government guarantees to depositors, if applicable, of the financial institutions and believes there to be little or no credit risk to us. A hypothetical 10% change in interest rates would not have had a material impact on the value of our cash and cash equivalents as of December 31, 2024.
Management has reviewed the financial situation and government guarantees to depositors, if applicable, of the financial institutions and believes there to be little or no credit risk to us. A hypothetical 10% change in interest rates would not have had a material impact on the value of our cash and cash equivalents as of December 31, 2025.
Item 7A. Quantitative and Qualitat ive Disclosures About Market Risk. We had cash, cash equivalents and short-term and long-term investments of $22.5 million as of December 31, 2024. We generally hold our cash and cash equivalents in interest-bearing bank accounts, money market funds, and U.S. treasury bills.
Item 7A. Quantitative and Qualitat ive Disclosures About Market Risk. We had cash, cash equivalents and short-term and long-term investments of $18.0 million as of December 31, 2025. We generally hold our cash and cash equivalents in interest-bearing bank accounts, money market funds, and U.S. treasury bills.
We do have the ability to disable the system’s ability to operate for lack of payment and, in the case of notes receivable, repossess the system if scheduled payments lapse. As of December 31, 2024, one customer accounted for approximately 12% of our accounts receivable, net.
We do have the ability to disable a system’s ability to operate for lack of payment and, in the case of notes receivable, repossess the system if scheduled payments lapse. As of December 31, 2025, no customer accounted for more than 10% of our accounts receivable, net.

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