UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-K
☒ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the fiscal year ended December 31, 2025
or
For
the transition period from ________ to ________
Commission
File Number 001-39678
SANARA
MEDTECH INC.
(Exact
name of Registrant as specified in its charter)
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
(Address
of principal executive offices)
(817)529-2300
(Registrant’s
telephone number, including area code)
Securities registered pursuant to Section
12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, $0.001 par value SMTI The Nasdaq Capital Market
Securities
registered pursuant to Section 12(g) of the Act: None
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒
No
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐ Yes
☒ No
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files). ☒ Yes ☐ No
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
☐ ☐ ☒ ☒ ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered
public accounting firm that prepared or issued its audit report. ☐
If
securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate
by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate
by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The
aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of June 30, 2025 (the last
business day of the registrant’s most recently completed second fiscal quarter), based on the $28.39 closing price as of such date,
was approximately $147,507,172.
As
of March 20, 2026, 9,167,040 shares of the registrant’s common stock, $0.001 par value per share, were issued and outstanding.
DOCUMENTS
INCORPORATED BY REFERENCE
The
information required by Part III of this Annual Report on Form 10-K, to the extent not set forth herein, is incorporated by reference
to the registrant’s Definitive Proxy Statement on Schedule 14A relating to the 2026 Annual Meeting of Shareholders which will be
filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year to which this Annual Report on Form
10-K relates.
SANARA
MEDTECH INC.
Form
10-K
For
the Year Ended December 31, 2025
PAGE
PART I
ITEM 1. BUSINESS 4
ITEM 1A. RISK FACTORS 15
ITEM 1B. UNRESOLVED STAFF COMMENTS 37
ITEM 1C. CYBERSECURITY 37
ITEM 2. PROPERTIES 38
ITEM 3. LEGAL PROCEEDINGS 38
ITEM 4. MINE SAFETY DISCLOSURES 38
PART II
ITEM 6. RESERVED 39
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 52
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA F-1
ITEM 9A. CONTROLS AND PROCEDURES 53
ITEM 9B. OTHER INFORMATION 54
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 54
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 54
ITEM 11. EXECUTIVE COMPENSATION 54
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES 54
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 55
Sanara,
Sanara MedTech, our logo and our other trademarks or service marks appearing in this report are the property of Sanara MedTech Inc. Trade
names, trademarks and service marks of other companies appearing in this report are the property of their respective owners. Solely for
convenience, the trademarks, service marks and trade names included in this report are without the ®, TM or other applicable
symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable
law, our rights or the rights of the applicable licensors to these trademarks, service marks and trade names.
Unless
otherwise indicated, “Sanara MedTech,” “Sanara,” the “Company,” “our,” “us,”
or “we,” refer to Sanara MedTech Inc. and its consolidated subsidiaries.
Table of Contents
CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This
report contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements generally relate
to future events or our future financial or operating performance, including topics such as new products under development. In some cases,
you can identify forward-looking statements because they contain words such as “aims,” “anticipates,” “believes,”
“contemplates,” “continue,” “could,” “estimates,” “expects,” “forecast,”
“guidance,” “intends,” “may,” “plans,” “possible,” “potential,”
“predicts,” “preliminary,” “projects,” “seeks,” “should,” “target,”
“will” or “would” or the negative of these words, variations of these words or other similar terms or expressions
that concern our expectations, strategy, plans, or intentions. Such forward-looking statements are subject to certain risks, uncertainties
and assumptions relating to factors that could cause actual results to differ materially from those anticipated in such statements, including,
without limitation, the following:
● shortfalls in forecasted revenue growth;
● our ability to meet our future capital requirements;
● our ability to maintain compliance with our debt obligations;
● our ability to retain and recruit key personnel;
● the failure of our products to obtain market acceptance;
● the effect of security breaches and other disruptions;
● our ability to maintain effective internal controls over financial reporting;
● the impact of competitors inventing products that are superior to ours;
All
forward-looking statements speak only as of the date on which they are made. For a more detailed discussion of these and other factors
that may affect our business, see the discussion in “Item 1A. Risk Factors” and “Item 7. Management’s Discussion
and Analysis of Financial Condition and Results of Operations” in this report. We caution that the foregoing list of factors is
not exclusive, and new factors may emerge, or changes to the foregoing factors may occur, that could impact our business. We do not undertake
any obligation to update any forward-looking statement, whether written or oral, relating to the matters discussed in this report, except
to the extent required by applicable securities laws.
Table of Contents
PART
I
ITEM
1. BUSINESS
Overview
We
are a medical technology company focused on developing and commercializing transformative technologies to improve clinical outcomes and
reduce healthcare expenditures in the surgical market. Our products are designed to achieve our goal of providing better clinical outcomes
at a lower overall cost for healthcare systems. We strive to be one of the most innovative and comprehensive providers of effective surgical
solutions and are continually seeking to expand our offerings for patients requiring surgical treatments in the United States.
We
primarily market and sell soft tissue repair and bone fusion products for use in the operating room or other sterile environments. Our
soft tissue repair products include, among other products, our lead product, CellerateRX Surgical Powder (“CellerateRX Surgical”),
a hydrolyzed collagen that aids in the management of surgical wounds, and BIASURGE Advanced Surgical Solution (“BIASURGE”),
a sterile no-rinse, advanced surgical solution used for wound irrigation. Our bone fusion products include, among other products, BiFORM
Bioactive Moldable Matrix (“BiFORM”), an osteoconductive, bioactive, porous implant that allows for bony ingrowth across
the graft site, and ALLOCYTE Plus Advanced Viable Bone Matrix (“ALLOCYTE Plus”), a human allograft cellular bone matrix containing
bone-derived progenitor cells and conformable bone fibers.
We
also utilize an in-house research and development team, Rochal Technologies. We are advancing a strong pipeline of next-generation products
that supports and extends our surgical strategy of “Prepare, Promote and Protect.”
Shift
in Strategy and Discontinuance of Value-Based Wound Care Program
Our
company’s main source of revenue has consistently been from soft tissue repair and bone fusion products for the surgical
market. Additionally, we generate a smaller portion of revenue from products sold in the post-acute setting. To further support this
segment, particularly in wound care, we launched a value-based care services initiative designed to enhance outcomes while
complementing our offerings in both surgical and post-acute markets. This post-acute strategy, which we referred to as Tissue Health
Plus (“THP”), was focused on providing value-based wound care services. Through THP, we planned to offer a first of its
kind value-based wound care program to payers and risk-bearing entities. This program was designed to enable payers to divest wound
care spend risk, reduce wound related hospitalizations and improve patient quality of life. To further develop our value-based care
strategy, we executed an investment and acquisition strategy to build telehealth services and acquire technologies to support the
THP platform.
Since
the second quarter of 2024, we managed our business on the basis of two operating and reportable segments: the Sanara Surgical segment
and the THP segment.
Our
intention in incubating THP was coupled with a goal to find an outside partner to buy or invest in the platform. Starting in 2024,
we held several meetings and did significant outreach to find potential funding for THP. This effort included meetings with venture
capital firms, strategic buyers, provider service companies, insurance companies and private equity firms. During the third quarter
of 2025, following authorization from our Board of Directors, management initiated a review of strategic options for THP and
formally engaged an investment bank to search for potential investors or purchasers. By mid-September 2025, we concluded that these
efforts were unlikely to succeed within the timeline allocated by the Board of Directors and ended our engagement with the
investment bank. Persistent losses related to THP and a lack of any firm commitments from potential investors led management and our
Board of Directors to decide to discontinue THP’s operations in mid-September 2025 and shift our focus exclusively on products
and technologies for use in the surgical market.
As
a result of this decision, THP met the accounting requirements to be classified under discontinued operations as of September 30, 2025.
In accordance with generally accepted accounting principles in the United States (“GAAP”), the operations of THP are presented
as discontinued operations in our Consolidated Balance Sheets and Consolidated Statements of Operations and, as such, have been excluded
from continuing operations for all periods presented. As a result of the disposal of THP, we now have a single reportable
segment. This determination is in accordance with Accounting Standards Codification 280, Segment Reporting.
Certain
prior period amounts have been reclassified to conform to the current year presentation.
Table of Contents
Summary
of Our Key Products and Development Programs
We
market and distribute surgical products to surgeons at hospitals and surgical centers. Our products are primarily sold in the U.S. surgical
tissue repair market. We believe that we have the ability to drive our product pipeline from concept to preclinical and clinical development
while meeting quality and regulatory requirements.
CellerateRX
Surgical
CellerateRX
Surgical is a Type I bovine hydrolyzed collagen indicated for the management of surgical, traumatic, and partial and full-thickness wounds
as well as first- and second-degree burns. It is manufactured with a proprietary process. CellerateRX Surgical is sterilized, packaged
and designed specifically for use in the operating room. CellerateRX Surgical is primarily purchased by hospitals and ambulatory surgical
centers for use by surgeons to treat surgical wounds, including those associated with orthopedic, spine and trauma procedures. Additional
surgical wounds that often benefit from the use of CellerateRX Surgical include general, vascular, plastic/reconstructive, cardiovascular,
gynecologic, and urologic related procedures.
CellerateRX
Surgical is used in operative cases where patients might have trouble healing normally due to underlying health complications. There
is always a risk of complication with surgical wounds. This is especially true in patients with certain comorbidities, including obesity,
diabetes and hypertension. These complications can include surgical wound infections, dehiscence (where an incision opens after primary
closure) and necrosis. Surgeons use CellerateRX Surgical to complement the body’s normal healing process. By supporting the body
to heal normally without complications, improved patient outcomes are achieved, thereby reducing downstream costs related to complications
(such as re-operation, longer hospitalization, re-admittance, extended rehabilitative care and other additional treatments). Surgical
wound complications have become increasingly problematic due to the high rates of surgical patient comorbidities and the financial strain
on insurance payors as well as hospitals that suffer exorbitant costs for readmission of these patients within 90 days of surgery.
BIASURGE
BIASURGE
is a 510(k) cleared sterile no-rinse, advanced surgical solution used for wound irrigation. It contains an antimicrobial preservative
effective against a broad spectrum of pathogenic microorganisms in the solution. BIASURGE is indicated for use in the mechanical cleansing
and removal of debris, including microorganisms, from surgical wounds.
Other
Products
TEXAGEN
Amniotic Membrane Allograft is a multi-layer amniotic membrane allograft used as an anatomical barrier with robust handling that can
be sutured for securement if needed.
BiFORM
is an osteoconductive, bioactive, porous implant that allows for bony ingrowth across the graft site. It can be hydrated and used as
a strip or molded into a putty to fill a bone defect.
ACTIGEN
Verified Inductive Bone Matrix is a naturally derived, differentiated allograft matrix with robust handling properties.
ALLOCYTE
Plus is a human allograft cellular bone matrix containing bone-derived progenitor cells and conformable bone fibers. These viable cellular
allografts are ready to use upon thawing and have fibrous handling properties.
FORTIFY
TRG Tissue Repair Graft (“FORTIFY TRG”) is a freeze-dried, multi-layer small intestinal submucosa extracellular matrix sheet.
The graft is 510(k) cleared for implantation to reinforce soft tissue, is terminally sterilized, has a thin profile, is available in
multiple sizes, and can be cut to size to accommodate the patient’s anatomy. FORTIFY TRG is provided sterile and can be hydrated
with autologous blood fluid.
Our
product portfolio includes other products that have an insignificant impact on our revenue at this time.
Table of Contents
Tufts
University License Agreement
On
December 20, 2023, we signed an exclusive license agreement with Tufts University (“Tufts”) to develop and commercialize
patented technology covering 18 unique collagen peptides. As part of this agreement, we formed a new subsidiary, Sanara Collagen Peptides,
LLC (“SCP”), and issued 10% of SCP’s outstanding units to Tufts. SCP has exclusive rights to develop and commercialize
new products based on the licensed patents and patents pending. SCP will pay royalties to Tufts based on net sales of licensed products
and technologies. Under the exclusive license agreement, royalties will be calculated at a rate of 1.5% or 3%, depending on the type
of product or technology developed. SCP will pay Tufts a minimum annual royalty of $50,000 on January 1 of the year following the first
anniversary of the first commercial sale of the licensed products or technologies. SCP will pay Tufts a $100,000 minimum annual royalty
on January 1 of each subsequent year during the royalty term specified in the exclusive license agreement. There have been no material
accounting impacts and no royalties paid related to this arrangement as of December 31, 2025.
In
connection with the shift in strategy discussed above, we are in the process of terminating the exclusive license agreement with
Tufts and dissolving SCP in order to focus on developing and commercializing our surgical product portfolio.
Strategy
Our
mission is to develop and commercialize transformative technologies to improve clinical outcomes and reduce healthcare expenditures in
the surgical market. Within this mission, we strive to:
●
Deliver surgical solutions that matter for every customer and every procedure. We plan to do this through a strong commitment
to each of our stakeholders. For patients, we are focused on providing solutions that support the body’s natural healing process
and help reduce complications, enabling better recovery. For surgeons, we are focused on offering clinically proven tools designed to
address real surgical challenges, so they can perform at their best for each patient they serve. For healthcare systems, we are focused
on delivering evidence-based products that improve outcomes and help reduce complications, positioning healthcare systems to achieve
quality metrics, control costs, and elevate care across networks. For distributor partners, we are focused on providing a broad portfolio
of efficacious products, empowering their teams to present solutions to surgeons and ultimately improving clinical outcomes for the patients
they support.
●
Drive additional market penetration as well as geographic expansion for our products. We are actively working to expand our geographic
footprint across the entire United States. We also intend to leverage our comprehensive product portfolio and relationships with key
constituents to deepen our presence in the surgical markets. We believe the breadth and flexibility of the products we offer allow us
to address a wide variety of surgical site needs, wound types and sizes and offer significant new opportunities for sales growth. In
addition, we believe that as we continue to offer new products, our salesforce’s ability to reach additional customers in new and
existing geographic regions, while also penetrating further in existing customer accounts, will be enhanced.
●
Let “Prepare, Promote and Protect” continue to guide our approach to surgical care. Our product portfolio strategy
“Prepare, Promote and Protect” is the basis for our existing portfolio of surgical solutions, product development initiatives
and related partnerships. Our products aid in the preparation of procedures and help reduce complications, most notably our mechanical
cleansing solution, BIASURGE. Our products promote soft tissue and bone repair, including our orthobiologic products such as BiFORM,
ACTIGEN, and ALLOCYTE Plus. Our products protect the surgical wound environment, including CellerateRX Surgical, which utilizes hydrolyzed
collagen technology to support wound healing and tissue repair and has been clinically shown to reduce complications.
●
Launch new innovative products. We have partnered with Biomimetic Innovations Limited to commercialize additional products
such as OsStic BioAdhesive, the first true bioadhesive for advanced fixation, which is estimated to be introduced to the U.S. commercial
market in the first quarter of 2027. We expect products like OsStic BioAdhesive to deepen our portfolio of technologies that improve
surgical site outcomes. We are focused on offering additional products that are more efficacious than competing products and provide
a stronger value proposition (e.g., lower total cost to heal and less time to heal, leading to reduced healthcare system costs).
Table of Contents
Competitive
Strengths
●
Differentiated surgical technologies. We believe our products address key challenges, facilitate improved outcomes, and reduce
overall costs. We offer products that specifically address common surgical site complications. We believe our products facilitate improved
outcomes for patients and lower the overall cost of care.
●
Proven commercial strategy. We believe we have a proven commercial strategy and scalable model with multiple drivers to facilitate
strong growth. Our commercial distribution network has delivered strong results, achieved significant commercial scale and demonstrated
operating leverage. As of the end of 2025, our team has secured product contracts with more than 4,000 hospitals and engaged surgeons
in key specialties across the United States.
●
Pipeline of innovative products. We have a pipeline of compelling surgical products. We believe the efficacy of our products will
be demonstrated via clinical and health economic outcomes data, facilitating their expanded adoption, while lowering the overall cost
of treatment for healthcare systems and payors.
●
Experienced senior leadership team with a multi-year track record of execution in the surgical market. We are led by a dedicated
and seasoned senior leadership team with significant industry experience who have successfully executed our strategy in the surgical
market to date by introducing and commercializing multiple products and technologies through investment in new areas of growth. We believe
our leadership team has the vision, experience, and expertise required to guide and successfully implement our future growth strategy.
Research,
Clinical and Economic Evaluation
Our
portfolio continues to gain validation as a clinically effective and economic value solution for the management of surgical wounds. Building
on the evidence, new research published during the most recent twelve months has strengthened our
preclinical, clinical and health economic data.
Preclinical
and Translational Research
CellerateRX
Surgical continues to demonstrate efficacy and safety across a range of challenging wound types and patient populations, as
supported by both preclinical and clinical research. The in vitro studies have demonstrated the differentiated effects of
CellerateRX Surgical on mammalian cells compared to competitor products, supporting the growing body of evidence pertaining to the
bioactivity of the product and individual hydrolyzed collagen peptide components, beyond what is currently reported in the general
literature. In animal model studies conducted by multiple academic institutions, CellerateRX Surgical demonstrated contribution to
the proper wound healing environment, supporting resolution of local inflammation, improvement in tissue perfusion, accelerated
wound closure and increased breaking strength of repaired skin. This translational research aligns with previously published
scientific research and clinical literature, furthering the mechanistic contributions of hydrolyzed collagen in optimizing the
surgical wound healing environment. Ongoing research continues to explore the unique benefits of hydrolyzed collagen in the quality
of surgical wound tissue supported care.
In
November 2025, additional preclinical research on BIASURGE was published in The Journal of Arthroplasty, titled “The in vitro
Performance of Surgical Irrigation Solutions in Preventing Biofilm Formation on Implants.” In this comparative, in vitro
study, the use of BIASURGE demonstrated statistical significance and meaningful prevention of biofilm formation compared to saline controls
and competitive comparators across common orthopedic implant surfaces: stainless steel, titanium, cobalt-chrome and polyethylene. At
clinically relevant two-minute exposure times, BIASURGE exhibited high antimicrobial efficacy with low cytotoxicity, supporting fibroblast
recovery above standard biocompatibility thresholds. By contrast, benzalkonium chloride solutions exhibited persistent cytotoxic effects.
These results highlight BIASURGE’s potential as a clinically preferred irrigation solution for reducing implant-associated infection
risk without compromising cell viability.
Together,
the CellerateRX Surgical and BIASURGE preclinical findings express our commitment to biologically active and safe technologies
that address both infection control and quality wound repair in surgical environments.
Clinical
Research and Outcomes
In
addition to preclinical findings, multiple peer-reviewed studies have been published over the past year evaluating CellerateRX Surgical
in various surgical procedures and expanding and corroborating previous studies.
For
example, recent research includes a study titled “Adjuvant Hydrolyzed Collagen Powder in High-Risk Patients with Large Soft-Tissue
Defects Undergoing Orthoplastic Limb Preservation Surgery,” which demonstrated that the adjunctive use of CellerateRX Surgical
in combination with reconstructive flap and graft procedures supported consistent wound closure and enhanced granulation in patients
with extensive limb injuries and compromised healing cascades. Treatment with adjunctive hydrolyzed collagen promoted earlier graft take,
resulting in improved limb preservation and reduced infection outcomes. Another publication, “A Novel Approach to
Vulvectomy Care: The Role of Hydrolyzed Collagen Surgical Powder,” evaluated hydrolyzed collagen as an adjunctive
therapy in complex vulvectomy surgical wound management. Patients treated with CellerateRX Surgical exhibited improved epithelialization,
reduced exudate and fewer dressing changes compared with historical care models, illustrating the benefit of CellerateRX Surgical in
facilitating healing within moist, high-shear environments.
A
2025 retrospective case series titled “Intraoperative Use of Hydrolyzed Collagen Powder in Morbidly Obese Patients
Undergoing Direct Anterior Approach Total Hip Arthroplasty” evaluated the application of CellerateRX Surgical during
anterior hip replacement in patients with a preoperative body mass index (BMI) >40 kg/m2, a group recognized as being
at markedly increased risk for wound complications and infection. In this series, hydrolyzed collagen was applied intraoperatively
to the fascial plane prior to skin closure. In all four patients, complete wound healing was achieved without dehiscence, seroma
or infection within three months post-procedure. The intraoperative CellerateRX Surgical placement was safe, synergistic with
the surgical procedure and effective in eliminating dead space and enhancing closure quality. Collectively, these case series data
support reduced superficial wound complications and periprosthetic joint infection risk in high-risk arthroplasty patients. In a
cross-specialty evaluation, a study titled “Evaluation of CellerateRX Utility in Reducing Groin Complications after Femoral
Exposure” examined outcomes in high-risk vascular surgery patients and found that use of CellerateRX Surgical was
associated with a notable reduction in groin wound complications and dehiscence compared with standard care, confirming earlier
evidence of decreased infection rates and improved tissue integrity.
Collectively,
these studies reinforce the expanding clinical applicability of our hydrolyzed collagen technology, CellerateRX Surgical,
across orthopedic, reconstructive, plastic, vascular and general surgical specialties. Consistent findings of improved wound closure,
reduced complication rates and quality of tissue repair demonstrate the broad therapeutic application of CellerateRX Surgical as a bioactive
adjunct for surgical wound management. These new data bolster previously published findings in spinal (Dickerman, 2017; Hotchkiss, 2021;
Gitelman, 2022) and broad elective surgical specialties (Nowrouzi, 2023) demonstrating reduced surgical site infections, enhanced wound
strength and measurable cost savings, strengthening the multi-year evidence compendium supporting CellerateRX Surgical as a value-enhancing
solution.
ALLOCYTE Plus
was featured in a long-term clinical study published in the Journal of Spine & Neurosurgery (Dorchak and Burkus, 2025).
This study evaluated outcomes of lumbar spinal fusions using a cryopreserved viable cellular bone allograft as a standalone graft substitute.
Ten patients followed for 24-36 months demonstrated universal radiographic fusion by six months post-operation, with
sustained improvements in neurological and clinical outcomes at final follow-up. No complications, graft failures or revision surgeries
were reported. The advanced cryopreservation technology preserved high cell viability (~92%) without dimethyl sulfoxide, maintaining
viable mesenchymal stem cells and osteoprogenitor populations capable of osteogenesis. These findings indicate that ALLOCYTE Plus
provides a safe, biologically active alternative to autogenous iliac crest bone grafts, eliminating donor-site morbidity while achieving
durable arthrodesis outcomes.
Table of Contents
Economic
and Clinical Value
In
March 2026, we announced the publication of a peer-reviewed health economic study in the Journal of Medical Economics
titled “Evaluating the Economic and Clinical Value of CellerateRX Surgical Powder in the Management
of Spine Surgery Wounds.” The study evaluated the cost-effectiveness of CellerateRX Surgical as an adjunct
to standard of care for managing acute spinal surgery wounds in high-risk patient populations. Using published clinical data, researchers
modeled postoperative complications, hospital readmissions and surgical revision procedures over a one-year period. Clinical efficacy
was measured in quality-adjusted life years (“QALY”), and direct medical costs were assessed in 2025 U.S. dollars.
Results demonstrated that CellerateRX Surgical achieved a dominant cost-effectiveness profile compared to standard care alone, yielding
improved outcomes at reduced costs. Specifically, CellerateRX Surgical averaged a cost savings of $3,852 per patient,
a QALY gain of 0.007 and a net monetary benefit of $4,542. The primary contributors to cost reductions were decreases
in readmissions and revision procedures, which accounted for approximately $2,238 and $835 of the total
savings, respectively. Furthermore, CellerateRX Surgical maintained economic dominance in more than 99% of clinical variability
simulations. Researchers concluded that integrating CellerateRX Surgical into standard wound management protocols for high-risk spinal
surgery patients enhances both clinical outcomes and cost efficiency, reinforcing its role as a value-driven component of the perioperative
care surgical bundle.
Building
upon this scientific foundation, we plan to advance prospective multicenter studies and translational research to further validate
the real-world performance of our current and future portfolio technologies, further aligning our mission to
improve surgical outcomes and reduce healthcare expenditures.
Intellectual
Property
Since
our acquisition of assets from Rochal Industries, LLC (“Rochal”) in July 2021, and our acquisition of assets from The Hymed
Group Corporation (“Hymed”) and Applied Nutritionals, LLC (“Applied”) in August 2023 (the “Applied Asset
Purchase”), our research and development activities have included internally developing additional proprietary products for the
surgical market and actively working with third-party research and development partners. For our internally developed products, we seek
patent protection for our inventions to protect and differentiate our products and establish a defense against third-party infringement
claims. With the aim of optimizing commercial and regulatory success, our proprietary technology and innovative applications thereof
are protected by product, system, process and method-of-use patent claims. We believe that our granted patents and pending applications
collectively protect our internally developed intellectual property, both in terms of our existing products, as well as our anticipated
pipeline of new offerings.
In
July 2021, we acquired certain assets from Rochal, including intellectual property. With respect to the assets we acquired from Rochal
and products developed following the Rochal acquisition, our patent portfolio includes, among others, 11 issued U.S. patents, including
U.S. Patent No. 8,829,053 entitled “Biocidal Compositions and Methods of Using the Same” expiring December 7, 2031 (foreign
patents expiring December 6, 2032) and supported by an additional U.S. patent expiring June 20, 2041 relating to BIASURGE Surgical Irrigation,
BIAKŌS Antimicrobial Skin & Wound Cleanser and BIAKŌS Antimicrobial Wound Gel, as well as over 200 issued patents in
foreign jurisdictions. Following the Applied Asset Purchase in August 2023, our portfolio also now includes, among others, ten additional
U.S. patent applications, five trademarks, four 510(k) clearances and various domain names.
In
2024, our research and development team submitted 11 provisional patent applications covering innovations in proprietary antimicrobial
technologies and hydrolyzed collagen technologies. These applications encompass novel product formats and target a range of treatment
applications. Key advancements include unique collagen formulations designed to enhance antimicrobial efficacy and optimize healing outcomes
across diverse medical indications. In 2025, these 11 provisional patent applications were converted into non-provisional filings, with
corresponding U.S. and PCT applications submitted, and as of the date of this report, all applications are pending. An additional three
provisional patents were filed in 2025, further expanding the breadth of intellectual property protection and indicating our future platform
development efforts.
Our
pending patent applications and new filings are representative of our ongoing efforts to broaden our portfolio as we continue developing
new products focused on the surgical market. We intend to defend our intellectual property as we believe necessary by actively pursuing
any infringements. Additionally, we are focused on continuing to develop our portfolio of patents, brands and trademarks, pursuing any
incremental commercial opportunities that our patents provide and pursuing patents for new products as they are developed.
Sales
and Marketing
As
of December 31, 2025, we employed 40 U.S. based field sales representatives. Our field sales representatives are recruited based on their
extensive industry experience and professional performance. We constantly evaluate new markets and opportunities to add to our sales
teams.
Our
surgical products are sold through a growing network of surgical specialty distributors and Company representatives who are credentialed
to demonstrate the products in surgical settings. Field sales representatives are initially trained through an internal learning management
system, “SanaraU,” which gives them further product and surgical specialty training, including wound etiology, operating
room etiquette and credentialing requirements. After completing their internal training, newly hired field sales representatives participate
in field training with our experienced field sales representatives in order to obtain real world training and gain additional insights
into best practices. The initial training period lasts approximately eight weeks. Field sales representatives are supported by regularly
updated training modules on product information and best practices.
A
key component of our sales efforts involves working with physicians and clinicians to champion our products in their facilities. We work
closely with surgeons and health system stakeholders to demonstrate the efficacy and beneficial impact of our surgical products and successfully
navigate the hospital value analysis committee approval process, allowing our products to be sold in those facilities. If our sales efforts
are successful, the clinicians then advocate for the use of our products when medically necessary.
Manufacturing,
Supply and Production
We
do not own or operate our own manufacturing facilities. We rely on contract manufacturers to supply our products. Our contract manufacturing
strategy is intended to drive cost leverage through scale and avoid high capital outlays and fixed costs associated with constructing
and operating manufacturing facilities. Our manufacturing partners have internal compliance processes to maintain the high quality and
reliability of our products.
Reimbursement,
Clinical Validation and Clinical Utility
Our
products are not subject to reimbursement risk and are all sold as Diagnosis Related Group products within the operating room suite. Our strategy is focused on continued innovation and the development
of clinical evidence to validate clinical utility of our products, including clinical data, real-world evidence and health economic analyses
intended to demonstrate product performance, clinical relevance and economic value to patients and the totality of the healthcare system.
The data that must be gathered for decision support is directed by third-party payors and government regulators.
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Competition
The
surgical wound care market is served by several large, multi-product line companies as well as a number of small companies. Our products
compete with surgical wound irrigation products and biomaterial products. Manufacturers and distributors of competitive products include
Medline Industries, Inc., Irrimax Corporation, Becton Dickinson and Company, Solventum, Integra LifeSciences Holdings Corporation and
numerous others. Many of our competitors are significantly larger than we are and have greater financial and personnel resources.
Government
Regulation
Our
operations are subject to comprehensive federal, state and local laws and regulations in the jurisdictions in which we or our research
and development partners or affiliates do business. The laws and regulations governing our business and interpretations of those laws
and regulations are subject to frequent change. Our ability to operate profitably will depend in part upon our ability, and that of our
research and development partners and affiliates, to operate in compliance with applicable laws and regulations. The laws and regulations
relating to medical products that apply to our business and that of our partners and affiliates continue to evolve, and we must, therefore,
devote significant resources to monitoring developments in legislation, enforcement, and regulation in such areas. As the applicable
laws and regulations change, we are likely to make conforming modifications in our business processes from time to time. We cannot provide
assurance that a review of our business by courts or regulatory authorities will not result in determinations that could adversely affect
our operations or that the regulatory environment will not change in a way that restricts our operations.
U.S.
Food and Drug Administration Regulation
Our
medical products and operations are regulated by the U.S. Food and Drug Administration (the “FDA”) and other federal and
state agencies. Most of the products we currently market are regulated as medical devices in the United States under the Federal Food,
Drug, and Cosmetic Act (“FDCA”), as implemented and enforced by the FDA. The FDA regulates the development, testing, manufacturing,
labeling, packaging, storage, installation, servicing, advertising, promotion, marketing, distribution, import, export and market surveillance
of our medical devices.
In
addition, we market certain products for use in surgical wound care regulated by the FDA under Section 361 of the Public Health Service
Act (“PHSA”) (42 U.S.C. § 264) and 21 C.F.R. Part 1271.
Device
Premarket Regulatory Requirements
Before
being introduced into the U.S. market, each medical device must obtain marketing clearance from the FDA through the 510(k) premarket
notification process, the de novo classification process (summarized below), or the premarket approval application
(“PMA”) process, unless they are determined to be Class I devices or to otherwise qualify for an exemption from one of
these available forms of premarket review and authorization by the FDA. 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 provide reasonable assurance of safety and effectiveness. Classification of a device is important
because the class to which a device is assigned determines, among other things, the necessity and type of FDA review required prior
to marketing the device. Class I devices are those for which reasonable assurance of safety and effectiveness can be assured by
adherence to general controls that include compliance with the applicable portions of the FDA’s Quality Management System
Regulation (“QMSR”), as well as regulations requiring facility registration and product listing, reporting of adverse
medical events, and appropriate, truthful and non-misleading labeling, advertising and promotional materials. The Class I
designation also applies to devices for which there is insufficient information to determine that general controls are sufficient to
provide reasonable assurance of the safety and effectiveness of the device or to establish special controls to provide such
assurance, but that are not life-supporting or life-sustaining or for a use which is of substantial importance in preventing
impairment of human health, and that do not present a potential unreasonable risk of illness or injury.
Class
II devices are those for which general controls alone are insufficient to provide reasonable assurance of safety and effectiveness and
there is sufficient information to establish “special controls.” These special controls can include performance standards,
post-market surveillance requirements, patient registries and FDA guidance documents describing device-specific special controls. While
most Class I devices are exempt from the 510(k) premarket notification requirement, most Class II devices require a 510(k) premarket
notification prior to commercialization in the United States; however, the FDA has the authority to exempt Class II devices from the
510(k) premarket notification requirement under certain circumstances. As a result, manufacturers of most Class II devices must submit
510(k) premarket notifications to the FDA under Section 510(k) of the FDCA (21 U.S.C. § 360(k)) in order to obtain the necessary
clearance to market or commercially distribute such devices. To obtain 510(k) clearance, manufacturers must submit to the FDA adequate
information demonstrating that the proposed device is “substantially equivalent” to a predicate device already on the market.
A predicate device is a legally marketed device that is not subject to PMA, meaning, (i) a device that was legally marketed prior to
May 28, 1976 (“preamendment device”) and for which a PMA is not required, (ii) a device that has been reclassified from Class
III to Class II or I, or (iii) a device that was found substantially equivalent through the 510(k) process. If the FDA agrees that the
device is substantially equivalent to a predicate device currently on the market, it will grant 510(k) clearance to commercially market
the device. If there is no adequate predicate to which the manufacturer can compare its proposed device, the proposed device is automatically
classified as a Class III device. In such cases, the device manufacturer must then fulfill the more rigorous PMA requirements or can
request a risk-based classification determination for the device in accordance with the de novo classification process.
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The
de novo classification process allows a manufacturer whose novel device is automatically classified into Class III to request
down-classification of its device to Class I or Class II on the basis that the device presents low or moderate risk, rather than requiring
the submission and approval of a PMA. Under the Food and Drug Administration Safety and Innovation Act of 2012 (“FDASIA”),
the FDA is required to classify a device within 120 days following receipt of the de novo classification request. If the manufacturer
seeks reclassification into Class II, the classification request must include a draft proposal for special controls that are necessary
to provide a reasonable assurance of the safety and effectiveness of the medical device. The FDA may reject the classification request
if it identifies a legally marketed predicate device that would be appropriate for a 510(k) or determines that the device is not low
to moderate risk or that general controls would be inadequate to control the risks and special controls cannot be developed.
Devices
that are intended to be life sustaining or life supporting, devices that are implantable, devices that present a potential unreasonable
risk of harm or are of substantial importance in preventing impairment of health and devices that are not substantially equivalent to
a predicate device are placed in Class III and generally require FDA approval through the PMA process, unless the device is a preamendment
device not yet subject to a regulation requiring premarket approval. The PMA process is more demanding than the 510(k) premarket notification
process. For a PMA, the manufacturer must demonstrate through extensive data, including data from preclinical studies and clinical trials,
that the device is safe and effective. The PMA must also contain a full description of the device and its components, a full description
of the methods, facilities and controls used for manufacturing, and proposed labeling. Following receipt of a PMA, the FDA determines
whether the application is sufficiently complete to permit a substantive review. If the FDA accepts the application for review, it has
180 days under the FDCA to complete its review of a PMA, although in practice, the FDA’s review often takes significantly longer,
and can take up to several years. Before approving a PMA, the FDA generally also performs an on-site inspection of manufacturing facilities
for the product to ensure compliance with the QMSR.
Clinical
trials are almost always required to support PMAs and are sometimes required to support 510(k) submissions. All clinical investigations
of devices to determine safety and effectiveness must be conducted in accordance with the FDA’s investigational device exemption
(“IDE”) regulations that govern investigational device labeling, prohibit promotion of the investigational device and specify
recordkeeping, reporting and monitoring responsibilities of study sponsors and study investigators. If the device presents a “significant
risk,” as defined by the FDA, the agency requires the device sponsor to submit an IDE application to the FDA, which must become
effective prior to commencing human clinical trials. The IDE will automatically become effective 30 days after receipt by the FDA, unless
the FDA denies the application or notifies the company that the investigation is on hold and may not begin until the sponsor provides
supplemental information about the investigation that satisfies the FDA’s concerns. If the FDA determines that there are deficiencies
or other concerns with an IDE that require modification of the study, the FDA may permit a clinical trial to proceed under a conditional
approval. In addition, the study must be approved by, and conducted under the oversight of, an institutional review board (“IRB”),
for each clinical site. If the device presents a non-significant risk to the patient according to criteria established by the FDA as
part of the IDE regulations, a sponsor may begin the clinical trial after obtaining approval for the trial by one or more IRBs without
separate authorization from the FDA, but must still comply with abbreviated IDE requirements, such as monitoring the investigation, ensuring
that the investigators obtain informed consent, and labeling and record-keeping requirements.
Device
Postmarket Regulatory Requirements
After
a device is cleared or approved for commercialization, and prior to marketing, numerous regulatory requirements apply to the various
entities responsible for preparing a device for distribution, including the manufacturer (including specification developer), contract
manufacturers, relabelers/repackagers, sterilizers and initial importer, as applicable. These include:
● establishment registration and device listing;
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We
and our research and development partners and contract manufacturers are subject to periodic scheduled or unscheduled inspections by
the FDA. If the FDA believes we or any of our research and development partners or contract manufacturers are not in compliance with
the QMSR, or other postmarket requirements, it has broad authority to take significant enforcement actions to compel compliance. Specifically,
if the FDA determines that we or our research and development partners or contract manufacturers failed to comply with applicable regulatory