OTC: POSC

The Company

Positron Corporation is a medical technology company
focused on advancing positron emission tomography (“PET”) imaging through the development, manufacture, and commercialization
of PET and PET-computed tomography (“PET-CT”) imaging systems. The Company maintains a primary focus on cardiac PET
imaging, which is widely utilized in nuclear cardiology for the diagnosis and management of cardiovascular disease. The Company’s
solutions are designed to support diagnostic accuracy, improve patient outcomes, and enable cost-effective care for healthcare
providers.

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The Company’s imaging portfolio includes
its dedicated PET system and its next-generation PET-CT platform. The Company is preparing for the introduction of its Affinity™
PET-CT 4D 64-slice system, which is intended to enhance clinical performance, workflow efficiency, and system capabilities. The
Affinity PET-CT system is designed to support multiple clinical applications, including cardiology, oncology, and neurology.

Through its strategic relationship with Shenyang
Intelligent Nuclear Medical Technology Co. Ltd., a subsidiary of Neusoft Medical Systems, the Company collaborates on product development,
engineering, and manufacturing. The Company intends to manufacture, distribute, and service its PET and PET-CT systems in its target
markets. The Company also plans to pursue regulatory clearance for its Affinity PET-CT system through amendment of its existing
U.S. Food and Drug Administration (“FDA”) 510(k) clearance.

The Company’s collaboration with Neusoft
also supports the continued development and production of its PET imaging systems and related technologies. The Company believes
that its combined approach to product development, manufacturing, and service enables it to address evolving clinical and operational
requirements within nuclear imaging.

The Company’s strategy emphasizes accessibility,
operational efficiency, and cost-effective system deployment. The Company believes it is positioned to address growing demand for
PET-based imaging solutions across nuclear cardiology and other clinical applications.

Positron’s Headquarters is in North Tonawanda,
NY.

Recent Developments

On November 5, 2025, the Company granted options
to purchase an aggregate of 5,150,000 shares of its common stock to certain members of management under the Company’s 2021
Equity Incentive Plan. The options were granted with an exercise price of $1.48 per share, which represents the quoted closing
price on the grant date. The options fully vested on November 5, 2025, and will expire on November 5, 2030.

Our Products and Key Components

The Company offers a range of products and services
for the nuclear imaging community that are discussed below.

PET and PET-CT Molecular Imaging Systems
and Clinical, Training and Technical Support Services

Positron Corporation provides molecular imaging
solutions to nuclear cardiologists and other healthcare providers through its PET and PET-CT imaging systems. The Company’s
imaging technologies are supported by clinical and technical services, including training, remote diagnostics, and maintenance
programs designed to support system performance and operational efficiency.

To facilitate adoption, the Company offers flexible
commercial arrangements, including rental and service agreements, which are generally structured as multi-year contracts to align
with the operational and financial requirements of hospitals, imaging centers, and physician practices.

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The Company’s PET imaging systems are primarily
utilized for the non-invasive diagnosis and evaluation of coronary artery disease, supporting clinical decision-making and patient
management. The Company’s solutions are designed to improve diagnostic accuracy, support workflow efficiency, and enhance
patient care.

The Company is expanding its product offerings
to include PET-CT imaging systems, including the development of its Affinity™ PET-CT 4D system, which is intended to support
additional clinical applications, including oncology and neurology. These systems are designed to provide performance capabilities
and operational efficiencies suited to a range of clinical environments.

As
of the date of this filing, the Company has received deposits for PET-CT systems; however, substantially all historical revenues
have been derived from PET system services.

Market Opportunity (USA)

Industry Overview

Cardiovascular disease (“CVD”) remains
the leading cause of mortality in the United States and represents a significant and growing public health and economic burden.
According to the American Heart Association, approximately 48% of U.S. adults are affected by one or more forms of CVD. The total
economic impact of CVD continues to expand, with combined direct and indirect costs projected to exceed $1 trillion annually by
2035, driven by an aging population, increasing prevalence of obesity and diabetes, and improved disease detection. Data from the
National Institutes of Health further underscores the long-term growth in healthcare expenditures associated with cardiovascular
disease.

Diagnostic imaging is central to the early detection,
diagnosis, and management of cardiovascular disease. Advanced imaging technologies enable clinicians to identify disease at earlier
stages, guide therapeutic decisions, and reduce the need for invasive and costly procedures. Nuclear imaging is a specialized diagnostic
modality that utilizes low-dose radiopharmaceuticals to evaluate both anatomical structure and physiological function, including
myocardial perfusion, blood flow, and metabolic activity.

In cardiology, nuclear imaging is widely used in
the evaluation of coronary artery disease (“CAD”) and serves as a non-invasive “gatekeeper” to invasive
procedures such as coronary angiography. The two principal nuclear imaging modalities are Single Photon Emission Computed Tomography
(“SPECT”) and Positron Emission Tomography (“PET”). While SPECT has historically dominated the market,
PET imaging is increasingly recognized as the superior modality due to its higher diagnostic accuracy and expanded clinical capabilities.

Cardiac PET imaging offers enhanced sensitivity
and specificity, lower radiation exposure, and the ability to quantify myocardial blood flow and coronary flow reserve, enabling
improved detection of multivessel and diffuse coronary disease. PET imaging is commonly performed using radiotracers such as Rubidium-82
and Nitrogen-13 ammonia. Recent advancements, including the introduction of Fluorine-18–based tracers such as Flurpiridaz
F-18, are expected to further accelerate adoption by improving image quality, extending tracer availability, and simplifying logistics.

Market Opportunity and Industry Transition

The Company believes the U.S. nuclear cardiology
market is undergoing a significant structural transition from SPECT to PET-CT imaging. There are approximately 13,000 SPECT systems
installed in the United States, of which an estimated 10,000 are utilized primarily for cardiac imaging. Industry data and clinical
guidance suggest that a substantial portion of these systems will be replaced or upgraded over time as providers transition to
PET-CT technology.

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Professional society guidance, including position
statements and clinical literature associated with the American Society of Nuclear Cardiology, increasingly supports PET imaging
as a preferred modality for myocardial perfusion imaging in appropriate patient populations. PET imaging provides superior diagnostic
performance, supports quantification of coronary flow reserve, and enables more efficient, single-session imaging protocols compared
to traditional SPECT imaging.

In addition, reimbursement dynamics and operational
efficiencies further support the transition to PET-CT. PET imaging is generally associated with higher reimbursement rates relative
to SPECT, while also offering faster scan times, improved throughput, and reduced downstream testing. Clinical studies have demonstrated
that PET imaging may reduce unnecessary invasive procedures and improve overall cost efficiency in patient management.

The introduction of next-generation radiopharmaceuticals,
including Fluorine-18–based tracers, is expected to expand access to cardiac PET imaging by enabling broader distribution
through conventional radiopharmacy networks, further accelerating market adoption.

Company Positioning and Strategy

The Company is focused on addressing the growing
demand for PET-CT imaging by providing high-performance, cost-effective imaging solutions designed to expand access to advanced
nuclear cardiology.

The Company’s PET-CT systems are designed
to deliver the clinical benefits of PET imaging while offering a compelling economic value proposition relative to traditional
market offerings. The Company believes its ability to provide PET-CT imaging systems at price points comparable to, or in certain
cases near, SPECT-CT systems positions it favorably to support the ongoing transition from SPECT to PET-CT.

In addition to equipment sales, the Company offers
comprehensive service and support solutions, including clinical, technical, and operational support, designed to facilitate adoption
and optimize utilization of PET-CT systems. These solutions are intended to reduce implementation barriers for healthcare providers
and enable broader adoption across a range of practice settings, including smaller and independent cardiology practices.

The Company believes that its integrated approach,
which combines advanced imaging technology, competitive pricing, and support services, aligns with current industry trends and
positions it to participate in the anticipated multi-year replacement cycle of legacy SPECT systems with PET-CT imaging solutions.

Barriers To Entry

Historically, adoption of cardiac PET imaging has
been constrained by the high capital cost associated with PET and PET-CT systems, as well as the operational complexity of implementing
advanced nuclear imaging programs. These factors have limited access primarily to larger hospital systems and well-capitalized
institutions.

In addition to capital expenditures, barriers to
entry have included ongoing service and maintenance costs, radiopharmaceutical access and logistics, reimbursement considerations,
and the need for specialized clinical and technical expertise to operate and interpret PET imaging studies.

The Company believes that recent industry developments,
including improved radiopharmaceutical availability and expanding clinical acceptance of PET imaging, are reducing certain structural
barriers; however, system cost and implementation complexity remain significant considerations for many healthcare providers.

The Company’s strategy is focused on lowering
these barriers through the introduction of cost-effective PET and PET-CT imaging systems, combined with integrated service and
support solutions designed to facilitate adoption. The Company believes its pricing model, which is generally positioned below
that of major market participants such as GE HealthCare, Philips Healthcare, and Siemens Healthineers, may enable broader access
to PET-CT imaging across a wider range of healthcare settings.

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The Company believes that reducing financial and operational
barriers to entry will be a key factor in accelerating the transition from SPECT to PET-CT imaging within nuclear cardiology.

Competitive Strengths

The Company believes it is well positioned within
the nuclear cardiology imaging market based on the following competitive strengths:

Focused Cardiac PET-CT Expertise

The Company
maintains a dedicated focus on cardiac PET and PET-CT imaging, enabling specialization in nuclear cardiology and alignment with
the growing clinical adoption of PET-based myocardial perfusion imaging.

Cardiac-Specific Imaging Software

The Company
offers advanced cardiac-focused imaging software designed to support clinical interpretation and workflow efficiency. These capabilities
include tools for therapy monitoring, coronary visualization, motion correction, and flexible protocol development.

Proprietary Imaging Systems

The Company
designs, develops, and markets molecular imaging systems optimized for cardiovascular applications, with an emphasis on performance,
workflow efficiency, and cost-effectiveness.

Integrated Clinical and Technical Support

The
Company provides comprehensive support services, including physician and technologist training, billing and reimbursement assistance,
clinical over-read support, and ongoing technical service. These services are designed to support customer adoption and maintain
high system uptime.

Flexible Financing and Access Models

The
Company offers a range of financing solutions, including rental and lease-to-own programs, intended to reduce upfront capital
requirements and facilitate broader access to PET-CT imaging technology.

Established Customer Base and Industry Relationships

The
Company benefits from an installed base of imaging systems and long-standing relationships with cardiologists and imaging centers,
supporting repeat business and customer referrals.

Targeted Market Approach

The Company focuses
on serving mid-sized hospitals and outpatient imaging centers, which may be underserved by larger imaging equipment providers,
creating opportunities for market penetration and growth.

Expansion into Multi-Disciplinary Imaging

With
the introduction of next-generation PET-CT systems, the Company is expanding its capabilities beyond cardiology into additional
clinical applications, including oncology and neurology.

Operational Efficiency and System Reliability

The
Company’s imaging systems are designed to support efficient workflows, compact installation environments, and high system
availability, which are important considerations for outpatient and high-throughput imaging settings.

Lifecycle Management and Service Capabilities

The
Company maintains involvement across the system lifecycle, including installation, service, and upgrades, which may enhance responsiveness,
cost management, and customer retention.

Alignment with Industry Trends

The Company
believes it is positioned to benefit from favorable industry dynamics, including increasing adoption of cardiac PET imaging, expanded
availability of radiopharmaceuticals, and ongoing shifts in reimbursement and clinical practice patterns.

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Sales and Marketing

The Company markets
its molecular imaging systems and related services through a dedicated internal sales and marketing organization. This team is
responsible for promoting, educating, and selling the Company’s products to healthcare providers, including hospitals, outpatient
imaging centers, and cardiology practices. The Company also benefits from referral activity generated through its installed base
of systems and established customer relationships.

The Company supports its sales efforts through
a range of marketing initiatives, including participation in industry trade shows, publication of clinical and product information,
targeted advertising, and presentations at medical and industry conferences. These activities are intended to increase brand awareness,
communicate the clinical and economic value of the Company’s offerings, and generate sales opportunities.

The Company primarily sells and distributes its
products and services directly to end-users. Its sales personnel are deployed across key geographic regions and may be organized
by market segment or product focus to enhance customer engagement and support. The Company’s sales approach emphasizes both
equipment placement and the adoption of associated service and support offerings designed to facilitate implementation and utilization
of its imaging systems.

Customer Support Services

The Company provides comprehensive customer support
services designed to support the performance, reliability, and utilization of its molecular imaging systems. These services are
delivered through a combination of internal clinical and technical personnel, as well as external clinical consultants and affiliated
specialists.

The Company’s support offerings include physician
interpretation training, nurse and technologist training, billing and prior-authorization assistance, clinical over-read support,
and ongoing clinical and technical guidance. The Company also provides continuous support coverage, including 24/7 technical assistance,
priority response, and after-hours service availability, along with software updates and system enhancements.

The Company maintains a team of field service engineers
responsible for installation support, equipment maintenance, hardware upgrades, and service contract fulfillment across its installed
base. These personnel also assist with site planning and customer training to support effective system implementation and operation.

The Company utilizes secure remote connectivity
to perform diagnostic monitoring and system maintenance, enabling real-time issue identification and resolution. When on-site service
is required, the Company’s modular system design supports efficient component replacement and reduced service times.

The Company’s service model is focused on
maximizing system availability and supporting consistent clinical operations. Based on internal service data, the Company’s
installed systems have historically achieved average uptime in excess of 98%.

The Company services its installed base of PET
systems and intends to provide ongoing service and support for its PET-CT systems, maintaining continuity across the system lifecycle.

Competition

The Company operates in a competitive nuclear imaging
equipment market that includes large multinational original equipment manufacturers and smaller specialized imaging companies.
Key competitors include GE HealthCare, Philips Healthcare, and Siemens Healthineers, each of which offers a broad portfolio of
diagnostic imaging products and has greater financial, technical, and marketing resources than the Company.

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The Company believes it differentiates through
its focused approach to cardiac PET and PET-CT imaging, as well as its integrated service and support model. The Company’s
offerings are designed to address the clinical and economic requirements of nuclear cardiology practices, including cost considerations,
workflow efficiency, and ongoing operational support.

The Company also competes with alternative diagnostic
imaging modalities, including computed tomography (“CT”), magnetic resonance imaging (“MRI”), and computed
tomography angiography (“CTA”). The Company believes these modalities are generally complementary to nuclear imaging,
as each provides distinct clinical information. Nuclear imaging, including PET and PET-CT, offers functional and physiological
data that may not be available through anatomical imaging techniques alone.

While CTA has been utilized in certain clinical
settings as a non-invasive diagnostic tool, the Company believes that nuclear imaging continues to play a critical role in the
assessment of myocardial perfusion and coronary artery disease. The selection of imaging modality is influenced by multiple factors,
including clinical indication, physician preference, availability, and reimbursement considerations.

The Company believes its targeted market approach,
combined with its emphasis on cost-effective PET-CT solutions and integrated support services, positions it to compete within the
evolving nuclear cardiology imaging market.

Third-Party Reimbursement

The Company’s customers typically rely on
reimbursement from government healthcare programs, including Medicare and Medicaid, as well as private third-party payers. Accordingly,
demand for the Company’s products and services is influenced by coverage determinations and reimbursement levels established
by these payers.

Third-party reimbursement is subject to extensive
federal, state, and local regulation, as well as evolving private payer policies. Coverage and payment criteria are often subject
to interpretation and may be modified from time to time. Variability in payer requirements, including contracting, accreditation,
and ownership or leasing structures, may affect the ability of healthcare providers to obtain reimbursement for imaging services
and may influence the adoption of certain business models.

Medicare reimbursement policies, administered by
the Centers for Medicare & Medicaid Services, establish standards for the payment of diagnostic imaging services, including
requirements related to medical necessity, billing practices, and provider qualifications. These policies may include limitations
on reimbursement methodologies, such as restrictions on the mark-up of diagnostic tests, which may impact provider economics.

The Company believes reimbursement trends are generally
supportive of advanced imaging modalities, including PET and PET-CT. Under the Medicare Physician Fee Schedule, myocardial perfusion
PET imaging reimbursement has been established at approximately $2,250 per study in the outpatient setting for recent periods,
reflecting recognition of the clinical value of PET imaging. In addition, reimbursement frameworks have evolved to support higher-value
imaging procedures, including the classification of certain PET/CT procedures into higher ambulatory payment categories and, in
certain cases, separate reimbursement for radiopharmaceuticals.

At the same time, reimbursement for alternative
modalities, including SPECT imaging, may be subject to ongoing pressure due to bundling methodologies and resource-related constraints.
These dynamics may influence provider decision-making and contribute to broader adoption of PET-based imaging.

Any reduction in coverage or reimbursement levels
for PET, PET-CT, or SPECT procedures, or adverse changes in applicable regulations or payer policies, could have a material adverse
effect on the Company’s business, financial condition, results of operations, and cash flows.

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Manufacturing

The Company’s manufacturing strategy combines
internal design capabilities and proprietary processes with strategic outsourcing to support cost efficiency and scalability. The
Company’s PET and PET-CT imaging systems are co-manufactured through its partner, Neusoft Medical Systems, at its development
and manufacturing facilities in Shenyang, China, including through affiliated entities.

The Company expects to continue utilizing third-party
manufacturing and sourcing arrangements for certain components and processes to enhance operational efficiency and manage production
costs. The Company performs select activities, including subassembly, system configuration, performance testing, and packaging
and labeling, at its facilities and, in certain cases, at customer sites. The Company also provides connectivity and integration
solutions, including system configuration and implementation support.

The Company and its third-party manufacturing partners
are subject to applicable regulatory requirements, including the U.S. Food and Drug Administration (“FDA”) Quality
System Regulation, as well as other federal, state, and international standards, including those applicable within the European
Union.

Research and Development

The Company conducts its research and development
activities in collaboration with its strategic partner, Neusoft Medical Systems, which provides expertise in the design, engineering,
and manufacturing of advanced medical imaging systems. This collaboration enables the Company to leverage established technical
capabilities, development infrastructure, and manufacturing resources in support of its PET and PET-CT product portfolio.

The Company’s research and development efforts
are focused on the enhancement of existing systems and the development of next-generation imaging technologies designed to address
evolving clinical and operational requirements. Areas of focus include system performance, workflow efficiency, software capabilities,
and expanded clinical applications.

The Company believes that its collaborative approach
to research and development supports efficient product development timelines and access to advanced technologies, positioning it
to respond to changes in clinical practice and market demand within nuclear cardiology and related imaging fields.

Regulatory Testing and Evaluation.

The Company’s next-generation PET-CT system,
the Affinity™, is currently undergoing required safety and performance testing in support of its U.S. Food and Drug Administration
(“FDA”) regulatory submission. This testing is being conducted in collaboration with Intertek, an internationally recognized
independent testing and certification organization.

The evaluation process includes a range of assessments
designed to validate compliance with applicable regulatory and industry standards, including electrical safety, electromagnetic
compatibility, and system performance. These evaluations are intended to confirm the safety of the system for both patients and
operators, as well as its ability to function reliably within a clinical environment.

Due to certain physical characteristics of the
system, including patient table configuration, portions of the testing have been conducted at the Company’s facility rather
than in a standard laboratory setting. The testing process involves simulation of both typical operating conditions and stress
scenarios to evaluate system performance under a variety of conditions.

The Company has worked collaboratively with its
internal engineering and service teams, technical personnel from its strategic partner Neusoft Medical Systems, and Intertek representatives
to complete the required evaluations. The Company believes it is nearing completion of this phase of testing and continues to advance
toward its regulatory objectives.

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Patents, Trademarks and Intellectual Property

As of the date of this filing, the Company holds
trademark registrations in the United States for, among others, Positron®, Attrius® and Affinity PET-CT™.

The Company seeks to protect its intellectual property
through a combination of trademark rights, trade secret protections, and contractual arrangements. The Company requires its employees,
consultants, and advisors to enter into confidentiality and proprietary rights agreements that restrict the disclosure of confidential
information and provide for the assignment to the Company of inventions, developments, and other intellectual property created
in connection with their service.

The Company relies in part on trade secrets and
proprietary know-how to maintain its competitive position. These protections are intended to safeguard technical information, processes,
and other proprietary assets related to the Company’s business and technology.

Despite these measures, there can be no assurance
that such protection will be adequate to prevent unauthorized use or disclosure of the Company’s intellectual property. Third
parties may seek to copy or otherwise obtain and use proprietary information, which could adversely affect the Company’s
competitive position.

Product Liability and Insurance

The Company is subject to risks associated with
product liability and other claims that may arise from the use of its medical devices. Such claims may involve allegations of personal
injury or other adverse outcomes related to the Company’s products.

The Company maintains commercial general liability
and other insurance coverage that it believes is appropriate for its operations and industry. While the Company has not experienced
any product liability claims to date, there can be no assurance that such claims will not arise in the future or that existing
insurance coverage will be sufficient to fully mitigate potential liabilities.

Employees

As of the date of this filing, the Company employed
10 full-time employees. None of the Company’s employees are represented by a union.

Available Information

Positron Corporation is required to file annual,
quarterly and special reports, proxy statements and other information with the Securities and Exchange Commission (“SEC”).
Investors may read and copy any document that Positron Corporation files, including this Annual Report on Form 10-K, at the SEC’s
Public Reference Room at 450 F Street, N.W., Washington, DC 20549. Investors may obtain information on the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet site at http://www.sec.gov that
contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC,
from which investors can electronically access Positron’s SEC filings.