Over the past few decades, stroke care has largely been focused on acute survival. There have been many meaningful advancements in acute stroke protocols and interventions, such as TPA and thrombectomy. And as a result, millions more people are surviving their strokes. But that has created a large and underserved population of chronic stroke survivors. There are approximately 9 million ischemic stroke survivors in the United States today, a large portion of who are living with chronic life-altering motor impairments, particularly in their arm and hand. Most of these patients undergo physical or occupational therapy in the first months following their stroke, that many will experience a plateau in improvement after the first three to six months. After that, they have historically been very few options to improve their upper limb function, and they are left to live with impairment for the rest of their lives. Our mission is to change that paradigm. Vivisem therapy is the first and only FDA-approved, clinically validated solution for chronic ischemic stroke survivors with moderate to severe upper limb impairment. The Vivisem system includes an implanted pulse generator and lead that delivers stimulation to the vagus nerve when activated during upper limb exercises. This paired VNS therapy boosts neuroplasticity and enables the brain to create new neural connections and remodel motor pathways that were damaged by the stroke. The meaningful and durable benefits of Vivistim therapy were proven in our VNS Rehab Pivotal Study. This was a randomized, triple-blinded, sham-controlled trial originally published in The Lancet in 2021, demonstrating that patients who received active Vivistem therapy had two to three times greater improvement in upper limb function compared to patients who underwent sham therapy with results out to two years. Importantly, this study included patients who were nine months to 10 years post-stroke, demonstrating that the results of Vivistem therapy are independent of time post-stroke. With Vivistem, there is no expiration date on recovery, and we have effectively raised the ceiling of possibility on a stroke survivor's recovery journey. Commercially, we have even successfully treated survivors up to 45 years post-stroke. Across our clinical studies and commercial experience, the increase in motor improvement enabled by Vivistem therapy has translated to meaningful functional benefits for patients. Some patients have regained the ability to get dressed independently, feed themselves, drive a car, or even return to work. Vivistem therapy has been life-altering for many stroke survivors. We have continued to further the evidence associated with vivistem therapy. In July, we announced the publication of two-year follow-up data from our pivotal trial in Neurology, the official peer-reviewed journal of the American Academy of Neurology, demonstrating the durability of improvement achieved with FITISM therapy. Participants maintained statistically significant and clinically meaningful gains for at least two years after treatment. A subset of patients who had been followed out to three years also demonstrated similarly durable outcomes, underscoring the lasting impact of our therapy. The study also captured data indicating that upper limb motor improvements translated into impactful real-world changes in the daily lives of stroke survivors, as reflected across several patient-reported measures of quality of life. Additionally, a separate subset of participants demonstrated further improvement between one to two years, suggesting recovery can continue over time with ongoing self-directed Vivisem therapy. Because Vivisem can be effective no matter the time elapsed since stroke, we are able to serve the immense existing prevalence population, as well as hundreds of thousands of people who suffer an ischemic stroke each year. Stroke is one of the leading causes of long-term disability in the United States, and we estimate that our serviceable market in the United States alone is worth over $30 billion. This figure is representative of patients who are on-label and strong candidates for medicine therapy. Given the significant opportunity within our current approved indication, we are focused on expanding access to this large market that we have approval for today. Our commercial model is purpose-built around the unique dynamics of the stroke market. We are targeting stroke centers because they have a strategic focus on delivering high-quality stroke care, and they have the expertise and infrastructure to lead the way in defining new standards of stroke recovery care. There are approximately 1,500 primary and comprehensive stroke centers in the United States, which is a concentrated and specialized group. In addition, the surrounding infrastructure network of these stroke hospitals provides access to both acute stroke patients entering the care pathway, as well as the larger population of stroke survivors already in ongoing recovery. To date, we have seen sustained interest from leading stroke centers across the country, while healthcare providers are championing our technology for patients. Our field team is split into territories, each consisting of a territory manager and at least one therapy development specialist. Territory managers are responsible for hospital logistics, healthcare professional relationships, and the support and creation of the STEM program infrastructure. The therapy development specialist, who's typically a licensed occupational or physical therapist, manages education and relationships within the ecosystem of stroke therapists, therapy sites, and is responsible for establishing a community support structure that drives awareness and identification of VivisDem therapy candidates. These two roles are complementary by design to support the full patient journey from identification through therapy. We are excited about the progress that this sales unit has shown in effectively initiating and growing territories. As we build the stroke recovery market, our growth and commercial success will be driven by several interconnected priorities, all oriented around broadening access and awareness for Vivistem therapy. The first is expansion into new territories and the launch of Vivistem programs at new stroke hospitals, which establishes a pathway for survivors to access treatment and ensures geographic coverage across the country. The second is increasing utilization within existing territories, supported by a robust patient funnel, resulting from more efficient identification, evaluation, and treatment. And the third is building awareness through education and engagement for all stakeholders. Healthcare professionals need both the awareness that Vivis Dem therapy is an option in chronic stroke recovery, and confidence in the beneficial patient outcomes it delivers. We take a methodical approach to launching new ViviStem programs at each site. Educating physicians, therapists, and patients is central to generating stakeholder buy-in and establishing a strong patient referral pathway at each institution. Over time, as programs mature and awareness grows, we envision ViviStem therapy becoming embedded in the continuum of care at stroke centers across the country, with survivors routinely screened and evaluated for Vivistem therapy upon discharge. This creates an increasingly self-sustaining patient flow at each program and further enables scalability in our business model. As we build our position in the stroke recovery market, our success will be driven by our commercial team's ability to expand access to Vivistem therapy for patients across the U.S., and the success will be measured by growing the number of active territories and the number of units sold for these respective territories. We define an active territory as one that has had a territory manager enroll for at least nine months. In the second quarter, we expanded our geographic footprint to 35.5 average active territories, an increase of 92 percent over the 18.5 active territories in the same period last year. We sold approximately 367 units in the quarter, driven by increasing utilization in existing territories and continued expansion into new territories and new hospital programs. On the reimbursement front, Vivisem has a Category 1 CPT code, and in 2026, CMS assigned this CPT code to a new tech APC 1580 under the hospital outpatient prospective payment system with Medicare reimbursement of approximately $45,000. We also continue to make progress supporting patient access across Medicare and commercial payers. The completion of our initial public offering represents a meaningful milestone for Mobia Medical. The proceeds give us the resources to accelerate growth for our commercial organization, expand our geographic footprint, and invest in activities that will improve broader awareness of and access to ViviStem therapy. This is a market that remains significantly underserved, and we believe the opportunity ahead of us is substantial. The patients we serve are getting better, and for many, ViviStem therapy has truly changed their lives. The future is bright for stroke survivors, and the future is bright for Movia Medical. With that, I will turn the call over to Bunker to review our second quarter financial results and provide our full year 2026 guidance. Bunker?
Thank you, Richard, and good afternoon, everyone. I'll walk through our second quarter 2026 financial results and provide our full year 2026 revenue guidance which we are initiating today i'd start by first reiterating the story about tess's why and what she's able to do now she and the other visits and patients improvements can be life-changing and it's why we do what we do total revenue for the second quarter of 2026 was 13.5 million representing year-over-year growth of 102 percent compared to 6.7 million in the second quarter of 2025. the increase was driven by the broader adoption of the Vivistim system at both new and existing programs, driving higher unit sales. Our patient funnel continues to create consistent, predictable revenues for our business. And with a massive TAM still ahead of us, we are excited about the trajectory going forward. Our gross margin was 83.2% for the second quarter of 2026, compared to 82.3% in the second quarter of 2025, reflecting that per-unit product costs remained relatively consistent as expected. The increase was primarily due to freight and tariff costs recognized in cost of goods sold during the period, partially offset by other changes in product costs. Moving forward, we expect gross margin to remain in the low 80s. Selling general and administrative expenses were $26.9 million in the second quarter of 2026, an increase of 85% compared to $14.5 million in the second quarter of 2025. The increase was primarily driven by increased headcount in our commercial organization and higher commissions associated with our revenue growth as well as increased audit legal and professional service fees associated with our ipo and marketing and clinical initiatives research and development expenses were 2.3 million in the second quarter of 2026 an increase of 61 compared to 1.4 million in the second quarter of 2025 driven primarily by increased headcount. Net loss was $21.0 million or $1.10 per share in the second quarter of 2026 compared to a net loss of $10.5 million or $12.44 per share in the second quarter of 2025. The year-over-year decrease in net loss per share primarily reflects the significant increase in common shares outstanding following the company's IPO and the conversion of outstanding convertible preferred stock and convertible notes into common stock turning to the balance sheet cash and cash equivalents as of june 30th 2026 were 177.1 million this includes the net proceeds of approximately 134.0 million from our initial public offering which closed in may one modeling note before i turn to guidance approximately 3.5 million of ipo related expenses have been accrued in q2 but paid in q3 this is timing associated with the completion of our offering not a change in our underlying spend trajectory for opex or cash balance expectations turning to our outlook for the full year 2026 we expect total revenue to be in the range of 54.0 million to 56.0 million representing growth of approximately 69 percent to 75 percent over the full year 2025. This outlook reflects our consistent commercial execution and is grounded in our confidence and the durability of our patient funnel and the momentum from hospitals implementing Vivistin programs. With that, I'll turn the call back to Richard for a few closing comments.
Thanks, Bunker. Before we open the line for questions, I want to reiterate how excited we are about the opportunity in front of us. We have a clinically validated, FDA-approved therapy that is addressing an enormous unmet need and meaningfully improving the lives of stroke survivors. We have a commercial organization that is executing consistently and scaling with efficiency. And with the completion of our IPO, we can continue investing in our growth. The stroke recovery market is large and critically underserved, and as we broaden access to our technology for millions of patients, we believe Vivisim therapy can and should become the standard of care for chronic stroke survivors with motor impairments. Finally, I also want to thank our dedicated and talented Mobia Medical Team, the healthcare providers and therapists we work with, the investors who support us, and most importantly, the patients who are at the heart of our mission. Every implant, therapy session, and functional milestone a patient reaches is a testament to what we can accomplish together. We look forward to keeping you updated on our progress in the quarters ahead. With that, I will turn the call over to the operator for Q&A.
Operator
Thank you, ladies and gentlemen. If you have a question or a comment at this time, please press star 1-1 on your telephone. If your question has been answered or you're seeing with yourself from the queue, please press star 1-1 again. And we also ask that you limit yourself to one question and one follow-up. We'll pause for a moment while we compile our Q&A roster. Our first question comes from Travis Steed with Bank of America. Your line is open.
Hey, congrats on the quarter and the first earnings call. Nice milestone. Maybe talk a little bit about, you know, the strong Q2 revenues, buy $1.3 million, raise the guide. Just kind of what you're seeing as you scale market adoption and how you set guidance as, you know, kind of the first time and how you're thinking about the guidance strategy here.
Travis, this is Richard. Thank you very much for the question. I would say Q2 was an extremely strong quarter, and all the things that we do to, you know, increase the number of active territories and drive adoption across the United States is working. and as we think about the key assumptions around the guide it's really that you know we have a tremendous growth profile in front of us and we have high confidence in this range we have a disciplined and thoughtful approach to how we do it and you know we want to make sure that our growth is significant moving forward using the stable predictable commercial model that we have so we
feel really confident in that comprehensive approach and how that translates to the range that we're giving okay and then that's helpful I wanted to ask about the new tech APT that came through recently if that gives you kind of more confidence and the level six APC code and then and maybe a nitpicky question but there was some movement on value converts on the P&L And just wanted to make sure that was clear to everybody, you know, the OpEx movement and the P&L movements, you know, on the EPS line this quarter, if you could just help explain that.
Absolutely. I'll take the first question and let Funker take the second question on the EPS. In terms of bubble six, and I would just say NewTek APC 1580, today it's a proposal by CMS. I mean, I think we're confident in that process, but it is a proposal. It's not, you know, done until it's done. Well, I'll find out in November when the final rule comes. But I think that is a very positive trend for us, obviously, being put in it for 2026 and have it be part of the proposed rule for 2027. So that gives us a lot of stability and predictability associated with payment.
And, Travis, this is Bunker. On the net loss figure that you're referencing, that would be the net income of approximately negative $21 million that included a $4 million charge related to marking the convertible notes to fair market value immediately prior to the conversion. So, this is a non-cash item related to a one-time conversion of those notes. And so, thank you for calling that out. That was one of the notes that we wanted to make sure that people got when they were updating their models.
Operator
Great. One moment for our next question. Our next question comes from Robbie Marcus to J.P. Morgan. Your line is open.
Thanks a lot. Also, I had my congratulations on a good first quarter. Maybe I could start on an update on reimbursement or more commercial coverage and coverage. You know, where do you stand? Any big wins in the quarter and any big wins on the horizon for second half of the year? and then I have a follow-up.
Yeah, thank you, Robbie. So, I would start by saying, you know, based on our stable, predictable commercial model that we have, you know, reimbursement is right there. It's stable and predictable. And as I break apart the way I think about this coding payment and coverage, you know, coding, we're in a really good spot with a Category 1 CPT code now in a new tech APC. Payment is something that comes in a very predictable way and coverage is, is in development. So I would say today, you know, we have, you know, a number of insurance providers across the United States that are, that are paying claims. And then we also have, you know, development of real world evidence and extension of our BNS rehab studies. And those will play an important role for coverage development over time. And I see that happening over a period of years, not necessarily, you know, from one quarter to the next.
Not sure who this question is most appropriate for, but with the IPO proceeds, maybe speak to some of the investments and programs you're able to now initiate with the added funds and how you're spending it. Thank you, Robby.
I'll take part of it and let Bunker add some comments at the end. I would say majority, as we think about the deployment of resources, first of all, we're following the plan that we laid out with our IPO thesis. And it really is, this is an execution story, and most of our proceeds are going towards building and developing our commercial model, And that's hiring TMs, TDSs, and building awareness, you know, across the United States. And so, really, the deployment of our OPEXs is highly focused on the commercial model There is obviously some part of it that is around clinical development as well, as we need to, you know, build evidence and confidence in our technology and our outcomes over time in the real world setting. Bunker, would you like to add anything else to that?
Only to reiterate the execution story that we see in front of us. We have a commercial playbook that we feel comfortable that we understand the rinse, wash, repeat of the scalability of what we need to do to build this out. And with a $30 billion market ahead of us, we feel comfortable that the IPO proceeds give us the capital that we need to strategically deploy it as the business growth to make sure that we get the highest bang for our buck and continue to expand this across the country.
Operator
Thank you. One moment for our next question. Our next question comes from Ryan Zimmerman with BTIG. Your line is open.
Good afternoon, and I'll echo my congrats on the first quarter out the gate here. You know, Richard, we were at SNIS. We got to hear from one of your users on, you know, how they approach BNS and stroke rehabilitation. I'd love to just hear your thoughts about, you know, how you're approaching physicians or how physicians, I should say, are approaching, you know, market development and, you know, building these programs and, you know, maybe contrast kind of existing users versus new users as we think about, you know, the growth in territories and so forth.
Yeah, I would say at the highest level. So, again, Ryan, thank you for the question and congratulations. the way we think about this is redefining what stroke care means. And, you know, all the conversations start with, you know, not just stroke survival, but it's about stroke recovery. And I think when we take programs, and that's more than one physician on that journey for a hospital, I think everyone gets it very quick and they lean into that story. And it doesn't take a lot of time or effort for people to understand kind of this high level evidence that we have and that we have a solution that can be operationalized today. And I would say our approach and our building out of these programs has gotten, you know, really sequenced and refined over the three years that we've been commercial. And, you know, every program that we open is easier than the next. And so that's how we think about territories. And, you know, a lot of physicians do reach out and are connecting with each other. So, as you can imagine, as we're building more territories, there's more people who know that this exists. And it really gets back to the story that we're building awareness and access for patients.
And this is a follow-up. You know, when I think about, you know, in the model, you know, one of the things we try and understand is just the interplay between, you know, both territory growth and units per territory and just productivity. How do you think about kind of either gating that or accelerating that in the context of, you know, you have now the IPO proceeds and so forth and just, you know, is it, and you and I spoke about this before, but, you know, are you measured in how you're approaching demand building the market right now as you raise awareness? And when do you feel like you reach that point where, you know, you can maybe unconstrain that a little bit? Thank you for taking the question.
Yeah, I think I'll let Bunker speak specifically to the metric. But before we get to that, I think, you know, what's important to recognize is that we have a CIRS model that works really well. And there's still lots of, I would say, complementary inflection points that we are going to meet and achieve in the future that will unlock a lot more growth. And those are things like guidelines, coverage decisions, more clinical data and adoption. And so we're building for those things. But even today, we are an execution story that is really high growth. Bunker, just to comment on the metrics.
Yes, and Ryan, I think you hit on the ones that we look at as well in terms of the units per active territory and the number of active territories that we're growing as we have a consistently high ASP that has remained durable over time. We see our growth as a combination of both those active territories and continuing to have a high productivity as it really is about the balancing act of making sure that we are deploying the capital effectively across the different territories and taking a measured approach. It's hard to say when we're going to take the reins off, as you put it, and really start to deploy that capital much more expeditiously. For now, we're taking a measured approach and just executing the plan that's in front of us that we laid out during our IPO.
Appreciate it. Congrats again.
Operator
One moment for our next question. Our next question comes from Michael Pollark with Wolf Research. Your line is open.
Hey, good afternoon. Modeling question for the back half. piggybacking on Ryan's question there. So in the quarter, I think you added five active territories quarter over quarter. My question on that metric is, how are you building the back half? What's the sequential expectation for active territory ads? And do you feel like five is comfortable? If so, why? And sorry, multiparter. That's annoying, I know. But the related topic is being public and being in territory ad mode. Do you think being public has added to your talent hiring pipeline? And if so, how?
Yeah, thank you, Mike. I'll take the last question first. Then, Bunker, we'll get to your point about the active territories. I would say absolutely. You know, our reputation as a company has always been very positive. You know, we pride ourselves in, you know, what people think and the culture that we provide here. And I think that shapes itself when people that work here get calls from other great people. I would say the IPO has just given us a bigger platform, you know, to, you know, talk about all the great things that we're doing and really showcase patient outcomes at a different level. It's so amazing to talk to new candidates, and the first thing that they mention are the videos and the comments that our social media shows about patient outcomes. And I think this is something that we have that is inherent, and putting patients first is directly correlated to gaining more talent because people like the mission. They want to be responsible for bringing something that, you know, before today was not attainable. So, yeah, thank you for the question. It's an amazing, amazing opportunity right now.
And as it relates to your modeling question about the active territories, you're correct that we added five active territories in Q2. um while we don't guide to the number of territories that we add each quarter i think directionally um we're taking a measured approach to how we build these territories out over time and that's the approximate range you know kind of the four or five for the back half of the year would be a you know a comfortable number for us helpful um a follow-up uh clinical question um richard in your prepared remark i think you mentioned commercially you have uh the system has been, has treated a patient 45 years post-stroke.
So that's a remarkable number. I don't think I'd heard it before. Obviously, 45 years post-stroke is outside of what was studied in the pivotal. And so maybe just remind us how you encourage physicians to screen these patients to ensure that, you know, the outcome in that patient scenario can be as good as folks studied in the trial or folks that are closer to the acute stroke of that.
Yeah, thank you, Mike. I would say, you know, the way we thought about this and the reason why we structured our trial the way it was is to really uncover whether there was a mechanistic reason around neuroplasticity between, you know, nine months and ten years that would show that patients stopped responding at some time point. And we uncovered that that was not the case. and part of our labeling doesn't include, you know, time since stroke. So, you know, today, as patients are being screened by therapists and health care providers, you know, they are looking at, you know, their function and their goals and whether they can undergo the procedure. And those are really the building blocks of how they screen patients. And I think it's really important to note that, you know, patients can also hear from other patients. And so when you have patients that, you know, have this, you know, 20 years or 30 years post-stroke, you know, they are usually in a position to speak and give their insights in terms of how their meaningful outcomes, you know, as I mentioned in my prepared remarks, you know, being able to drive a car, go to the bathroom, you know, lift up your child for the first time, you know, these are all things that, you know, people can decide for themselves, whether, you know, that's something that they want to shoot for.
Operator
Thank you. I'm not showing any further questions this time. I'd like to turn the call back to Richard for any closing remarks.
Yeah, thank you, Kevin. I just want to make a couple comments here. One is thank you all for the questions and the time. I just want to remind everyone, this is a market that remains significantly underserved. We believe the opportunity ahead of us is substantial. The patients we serve are getting better, and for many, that is STEM therapy has truly changed their lives. I believe that the future is bright for these stroke survivors, and with all the things that positive directions, the future is extremely bright for Mobium Medical. Thank you very much.
Operator
Thank you, ladies and gentlemen. That's conclude today's presentation. We thank you for your participation. You may now disconnect, and have a wonderful day.
