CVRx, Inc. (CVRX) Business

Item 1. Business

Overview

CVRx is a commercial-stage medical device company focused on developing, manufacturing, and commercializing innovative and minimally invasive neuromodulation solutions for patients with cardiovascular disease. Barostim is the first medical technology approved by the U.S. Food and Drug Administration (the “FDA”) that uses neuromodulation to improve the symptoms of patients with heart failure (“HF”). Barostim is an implantable device that delivers electrical pulses to baroreceptors located in the wall of the carotid artery to counteract decreased baroreceptor signaling, which creates an imbalance in the brain’s Autonomic Nervous System (“ANS”) resulting in excess neurohormones that drive HF progression. Barostim provides Baroreflex Activation Therapy (“BAT,” or “Barostim Therapy”), which links the cardiovascular system to the ANS. This therapy complements the pharmaceutical neurohormonal blockade, or Guideline Directed Medical Therapy (“GDMT”), by increasing the signaling of the baroreceptors, thereby, reducing symptoms of HF. Barostim received the FDA Breakthrough Device designation and is FDA-approved for use in HF patients in the U.S. We estimate our total market opportunity using both prevalence and incidence epidemiologic models in which prevalence reflects the total number of individuals indicated for therapy at a given time, while incidence captures the annual occurrence of new cases meeting the indication. Based on these distinct models, we estimate that our prevalence-based market opportunity for HFrEF is $10.5 billion in the U.S. Using an incidence-based model, we estimate an annual market opportunity of $2.4 billion in the U.S.

​

HF is one of the most prevalent and devastating cardiovascular diseases. We estimate that there are approximately 64 million people worldwide suffering from HF, including approximately 6.7 million people in the U.S. HF is characterized by the heart’s inability to effectively circulate blood throughout the body resulting in insufficient levels of oxygen and nourishment to various body parts. This impacts a patient’s ability to function and leads to a variety of symptoms such as shortness of breath, extreme fatigue, exercise intolerance, swelling, and fluid retention that affects the patient’s quality of life, both physically and emotionally. HF worsens over time due to maladaptive responses from the body’s control systems, mediated by the ANS, that lead to excessive neural and hormonal activation. Autonomic activation is also a significant mechanism involved with multiple other cardiovascular diseases, such as hypertension, angina pectoris, and cardiac arrhythmia, as well as other diseases, such as chronic kidney disease.

​

We are currently focused on the treatment of patients with HF with reduced Ejection Fraction (“HFrEF”), which represent approximately 31% of the patients with HF. In HFrEF, the left ventricle loses its ability to contract properly, resulting in insufficient power to pump and push the necessary quantities of blood into circulation. Approximately 75% of HFrEF patients die within five years of being admitted to the hospital for HFrEF. Patients with HFrEF are typically placed on a treatment progression plan during which they are initially given GDMT to help manage symptoms, and then progress to more invasive and costly treatment options involving other implantable devices with the most severe patients often requiring Left Ventricular Assist Devices (“LVADs”) or heart transplants. These other implantable devices mostly target different HFrEF patient populations, may require an invasive procedure that places hardware directly inside the heart, and are not designed to address the imbalance of the ANS that causes the disease. We believe there is a significant need and market opportunity for a safe, effective, and minimally invasive device-based treatment option for HFrEF.

​

We believe Barostim offers meaningful benefits for patients, physicians and payers that will continue to drive adoption of our therapy. The primary benefits include:

​

5

Table of Contents

​

In summary, the primary safety endpoint in the pre-market phase was previously met and subsequently confirmed in the post-market phase. In the pre-market phase, all effectiveness endpoints were previously met, demonstrating 6-month improvements in 6MHW, quality of life, NYHA Class and NT-proBNP (defined below). The post-market phase effectiveness primary endpoint of CV mortality and HF hospitalization was not met. Additional post-market phase effectiveness analyses (Win Ratio, freedom from all-cause mortality) suggested a favorable effect of Barostim Therapy. The totality of the 6, 12 and 24-month data demonstrated symptomatic improvements for HF patients who are NYHA Class III or Class II (who had a recent history of Class III) despite treatment with guideline-directed therapies and who have a LVEF ≤ 35% and a NT-proBNP1,600 pg/mL.

​

6

Table of Contents

Barostim is a minimally invasive neuromodulation device that consists of two implantable components, an IPG and a stimulation lead and is programmed by a wireless clinician-controlled programmer that communicates with the IPG. The IPG contains the electronics and battery in a hermetic enclosure and controls and delivers the imperceptible and persistent electrical pulses to the carotid baroreceptors through the stimulation lead attached to the exterior wall of the carotid artery. Barostim has no intravascular components. These electrical pulses delivered to the baroreceptors increase signals to the brain to modulate the cardiovascular function, thereby improving symptoms of HFrEF. Our wireless programmer allows physicians to verify and customize the therapy to the patient’s needs by adjusting the intensity and frequency of the electrical pulses.

​

We have developed a significant clinical data set that demonstrates the safety, effectiveness, patient adherence, and durable benefits of Barostim Therapy. Our BeAT-HF pivotal trial, which was a multi-center, prospective, randomized, controlled trial, met the primary safety and effectiveness endpoints and demonstrated meaningful improvement in the quality of life, both physically and emotionally, for patients suffering from HFrEF. These results led to FDA Premarket Approval (“PMA”) of Barostim in August 2019 on an accelerated basis of only four months from the submission of the clinical trial report.

​

The BeAT-HF pivotal trial continued enrolling patients in the post-market stage of the trial in order to gather and evaluate additional, long-term data. In December 2023, the FDA approved expanded labeling for Barostim based on the BeAT-HF trial data, resulting in simplification and clarification of the indications for use, as well as inclusion of the primary endpoint results, the 6, 12 and 24 month symptomatic data, the Win Ratio and the all-cause mortality data in the “Clinical Summary” discussion included in Barostim’s indications for use. We currently believe, using a prevalence-based epidemiologic model, our market opportunity in the U.S. is an estimated $10.5 billion, or 339,000 patients.

​

We continue to develop and expand upon our significant body of published clinical evidence that supports the meaningful benefits of Barostim Therapy. We are investigating the benefits of Barostim in an expanded population of patients with HF with mildly Reduced Ejection Fraction (“HFmrEF”) and HFrEF with NT-proBNP 5,000 pg/mL in a large, multi-center, randomized controlled trial. If successful, we believe that our market

7

Table of Contents

opportunity in the U.S. could increase to an estimated $30.5 billion or 983,000 patients using a prevalence-based epidemiologic model. We are also analyzing data from U.S. and European Union (“EU”) patient registries and other real world evidence (“RWE”) datasets, in order to evaluate and assess a comprehensive view of outcomes from HFrEF patients who have been implanted with Barostim. We are continuing to invest in investigator-sponsored studies, driven by the strong interest of independent clinicians seeking to further validate the mechanisms underlying the device’s benefits.

​

We primarily sell Barostim to hospitals through a direct sales organization in the U.S. and Germany and through distributors in Austria, Spain, and other European countries. Our global sales and marketing team engages in sales efforts and promotional activities focused on HF specialists, interventional cardiologists, general cardiologists, advanced practice providers (“APPs”), electrophysiologists (“EPs”), vascular surgeons, and cardiothoracic surgeons. We are prioritizing our sales and marketing efforts on high volume cardiology centers that are strategically located and on educating and training physicians. We support all aspects of the patient journey, which includes initial diagnosis, surgical support, and patient follow-up. We also highlight our compelling clinical benefits and value proposition to build awareness and adoption among physicians through targeted key opinion leader (“KOL”) development, referral network education and direct-to-consumer marketing. We utilize direct communication channels to inform and educate patients about Barostim Therapy and utilize a qualification process to aid in the identification of the appropriate patients for our therapy. In the U.S., Barostim is reimbursed by the Centers for Medicare and Medicaid Services (“CMS”) across all regions. We assist with reimbursement approvals, if required. We plan to continue actively expanding our direct sales force and commercial organization in the U.S., which is where we expect to focus most of our sales and marketing efforts in the near-term.

​

The primary focus of our research and development efforts in the near-term will be the continued technological advancement of Barostim. In the future, we plan to explore Barostim’s potential to expand its indications for use to other cardiovascular diseases, including different forms of HF, hypertension, and arrhythmias. Expansions into these or other new indications would require additional FDA approvals and may involve additional clinical trials or modifications to Barostim to treat such indications. If clinical studies for future indications do not produce results necessary to support regulatory clearance or approval in the U.S. or elsewhere, we will be unable to commercialize our products for these indications.

​

We generated revenue of $56.7 million, a gross margin of 85% and a net loss of $53.3 million for the year ended December 31, 2025, compared to revenue of $51.3 million, a gross margin of 84% and a net loss of $60.0 million for the year ended December 31, 2024. Our accumulated deficit as of December 31, 2025 and 2024, was $590.7 million and $537.3 million, respectively.

​

Our market and industry

Overview of HF

It is estimated that HF currently affects approximately 64 million people globally, including approximately 6.7 million people in the U.S. HF is associated with a five-fold increase in sudden cardiac death. There is no known prevention for HF other than the treatment of the common risk factors associated with the disease, such as hypertension, diabetes, and obesity.

​

HF is a debilitating, progressive and potentially life-threatening condition where the heart does not pump enough blood throughout the body. Without proper blood circulation, insufficient levels of oxygen and nourishment are delivered to various body parts, impacting a person’s ability to function and leading to a variety of symptoms that affect quality of life, both physically and emotionally, such as shortness of breath, extreme fatigue, exercise intolerance, swelling and fluid retention. HF worsens over time due to maladaptive responses from the body’s control systems, mediated by the ANS, that lead to excessive neural and hormonal activation. Autonomic activation is also a significant mechanism involved with multiple other cardiovascular diseases, such as hypertension, angina pectoris and cardiac arrhythmia, as well as other diseases, such as chronic kidney disease.

​

8

Table of Contents

The role of the imbalance of ANS in HF

​

The ANS, which is a part of the peripheral nervous system, plays a vital role in the function of the heart. It is a collection of receptors and neurons that acts outside of a person’s conscious awareness, regulating bodily functions such as bodily fluid production, urination and sexual responses. There are two primary components of the ANS that impact heart functionality: the sympathetic system and the parasympathetic system.

​

The sympathetic system of the ANS is responsible for preparing the body for action through the “fight or flight” response, which consists of the release of specific neurohormones that act across the cardiovascular system. When the body perceives a threat in the environment, the sympathetic system stimulates the release of these neurohormones, which increase the heart rate, widen the airways to allow for easier breathing, release stored energy, increase strength in the muscles, and slow digestion and other bodily processes that are not as critical for taking action. These changes prepare the body to respond appropriately to a threat in its environment.

​

The parasympathetic system of the ANS is responsible for restoring the body to a state of calm through the “rest and digest” counter response in order to maintain homeostasis. This is done by decreasing the heart rate, conserving energy, constricting the airways, relaxing the muscles, and increasing digestion.

​

​

These two systems are strongly influenced by baroreceptors that are located in carotid artery walls. The baroreceptors regulate the baroreflex, which is one of the mechanisms of the ANS that helps to maintain blood pressure at nearly constant levels (i.e., homeostasis). Baroreceptors provide beat-by-beat regulation of the body’s circulatory system by sending electrical signals to the brain.

​

Healthy individuals have balanced sympathetic and parasympathetic activities due to normal baroreceptor signaling, promoting the effective function of the heart. However, there are many factors, including a person’s diet, lifestyle, and underlying conditions such as diabetes and obesity that can contribute to an imbalance of the ANS and an excess of neurohormones. This imbalance, or the elevated levels of sympathetic activity and reduced levels of parasympathetic activity, may result in additional stress on the heart, leading to HF and potentially death.

​

Overview of HFrEF

​

When the heart pumps, oxygen-rich blood travels from the lungs, through the left atrium and into the left ventricle from where it is pumped to the rest of the body. Given that the left ventricle is responsible for the majority of the heart’s pumping power, it is larger than the other chambers and critical for proper heart functionality. In left-sided or left-ventricular HF, the left side of the heart must work much harder to pump the same amount of blood it would under healthy conditions.

​

9

Table of Contents

There are two types of left-sided HF, HFrEF, or systolic heart failure, and HF with preserved Ejection Fraction (“HFpEF”), or diastolic heart failure. In HFrEF, the left ventricle loses its ability to contract properly, resulting in insufficient power to pump and push the necessary quantities of blood into circulation. In HFpEF, the left ventricle loses its ability to relax properly (due to muscle stiffness), leading to the improper filling of blood in the heart during the resting period between heartbeats.

​

We are currently focused on the treatment of patients with HFrEF, which represents approximately 31% of the patients with HF. These patients currently have limited commercially available device-based treatment options that improve HFrEF symptoms such as shortness of breath, fatigue, weakness, swelling of the legs and feet, reduced ability to exercise, a persistent cough, an increased need to urinate and sudden weight gain. Approximately 75% of HFrEF patients die within five years of being admitted to the hospital for HFrEF.

​

Given HFrEF is a multifactorial and heterogeneous disease, physicians use a variety of indicators in the underlying pathology, severity of symptoms and a patient’s functional limitations to classify HF patients. Below are some of the common indicators used by cardiologists to diagnose HF:

​

​

10

Table of Contents

Existing treatments for HFrEF

Patients with HFrEF are typically placed on a treatment progression plan during which they are initially given GDMT to help manage symptoms. GDMT usually includes a progression or combination of prescribed drugs such as diuretics, beta-blockers, ACE Inhibitors, ARBs, ARNIs, SGLT2 inhibitors and sinus node inhibitors. After being treated with pharmaceuticals for a short period, if the symptoms persist, patients move to more invasive and costly treatment options involving other implantable devices, with the most severe patients often requiring LVADs or heart transplants.

​

Other commercially available implantable devices

Implantable Cardiac Defibrillators (“ICD”)

​

ICDs are indicated for patients with NYHA Class II or III and LVEF ≤ 35% for both wide and narrow QRS. However, these devices are generally used to prevent sudden cardiac arrest rather than reduce HFrEF symptoms, as their electrical shocks focus on restoring a normal heartbeat when a heart beats too quickly or randomly. Given their purpose and mechanism of action, these devices are not a treatment for HFrEF but are used in conjunction with other treatment options that focus on reducing HF symptoms.

​

Cardiac Resynchronization Therapy (“CRT”)

​

CRTs, or biventricular pacing, are indicated for patients with NYHA Class II or III, LVEF ≤ 35% and wide QRS. These devices are primarily used to reduce symptoms of HFrEF by generating electrical pulses to regulate the pace of a heartbeat. While CRTs can alleviate symptoms for patients with a wide QRS, they are not eligible for patients with a narrow QRS, which represents approximately 59% of patients with NYHA Class II or III and LVEF ≤ 35%. These devices can be combined with an ICD, which are referred to as CRT-D.

​

Cardiac Contractility Modulation (“CCM”)

​

CCM is eligible for patients with NYHA Class III, LVEF 25-45%, narrow QRS and normal sinus rhythm. CCM requires an invasive procedure whereby an IPG is implanted under the skin of the upper chest with electrical leads running through the veins and attached inside the heart’s ventricles, sending electrical pulses to the heart after it contracts. The device is rechargeable and therefore requires patients to recharge the battery on a regular basis.

​

Left Ventricular Assist Device (“LVAD”)

​

LVAD is an irreversible, invasive surgery generally reserved for critical HFrEF patients with NYHA Class IV. An LVAD is a mechanical pump that is implanted inside a patient’s chest and helps pump blood throughout the body. While LVADs do not replace the heart, they do require open chest surgery and often result in the destruction of a portion of the heart. Patients who do not respond to LVADs usually have no other treatment options and become candidates for heart transplants.

​

11

Table of Contents

Despite currently available pharmaceutical and device-based treatments, HF remains underpenetrated and imposes significant direct and indirect costs on the healthcare system through patient care, morbidity, unpaid care costs, premature mortality and lost productivity. National U.S. statistics indicate there are approximately 1.1 million HF hospital discharges every year, and annual costs are expected to reach $70 billion by 2030.

​

Barostim’s market opportunity

In late 2025, we revised our market opportunity and now estimate that our prevalence-based market opportunity for HFrEF is $10.5 billion, or 339,000 patients, in the U.S.

​

Our solution

We developed our Barostim platform technology to transform the treatment of HFrEF and other cardiovascular diseases and become the standard of care for this vulnerable and underpenetrated patient population. We believe Barostim offers meaningful benefits for patients, physicians and payers that will continue to drive adoption of our therapy.

Overview of Barostim Therapy

Our integrated platform technology, Barostim, leverages the power of the brain and its ANS to address the primary cause of HFrEF and other cardiovascular diseases. Our product, Barostim, is the first and only commercially available neuromodulation device indicated to improve symptoms for patients with HFrEF. Barostim Therapy utilizes a widely accepted mechanism of action and works by sending imperceptible and persistent electrical pulses to baroreceptors located in the wall of the carotid artery to counteract decreased baroreceptor signaling, which results in an excess of neurohormones that drives HF progression. Barostim provides BAT, which complements the neurohormonal blockade, or GDMT, by increasing the signaling of the baroreceptors. This increased signaling is well understood to normalize blood pressure, improve remodeling of the heart, increase vasodilation (widening of blood vessels), and improve kidney function. Based on the results of our BeAT-HF pivotal trial, Barostim has demonstrated its ability to meaningfully improve the quality of daily life, both physically and emotionally, for patients suffering from HFrEF.

​

Barostim

Barostim consists of two implantable components: an IPG and a stimulation lead. The image below depicts the relative location and size of Barostim under the patient’s skin:

​

12

Table of Contents

Implantable pulse generator

​

The current IPG contains the electronics and battery in a hermetic enclosure, has an average service life of five to six years and includes a battery that does not require any recharging. The IPG provides control and delivery of electrical pulses to baroreceptors located in the wall of the carotid artery through the stimulation lead. Nominal dimensions for the current IPG are 68 millimeters in height, 50 millimeters in width, and 14 millimeters in depth.

​

​

Stimulation lead

​

The stimulation lead is attached via six suture points to the exterior wall of the carotid artery and is connected to the current IPG. This allows the stimulation lead to carry the electrical pulses from the IPG to the baroreceptors located in the wall of the carotid artery. The stimulation lead is 40 centimeter long and terminates with a two-millimeter electrode.

​

Ancillary surgical accessories

​

In addition to the IPG and stimulation lead, we provide physicians with single-use surgical tools, including the port plug, torque wrench, and implant tool, all of which were designed to facilitate the implantation of Barostim.

13

Table of Contents

Programmer

​

Once implanted, Barostim is managed wirelessly by a programmer that communicates with the IPG. The programmer can be used to assist in verifying the desired location of the stimulation electrode during the implant procedure and allows physicians to input their patient’s therapy parameters and retrieve information on the status of the IPG, including the remaining battery life, without touching the IPG or the patient.

​

​

Treating patients with Barostim

Patient selection

​

Barostim is indicated for patients who are NYHA Class III or II (who had a recent history of Class III) despite treatment with guideline-directed medical therapies (medications and devices), have a LVEF ≤ 35% and a NT-proBNP 1,600 pg/mL. Barostim delivers BAT to improve patients’ NYHA functional status, 6MHW and quality of life.

​

Once a patient is diagnosed with HFrEF and recommended for an ICD and/or CRT, interventional or general cardiologists will often refer them to EPs, who often conduct a series of diagnostic tests, including an electrocardiogram, ultrasound, and various blood tests, from which they will determine the patient’s eligibility for our therapy. Many of our indicated patients may have already been pre-indicated for an ICD, whether or not they chose to undergo the ICD implantation procedure.

​

Implantation

​

Barostim is implanted during a short, minimally invasive procedure that is typically performed on an outpatient basis by a vascular surgeon or a cardiothoracic surgeon. The procedure has two steps. During the first step, a small incision is made on the right side of the neck to expose the carotid sinus. The physician uses the implant tool to hold the lead electrode in contact with the outside wall of the carotid artery while the lead is temporarily connected to the IPG to verify the location of the electrode. After the electrode is sutured in place, the second step begins by making a small incision below the right clavicle where a pocket is created under the skin to hold the IPG. The main body of the stimulation lead is tunneled under the skin, but over the clavicle, from the neck to the pocket. The lead connector is inserted and secured into the IPG header. Lastly, the IPG is placed in the pocket and a few stiches are used to close each incision.

​

This implantation procedure, which typically lasts one hour, is usually performed under general anesthesia and may require a short hospital stay. While patients may experience mild discomfort and swelling at the incision sites for a few days, this often can be managed with over-the-counter pain medications. Patients typically recover quickly and are discharged from the hospital within 24 hours of the procedure.

14

Table of Contents

​

Activation/Titration

​

After Barostim is implanted and activated, the patient attends a few follow-up visits with their doctor, during which the device is progressively titrated from a moderate level to a higher amplitude of electrical stimulation. The primary objective of these follow-up visits is for the patient to reach the optimal level of stimulation, which is typically achieved approximately three months after implantation. The exact level of stimulation varies from patient to patient based on the response to Barostim Therapy. Barostim can be adjusted through a digital wireless programmer, allowing the clinician to monitor and customize the therapy to the patient’s needs by adjusting the intensity and frequency of the electrical pulses being sent to the carotid artery. After the titration period, it is recommended that the patient attend a clinical visit two times each year to check impedance, battery longevity and adequacy of programming.

​

Key benefits for patients, physicians and payers

Barostim is designed to advance patient care and provide a safe, effective, and economically attractive treatment option to an underserved patient population suffering from HFrEF. We believe the following factors offer meaningful benefits for patients, physicians and payers that will continue to drive broad adoption of our therapy:

​

15

Table of Contents

The significant benefits of our therapy were observed despite a four-fold uptake of ARNI medication in the control arm, as compared to the device arm.

​

Clinical results and studies

The safety and effectiveness of Barostim in HFrEF is supported by compelling data, which demonstrated similarly robust and reproducible results across our three clinical trials evaluating 624 patients in aggregate across the U.S., Germany, Italy, France, Canada, and the United Kingdom. We designed our BeAT-HF (Phase III) pivotal trial in collaboration with the FDA under the Breakthrough Devices Program, which was implemented to accelerate the approval of novel therapies targeting unmet needs for debilitating or life-threatening conditions. The pre-market phase of our BeAT-HF pivotal trial met the primary safety and effectiveness endpoints and demonstrated meaningful improvement in the quality of life, both physically and

16

Table of Contents

emotionally, for patients suffering from HFrEF. These results led to the FDA approval of Barostim in August 2019 on an accelerated basis of only four months from the submission of the final clinical trial report. The post-market phase BeAT-HF pivotal trial met the primary safety endpoint, and although it did not meet the primary effectiveness endpoint, showed sustained improvements in exercise capacity, quality of life and NYHA functional status, and favored Barostim in freedom from all-cause mortality, LVAD or transplant and in the Win Ratio. This led to the FDA approval of expanded labeling with these results and a simplification and clarification of the following indications for use.

​

Barostim is indicated for patients who are NYHA Class III or Class II (with a recent history of Class III) despite treatment with guideline-directed medical therapies (medications and devices), have a LVEF ≤ 35% and a NT-proBNP 1,600 pg/mL. Barostim delivers BAT to improve patients’ NYHA functional status, 6MHW and quality of life.

​

The safety and effectiveness of Barostim Therapy have been published in more than 65 peer-reviewed publications, approximately 25 of which relate to the treatment of HF, including, among others, the publications on the pivotal trial results in the Journal of the American College of Cardiology and the European Journal of Heart Failure.

​

We established a U.S. patient registry and are collecting RWE to evaluate and assess real world patient outcomes from patients who have been implanted with Barostim in commercial settings. Investment in clinical evidence continues to be one of our core strategies, and we intend to continue to develop and expand upon a significant body of published clinical evidence that supports the safety and effectiveness of Barostim Therapy. Clinicians using Barostim often identify key insights and propose single- or multi-center studies to explore its physiological mechanisms in indicated patients. We actively invest in scientifically rigorous protocols to advance these initiatives, aligning with our strategy to build a comprehensive evidence base.

​

Pivotal phase III study: BENEFIT-HF

Overview

In November 2025, the Food and Drug Administration granted an investigational device exemption (“IDE”) study designed as a prospective, multi-center, randomized controlled trial to evaluate the Barostim device’s impact on all-cause mortality and heart failure decompensation events in an expanded population of HF patients.

In January 2026, we initiated the trial, supported by CMS Category B IDE coverage. We expect to begin enrolling the trial across approximately 150 centers in the first half of 2026 and complete enrollment within five years. The trial provides for a two-year follow-up period, resulting in the expected conclusion of the trial in five to seven years. We expect net trial costs of $20 million to $30 million spread over the period of the trial. A successful outcome could expand Barostim’s total addressable prevalence-based U.S. market from approximately 339,000 patients to approximately 983,000 patients, representing a sales market opportunity from $10.5 billion to $30.5 billion.

Design summary

17

Table of Contents

Pivotal phase III study: BeAT-HF

Overview

​

BeAT-HF was a multi-center, prospective, randomized, controlled trial that began in April 2016 to develop scientific evidence for the safety and effectiveness of BAT with Barostim. Between May 2016 and July 2020, 467 adult patients were randomized at 72 sites within the U.S. and one site in the United Kingdom.

​

The BeAT-HF study was designed to encompass two stages in an integrated and seamless approach:

​

(1)   A pre-market stage that examined three primary effectiveness endpoints (quality of life, 6MHW and NT-proBNP), as well as one safety endpoint that included the MANCE-free rate.

​

(2)   A post-market stage that examined the effects of BAT on rates of HF hospitalization and CV mortality, as well as sustained safety and symptomatic improvements, which expanded the labeling for Barostim.

​

Patients were eligible for the trial if they were NYHA Class III or Class II (with a recent history of Class III); had an LVEF ≤ 35% and NT-proBNP 1,600 pg/mL; were able to complete a 6MHW distance of 150 to 400 meters; were on stable optimal GDMT for ≥ 4 weeks; had at least one carotid artery that was below the level of the mandible with no ulcerative carotid arterial plaques or stenosis ≥ 50%; and were an acceptable surgical candidate.

​

Patients who had a Class I indication for a CRT according to the American Heart Association/American College of Cardiology/European Society of Cardiology guidelines were excluded, and there were no restrictions for atrial fibrillation or atrial flutter.

​

In summary, the primary safety endpoint in the pre-market phase was previously met and confirmed in the post-market phase. In the pre-market phase, all effectiveness endpoints were previously met, demonstrating 6-month improvements in 6MHW, quality of life, NYHA Class and NT-proBNP. The post-market phase effectiveness primary endpoint of CV mortality and HF hospitalization was not met. Additional post-market phase effectiveness analyses (Win Ratio and freedom from all-cause mortality) suggested a favorable effect of Barostim Therapy. The totality of the 6, 12 and 24-month data demonstrated symptomatic improvements for HF patients who are NYHA Class III or Class II (who had a recent history of Class III) despite treatment with guideline-directed therapies and who have a LVEF ≤ 35% and a NT-proBNP 1,600 pg/mL.

​

Pre-market phase results

​

The safety and effectiveness data in the BeAT-HF pivotal trial support the HFrEF clinical benefits of Barostim. These results demonstrated that BAT is safe in patients with HFrEF and significantly improves the patient-centered symptomatic endpoints of the quality-of-life score, 6MHW and NYHA functional status, as well as the confirmatory nature of the evidence provided by a reduction of NT-proBNP.

​

18

Table of Contents

The MANCE-free rate exceeded the performance criteria of 85%, with 121 out of 125 implanted patients being event free, resulting in an event-free rate of 97% (p 0.001; 95% 1-sided CI: 93% to 100%).

​

In addition to the results noted above, we observed a reduction in the rate of cardiovascular serious adverse events (non-HF related events) by 51% (events per patient-year; 0.101 Barostim group vs 0.206 control group; nominal p= 0.023; 95% CI: 0.10 to 0.73) and there were no significant differences in blood pressure or heart rate.

​

Post-market phase results

​

The BeAT-HF pivotal trial continued enrolling patients in the post-market stage of the trial to determine if Barostim demonstrates a statistically significant improvement in morbidity and mortality in patients with HFrEF. Between May 2019 and July 2020, an additional 59 adult patients were randomized at 17 sites within the U.S. as part of the post-market phase of the trial.

​

The safety and effectiveness data in the BeAT-HF pivotal trial support the HFrEF clinical benefits of Barostim. These results demonstrated that BAT is safe in patients with HFrEF, showed a directional reduction in the primary endpoint of CV mortality and HF morbidity (although not reaching statistical significance), and favored patient-centered symptomatic improvements at 6 and 12 months in 6MHW and at 6,12 and 24 months in the MLWHF quality of life questionnaire and NYHA Class.

​

19

Table of Contents

​

​

20

Table of Contents

​

​

​

​

21

Table of Contents

​

The system or procedure related MANCE endpoint includes all events that occurred across the duration of follow-up. The analysis includes subjects in Barostim group who had an implant attempted (n=159), representing 6,664 total months of implant follow-up. All implant attempts were successful. As shown below, the MANCE-free rate is 96.9%, with 154 out of 159 implanted patients being event free with a lower bound one-sided 95% confidence level of 93.5% (p value 0.001 compared to a performance goal of 85%).

​

Phase II study: HOPE4HF

HOPE4HF was a multinational, prospective, randomized, controlled trial that began in May 2012 to demonstrate the safety and performance of BAT with Barostim. A total of 146 patients (72 in the U.S. and 74 in Germany, Italy, France, and Canada) at 45 centers were randomized 1:1 with 76 patients in the Barostim group and 70 patients in the control group.

​

22

Table of Contents

Patients were eligible for the study based on symptoms, historical treatment plan and anatomical criteria, including if they were NYHA Class III, received GDMT for their HF, had a LVEF ≤ 35% and were considered a suitable surgical candidate, among others. Patients were excluded from the study if they had recently experienced NYHA Class IV, recently received an ICD or CRT, or had known baroreflex failure, among others.

​

Results

​

The overall MANCE-free rate was 97% (lower 95% CI bound 91%). Patients assigned to Barostim group, compared with control group patients, experienced improvements in MLWHF quality of life score (–17 ± 2.8 points Barostim group vs. 2.1 ± 3.1 points control group; p 0.001), 6MHW distance (60 ± 14 meters Barostim group vs. 1.5 ± 13 meters control group; p=0.004) and NT-pro BNP (-69 pg/mL Barostim group vs. 130 pg/mL control group; p =0.02). Barostim group patients also experienced at least a one-class improvement in NYHA class when compared to the control group (55% Barostim group vs 24% control group; p=0.002) and showed a trend toward fewer days hospitalized for HF (p=0.08) as compared to the control group.

​

Positive safety and performance results from the 146-patient combined, randomized, controlled clinical trials were presented in the late breaking clinical trial session of the American College of Cardiology and the European Society of Cardiology HF conference in 2015. The favorable data from this trial were published in the Journal of the American College of Cardiology — Heart Failure in 2015. These results led to CE Mark approval.

​

Phase I study: BAT in HF

BAT in HF was our first-in-human study of Barostim Therapy for the treatment of HF that was published in 2014. This study was a single-center, open-label evaluation, designed to evaluate the safety and performance of Barostim Therapy in patients with NYHA Class III receiving optimized medical therapy for their HF and had an LVEF ≤ 40%. Patients who had been implanted with a CRT device were excluded from this trial until six months after activation. Eleven patients met the eligibility criteria and received Barostim. After six months of Barostim Therapy, the mechanism of action was assessed with serial measurement of muscle sympathetic nerve activity (“MSNA”) and clinical measures of quality of life and functional capacity.

​

Results

​

MSNA was reduced over six months from 45 ± 7.7 to 31 ± 8.3 bursts/minute and from 68 ± 13 to 45 ± 12 bursts/​100 heartbeats, decreases of 31% and 33%, respectively (p 0.01). Concomitant improvements occurred in baroreflex sensitivity, ejection fraction, NYHA class and quality of life as measured by the MLWHF and 6MHW distance (p ≤ 0.05 each). On an observational basis, hospitalization and emergency department visits for worsening HF were reduced.

​

This study provided the first evidence that chronic stimulation of carotid baroreceptors markedly and persistently reduced the sympathetic activation characterizing HF patients. It also demonstrated that the reduction is accompanied by the improvement of a major modulator of sympathetic activity, the arterial baroreflex and baroreflex activation is accompanied by favorable therapeutic impact on cardiac function and clinical profile, as shown in the improved quality of life, increased exercise tolerance and improved NYHA functional status.

​

Other clinical trial

Hypertension

​

We have completed two clinical trials in Europe and North America for the treatment of drug-resistant hypertension using our first-generation Barostim Therapy device called Rheos, and determined this study was successful in achieving three of the required five safety and effectiveness endpoints (“Baroreflex Activation

23

Table of Contents

Therapy Lowers Blood Pressure in Patients with Resistant Hypertension: Results from the Double-Blind, Randomized, Placebo-Controlled Rheos Pivotal Trial,” by John D. Bisognano, M.D. et al that was published in 2011 in the Journal of the American College of Cardiology, volume 58, No. 7, 2011). In 2014 we submitted a request for a Humanitarian Device Exemption (“HDE”) to commercialize Barostim Legacy, our second generation IPG for the subjects that were enrolled in the Rheos Pivotal trial, who are benefitting clinically from Rheos (estimated at the time to be 70–80% of the subjects enrolled) and whose IPG battery had become depleted. In December 2014, after a favorable review of the long-term clinical data from the Rheos pivotal hypertension trial, the FDA granted the HDE to Barostim Legacy.

​

Since 2011, we have completed one clinical trial in Europe and North America for the treatment of drug-resistant hypertension using Barostim (“Minimally Invasive System for Baroreflex Activation Therapy Chronically Lowers Blood Pressure with Pacemaker-like Safety Profile: Results from the Barostim Neo Trial,” by Uta C. Hoppe, M.D. et al, in the Journal of the American Society of Hypertension, volume 5, no. 4, 2012).

​

In August 2011, we received CE Mark approval for Barostim for the treatment of resistant hypertension. In October 2012, we received FDA approval to conduct a pivotal trial for the treatment of resistant hypertension entitled “Barostim Hypertension Pivotal Study.” On April 12, 2013, the study had its first enrollment. However, a redirection of our limited available financial and personnel resources to develop Barostim Therapy in HFrEF led to putting the trial on hold. In December 2019, after review of the clinical data and the competitive landscape, FDA granted a Breakthrough Device designation for Barostim for the treatment of resistant hypertension.

​

Sales and marketing

We have established a systematic approach to market development which centers on active engagement across three key stakeholders in the HFrEF treatment paradigm—patients, physicians, and hospitals.

​

Barostim has FDA approval to improve symptoms of HFrEF in the U.S. and Medical Device Regulation (“MDR”) approval for the treatment of HFrEF and resistant hypertension in Europe. Additionally, the EU approved an amendment to the MDR (as defined below) which allows qualifying AIMDD CE certificates to be accepted through December of 2027. We have already met the qualifications identified within this amendment to allow continued distribution of Barostim through this time. We market our therapy in the U.S. to hospitals and clinics where EPs, HF specialists, interventional and general cardiologists and vascular surgeons treat patients with HFrEF.

We primarily sell Barostim to hospitals through a direct sales organization in the U.S. and Germany, and through distributors in Austria, Spain, and other European countries. Our global sales and marketing team engages in sales efforts and promotional activities focused on HF specialists, interventional and general cardiologists, APPs, EPs, vascular surgeons, and cardiothoracic surgeons. We are continuing to actively expand our direct sales force and commercial organization in the U.S.

​

Our direct sales representatives, which we refer to as Territory Managers, generally have substantial and applicable medical device experience, specifically in the cardiovascular space, and market our products directly to the approximately 800 HF specialists, 20,000 general cardiologists and 2,500 EPs in the U.S. We support all aspects of the patient journey, which includes initial diagnosis, surgical support, and patient follow-up. Our Territory Managers are focused on prioritizing high volume cardiology centers that are strategically located and on educating and training physicians who have strong connectivity to the HFrEF patient population that may be eligible for our therapy. We also employ Field Clinical Specialists who generally have experience in medical device clinical support. Our Field Clinical Specialists work to ensure that every procedure is done correctly by educating the implanting physicians, including vascular surgeons and cardiothoracic surgeons, about the technical aspects of Barostim and the implantation procedure.

​

Similar to our direct sales team, our marketing team has a significant amount of relevant expertise and a strong track record of success in the medical device industry. Our marketing organization is focused on

24

Table of Contents

building physician and APP awareness through targeted KOL development, referral network education and direct-to-consumer marketing.

​

In terms of patient education, we utilize direct communication channels to inform patients about Barostim Therapy and to enable them to connect with sites that offer Barostim. Our primary method of patient outreach is through digital marketing. We use a qualification process to aid in the identification of the appropriate patients for our therapy. The objective of this outreach is to inform potential patients about our education webinars and website, where they can find a wealth of information on HFrEF and the purpose, benefits, and risks of Barostim Therapy, based on our approved labeling.

​

In addition to driving broad awareness and increasing physician and patient education, our team has developed the in-house resources necessary to support physicians and patients in obtaining prior authorization approval for Barostim procedures.

​

Third-party coverage and reimbursement

Coding and payment in the United States

In the U.S., we sell Barostim primarily to hospitals, where the device is implanted in outpatient and inpatient settings. Our customers bill various third-party payers, such as government agencies, administrative contractors, commercial payers and integrated managed care organizations, for the cost required to treat each patient.

​

Third-party payers generally require physicians and hospitals to identify the service for which they are seeking reimbursement by using CPT codes. CPT codes are created and maintained by the American Medical Association. Prior to 2026, the implantation of Barostim was described by CPT code 0266T, a Category III code. Hospitals were able to use this code to submit for a system implant. CPT code 0268T was used to submit for an IPG replacement procedure, and CPT codes 0272T and 0273T were used for interrogation and programming of the IPG, respectively.

​

Effective January 2026, implantation of Barostim is described by CPT code 64654, a Category I code. CPT code 64655 is used to submit for an IPG replacement procedure, and CPT codes 93145 and 93146 are used for interrogation and programming of the IPG, respectively.

​

Medicare provides reimbursement to hospitals using Barostim under the hospital outpatient prospective system (“OPPS”), which provides bundled amounts generally intended to reimburse a hospital for all facility costs related to procedures performed in its outpatient setting. On January 1, 2024, the Barostim implant procedure was reassigned to New Technology APC 1580, which currently has an average payment amount of approximately $45,000. The IPG replacement will continue to be assigned to Level 5 Neurostimulator payment APC 5465, which currently has an average payment amount of approximately $31,500. Reimbursement rates from commercial payers for procedures performed in the outpatient setting vary depending on a variety of factors.

​

Medicare provides reimbursement to hospitals using Barostim under the hospital inpatient prospective system (“IPPS”), which provides bundled amounts generally intended to reimburse a hospital for all facility costs related to procedures performed in its inpatient setting. On October 1, 2024, the Barostim implant procedure was reassigned to MS-DRG 276, which currently has an average payment amount of approximately $44,000. Reimbursement rates from commercial payers for procedures performed in the inpatient setting vary depending on a variety of factors.

​

Government program and commercial payer coverage in the United States

Since approximately 67% of our target treatment population includes Medicare-eligible patients, we have prioritized CMS coverage while simultaneously developing processes to engage commercial payers. As of July 2020, all Medicare Administrative Contractors (“MACs”) have retired automatic coverage denial policies,

25

Table of Contents

thereby allowing implants to be adjudicated on a case-by-case basis. CMS has committed to considering additional process improvements to increase access to innovative devices. We will continue to monitor developments in this space, including decisions made by private payers, if any.

​

We will continue to leverage our in-house market access team to obtain appropriate prior authorization approvals in advance of treatment on a case-by-case basis where positive coverage policies currently do not exist. We believe our market access team is highly effective in obtaining prior authorizations, including navigating the appeals process. In our discussions with commercial payers, we highlight our compelling and robust clinical data, including the long-term post-market BeAT-HF data, the potential economic cost-savings associated with our highly compliant treatment, increased patient demand and support from leading medical societies and KOLs. As our operations continue to grow, we intend to continue to further expand our market access team accordingly.

​

Reimbursement outside of the United States

Outside the U.S., reimbursement levels vary by country and within some countries, by region. We are currently selling Barostim in Germany, where the German Institute of Medical Documentation and Information supports various codes for reimbursement coverage. OPS code 5-059.c6 covers the implantation and OPS code 5-059.d6 covers the replacement of a device stimulating the peripheral nervous system by activating the baroreceptors. This OPS code is combined with G-DRG ICD I50.13 to cover reimbursement of Barostim for the treatment of HFrEF. It can also be combined with G-DRG ICD I10.10 to cover reimbursement of Barostim for the treatment of hypertension. These DRG codes for both indications are combined with ZE code ZE2025-86 to cover the cost of the device. Barostim also is eligible for reimbursement in certain other European countries, where annual healthcare budgets for the hospital generally determine the number of patients to be treated and the prices to be paid for the related devices that may be purchased.

​

Research and development

Our research and development team has significant experience bringing innovative medical devices to market, including minimally invasive neuromodulation systems.

​

We are committed to ongoing research and development efforts of Barostim with an emphasis on improving clinical outcomes, optimizing patient adoption and comfort, increasing access for a greater number of patients and enabling more physicians to perform the procedure.

​

The primary focus of our research and development efforts in the near-term will be the continued technological advancement of Barostim.

​

While we are currently focused on the treatment of patients with HFrEF, we believe our platform technology can provide meaningful benefits to a broader set of patients suffering from cardiovascular diseases with significant unmet needs. Our longer-term goal is to explore Barostim’s potential to expand the indications for use to other cardiovascular diseases, including different forms of HF, hypertension, and arrhythmias. Expansions into these or other new indications would require additional FDA approvals and may involve additional clinical trials or modifications to Barostim to treat such indications. If clinical studies for additional indications do not produce results necessary to support regulatory clearance or approval in the U.S. or elsewhere, we will be unable to commercialize our products for these indications.

​

For both the years ended December 31, 2025 and 2024, we incurred research and development expenses of $11.1 million.

​

Competition

Our industry is subject to rapid change from the introduction of new products and technologies and other activities of industry participants. We consider our primary competition to be other device-based therapies designed to treat patients with HFrEF and a narrow QRS complex.

26

Table of Contents

​

There is only one other commercially available device-based option, CCM, that targets a limited subset of the same HFrEF patient population indicated for Barostim. CCM is offered by a privately-held medical technology company and has the potential to improve a patient’s quality of life and reduce symptoms of HFrEF. However, CCM is associated with a number of drawbacks, including not being designed to address excess of neurohormones; less favorable clinical effectiveness results in patients with LVEF 25–35% as compared to patients with LVEF 35–45% related to exercise capacity, quality of life and NYHA functional status; implantation through an invasive procedure that includes running electrical leads through the veins and attaching them to the heart’s ventricle, which may lead to increased risks to the patient; and the requirement that patients regularly charge the battery in their implanted device.

​

We believe that the primary competitive factors in the HFrEF treatment market are:

​

Aside from device-based treatments, pharmaceutical therapies are widely used to treat HFrEF and have been in use longer and are better known to physicians and patients than Barostim. However, because Barostim is designed to be used in conjunction with pharmaceutical therapies to alleviate the symptoms of HFrEF, we do not consider existing pharmaceutical therapies to be direct competition.

​

We also compete with other medical technology companies to recruit and retain qualified sales, training, and other personnel.

​

Intellectual property

We rely on a combination of patent, copyright, trademark and trade secret laws and confidentiality and invention assignment agreements to protect our intellectual property rights. As of December 31, 2025, we owned 41 issued U.S. patents and had 18 pending U.S. patent applications. Outside of the U.S., we owned 45 issued foreign patents in multiple countries and had seven pending applications. Our trademark portfolio focuses on nine trademarks in the U.S. and multiple other countries. Our patents cover aspects of our integrated platform technology, Barostim, including baroreflex methods, stimulus regimes, mapping methods, electrode designs, disease treatments, closed loop control, burst intervals, connection structures and baroreceptor locations, as well as future product concepts. The term of individual patents depends on the law of the countries in which they are granted. In most countries, including the U.S., the patent term is generally 20 years from the earliest claimed filing date of a nonprovisional patent application in the applicable country. There is no active patent litigation involving any of our patents, and we have not received any notices of patent infringement.

27

Table of Contents

​

We also rely, in part, upon unpatented trade secrets, know-how and continuing technological innovation to develop and maintain our competitive position. We protect our proprietary rights through a variety of methods, including confidentiality and assignment agreements with suppliers, employees, consultants, and others who may have access to our proprietary information.

​

Pending patent applications may not result in issued patents, and we cannot guarantee that any current or subsequently issued patents will protect our intellectual property rights or provide us with any competitive advantage. While there is no active litigation involving any of our patents or other intellectual property rights and we have not received any notices of patent infringement, we may be required to enforce or defend our intellectual property rights against third parties in the future. See “Risk Factors—Risks Related to Intellectual Property” for additional information regarding these and other risks related to our intellectual property portfolio and their potential effect on us.

​

Manufacturing and supply

We manage all aspects of manufacturing operations and product supply of Barostim, which include final assembly, testing and packaging of our IPG and stimulation lead, at our 35,183 square foot headquarters in Minneapolis, Minnesota. With minimal capital investment, our existing operations are capable of producing 5,000 IPGs and 5,000 stimulation leads per shift per year, and our manufacturing line was designed to be expandable and scalable in the future.

​

We currently source certain components for Barostim from a limited number of suppliers, including the module, module board, radio-frequency module, magnet switch, battery, and application-specific integrated circuits for the IPG and the electrode for the stimulation lead. Our suppliers manufacture and test the components they produce for us to meet our specifications. We maintain sufficient levels of inventory to mitigate potential supply disruption and to achieve more favorable volume-based pricing. We continue to seek to broaden and strengthen our supply chain through additional sourcing channels.

​

We select our suppliers to ensure that Barostim and its components are safe and effective, adhere to all applicable standards and regulations, are high quality and meet our supply needs. We employ a rigorous supplier assessment, qualification and selection process targeted to suppliers that meet the requirements of the FDA and relevant Canadian, European Economic Area (“EEA”) and Australian regulatory authorities and quality standards supported by internal policies and procedures. Our quality assurance process monitors and maintains supplier performance through qualification and periodic supplier reviews and audits. We received ISO certification for our quality management system and our most recent audits have not identified any major nonconformities. We are registered with the FDA as a medical device manufacturer and licensed by the State of Minnesota to manufacture our device.

​

Seasonality

We have seen seasonally lower rates of implants in our first fiscal quarter in recent years, which we believe is primarily due to U.S. patients shifting medical treatments to the later months of the year when they have better information about spending against the annual deductibility limits under their health insurance coverage, and we expect this trend to continue. Otherwise, mild seasonal variations are difficult to predict accurately and may vary among different markets.

​

Government regulation

Our products and operations are subject to extensive regulation by the FDA and other federal and state authorities in the U.S., as well as comparable authorities in the EEA. Our products are subject to regulation as medical devices under the Federal Food, Drug, and Cosmetic Act (the “FDCA”), as implemented and enforced by the FDA. The FDA regulates the development, design, non-clinical and clinical research, manufacturing, safety, effectiveness, labeling, packaging, storage, installation, servicing, recordkeeping, premarket clearance or approval, device tracking, adverse event reporting, recalls, safety alerts, injunctions,

28

Table of Contents

seizures, bans, 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.

​

In addition to U.S. regulations, we are subject to a variety of regulations in the EEA governing clinical trials and the commercial sales and distribution of our products. Whether we have or are required to obtain FDA clearance or approval for a product, we will be required to obtain authorization from the comparable regulatory authorities of countries outside of the U.S. before we can commence clinical trials or commercialize our products in those countries. The approval process varies from country to country and the time may be longer or shorter than that required for FDA clearance or approval.

​

FDA pre-market clearance and approval requirements

Unless an exemption applies, each medical device commercially distributed in the U.S. requires either FDA clearance of a 510(k) premarket notification, HDE, or PMA approval. Under the FDCA, medical devices are classified as Class I, Class II, Class III, depending on the degree of risk associated with each medical device and the extent of manufacturer and regulatory control needed to ensure its safety and effectiveness. In addition, a novel device with no predicate may be classified through the FDA’s De Novo classification process. Class I includes devices with the lowest risk to the patient and are those for which safety and effectiveness can be assured by adherence to the FDA’s General Controls for medical devices, which include compliance with the applicable portions of the Quality System Regulation (“QSR”), facility registration and product listing, reporting of adverse medical events and truthful and non-misleading labeling, advertising and promotional materials. Class II devices are subject to the FDA’s General Controls, and special controls as deemed necessary by the FDA to ensure the safety and effectiveness of the device. These special controls can include performance standards, post-market surveillance, patient registries, and FDA guidance documents. While most Class I devices are exempt from the 510(k) premarket notification requirement, manufacturers of most Class II devices must submit to the FDA a premarket notification under Section 510(k) of the FDCA requesting permission to commercially distribute the device. De Novo is a medical device with no predicate or premarket device for comparing substantial equivalence which is subject to the 510(k) premarket notification. The FDA’s permission to commercially distribute a device subject to a 510(k) premarket notification is generally known as 510(k) clearance. Under the 510(k) process, the manufacturer must submit to the FDA a premarket notification demonstrating that the device is “substantially equivalent” to either a device that was legally marketed prior to May 28, 1976, the date upon which the Medical Device Amendments of 1976 were enacted, or another commercially available device that was cleared through the 510(k) process.

​

Devices deemed by the FDA to pose the greatest risks are placed in Class III, requiring approval of an HDE or PMA.

​

Our currently U.S.-marketed Barostim devices are Class III devices which have received both a PMA and an HDE approval.

​

PMA & HDE approval pathway

Class III devices require PMA or HDE approval before they can be marketed, although some pre-amendment Class III devices for which the FDA has not yet required a PMA are cleared through the 510(k) process. The PMA process is more demanding than the 510(k) premarket notification process. In a PMA, the manufacturer must demonstrate that the device is safe and effective, and the PMA must be supported by extensive data, including data from preclinical studies and human clinical trials. The PMA must also contain a full description of the device and its components, and the methods, facilities and controls used for manufacturing and proposed labeling. Following receipt of a PMA, the FDA determines whether the application is sufficient 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 at times can take up to several years. An Advisory Committee or panel of experts from outside the FDA may be convened to review and evaluate the application and provide recommendations to the FDA as to the

29

Table of Contents

approvability of the device. In addition, the FDA will generally conduct a preapproval inspection of the applicant or its third-party manufacturers’ or suppliers’ manufacturing facilities to ensure compliance with the QSR.

​

The FDA will approve the new device for commercial distribution if it determines that the data and information in the PMA constitute valid scientific evidence and that there is reasonable assurance that the device is safe and effective for its intended use(s) according to the instructions for use or labeling. The FDA may approve a PMA with post-approval conditions intended to ensure the safety and effectiveness of the device, including, among other things, restrictions on labeling, promotion, sale and distribution and collection of long-term follow-up data from patients in the clinical study that supported PMA approval or requirements to conduct additional clinical studies post-approval. The FDA may condition PMA approval on some form of post-market surveillance or study when deemed necessary to protect the public health or to provide additional safety and effectiveness data for the device in a larger population or for a longer period of use. In such cases, the manufacturer might be required to follow certain patient groups and make periodic reports to the FDA on the clinical status of those patients. Failure to comply with the conditions of approval can result in material adverse enforcement action, including withdrawal of the approval.

​

Certain changes to an approved device, such as changes in manufacturing facilities, methods, or quality control procedures, or changes in the design performance specifications, which can affect the safety or effectiveness of the device, require submission of a PMA supplement. PMA supplements often require submission of the same type of information as a PMA, except that the supplement is limited to information needed to support any changes from the device covered by the original PMA and typically does not require as extensive clinical data or the convening of an advisory panel. Certain other changes to an approved device require the submission of a new PMA, such as when the design change causes a different intended use, mode of operation, and technical basis of operation, or when the design change is so significant that a new generation of the device will be developed, and the data that were submitted with the original PMA are not applicable for the change in demonstrating a reasonable assurance of safety and effectiveness.

​

The FDA will approve the new device for commercial distribution if it determines that the data and information in the HDE constitute valid scientific evidence and that there is reasonable assurance that the device is safe and has probable benefit for its intended use(s) according to the instructions for use or labeling. The HDE approved devices are subject to the same requirement elements and changes as the above PMA devices. An additional limitation for HDE devices is they must be prescribed for a patient population that has a medical condition or disease that afflicts less than 8,000 people per year in the United States and have been designated as a Humanitarian Use Device by the FDA.

​

Clinical trials

Clinical trials are usually required to support a PMA and are sometimes required to support an HDE, 510(k) or De Novo submission. All clinical investigations of investigational devices to determine safety and effectiveness must be conducted in accordance with the FDA’s IDE, regulations which govern investigational device labeling, prohibit promotion of the investigational device, and specify an array of recordkeeping, reporting and monitoring responsibilities of study sponsors and study investigators. If the device presents a “significant risk” to human health, as defined by the FDA, the FDA requires the device sponsor to submit an IDE application to the FDA, which must be approved prior to commencing human clinical trials. A significant risk device is one that presents a potential for serious risk to the health, safety or welfare of a subject and either is implanted, used in supporting or sustaining human life, substantially important in diagnosing, curing, mitigating or treating disease or otherwise preventing impairment of human health, or otherwise presents a potential for serious risk to a subject. An IDE application must be supported by appropriate data showing that it is safe to test the device in humans and that the testing protocol is scientifically sound. The IDE will automatically become effective 30 days after receipt by the FDA unless the FDA notifies the company that the investigation may not begin. If the FDA determines that there are deficiencies or other concerns with an IDE for which it requires modification, the FDA may permit a clinical trial to proceed under a conditional approval.

​

30

Table of Contents

In addition, the study must be approved by, and conducted under the oversight of, an institutional review board (“IRB”), for each clinical site. The IRB is responsible for the initial and continuing review of the IDE and may pose additional requirements for the conduct of the study. If an IDE application is approved by the FDA and one or more IRBs, human clinical trials may begin at a specific number of investigational sites with a specific number of subjects, as approved by the FDA. If the device presents a non-significant risk to the patient, a sponsor may begin the clinical trial after obtaining approval for the trial by one or more IRBs without separate approval from the FDA, but must still follow abbreviated IDE requirements. Acceptance of an IDE application for review does not guarantee that the FDA will allow the IDE to become effective and, if it does become effective, the FDA may or may not determine that the data derived from the trials support the safety and effectiveness of the device or warrant the continuation of clinical trials. An IDE supplement must be submitted to, and approved by, the FDA before a sponsor or investigator may make a change to the investigational plan that may affect its scientific soundness, study plan, or the rights, safety, or welfare of human subjects.

​

During a study, the sponsor and clinical investigators are required to comply with the applicable FDA requirements. Additionally, after a trial begins, we, the FDA or the IRB could suspend or terminate a clinical trial at any time for various reasons, including a belief that the risks to study subjects outweigh the anticipated benefits.

​

Post-market regulation

After a device is cleared or approved for marketing, numerous regulatory requirements continue to apply. These include:

​

31

Table of Contents

We may be subject to similar foreign laws that include post-marketing requirements such as safety surveillance. Our manufacturing processes must comply with the applicable portions of the QSR, which 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. As a manufacturer, our facilities, records and manufacturing processes are subject to periodic scheduled or unscheduled inspections by the FDA. Our failure to maintain compliance with the QSR or other applicable regulatory requirements could result in the shut-down of, or restrictions on, our manufacturing operations and the recall or seizure of our products. The discovery of previously unknown problems with any of our products, including unanticipated adverse events or adverse events of increasing severity or frequency, whether resulting from the use of the device within the scope of its clearance or off-label by a physician in the practice of medicine, could result in restrictions on the device, including the removal of the product from the market or voluntary or mandatory device recalls.

​

The FDA has broad regulatory compliance and enforcement powers. If the FDA determines that we failed to comply with applicable regulatory requirements, it can take a variety of compliance or enforcement actions, which may result in any of the following sanctions:

​

32

Table of Contents

Regulation of medical devices in the EEA

To be placed on the market in the EEA, medical devices require a CE Mark and a corresponding declaration of conformity. For our medical devices, the CE Mark must be issued by an organization accredited by a Member State of the EEA to conduct conformity assessments, a so-called Notified Body. Conformity assessments are conducted to demonstrate that the medical device meets the legal requirements set forth in the regulations and standards to ensure that it meets general safety and performance criteria. Clinical investigations or evidence of the safety and clinical outcomes, among other things, may be required for issuance of a CE Mark. With a CE Mark, the medical devices are generally marketable in the entire EEA. A CE Mark was first issued for Barostim for the treatment of resistant hypertension in 2011 and for the treatment of HFrEF in 2014.

​

EU Legislation: medical devices regulation

The regulatory framework governing medical devices in the EEA underwent a major change on April 5, 2017, when the European Parliament passed the MDR (Regulation (EU) 2017/745). The MDR repealed and replaced the EU Medical Devices Directive (Council Directive 93/42/EEC — “MDD” or Council Directive 90/385/EEC).

​

Previously, medical devices regulated under the MDD and AIMDD were classified into one of four classes — Class I, Class IIa, Class IIb, or Class III — based on the extent of the regulatory controls necessary and sufficient to provide reasonable assurance of safety and effectiveness of the device. The AIMDD applied to implantable electrical active medical devices that were typically considered to be Class III under MDD and similar controls for the highest risk devices. The classification corresponded to the level of potential hazard inherent in the type of device concerned. Class I included devices with the lowest risk to the patient. Class IIa and Class IIb devices were higher risk devices and Class III devices were devices with a significant risk, which were subject to more regulatory oversight to ensure the safety and effectiveness of the device, such as performance standards and post-market surveillance. Barostim has been classified and regulated under the AIMDD.

​

The MDR entered into force on May 25, 2017 and is progressively replacing the MDD/AIMDD during a transition period, which was originally intended to become fully effective on May 26, 2021. The MDR, among other things, is designed to establish a uniform, transparent, predictable, and sustainable regulatory framework across the EEA for medical devices and to ensure a high level of safety and health while supporting innovation. The regulations impose strict demands on medical device manufacturers and the Notified Bodies whom they must involve in the conformity assessment procedure. Unlike directives, which must be implemented into the national laws of the EEA, the regulations are directly applicable in all EEA member states and are intended to eliminate differences in the regulation of medical devices among EEA member states.

​

The new regulations:

​

33

Table of Contents

To avoid market disruption and allow a smooth transition from the MDD/AIMDD to the MDR, several transitional provisions are in place, which include allowing devices lawfully placed on the market prior to expiration of their MDD/AIMDD CE Marks to remain available on the market and be put into service, both under certain prerequisites and until a certain time.

​

We received MDR approval for Barostim on April 9, 2025, which included the 9020 Programmer. Additionally, the European Commission extended qualifying AIMDD CE certificates, including ours, through December 31, 2027. This extension was driven by delays in notified body reviews and approvals across the medical device industry as well as the fact that a substantial number of CE Mark certificates were continuing to expire during this unpredictable and extended transition period to MDR. We will continue to supply applicable AIMDD legacy devices until December 2027.

​

Regulation of medical devices under MDR

CE Marking

Manufacturers of medical devices must comply with the general safety and performance requirements of the MDR in order to obtain a CE Mark for the product and market the product in the EEA. To demonstrate compliance with the general safety and performance requirements, the manufacturer must undergo a conformity assessment procedure which requires the involvement of a Notified Body except for low-risk, self-certified medical devices of Class I. The Notified Body typically audits the quality management system of the manufacturer, which must comply with the current version of ISO 13485 requiring that manufacturers follow defined and approved design and development procedures, testing, control, documentation and other quality assurance procedures throughout the entire design and manufacturing process. The Notified Body also reviews the Technical File that includes the Biological Evaluation, Clinical Evaluation and Risk Management reports and Post Market Clinical Follow-Up (“PMCF”), among other items, submitted for approval of the CE Mark. If the quality management system audit and the technical file review are successful, the Notified Body issues certificates of conformity. These certificates entitle the manufacturer to draw up the EU declaration of conformity and affix the CE Mark to the labeling of its medical devices and place the medical device on the EEA market.

​

CE Marking in Switzerland

Switzerland and the EU had a bilateral mutual recognition agreement (MRA) on conformity assessment, which entered into force in 2002, but ceased to be enforced on May 26, 2021. Currently, Switzerland unilaterally recognizes EU certificates of conformity for medical devices. Labeling and CE marking requirements for medical devices placed on the Swiss market must follow EU CE labeling requirements. To place a product on the Swiss market as an economic operator located outside of Switzerland, manufacturers, distributors, and importers must have a Swiss authorized representative (“CH-REP”). Product labeling should include the CH-REP name and address to show compliance. MDD/AIMDD devices with certificates issued by EU-recognized Notified Bodies will continue to be valid until December 31, 2027. We have engaged a CH-REP and the devices may continue to be sold in Switzerland through 2027.

​

Clinical investigation

For our medical devices, clinical investigations or evidence will be required to demonstrate safety, performance, and the expected clinical outcomes. The term “performance” describes how the medical device functions. Under the MDR, performance must be linked to expected clinical metrics and outcomes. From a

34

Table of Contents

practical standpoint, “performance” is analogous to the term “effectiveness” when applied to our medical devices. Clinical investigations must be conducted in accord with Good Clinical Practices (ISO 14155) and are subject to audits by the Notified Bodies.

​

Post-market surveillance

After a medical device is placed on the market, numerous regulatory requirements apply, which link to the manufacturer’s continuous review of risk management information. The manufacturer must establish and maintain a systematic procedure to proactively collect and review real-life experience and data gained from their devices placed on the market. Post-market surveillance is comprised of, but not limited to, reports of serious adverse events, device deficiency reports, product complaints from consumers and health care professionals, field safety corrective actions and post-marketing clinical studies/updated clinical evaluation reports. Manufacturers must guarantee that their medical device continues to provide the promised benefit to patients as well as the lack of any unacceptable risks, through a constant and systematic approach to post-market surveillance. Further, manufacturers, medical practitioners and medical institutions are obliged to report any incident involving a medical device, including any malfunction or deterioration in the characteristics and/or performance of a device, as well as any inadequacy in the labelling or the instructions for use which might lead to or might have led to the death of a patient or to a serious deterioration in his or her state of health. The reporting also includes any device recalls. Manufacturers must prepare a periodic safety update report for each device summarizing the results and conclusions of the analyses of the post-market surveillance data gathered.

​

Non-compliance

If we fail to comply with applicable EU, UK and Swiss regulatory requirements, we may be subject to, among other things, fines, product recalls, seizure of products, operating restrictions, enforcement actions by competent authorities or Notified Bodies, and criminal prosecution. Failure to comply with EU, UK or Swiss regulatory requirements could prevent us from developing, manufacturing and later selling the products in the respective region.

​

Federal, state, and foreign fraud and abuse and physician payment transparency laws

In addition to FDA restrictions on marketing and promotion of drugs and devices, other federal and state laws restrict our business practices. These laws include, without limitation, foreign, federal, and state anti-kickback and false claims laws, as well as transparency laws regarding payments or other items of value provided to healthcare providers.

​

The federal Anti-Kickback Statute prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving any remuneration (including any kickback, bribe or rebate), directly or indirectly, overtly or covertly, in cash or in kind to induce or in return for purchasing, leasing, ordering or arranging for or recommending the purchase, lease or order of any good, facility, item or service reimbursable, in whole or in part, under Medicare, Medicaid or other federal healthcare programs. The term “remuneration” has been broadly interpreted to include anything of value, including stock, stock options and the compensation derived through ownership interests.

​

Recognizing that the federal Anti-Kickback Statute is broad and may prohibit many innocuous or beneficial arrangements within the healthcare industry, the U.S. Department of Health, and Human Services (“HHS”) issued regulations in July 1991, which HHS has referred to as “safe harbors.” These safe harbor regulations set forth certain provisions which, if met in form and substance, will assure medical device manufacturers, healthcare providers and other parties that they will not be prosecuted under the federal Anti-Kickback Statute. Additional safe harbor provisions providing similar protections have been published intermittently since 1991. Although there are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution, the exceptions and safe harbors are drawn narrowly. Our arrangements with physicians, hospitals and other persons or entities who are in a position to refer may not fully meet the stringent criteria specified in the various safe harbors. Practices that involve remuneration that may be

35

Table of Contents

alleged to be intended to induce prescribing, purchases or recommendations may be subject to scrutiny if they do not qualify for an exception or safe harbor. Failure to meet all of the requirements of a particular applicable statutory exception or regulatory safe harbor does not make the conduct per se illegal under the federal Anti-Kickback Statute. Instead, the legality of the arrangement will be evaluated on a case-by-case basis based on a cumulative review of all its facts and circumstances. Several courts have interpreted the statute’s intent requirement to mean that if any one purpose of an arrangement involving remuneration is to induce referrals of federal healthcare covered business, the federal Anti-Kickback Statute has been violated. In addition, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation. Moreover, a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal civil False Claims Act (described below).

​

Violations of the federal Anti-Kickback Statute may result in civil monetary penalties up to $100,000 for each violation, or the maximum amount as adjusted for inflation under federal law, plus up to three times the remuneration involved. Civil penalties for such conduct can further be assessed under the federal civil False Claims Act. Violations can also result in criminal penalties, including criminal fines of up to $100,000, or such higher amounts as may be provided by law, and imprisonment of up to 10 years. Similarly, violations can result in exclusion from participation in government healthcare programs, including Medicare and Medicaid. Liability under the federal Anti-Kickback Statute may also arise because of the intentions or actions of the parties with whom we do business. While we are not aware of any such intentions or actions, we have only limited knowledge regarding the intentions or actions underlying those arrangements. Conduct and business arrangements that do not fully satisfy one of these safe harbor provisions may result in increased scrutiny by government enforcement authorities. The majority of states also have anti-kickback laws that establish similar prohibitions and, in some cases, may apply more broadly to items or services covered by any third-party payer, including commercial insurers and self-pay patients.

​

The federal civil False Claims Act prohibits, among other things, any person or entity from knowingly presenting, or causing to be presented, a false or fraudulent claim for payment or approval to the federal government or knowingly making, using, or causing to be made or used a false record or statement material to a false or fraudulent claim to the federal government. A claim includes “any request or demand” for money or property presented to the U.S. government. The federal civil False Claims Act also applies to false submissions that cause the government to be paid less than the amount to which it is entitled, such as a rebate. Intent to deceive is not required to establish liability under the federal civil False Claims Act.

​

In addition, private parties may initiate “qui tam” whistleblower lawsuits against any person or entity under the federal civil False Claims Act in the name of the government and share in the proceeds of the lawsuit. Penalties for federal civil False Claims Act violations include fines for each false claim, plus up to three times the amount of damages sustained by the federal government and, most critically, may provide the basis for exclusion from the federally funded healthcare program. On May 20, 2009, the Fraud Enforcement Recovery Act of 2009 (“FERA”), was enacted, which modifies and clarifies certain provisions of the federal civil False Claims Act. In part, FERA amends the federal civil False Claims Act such that penalties may now apply to any person, including an organization that does not contract directly with the government, who knowingly makes, uses or causes to be made or used, a false record or statement material to a false or fraudulent claim paid in part by the federal government. The government may further prosecute conduct constituting a false claim under the federal criminal False Claims Act. The federal criminal False Claims Act prohibits the making or presenting of a claim to the government knowing such claim to be false, fictitious, or fraudulent and, unlike the federal civil False Claims Act, requires proof of intent to submit a false claim. When an entity is determined to have violated the federal civil False Claims Act, the government may impose civil fines and penalties ranging from $14,308 to $28,629 (as adjusted for inflation) for each false claim, plus treble damages, and exclude the entity from participation in Medicare, Medicaid, and other federal healthcare programs.

​

The Civil Monetary Penalty Act of 1981 imposes penalties against any person or entity that, among other things, is determined to have presented or caused to be presented a claim to a federal healthcare program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent, or offering or transferring remuneration to a federal healthcare beneficiary that a person knows or

36

Table of Contents

should know is likely to influence the beneficiary’s decision to order or receive items or services reimbursable by the government from a particular provider or supplier.

​

The Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) also created additional federal criminal statutes that prohibit, among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payers, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services. Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.

​

Many foreign countries have similar laws relating to healthcare fraud and abuse. Foreign laws and regulations may vary greatly from country to country and may carry civil, criminal, or administrative penalties for non-compliance. For example, the advertising and promotion of our products is subject to EU Directives concerning misleading and comparative advertising and unfair commercial practices, as well as other EEA member state legislation governing the advertising and promotion of medical devices. These laws may limit or restrict the advertising and promotion of our products to the general public and may impose limitations on our promotional activities with healthcare professionals. Also, many U.S. states have similar fraud and abuse statutes or regulations that may be broader in scope and may apply regardless of payer, in addition to items and services reimbursed under Medicaid and other state programs.

​

Additionally, there has been a recent trend of increased foreign, federal, and state regulation of payments and transfers of value provided to healthcare professionals or entities. The federal Physician Payments Sunshine Act imposes annual reporting requirements on certain drug, biologics, medical supplies and device manufacturers for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program for payments and other transfers of value provided by them, directly or indirectly, to physicians (including physician family members), certain other healthcare providers and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members. A manufacturer’s failure to submit timely, accurately, and completely the required information for all payments, transfers of value or ownership or investment interests may result in civil monetary penalties of up to $14,067 per failure up to an aggregate of $211,008 per year (or up to an aggregate of $1.406 million per year for “knowing failures”), as adjusted for inflation. Manufacturers must submit reports by the 90th day of each calendar year. Certain foreign countries and U.S. states also mandate implementation of commercial compliance programs, impose restrictions on device manufacturer marketing practices and require tracking and reporting of gifts, compensation and other remuneration to healthcare professionals and entities.

​

Data privacy and security laws

We are also subject to various federal, state, and foreign laws that protect the confidentiality of certain patient health information, including patient medical records, and restrict the use and disclosure of patient health information by healthcare providers, such as HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”), in the U.S.

​

HIPAA established uniform standards governing the conduct of certain electronic healthcare transactions and requires certain entities, called covered entities, to comply with standards that include the privacy and security of protected health information (“PHI”). HIPAA also requires business associates, such as independent contractors or agents of covered entities that have access to PHI in connection with providing a service to or on behalf of a covered entity, of covered entities to enter into business associate agreements with the covered entity and to safeguard the covered entity’s PHI against improper use and disclosure.

​

The HIPAA privacy regulations cover the use and disclosure of PHI by covered entities as well as business associates, which are defined to include subcontractors that create, receive, maintain, or transmit PHI on behalf of a business associate. They also set forth certain rights that an individual has with respect to his or

37

Table of Contents

her PHI maintained by a covered entity, including the right to access or amend certain records containing PHI, or to request restrictions on the use or disclosure of PHI. The security regulations establish requirements for safeguarding the confidentiality, integrity and availability of PHI that is electronically transmitted or electronically stored. HITECH, among other things, established certain health information security breach notification requirements. A covered entity must notify any individual whose PHI is breached according to the specifications set forth in the breach notification rule. The HIPAA privacy and security regulations establish a uniform federal “floor” and do not supersede state laws that are more stringent or provide individuals with greater rights with respect to the privacy or security of, and access to, their records containing PHI or insofar as such state laws apply to personal information that is broader in scope than PHI as defined under HIPAA.

​

HIPAA requires the notification of patients, and other compliance actions, in the event of a breach of unsecured PHI. If notification to patients of a breach is required, such notification must be provided without unreasonable delay and in no event later than 60 calendar days after discovery of the breach. In addition, if the PHI of 500 or more individuals is improperly used or disclosed, we would be required to report the improper use or disclosure to HHS, which would post the violation on its website, and to the media. Failure to comply with the HIPAA privacy and security standards can result in civil monetary penalties up to $63,973 per violation, not to exceed $1.92 million per calendar year for non-compliance of an identical provision and, in certain circumstances, criminal penalties with fines up to $250,000 per violation and/or imprisonment.

​

HIPAA authorizes state attorneys general to file suit on behalf of their residents for violations. Courts are able to award damages, costs and attorneys’ fees related to violations of HIPAA in such cases. While HIPAA does not create a private right of action allowing individuals to file suit against us in civil court, its standards have been used as the basis for duty of care cases in state civil suits such as those for negligence or recklessness in the misuse or breach of PHI. In addition, HIPAA mandates that the Secretary of HHS conduct periodic compliance audits of HIPAA covered entities, such as us, and their business associates for compliance with the HIPAA privacy and security standards. It also tasks HHS with establishing a methodology whereby harmed individuals who were the victims of breaches of unsecured PHI may receive a percentage of the civil monetary penalty paid by the violator.

​

Additionally, we may be subject to laws relating to our collection, control, processing, and other use of personal data (i.e., data relating to an identifiable living individual). We process personal data in relation to our operations. We process data of both our employees and our customers, including health and medical information. The data privacy regime in the EU includes the EU Data Protection Directive (95/46/EC) regarding the processing of personal data and the free movement of such data, the E-Privacy Directive 2002/58/EC and national laws implementing each of them. Each EU Member State has transposed the requirements laid down by the Data Protection Directive and E-Privacy Directive into its own national data privacy regime and therefore the laws may differ by jurisdiction, sometimes significantly. We must ensure compliance with the rules in each jurisdiction where we are established or are otherwise subject to local privacy laws.

​

The requirements include that personal data may only be collected for specified, explicit and legitimate purposes based on legal grounds set out in the local laws and may only be processed in a manner consistent with those purposes. Personal data must also be adequate, relevant, not excessive in relation to the purposes for which it is collected, be secure, not be transferred outside of the EEA unless certain steps are taken to ensure an adequate level of protection and must not be kept for longer than necessary for the purposes of collection. To the extent that we process, control, or otherwise use sensitive data relating to living individuals (for example, patients’ health or medical information), more stringent rules apply, limiting the circumstances and the manner in which we are legally permitted to process that data and transfer that data outside of the EEA. In particular, in order to process such data, explicit consent to the processing (including any transfer) is usually required from the data subject (being the person to whom the personal data relates).

​

The EU-wide General Data Protection Regulation (“GDPR”) became applicable on May 25, 2018, replacing the previous data protection laws issued by each EU Member State based on the Directive 95/46/EC. Unlike the Directive (which needed to be transposed at national level), the GDPR text is directly applicable in each EU member state, resulting in a more uniform application of data privacy laws across the EU. The GDPR

38

Table of Contents

imposes onerous accountability obligations, requiring data controllers and processors to maintain a record of their data processing and policies. It requires data controllers to be transparent and disclose to data subjects (in a concise, intelligible and easily accessible form) how their personal information is to be used, imposes limitations on retention of information, increases requirements pertaining to pseudonymized (i.e., key-coded) data, introduces mandatory data breach notification requirements and sets higher standards for data controllers to demonstrate that they have obtained valid consent for certain data processing activities. Fines for non-compliance with the GDPR are significant—the greater of EUR 20 million or 4% of global turnover. The GDPR provides that EU Member States may introduce further conditions, including limitations, to the processing of genetic, biometric or health data, which could limit our ability to collect, use and share personal data, or could cause our compliance costs to increase, ultimately having an adverse impact on our business. In the UK, the UK General Data Protection Regulation (the “UK GDPR”) came into effect on January 1, 2021. Similar to the GDPR, the UK GDPR sets out the key principles, rights, and obligations for most processing of personal data in the UK. The Data Protection Act of 2018, which came into effect on May 25, 2018 and was amended on January 1, 2021, works alongside and supplements the UK GDPR.

​

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

​

We depend on third parties in relation to our provision of our services, a number of which process personal data on our behalf. With each such provider we enter into contractual arrangements to ensure that they only process personal data according to our instructions, and that they have sufficient technical and organizational security measures in place. When we transfer personal data outside the EEA, we do so in compliance with the relevant data export requirements. We take our data protection obligations seriously, as any improper disclosure, particularly with regard to our customers’ sensitive personal data, could negatively impact our business and/or our reputation.

​

Healthcare reform

The U.S. 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. Among policy makers and payers in the U.S. and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality, or expanding access. Current and future legislative proposals to further reform healthcare or reduce healthcare costs may limit coverage of or lower reimbursement for the procedures associated with the use of our products. The cost containment measures that payers and providers are instituting and the effect of any healthcare reform initiative implemented in the future could impact our revenue from the sale of our products.

​

The implementation of the Affordable Care Act in the U.S., for example, has changed healthcare financing and delivery by both governmental and private insurers substantially, and affected medical device manufacturers significantly. The Affordable Care Act provided incentives to programs that increase the federal government’s comparative effectiveness research and implemented payment system reforms, including a national pilot program on payment bundling to encourage hospitals, physicians, and other providers to improve the coordination, quality, and efficiency of certain healthcare services through bundled payment models. Additionally, the Affordable Care Act has expanded eligibility criteria for Medicaid programs and created a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in and conduct comparative clinical effectiveness research, along with funding for such research. There have been judicial and Congressional challenges to certain aspects of the Affordable Care Act, and we expect additional amendments in the future. Moreover, the Trump Administration and the U.S. Congress may take further action regarding the Affordable Care Act. In 2017, the Tax Cuts and Jobs Acts was enacted, which, among other things, removed penalties for not complying with the individual mandate to carry health insurance, effective in 2019.

​

In addition, other legislative changes have been adopted since the Affordable Care Act. For example, the Budget Control Act of 2011, among other things, included reductions to Medicare payments to providers of 2% per fiscal year, which went into effect on April 1, 2013 and will remain in effect through 2032 unless

39

Table of Contents

additional Congressional action is taken. Additionally, the American Taxpayer Relief Act of 2012, among other things, reduced Medicare payments to several providers, including hospitals, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

​

We expect additional state and federal healthcare reform measures to be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for our products or additional pricing pressure.

​

Anti-bribery and corruption laws

Our U.S. operations are subject to the U.S. Foreign Corrupt Practices Act (the “FCPA”). We are required to comply with the FCPA, which generally prohibits covered entities and their intermediaries from engaging in bribery or making other prohibited payments to foreign officials to obtain or retain business or other benefits. In addition, the FCPA imposes accounting standards and requirements on publicly traded U.S. corporations and their foreign affiliates, which are intended to prevent the diversion of corporate funds to the payment of bribes and other improper payments, and to prevent the establishment of “off books” slush funds from which such improper payments can be made. We also are subject to similar anticorruption legislation implemented in Europe under the Organization for Economic Co-operation and Development’s Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.

Environmental laws

Our facilities and operations are also subject to complex federal, state, local and foreign environmental and occupational safety laws and regulations, including those relating to discharges of substances in the air, water and land, the handling, storage and disposal of wastes and the clean-up of properties contaminated by pollutants. We do not expect that the ongoing costs of compliance with these environmental requirements will have a material impact on our consolidated earnings, capital expenditures or competitive position.

​

Human capital management

Our human capital objectives include, as applicable, identifying, recruiting, retaining, incentivizing, and integrating our existing and additional employees. The principal purposes of our equity incentive plans are to attract, retain and motivate selected employees, consultants, and directors through the granting of stock-based compensation awards.

​

As of December 31, 2025, we had 223 employees worldwide, all of which were employed on a full-time basis. None of our employees is subject to a collective bargaining agreement or represented by a trade or labor union. We consider our relationship with our employees to be good.

​

Our mission

Our mission is to team with clinicians to advance innovative device therapies that modulate the ANS to meaningfully improve the lives of people with chronic disease. We envision Barostim becoming a standard of care for the treatment of HF, accessible to all who would benefit. In seeking to accomplish our mission, we rely on our values, which are central to our human capital management policies and practices. These values are:

​

40

Table of Contents

• Resilience —  We rise to every challenge: We persevere through obstacles and turn challenges into opportunities as we advance our mission.

Health and safety

We are acutely focused on the health and safety of our employees in the workplace. Our health and safety team monitors various metrics in an effort to ensure we are providing a safe environment to work. These results are shared with relevant regulatory agencies as required and presented to our management team.

Available Information

We make our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, available free of charge at our website as soon as reasonably practicable after they have been filed with, or furnished to, the U.S. Securities and Exchange Commission (the “SEC”). Our website address is www.cvrx.com. Information on our website is not part of this Annual Report on Form 10-K. The SEC maintains a website that contains the materials we file with the SEC at www.sec.gov.

​