Mobia Medical, Inc 10-Q for FY2026 Q2
Mobia Medical, Inc. (MOBI)
About this 10-Q
Mobia Medical, Inc filed this 10-Q on August 11, 2026, covering the quarter ended June 30, 2026 (FY2026 Q2).
Headline figures
Quarter ended June 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $13.51M
- up 102.4% from $6.67M a year earlier
- Net loss
- $21.04M
- compared with a net loss of $10.49M a year earlier
- Diluted EPS
- -$1.10
- compared with -$12.44 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
or
Commission File Number:
(Exact name of registrant as specified in its charter)
|
||
(State or other jurisdiction of incorporation or organization) |
|
(I.R.S. Employer Identification No.) |
(Address of principal executive offices)
(Zip Code)
(
(Registrant’s telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
|
Trading Symbol |
|
Name of each exchange on which registered |
|
|
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
☐ |
|
Accelerated filer |
☐ |
|
|
|
|
|
☒ |
|
Smaller reporting company |
||
|
|
|
|
|
|
|
|
Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of August 6, 2026, there were
1
Mobia Medical, Inc.
TABLE OF CONTENTS
2
Special Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains forward-looking statements. We make such forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding our expectations of future results of operations and financial condition, business strategy, solutions, technology, R&D costs, regulatory approvals, potential market opportunity, anticipated trends in our business, timing and likelihood of success, as well as plans and objectives of management for future operations, are forward-looking statements. These statements involve known and unknown risks, uncertainties, and other important factors that are in some cases beyond our control and may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements.
The words “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would,” or the negative of these terms or other similar expressions, are intended to identify forward-looking statements. Forward-looking statements contained in this Quarterly Report include, but are not limited to, statements about:
These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including those described in the section titled “Risk Factors” and elsewhere in this Quarterly Report and in other filings we make with the U.S. Securities and Exchange Commission (the “SEC”) from time to time. Moreover, we operate in a competitive and rapidly changing environment.
3
New risks and uncertainties emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, the forward-looking events and circumstances discussed in this Quarterly Report may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.
Although we believe that the expectations reflected in our forward-looking statements are reasonable based on the information available to us when they are made, we cannot guarantee that the future results, advancements, discoveries, levels of activity, performance, or events and circumstances reflected in the forward-looking statements will be achieved or occur. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and you are cautioned not to unduly rely upon these forward-looking statements. We undertake no obligation to update any forward-looking statements, which speak only as of the date they are made, for any reason after the date of this Quarterly Report.
4
PART I—FINANCIAL INFORMATION
Item 1. Condensed Financial Statements
Mobia Medical, Inc.
Condensed Balance Sheets
(Unaudited)
(in thousands, except share and per share data)
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2026 |
|
|
2025 |
|
||
Assets |
|
|
|
|
|
|
||
Current assets |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
||
Accounts receivable |
|
|
|
|
|
|
||
Inventory |
|
|
|
|
|
|
||
Deferred offering costs |
|
|
— |
|
|
|
|
|
Other current assets |
|
|
|
|
|
|
||
Total current assets |
|
|
|
|
|
|
||
Property and equipment, net |
|
|
|
|
|
|
||
Right-of-use assets — operating leases |
|
|
|
|
|
|
||
Other assets |
|
|
|
|
|
|
||
Total assets |
|
$ |
|
|
$ |
|
||
Liabilities, redeemable convertible preferred stock, and stockholders’ equity (deficit) |
|
|
|
|
|
|
||
Current liabilities |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
|
|
$ |
|
||
Operating lease liabilities, current |
|
|
|
|
|
|
||
Product warranty liability |
|
|
|
|
|
|
||
Accrued payroll, commissions, and bonuses |
|
|
|
|
|
|
||
Accrued offering costs |
|
|
|
|
|
|
||
Accrued and other current liabilities |
|
|
|
|
|
|
||
Total current liabilities |
|
|
|
|
|
|
||
Warrant liabilities |
|
|
|
|
|
|
||
Notes payable, net of discount and deferred financing costs |
|
|
|
|
|
|
||
Operating lease liabilities, non-current |
|
|
|
|
|
|
||
Total liabilities |
|
|
|
|
|
|
||
|
|
|
|
|
|
|||
Redeemable convertible preferred issuable in series, stock, $ |
|
|
— |
|
|
|
|
|
Stockholders’ equity (deficit) |
|
|
|
|
|
|
||
Common stock, $ |
|
|
|
|
|
|
||
Additional paid-in capital |
|
|
|
|
|
|
||
Accumulated deficit |
|
|
( |
) |
|
|
( |
) |
Total stockholders’ equity (deficit) |
|
|
|
|
|
( |
) |
|
Total liabilities, redeemable convertible preferred stock, and stockholders’ equity (deficit) |
|
$ |
|
|
$ |
|
||
The accompanying notes are an integral part of these condensed financial statements.
5
Mobia Medical, Inc.
Condensed Statements of Operations
(Unaudited)
(in thousands, except share and per share data)
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Cost of goods sold |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross profit |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Research and development costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling, general and administrative expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss from operations |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Change in fair value of convertible notes payable |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Interest expense |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Other income (expense), net |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total other expense, net |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Loss before provision for income tax |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Provision for income tax |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net loss attributable to common stockholders |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Net loss per share attributable to common stockholders |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Diluted |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Weighted average shares used to compute net loss per |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
The accompanying notes are an integral part of these condensed financial statements.
6
Mobia Medical, Inc.
Condensed Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)
(Unaudited)
(in thousands, except share and per share data)
For the three and six months ended June 30, 2026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional |
|
|
|
|
|
Total |
|
|||||||
|
|
Redeemable Convertible Preferred Stock |
|
|
|
Common Stock |
|
|
Paid-In |
|
|
Accumulated |
|
|
Stockholders' |
|
|||||||||||||
|
|
Shares |
|
|
Amount |
|
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Equity (Deficit) |
|
|||||||
Balance, December 31, 2025 |
|
|
|
|
$ |
|
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|||||
Net loss |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Exercise of common stock options |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||
Share-based compensation |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Balance, March 31, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|||||
Net loss |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Conversion of redeemable preferred stock to common stock |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||
Conversion of convertible notes payable to common stock |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||
Issuance of common stock upon exercise of warrants |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||
Issuance of common stock upon initial public offering, net of underwriting discounts and commissions of $ |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||
Exercise of common stock options |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||
Share-based compensation |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Balance, June 30, 2026 |
|
|
— |
|
|
$ |
— |
|
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
For the three and six months ended June 30, 2025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional |
|
|
|
|
|
Total |
|
|||||||
|
|
Redeemable Convertible Preferred Stock |
|
|
|
Common Stock |
|
|
Paid-In |
|
|
Accumulated |
|
|
Stockholders' |
|
|||||||||||||
|
|
Shares |
|
|
Amount |
|
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Deficit |
|
|||||||
Balance, December 31, 2024 |
|
|
|
|
$ |
|
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|||||
Net loss |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Issuance of Series F redeemable convertible preferred stock, net of |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
||
Related Party Issuance of Series F redeemable convertible preferred |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
||
Exercise of common stock options |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||
Share-based compensation |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Balance, March 31, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|||||
Net loss |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Exercise of common stock options |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Share-based compensation |
|
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Balance, June 30, 2025 |
|
|
|
|
$ |
|
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|||||
The accompanying notes are an integral part of these condensed financial statements.
7
Mobia Medical, Inc.
Condensed Statements of Cash Flows
(Unaudited)
(in thousands)
|
|
Six Months Ended |
|
|||||
|
|
June 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Cash flows from operating activities |
|
|
|
|
|
|
||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
Adjustments to reconcile net loss to net cash used in operating activities |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
||
Share-based compensation |
|
|
|
|
|
|
||
Change in fair value of convertible notes payable |
|
|
|
|
|
|
||
Change in fair value of warrant liabilities |
|
|
( |
) |
|
|
|
|
Fair value adjustment of redeemable convertible preferred stock tranche liability |
|
|
|
|
|
|
||
Amortization of debt discount and debt issuance costs |
|
|
|
|
|
|
||
Changes in operating assets and liabilities |
|
|
|
|
|
|
||
Accounts receivable |
|
|
( |
) |
|
|
( |
) |
Inventory |
|
|
( |
) |
|
|
( |
) |
Other assets |
|
|
( |
) |
|
|
|
|
Accounts payable |
|
|
|
|
|
|
||
Accrued liabilities and other |
|
|
|
|
|
|
||
Net cash used in operating activities |
|
|
( |
) |
|
|
( |
) |
Cash flows from investing activities |
|
|
|
|
|
|
||
Purchases of property and equipment |
|
|
( |
) |
|
|
( |
) |
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
Cash flows from financing activities |
|
|
|
|
|
|
||
Exercise of common stock options |
|
|
|
|
|
|
||
Proceeds from issuance of common stock in public offering, net |
|
|
|
|
|
|
||
Proceeds from issuance of common stock in warrant exercise |
|
|
|
|
|
|
||
Proceeds from issuance of convertible notes payable |
|
|
|
|
|
|
||
Proceeds from the related party issuance of convertible notes payable |
|
|
|
|
|
|
||
Proceeds from issuance of Series F redeemable convertible preferred stock, |
|
|
|
|
|
|
||
Proceeds from the related party issuance of Series F redeemable convertible |
|
|
|
|
|
|
||
Net cash provided by financing activities |
|
|
|
|
|
|
||
Net change in cash and cash equivalents |
|
|
|
|
|
|
||
Cash and cash equivalents, beginning of period |
|
|
|
|
|
|
||
Cash and cash equivalents, end of period |
|
$ |
|
|
$ |
|
||
Supplemental disclosures of cash flows information |
|
|
|
|
|
|
||
Cash paid for interest |
|
$ |
|
|
$ |
|
||
Cash paid for taxes |
|
$ |
|
|
$ |
|
||
Unpaid accrued offering costs |
|
$ |
|
|
$ |
|
||
The accompanying notes are an integral part of these condensed financial statements.
8
Mobia Medical, Inc.
Notes to Condensed Unaudited Interim Financial Statements
Note 1 – Description of Business
Mobia Medical, Inc. (the “Company”) was incorporated in Delaware in March 2007. Effective February 23, 2026, the Company amended its certificate of incorporation to change its name from MicroTransponder, Inc. to Mobia Medical, Inc. The change was solely a corporate name change and had no impact on the Company’s financial statements.
The Company develops, markets, and sells devices for the treatment of medical conditions. The first device brought to market, the Vivistim Paired VNS System (“Vivistim System”), received U.S. Food and Drug Administration premarket approval in 2021 and is intended to be used by chronic ischemic stroke survivors with moderate to severe upper extremity impairments to reduce upper extremity motor deficits and improve motor function. The Vivistim System was first brought to market in 2022, with the first commercial implant in May 2022, and commenced full commercial launch in 2023.
Initial Public Offering – In May 2026, the Company completed its initial public offering (“IPO”) in which it sold
Risks and Uncertainties – The Company’s activities are subject to significant risks and uncertainties, including, but not limited to, failure to manage growth effectively, reliance on the success of the Vivistim System, new technological innovations, dependence upon third-party payers to provide adequate coverage and reimbursement to our customers, the absence of a national coverage determination or local coverage determinations applicable to its device administered by the Centers for Medicare and Medicaid Services (CMS), dependence on key personnel, dependence on key suppliers, protection of proprietary technology, product liability, and compliance with government regulations. The Company is also subject to risks relating to cybersecurity and the protection of confidential information and personal information, as well as risks relating to evolving regulatory requirements (including potential additional clinical evidence requirements) that could affect commercialization of existing or future products. These risks and uncertainties, as well as failure to secure additional funding, if needed, can adversely affect the Company’s future financial results, financial position, and cash flow.
In addition, economic conditions in the United States, including any economic disruptions, inflationary, or supply chain pressures, may adversely impact the Company’s future financial results. The Company uses contract manufacturers in Uruguay to supply key products. Political instability or the deterioration of trade relations, including implementation of new tariffs and trade restrictions, could adversely impact the Company’s business.
Concentration of credit risk – The Company maintains its cash deposits with high credit quality financial institutions. At times, such deposits may be in excess of the Federal Deposit Insurance Corporation insured limits; however, management does not believe it is exposed to any significant credit risk. All such accounts are monitored by management to mitigate risk and cash equivalents are invested in highly rated money market funds.
Supplier concentration risk – The Company depends on a small number of third-party contract manufacturers and suppliers, some of which are single source, to produce and package all elements comprising the Vivistim System as well as certain implantation tools. A failure by these suppliers and manufacturers to supply the Vivistim System or its components or subcomponents in sufficient quantities or at all, could adversely affect the Company’s financial condition, results of operations, and cash flows.
9
Note 2 – Liquidity and Going Concern
These condensed unaudited interim financial statements were prepared on a going concern basis. The going concern basis assumes that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business.
The Company has incurred operating losses and negative cash flows from operations since its inception. For the six months ended June 30, 2026, the Company had a net loss of $
Since inception, the Company has financed its activities principally from the issuance of preferred stock, debt financing arrangements, revenue from sales of the Vivistim System and net proceeds from the IPO completed in May 2026. The Company believes that its operating losses and negative operating cash flows will continue into the foreseeable future. There can be no assurance that the Company’s products will generate sufficient revenue for the Company to achieve profitable operations.
Based on its current operating plan, the Company expects to continue to incur significant expenditures to increase awareness and adoption of the Vivistim System, support research and development activities, including regulatory affairs and clinical studies, scale its commercial operations and infrastructure, and operate as a public company. In prior reporting periods, the Company concluded that recurring operating losses, negative cash flows from operations, and future expenditures raised substantial doubt about its ability to continue as a going concern. In May 2026, the Company completed its IPO and received net proceeds of approximately $
If future revenue is not sufficient or if sufficient funds on acceptable terms are not available when needed, the Company may be required to curtail planned activities to significantly reduce its operating expenses. Failure to manage discretionary spending or raise additional financing, as needed, may have a material adverse effect on the Company’s future viability and results of operations.
Note 3 – Summary of Significant Accounting and Reporting Policies
Basis of Presentation – The condensed unaudited interim financial statements do not include all disclosures, including certain notes required by accounting principles generally accepted in the United States of America (“GAAP”) on an annual reporting basis. The condensed unaudited interim financial statements have been prepared on the same basis as the annual financial statements. In management’s opinion, the condensed unaudited interim financial statements reflect all adjustments (consisting only of normal recurring adjustments) necessary for a fair statement of the condensed balance sheets, condensed statements of operations, condensed statements of redeemable convertible preferred stock and stockholders’ deficit, and condensed statements of cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full fiscal year or any future period. The condensed unaudited interim financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2025 included in the Company’s prospectus dated May 7, 2026 filed pursuant to Rule 424(b)(4) with the U.S. Securities and Exchange Commission (the “SEC”) on May 8, 2026.
The financial statements are presented in thousands, except for share and per share amounts. Certain prior period amounts presented in the Company’s Registration Statement on Form S-1 have been rounded to the nearest thousand to conform to the current period’s presentation. Accordingly, certain prior period figures may differ slightly from previously filed reports presented in whole dollars.
10
Reverse Stock Split – In connection with the IPO, on May 1, 2026 the Company effected a reverse stock split of its issued and outstanding common stock. All references to common stock issued and outstanding, stock options, loss per share and per share amounts presented in the accompanying financial statements and notes thereto have been retroactively adjusted for all periods presented to reflect the reverse stock split. The per share par value, authorized numbers of shares of the Company’s common stock and redeemable convertible preferred stock, issued and outstanding number of shares of redeemable convertible preferred stock, and redeemable convertible preferred stock warrants were not adjusted as a result of the reverse stock split. Instead, the conversion ratio was updated whereby each share of each series of Preferred Stock was convertible into shares of common stock on a basis.
Use of Estimates – The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions include, but are not limited to, share-based compensation, valuations of common and preferred stock, valuation of warrant liabilities, product warranty liability, and the redeemable convertible preferred stock tranche liability. Actual results could differ from those estimates.
Emerging Growth Company Status – The Company is an emerging growth company (“EGC”), as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”), enacted in 2012. Under the JOBS Act, EGCs can delay adopting new or revised accounting standards issued after the enactment of the JOBS Act until those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an EGC or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act.
Segment Reporting – The Company operates and manages its business as a reportable and operating segment. Operating segments are defined as components of an enterprise where separate financial information is evaluated regularly by the chief operating decision maker (CODM) in deciding how to allocate resources and assess performance. The Company’s CODM is the For additional segment reporting information, refer to Note 14.
Significant Accounting Policies – There have been no material changes to the Company’s significant accounting policies as described in the Company’s audited financial statements for the year ended December 31, 2025.
Deferred Offering Costs – Deferred offering costs consisted of legal fees incurred directly related to the Company's IPO. Upon completion of the IPO, these costs were recorded as a reduction of the offering proceeds included within additional paid-in capital. Unpaid offering costs as of June 30, 2026 were $
Inventory – Inventory costs are comprised primarily of finished goods and raw materials and include the acquisition costs of raw materials and components, in addition to direct labor and overhead. All inventory is stated at the lower of cost or net realizable value and is accounted for on a first in, first out (FIFO) basis.
The balance of inventory is as follows (in thousands):
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2026 |
|
|
2025 |
|
||
Raw materials |
|
$ |
|
|
$ |
|
||
Finished goods |
|
|
|
|
|
|
||
Total inventories |
|
$ |
|
|
$ |
|
||
11
The Company performs an assessment of the recoverability of inventory during each reporting period, and, if applicable, writes down any excess and obsolete inventories to their estimated net realizable value in the period in which the impairment is first identified. The determination of whether inventory costs will be realizable requires estimates by management. If actual market conditions are less favorable than projected by management, additional write-downs of inventory may be required. There were no expenses recorded for excess inventory or other impairments for each of the three and six months ended June 30, 2026 and 2025.
Related Party Transactions – The Company’s Chief Financial Officer held an indirect ownership interest in Exceller Hunt MicroTransponder 2017, LP (“Exceller Hunt”) and the Curnes Fund 2001 (“Curnes Fund”), both of which are stockholders of the Company. Jordan Curnes, the Company’s Co-founder and a former member of the Board of Directors, also held an indirect ownership interest in the Curnes Fund. Entities affiliated with U.S. Venture Partners and Osage University Partners are principal stockholders of the Company.
During the six months ended June 30, 2026, Exceller Hunt and the Curnes Fund participated in the Company’s issuance of convertible promissory notes discussed in Note 6 and purchased approximately $
During the six months ended June 30, 2025, Exceller Hunt and the Curnes Fund acquired
Recently Issued Accounting Standards – On December 14, 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires enhanced income tax disclosures, including specific categories and disaggregation of information in the effective tax rate reconciliation, disaggregated information related to income taxes paid, income or loss from continuing operations before income tax expense or benefit, and income tax expense or benefit from continuing operations. This guidance is effective for annual periods beginning after December 15, 2024; however, as an EGC, the Company has elected to use the extended transition period for adopting new or revised accounting standards, and therefore the guidance will be effective for the Company for the year ended December 31, 2026. The adoption of ASU 2023-09 is expected to have a disclosure-only impact on the Company’s financial statements for the year ended December 31, 2026. The Company is currently evaluating the impact of this pronouncement on the disclosures in its financial statements.
On November 4, 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires more detailed disclosures about specified categories of expenses (including employee compensation, depreciation, and amortization) included in certain expense captions presented on the face of the income statement. This ASU is effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The amendments may be applied either (i) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (ii) retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact of this pronouncement on the disclosures in its financial statements.
On November 26, 2024, the FASB issued ASU 2024-04, Debt – Debt with Conversion and Other Options (Subtopic 470-20), which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion rather than as extinguishments of debt. The amendments may be applied on either a prospective or a
12
retrospective basis. This ASU is effective for fiscal years beginning after December 15, 2025, and interim periods within those annual reporting periods. The Company
On December 8, 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270) Narrow-Scope Improvements, which is intended to improve the navigability of interim disclosures, clarifies when Topic 270 applies, and provides additional interim disclosure guidance, including a principle to disclose material events since the most recent annual reporting period. The amendments do not change the underlying objectives of interim reporting but are designed to enhance clarity in application. This ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027; however, as an EGC, the Company has elected to use the extended transition period for adopting new or revised accounting standards, and therefore the guidance will be effective for the Company for interim periods within annual periods beginning after December 15, 2028. The Company is currently evaluating the impact of this pronouncement on its financial statements.
Note 4 – Fair Value Measurements
ASC 820, Fair Value Measurements and Disclosures, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under ASC 820 are described below:
Level 1 – This level consists of quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.
Level 2 – This level consists of directly or indirectly observable inputs as of the reporting date through correlation with market data, including quoted prices for similar assets and liabilities in active markets and quoted prices in markets that are not active. Level 2 also includes assets and liabilities that are valued using models or other pricing methodologies that do not require significant judgment since the input assumptions used in the models, such as interest rates and volatility factors, are corroborated by readily observable data from actively quoted markets for substantially the full term of the financial instrument.
Level 3 – This level consists of unobservable inputs that are supported by little or no market activity and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions.
In determining the fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the unobservable inputs to the extent possible, as well as considers counterparty credit risk in its assessments of fair value.
Fair Value of Liabilities –
June 30, 2026 |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Warrant liabilities |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
||
Total liabilities, at fair value |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
13
December 31, 2025 |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Warrant liabilities |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
||
Total liabilities, at fair value |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
||
The Company’s warrant liabilities consisted of warrants issued in connection with certain preferred stock financings and warrants issued in connection with the Company’s Loan and Security Agreement with Horizon Technology Finance Corporation (“Horizon”). The warrant liabilities were categorized within Level 3 of the fair value hierarchy because their valuation included significant inputs that were not observable in active markets. The classification of a financial instrument within the fair value hierarchy is based on the lowest-level input that is significant to the fair value measurement.
Prior to the IPO, t
|
|
Preferred Warrants |
||||
December 31, 2025 |
|
Series B |
|
Series D |
|
Series E2 and F |
Strike price |
|
$ |
|
$ |
|
$ |
Expected dividend yield |
|
— % |
|
— % |
|
— % |
Expected term (years) |
|
|
|
|||
Volatility |
|
|
|
|||
Risk-free interest rate |
|
|
|
|||
The Company estimated volatility based upon analysis of the historical volatility of peer public companies as well as factors specific to the Company, including, but not limited to, size, expected growth and relative risk. The expected life assumption was based on the remaining contractual terms of the warrants. The risk-free rate as of December 31, 2025 was based on the
Immediately prior to the IPO, the fair value of the warrant liability was estimated by multiplying the number of equivalent common shares by the difference between the common stock offering price and the exercise price. All of the redeemable convertible preferred stock warrants were exercised or expired upon the completion of the IPO.
As of June 30, 2026, the Company’s warrant liability consisted solely of warrants issued in connection with the Loan and Security Agreement with Horizon Technology Finance Corporation (the “Horizon Warrants”). The fair value of the Horizon Warrants was estimated by multiplying the number of equivalent common shares by the difference between the Company’s closing stock price and the exercise price.
Changes in the fair value of the warrant liabilities were recognized within Other income (expense), net in the condensed statements of operations.
In January and February 2026, the Company issued convertible promissory notes in an aggregate principal amount of $
14
As of issuance, key assumptions included a discount rate of approximately
The following table summarizes the change in the fair value of the Convertible Notes (in thousands):
|
Three Months Ended |
|
|
Six Months Ended |
|
||
|
June 30, |
|
|
June 30, |
|
||
|
2026 |
|
|
2026 |
|
||
Beginning balance |
$ |
|
|
$ |
|
||
Issuance of convertible notes payable |
|
|
|
|
|
||
Change in fair value |
|
|
|
|
|
||
Conversion of convertible notes payable to common stock |
|
( |
) |
|
|
( |
) |
Ending balance |
$ |
|
|
$ |
|
||
In May 2026, all of the Convertible Notes were converted into an aggregate of
Note 5 – Product Warranties
The Company provides an assurance-type warranty that its products will conform to agreed-upon technical and quality specifications. The warranty provides for repair or replacement of products that fail to meet specifications or become unusable during this period, which generally ranges from to
The Company maintains a warranty reserve for implanted pulse generators (“IPGs”) and leads and began recording a warranty liability in 2024 based on historical product replacement experience. A warranty liability is recorded at the time revenue is recognized for all periods presented and is separately presented as product warranty liability on the face of the balance sheets. The warranty reserve is estimated based on historical product replacement experience. The Company establishes product replacement rates separately for IPGs and leads using historical replacement data beginning with the first full period of commercial shipments. The replacement rate represents the average historical rate of product replacement and is applied to units sold during each reporting period to estimate expected warranty obligations.
In developing its replacement rate assumptions, the Company evaluates historical replacement patterns over the expected product life cycle. The warranty accrual is calculated quarterly. The Company evaluates and updates its replacement rate assumptions annually, or more frequently if actual experience or product performance trends indicate that revisions are necessary.
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Beginning balance |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Accruals for warranties issued |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Claims settled |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Ending balance |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
15
Note 6 – Convertible Notes and Notes Payable
Convertible Notes
In January and February 2026, the Company issued Convertible Notes in an aggregate principal amount of $
The Company elected the fair value option under ASC 825 for the Convertible Notes in order to account for the Convertible Notes as a single unit of account, which reflects the combined effect of the debt host and the embedded features within the overall fair value measurement. Accordingly, the Convertible Notes were initially recorded at fair value and subsequently remeasured at fair value at each reporting date through the date of conversion, with changes in fair value recognized in the statement of operations within “Change in fair value of convertible notes payable.” No portion of the change in fair value was attributed to instrument-specific credit risk. Because the Convertible Notes were accounted for under the fair value option, no separate interest expense was recognized.
Prior to conversion, the Convertible Notes are presented as a separate line item on the balance sheet titled “Convertible notes payable”. At issuance, the Company determined that the transaction price represented the best evidence of fair value and recorded the Convertible Notes at the proceeds received. Immediately prior to the conversion in May 2026, the estimated fair value was $
Immediately prior to the completion of the Company’s IPO in May 2026, all Convertible Notes were converted into an aggregate of
Notes
On December 29, 2023, the Company entered into a Loan and Security Agreement (the “Loan and Security Agreement”) with Horizon Technology Finance Corporation. On June 1, 2024, Horizon Technology Finance Corporation assigned all of its right, title and interest in and to the loans outstanding under the Loan and Security Agreement and related warrants to Horizon Funding II, LLC, its wholly-owned subsidiary (together with Horizon Technology Finance Corporation, “Horizon”). The Loan and Security Agreement provides for term loans of up to an aggregate principal amount of $
Borrowings under the Loan and Security Agreement accrue interest at an annual rate equal to the greater of (i) the Wall Street Journal (or any successor thereto) prime rate (subject to a floor of
In connection with the Company’s draw down of the first tranche under the Loan and Security Agreement, the Company issued warrants to purchase such number of securities representing an aggregate of $
16
As of June 30, 2026 and December 31, 2025, the carrying value of the borrowings under the Loan and Security Agreement was $
There were no additional borrowings, repayments, or material modifications regarding the Loan and Security Agreement during the six months ended June 30, 2026. Total interest expense was $
Note 7 – Leases
On March 20, 2025 the Company entered into a modification of its existing operating lease. The modification extended the lease term to
On August 8, 2025, the Company entered into an additional non-cancellable operating lease for office space. The commencement date of the lease was
Supplemental lease cost information is as follows (in thousands):
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Operating lease cost |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Short-term lease cost |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Variable lease cost |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total lease cost |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The following table presents the lease balances within the balance sheet (in thousands):
17
|
|
June 30, 2026 |
|
|
December 31, 2025 |
|
||
Operating Leases: |
|
|
|
|
|
|
||
Right-of-use asset |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Operating lease liabilities, current |
|
$ |
|
|
$ |
|
||
Operating lease liabilities, non-current |
|
|
|
|
|
|
||
Total operating lease liabilities |
|
$ |
|
|
$ |
|
||
The following table presents undiscounted future minimum lease payments as of June 30, 2026, which reconcile to the total lease liability as follows (in thousands):
Years Ending December 31 |
|
|
|
|
2026, remaining months |
|
$ |
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
2030 |
|
|
|
|
Total undiscounted future minimum lease payments |
|
|
|
|
Less: Amounts representing interest |
|
|
( |
) |
Total lease liabilities |
|
$ |
|
|
The weighted average lease terms and discount rates are as follows:
Operating Lease Term and Discount Rate |
|
June 30, 2026 |
|
December 31, 2025 |
Weighted-average remaining lease term |
|
|
||
Weighted-average discount rate |
|
|
Supplemental cash flow information related to leases was as follows (in thousands):
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
Cash paid for amounts included in the measurement of lease liabilities: |
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Operating cash flow from operating leases |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Note 8 – Income Taxes
The Company accounts for income taxes in accordance with ASC 740, Income Taxes. The income tax provision for interim periods is determined using an estimate of the Company’s annual effective tax rate, adjusted for discrete items recognized in the period. The Company had an effective tax rate of
For periods ended June 30, 2026 and 2025, the Company continued to maintain a full valuation allowance against its deferred tax assets as management believes it is more likely than not that these assets will not be realized based on the Company’s history of operating losses. The Company’s tax provision for interim periods primarily reflects state income taxes and other minimum taxes.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted, introducing various federal tax changes, including extensions of certain 2017 Tax Cuts and Jobs Act (“TCJA”) provisions and updates to individual and business tax rules. Management evaluated the provisions applicable to the Company and determined that OBBBA did not have a significant impact on the Company’s condensed unaudited interim financial statements for the three and six months ended June 30, 2026.
18
Note 9 – Redeemable Convertible Preferred Stock
Prior to the Company’s IPO, the Company had issued Series A redeemable convertible preferred stock (“Series A”), Series B redeemable convertible preferred stock (“Series B”), Series C redeemable convertible preferred stock (“Series C”), Series D redeemable convertible preferred stock (“Series D”), Series E-1 redeemable convertible preferred stock (“Series E-1”), Series E-2 redeemable convertible preferred stock (“Series E-2”), and Series F redeemable convertible preferred stock (“Series F”), collectively the (“Preferred Stock”).
In March 2025, the Company entered into a Series F preferred stock purchase agreement (the “Series F Agreement”) pursuant to which the Company issued
The Company classified the Series F preferred stock tranche obligation as a liability on its balance sheets as it represents a freestanding financial instrument that may require the Company to transfer assets to settle its obligation (upon events that are outside of its control). The Series F preferred stock tranche obligation was initially recorded at fair value upon the date of issuance and was subsequently remeasured to fair value at each reporting date until settlement. Changes in the fair value of the Series F preferred stock tranche obligation were recognized as a component of other income, net in the statements of operations.
The Series F preferred stock tranche obligation had an initial fair value of $
The Series F preferred stock tranche obligation was settled in October 2025, with the issuance of
Immediately prior to the completion of the Company’s IPO in May 2026, all the outstanding shares of Preferred Stock automatically converted into an aggregate of
As of December 31, 2025,
|
|
December 31, 2025 |
|
|||||||||||||||||
|
|
Number of Shares Authorized |
|
|
Number of Shares Issued and Outstanding |
|
|
Original Issue Price |
|
|
Carrying Value |
|
|
Liquidation Value |
|
|||||
Series A |
|
|
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Series B |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Series C |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Series D |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Series E-1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Series E-2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Series F |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total |
|
|
|
|
|
|
|
|
|
|
$ |
|
|
$ |
|
|||||
19
Dividends
In the event dividends are declared by the Board of Directors on the common stock (except dividends on common stock payable in additional shares of common stock), the holders of the Preferred Stock shall be entitled to receive a dividend per share on the Preferred Stock, as applicable, pro rata with the shares of common stock, as if such shares of Preferred Stock had been converted to shares of common stock, assuming for this purpose only that shares of redeemable convertible preferred stock are convertible into fractional shares, at the record date for the determination of stockholders entitled to such dividends. The right to receive dividends on shares of redeemable convertible preferred stock is non-cumulative, and no right to such dividends accrues to holders of redeemable convertible preferred stock by reason of the fact that dividends on such shares are not declared or paid in any years.
Redeemable Convertible Preferred Stock Warrants
As of December 31, 2025, the Company had
In connection with the Company’s IPO in May 2026, certain outstanding redeemable convertible preferred stock warrants were exercised in accordance with their terms, and all remaining redeemable convertible preferred stock warrants expired. Accordingly no warrants to purchase redeemable convertible preferred stock remained outstanding as of June 30, 2026.
Note 10 – Common Stock
In March 2025, the Company amended and restated the Company’s Certificate of Incorporation to increase the number of authorized shares of common stock to
Note 11 – Share-Based Compensation
In April 2026, the Board of Directors approved the Company’s 2026 Incentive Award Plan (the “2026 Plan”) and 2026 Employee Stock Purchase Plan (the “2026 ESPP”). The stockholders of the Company approved the 2026 Plan and the 2026 ESPP in May 2026. Both plans became effective in connection with the Company’s IPO. The 2026 Plan provides for the grant of equity-based awards and authorizes an initial share reserve of
On December 15, 2022, the Board of Directors approved the Company’s 2022 Equity Incentive Plan (the “2022 Plan”) providing for the grants of non-qualified stock options, incentive stock options and other stock-based awards up to an aggregate of
Under the 2022 Plan, stock options generally vest and become exercisable in respect of
20
number of Shares initially subject to the Option on each monthly anniversary of the Vesting Commencement Date thereafter, so that
All share and per-share amounts presented in the note have been retrospectively adjusted to reflect the Company’s reverse stock split effected on May 1, 2026.
The fair market value of stock options was estimated using the Black-Scholes valuation model. Because the Company has limited trading history as a public company, expected volatility is estimated using the historical volatility of a group of comparable publicly traded companies over a period of time equal to the expected life of the options. The Company uses the simplified method to calculate the expected term and contractual terms. Under the simplified method, the expected life is equal to the average of the share-based award’s weighted average vesting period and its contractual term. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. There were
|
|
Three Months Ended |
|
Six Months Ended |
||||
|
|
June 30, |
|
June 30, |
||||
|
|
2026 |
|
2025 |
|
2026 |
|
2025 |
Expected term (years) |
|
|
|
|
||||
Volatility |
|
|
|
|
||||
Risk-free interest rate |
|
|
|
|
||||
Dividend yield |
|
|
|
|
||||
The following assumptions were used to estimate the fair value of common stock to be purchased under the 2026 Employee Stock Purchase Plan (ESPP) in 2026:
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, |
|
June 30, |
|
|
2026 |
|
2026 |
Expected term (years) |
|
|
||
Volatility |
|
|
||
Risk-free interest rate |
|
|
||
Dividend yield |
|
|
21
Stock options — A summary of stock options activity under the 2007, 2022, and 2026 Plans is presented below (in thousands, except for share and per share amounts):
|
|
Options Outstanding |
|
|
|
|
|
|
||||||
|
|
Number of Options |
|
|
Weighted Average Exercise Price |
|
|
Weighted Average Remaining Contractual Term (in years) |
|
Aggregate Intrinsic Value |
|
|||
Outstanding as of December 31, 2025 |
|
|
|
|
$ |
|
|
|
$ |
|
||||
Options Granted |
|
|
|
|
$ |
|
|
|
|
|
|
|||
Options Exercised |
|
|
( |
) |
|
$ |
|
|
|
|
|
|
||
Options Forfeited, Cancelled, or Expired |
|
|
( |
) |
|
$ |
|
|
|
|
|
|
||
Outstanding as of June 30, 2026 |
|
|
|
|
$ |
|
|
|
$ |
|
||||
Vested and exercisable at June 30, 2026 |
|
|
|
|
$ |
|
|
|
$ |
|
||||
The following table summarizes information about stock options outstanding as of June 30, 2026:
|
|
Options Outstanding |
|
Options Vested |
||||||
|
|
|
|
|
|
Weighted Average |
|
|
|
|
|
|
|
|
|
|
Remaining |
|
|
|
|
|
|
Number of |
|
Weighted Average |
|
Contractual Term |
|
Number of |
|
Weighted Average |
Exercise Price |
|
Shares |
|
Exercise Price |
|
(in years) |
|
Shares |
|
Exercise Price |
$ |
|
|
$ |
|
|
|
$ |
|||
$ |
|
|
$ |
|
|
|
$ |
|||
$ |
|
|
$ |
|
|
|
$ |
|||
$ |
|
|
$ |
|
|
|
$ |
|||
$ |
|
|
$ |
|
|
|
$ |
|||
$ |
|
|
$ |
|
|
|
$ |
|||
$ |
|
|
$ |
|
|
|
$ |
|||
$ |
|
|
$ |
|
|
|
$ |
|||
$ |
|
|
$ |
|
|
— |
|
$ |
||
$ |
|
|
$ |
|
|
|
$ |
|||
$ |
|
|
$ |
|
|
— |
|
$ |
||
$ |
|
|
$ |
|
|
— |
|
$ |
||
$ |
|
|
$ |
|
|
— |
|
$ |
||
$ |
|
|
$ |
|
|
|
$ |
|||
The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock options and the fair value of the Company’s common stock for stock options that were in-the-money at period end. The aggregate intrinsic value of all options exercised was $
22
Restricted stock units — A summary of officer, employee, and non-employee restricted stock units granted and outstanding, under the 2026 Plan is presented below (in thousands, except for share and per share amounts):
|
|
Number of Restricted Stock Units |
|
|
Weighted Average Grant Date Fair Value |
|
|
Aggregate Intrinsic Value |
|
|||
Outstanding as of December 31, 2025 |
|
|
|
|
|
|
|
|
|
|||
Restricted Stock Units Granted |
|
|
|
|
$ |
|
|
|
|
|||
Restricted Stock Units Forfeited, Cancelled, or Expired |
|
|
( |
) |
|
$ |
|
|
|
|
||
Outstanding as of June 30, 2026 |
|
|
|
|
$ |
|
|
$ |
|
|||
Expected to vest as of June 30, 2026 |
|
|
|
|
$ |
|
|
$ |
|
|||
S
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Research and development costs |
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
||
Selling, general and administrative expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total share-based compensation expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Share-based compensation expense by award type was as follows (in thousands):
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Stock options |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Restricted stock units |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Employee stock purchase plan |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Total share-based compensation expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Note 12 – Net Loss Per Share
Net loss per share is calculated by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share is calculated similarly but includes potential dilution from the exercise of stock options and stock awards and conversion of redeemable convertible preferred stock, except when the effect would be anti-dilutive.
The following is a reconciliation of the numerators and denominators of the basic and diluted net loss per share computations for the periods presented (in thousands, except for share and per share amounts):
23
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Net loss attributable to common stockholders |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Share (denominator): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average number of common shares outstanding used in basic computation |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average number of common shares outstanding used in diluted computation |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss per share attributable to common stockholders |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Diluted |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
The following table summarizes the as-converted securities that were excluded from the diluted net loss per share calculation because the effect of including these potential shares would have been anti-dilutive:
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Series A redeemable convertible preferred stock |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Series B redeemable convertible preferred stock |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Series C redeemable convertible preferred stock |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Series D redeemable convertible preferred stock |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Series E redeemable convertible preferred stock |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Series F redeemable convertible preferred stock |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Redeemable convertible preferred stock warrants |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Common stock warrants |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Convertible notes payable |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Common shares issuable upon the exercise of stock options |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Common shares issuable upon the release of restricted stock units |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Potentially dilutive securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
In connection with the IPO, on May 1, 2026, the Company effected a reverse stock split. All share and per share amounts for all periods presented have been retroactively adjusted to reflect this reverse stock split.
Note 13 – Commitments and Contingencies
From time to time, the Company may become a party to claims, legal actions, and complaints arising in the ordinary course of business. Management is not aware of any such matters which would have a material effect on its financial position, results of operations, or cash flows. The Company relies on third-party manufacturers for the production of its IPGs and stimulation leads. Certain of these arrangements include non-cancelable purchase commitments and binding forecast obligations. The Company issues purchase orders based on production requirements, which are generally non-cancelable once accepted by the supplier. As of June 30, 2026, the Company had outstanding non-cancelable purchase orders totaling approximately $
During September 2024, the Company entered into an updated IPG supply agreement that expanded the scope of its supply arrangements with the third-party manufacturer. The agreement includes minimum annual purchase commitments over a five-year period commencing upon the first commercial shipment of product under the agreement. The first commercial shipment is currently expected to occur in 2028. The agreement also requires the Company to provide rolling twelve-month forecasts, portions of which
24
may become binding. As of June 30, 2026, no binding forecast commitments had been established under this agreement. The aggregate minimum purchase obligation over the
Note 14 – Segment Information
The Company operates as a single operating and reportable segment focused on the development and commercialization of the Vivistim System.
The following table presents segment revenue and significant segment expense categories regularly provided to the CODM for purposes of managing the Company’s operating and reportable segment. Segment revenue and net loss are consistent with the statements of operations (in thousands).
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
June 30, |
|
|
June 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of goods sold |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Research and development costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling, general and administrative expenses (1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other segment items (2) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
25
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following management’s discussion and analysis of our financial condition and results of operations in conjunction with our condensed unaudited interim financial statements (the condensed financial statements) and notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q and with our audited financial statements and notes thereto for the year ended December 31, 2025, included in our prospectus dated May 7, 2026, filed with the U.S. Securities and Exchange Commission (the “SEC”) pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended on May 8, 2026.
Overview
We are a commercial-stage medical device company redefining stroke recovery for survivors living with life-altering motor impairments. Our Vivistim Paired Vagus Nerve Stimulation (Paired VNS) System is the first and only clinically-validated, FDA-approved solution for chronic ischemic stroke survivors with moderate to severe upper extremity impairments. Stroke is one of the leading causes of long-term disability in the United States. While advancements in acute stroke care over the past decade have significantly reduced mortality, innovation for chronic stroke recovery has lagged, resulting in a growing number of stroke survivors living with meaningful impairments. Our breakthrough Vivistim Paired VNS System (Vivistim System) addresses this unmet need. The Vivistim System includes an implanted pulse generator and lead that deliver stimulation to the vagus nerve when activated. During treatment (Vivistim Therapy), intentional bursts of stimulation are delivered during functional movement to increase neuroplasticity and durably restore motor function. Clinical data have demonstrated that Vivistim Therapy delivers meaningful improvements in upper limb function, which can help stroke survivors regain critical capabilities and independence and restore quality of life, regardless of the time elapsed since the patient’s stroke. In July 2026, two-year follow-up data from the VNS-REHAB pivotal trial were published in Neurology. The publication reported that improvements observed following Vivistim Therapy in upper-limb motor impairment and function and certain patient-reported measures were sustained for at least two years. We believe we are setting a new standard of care in chronic stroke recovery, facilitating a new treatment pathway for chronic ischemic stroke survivors with moderate to severe upper extremity impairments.
Chronic stroke recovery presents a significant market opportunity. According to the American Heart Association (AHA), approximately 87% of the strokes in the United States are ischemic. This equates to approximately 9 million ischemic stroke survivors in the United States, of which we estimate that more than 4 million are chronic ischemic stroke survivors living with moderate to severe upper extremity impairment. This population falls within the current on-label indication for the Vivistim System. We believe that an initial market opportunity comprises approximately 1 million of those survivors that demonstrate the requisite overall health, cognition and motivation to participate in therapy and have received some amount of post-stroke therapy, which we estimate represents an initial market opportunity of over $30 billion based on the average selling price of the Vivistim System. Vivistim Therapy is effective for recent stroke survivors as well as patients who initiate treatment many years post-stroke. Based on a report published by the AHA in 2025, we estimate that each year approximately 200,000 new stroke survivors in the United States meet our indication for use, with 50,000 of these survivors representative of our initial market opportunity.
Our commercial strategy is designed to encourage Vivistim Therapy adoption at stroke centers and therapy sites through a coordinated, evidence-based approach. We sell the Vivistim System to customers, primarily stroke hospitals, in the United States, and our commercial organization is responsible for driving adoption of the Vivistim System through customer outreach, education, and relationship management activities. Our team includes Territory Managers (TMs), who support initial customer onboarding efforts at stroke centers and maintain commercial relationships with physicians and administrators, and Therapy Development Specialists (TDSs), who focus on outreach to therapy sites and provide general educational information regarding the clinical use of the Vivistim System. These activities are intended to facilitate customer adoption and utilization of the Vivistim System. Our commercial efforts are currently focused on primary and comprehensive stroke centers, which are hospitals that have cross-functional teams with the capabilities to treat acute stroke at the highest level of care and in compliance with AHA guidelines. These centers see significant volumes of acute stroke patients and are typically surrounded by a network of therapy sites with neurorehabilitation capabilities, providing the infrastructure necessary for efficient implementation of Vivistim Therapy. We work with these stroke centers to establish Vivistim Therapy as a treatment option for stroke survivors. Over time, we believe these centers will naturally integrate Vivistim Therapy into standard care pathways for stroke survivors upon discharge and establish self-sustaining care programs that use
26
Vivistim Therapy. According to data from the stroke center accreditation organizations, there were approximately 1,500 primary and comprehensive stroke centers in the United States as of December 2025. In addition, according to stroke claims data, approximately 70% of acute strokes in the United States are seen at 900 hospitals.
We rely on third-party contract manufacturers to manufacture the Vivistim System and accessories. We believe this strategy provides the expertise and capacity required to effectively and efficiently scale production based on demand, and helps to reduce our need for capital investment and reduce operational expenses.
To date, our primary sources of capital have been private placements of preferred stock, debt financing arrangements, revenue from sales of our Vivistim System and net proceeds from our initial public offering in May 2026 (the “IPO”). For the six months ended June 30, 2026, we generated revenue of $25.6 million, with a gross margin of 82.8%, and had a net loss of $38.8 million, compared to revenue of $12.3 million, with a gross margin of 82.2%, and a net loss of $21.1 million for the six months ended June 30, 2025. As of June 30, 2026, we had cash and cash equivalents of $177.1 million and an accumulated deficit of approximately $196.6 million. In May 2026, we completed our IPO and received net proceeds of approximately $134.0 million.
Key Factors and Trends Affecting our Business
We believe that our performance, results of operations and future success depend on several factors, including:
27
Components of Results of Operations
Revenue
We currently generate all of our revenue from the sale of our Vivistim System to customers, mainly primary and comprehensive stroke centers, in the United States. Our customers typically purchase an initial stocking order and then reorder replenishment product as procedures are performed. No single customer accounted for 10% or more of our revenue for the three and six months ended June 30, 2026 and 2025. We expect revenue to increase as we expand our commercial organization and sales territories, add customers and expand patient and customer awareness. We have expanded our commercial organization to help us drive and support revenue growth and intend to continue this expansion. We also expect that demand, and thus revenue growth, will be positively impacted by, and to the extent that, we obtain additional positive coverage policies with payors. While we have experienced strong revenue growth, our revenue may fluctuate from quarter to quarter due to a variety of factors.
Cost of goods sold and gross margin
Cost of goods sold primarily consists of acquisition costs of finished goods and components, warranty costs to replace aged, damaged or unusable items, product replacement costs, any outbound shipping costs and packaging costs, depreciation, and allocated
28
costs including facilities and information technology costs. We expect cost of goods sold to increase in absolute terms as our revenue grows.
We calculate gross margin as gross profit divided by revenue. Our gross profit has been and will continue to be affected by a variety of factors, including sales volumes, purchase volumes of inventory, cost of goods sold, tariffs, inflation, and product yields. Our gross margin will likely fluctuate from quarter to quarter.
Research and development costs
Research and development costs primarily consist of expenses related to product development, engineering, clinical studies related to new clinical indications, regulatory expenses, testing, consulting services and other costs associated with product improvements and next generation versions of our products. Other research and development expenses include salaries, employee benefits, stock-based compensation and other headcount-related costs, depreciation expense and allocated costs related to facilities and information technology. We expect our research and development costs to increase in absolute dollars in the future as we pursue product development initiatives, including product improvements and next-generation versions of our products, and continue to expand our clinical data. We expect research and development costs as a percentage of revenue to vary over time depending on the level and timing of initiating product development efforts and clinical development activities.
Selling, general and administrative expenses
Selling, general and administrative expenses primarily consist of compensation for personnel, including salaries, employee benefits, stock-based compensation, commissions associated with our commercial organization, spending related to sales and marketing, finance, information technology and human resource functions, expenses related to clinical studies and our registry for our current clinical indication, legal expenses related to regulatory matters, and training. Other expenses include travel expenses, advertising, conferences, trade shows, consulting and professional services fees, insurance costs, and general corporate expenses, including facilities-related expenses. The activities of our TMs and TDSs to facilitate customer adoption and utilization of the Vivistim System, and of our in-house market access team in facilitating the administrative prior authorization process, are included in selling, general and administrative expenses and do not represent contractual obligations or services provided to customers after product delivery. We expect selling, general and administrative expenses to continue to increase in absolute dollars as we expand our commercial organization, including with respect to TMs and TDSs, to both drive and support our planned growth in revenue, fund clinical studies and our registry for our current clinical indication, and incur additional expenses associated with operating as a public company, including costs related to legal, accounting, insurance, compliance with exchange listing and Securities and Exchange Commission requirements, and investor relations. We also expect an increase in our stock-based compensation expense with the establishment of the new equity plan in connection with our IPO and related grants thereunder. However, we expect selling, general and administrative expenses to decrease as a percentage of revenue primarily as, and to the extent, our revenue grows.
Total other income (expense), net
Other income (expense), net consists primarily of changes in the fair value of our Convertible Notes and warrant liabilities, interest expense on our debt obligations, amortization of debt issuance costs, and interest income earned on our cash and cash equivalents. The Convertible Notes converted into common stock upon the completion of our IPO in May 2026 and will therefore not result in additional fair value adjustments in future periods.
Provision for Income Taxes
Provision for income taxes consists of income taxes in the United States and includes deferred taxes on temporary differences for tax and financial statement purposes.
29
Results of Operations
Comparison of the three months ended June 30, 2026 and 2025
The following table summarizes our results of operations for the three months ended June 30, 2026 and 2025.
|
|
Three Months Ended June 30, |
|
|
Change |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
$ |
|
|
% |
|
||||
(in thousands, except percentage) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenue |
|
$ |
13,505 |
|
|
$ |
6,674 |
|
|
$ |
6,831 |
|
|
|
102.4 |
% |
Cost of revenue |
|
|
2,267 |
|
|
|
1,184 |
|
|
|
1,083 |
|
|
|
91.5 |
% |
Gross profit |
|
|
11,238 |
|
|
|
5,490 |
|
|
|
5,748 |
|
|
|
104.7 |
% |
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Research and development costs |
|
|
2,278 |
|
|
|
1,418 |
|
|
|
860 |
|
|
|
60.6 |
% |
Selling, general and administrative expenses |
|
|
26,886 |
|
|
|
14,532 |
|
|
|
12,354 |
|
|
|
85.0 |
% |
Total operating expenses |
|
|
29,164 |
|
|
|
15,950 |
|
|
|
13,214 |
|
|
|
82.8 |
% |
Loss from operations |
|
|
(17,926 |
) |
|
|
(10,460 |
) |
|
|
(7,466 |
) |
|
|
71.4 |
% |
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Change in fair value of convertible notes payable |
|
|
(4,142 |
) |
|
|
— |
|
|
|
(4,142 |
) |
|
N/A |
|
|
Interest expense |
|
|
(254 |
) |
|
|
(241 |
) |
|
|
(13 |
) |
|
|
5.4 |
% |
Other income (expense), net |
|
|
1,281 |
|
|
|
213 |
|
|
|
1,068 |
|
|
|
501.4 |
% |
Total other expense, net |
|
|
(3,115 |
) |
|
|
(28 |
) |
|
|
(3,087 |
) |
|
|
11025.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss before provision for income tax |
|
|
(21,041 |
) |
|
|
(10,488 |
) |
|
|
(10,553 |
) |
|
|
100.6 |
% |
Provision for income taxes |
|
|
(2 |
) |
|
|
(2 |
) |
|
|
— |
|
|
|
0.0 |
% |
Net loss |
|
$ |
(21,043 |
) |
|
$ |
(10,490 |
) |
|
$ |
(10,553 |
) |
|
|
100.6 |
% |
Revenue. Revenue increased by $6.8 million, or 102.4%, to $13.5 million for the three months ended June 30, 2026, compared to $6.7 million for the three months ended June 30, 2025. The increase was driven primarily by higher adoption of the Vivistim System, as units of IPGs sold, a primary component of the Vivistim System, increased comparably during the period. This revenue growth reflects our continued efforts to increase awareness and expand our commercial organization while maintaining a consistent average selling price of the Vivistim System.
Cost of goods sold and gross margin. Cost of goods sold increased by $1.1 million, or 91.5%, to $2.3 million for the three months ended June 30, 2026, compared to $1.2 million for the three months ended June 30, 2025. While the cost per unit of the underlying product remained relatively consistent year over year, the increase in cost of goods sold was primarily driven by higher sales volume of Vivistim Systems. Gross margin increased to 83.2% in the current period, from 82.3% in the three months ended June 30, 2025. The increase was primarily attributable to inbound freight and tariff costs recognized in cost of goods sold during the period, partially offset by other changes in product and warranty costs.
Research and development costs. Research and development costs increased by $0.9 million, or 60.6%, to $2.3 million for the three months ended June 30, 2026, compared to $1.4 million for the three months ended June 30, 2025. The increase was primarily due to a $0.6 million increase in personnel-related expenses associated with increased headcount and a $0.3 million increase in product development efforts, including external development services.
Selling, general and administrative expenses. Selling, general and administrative expenses increased by $12.4 million, or 85.0%, to $26.9 million for the three months ended June 30, 2026, compared to $14.5 million for the three months ended June 30, 2025. The increase was primarily due to an increase of $7.6 million in personnel-related expenses as a result of increased headcount primarily in our commercial organization, as well as higher commissions related to increased sales of Vivistim Systems. The increase also included $1.7 million in travel, meeting, marketing and branding expenses and $1.9 million in share-based compensation and professional fees.
Total other income (expense), net. Total other expense, net was $3.1 million for the three months ended June 30, 2026, compared to total other expense, net of $28,000 for the three months ended June 30, 2025. The increase in total other expenses was primarily attributable to a $4.1 million loss from the change in the fair value of our Convertible Notes, partially offset by $0.7 million of higher
30
interest income resulting from a higher average cash balance and a $0.2 million gain from changes in the fair value of warrant liabilities.
Comparison of the six months ended June 30, 2026 and 2025
The following table summarizes our results of operations for the six months ended June 30, 2026 and 2025.
|
|
Six Months Ended June 30, |
|
|
Change |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
$ |
|
|
% |
|
||||
(in thousands, except percentage) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenue |
|
$ |
25,579 |
|
|
$ |
12,335 |
|
|
$ |
13,244 |
|
|
|
107.4 |
% |
Cost of revenue |
|
|
4,400 |
|
|
|
2,199 |
|
|
|
2,201 |
|
|
|
100.1 |
% |
Gross profit |
|
|
21,179 |
|
|
|
10,136 |
|
|
|
11,043 |
|
|
|
108.9 |
% |
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Research and development costs |
|
|
3,970 |
|
|
|
2,772 |
|
|
|
1,198 |
|
|
|
43.2 |
% |
Selling, general and administrative expenses |
|
|
52,072 |
|
|
|
28,128 |
|
|
|
23,944 |
|
|
|
85.1 |
% |
Total operating expenses |
|
|
56,042 |
|
|
|
30,900 |
|
|
|
25,142 |
|
|
|
81.4 |
% |
Loss from operations |
|
|
(34,863 |
) |
|
|
(20,764 |
) |
|
|
(14,099 |
) |
|
|
67.9 |
% |
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Change in fair value of convertible notes payable |
|
|
(4,870 |
) |
|
|
— |
|
|
|
(4,870 |
) |
|
N/A |
|
|
Interest expense |
|
|
(611 |
) |
|
|
(480 |
) |
|
|
(131 |
) |
|
|
27.3 |
% |
Other income (expense), net |
|
|
1,563 |
|
|
|
104 |
|
|
|
1,459 |
|
|
|
1402.9 |
% |
Total other expense, net |
|
|
(3,918 |
) |
|
|
(376 |
) |
|
|
(3,542 |
) |
|
|
942.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss before provision for income tax |
|
|
(38,781 |
) |
|
|
(21,140 |
) |
|
|
(17,641 |
) |
|
|
83.4 |
% |
Provision for income taxes |
|
|
(2 |
) |
|
|
(3 |
) |
|
|
1 |
|
|
|
(33.3 |
)% |
Net loss |
|
$ |
(38,783 |
) |
|
$ |
(21,143 |
) |
|
$ |
(17,640 |
) |
|
|
83.4 |
% |
Revenue. Revenue increased by $13.2 million, or 107.4%, to $25.6 million for the six months ended June 30, 2026, compared to $12.3 million for the six months ended June 30, 2025. The increase was driven primarily by higher adoption of the Vivistim System, as units of IPGs sold, a primary component of the Vivistim System, increased comparably during the period. This revenue growth reflects our continued efforts to increase awareness and expand our commercial organization while maintaining a consistent average selling price of the Vivistim System.
Cost of goods sold and gross margin. Cost of goods sold increased by $2.2 million, or 100.1%, to $4.4 million for the six months ended June 30, 2026, compared to $2.2 million for the six months ended June 30, 2025. While the cost per unit of the underlying product remained relatively consistent year over year, the increase in cost of goods sold was primarily driven by higher sales volume of Vivistim Systems and higher product warranty costs. Gross margin increased to 82.8% for the six months ended June 30, 2026, compared to 82.2% for the six months ended June 30, 2025. The increase was primarily attributable to inbound freight and tariff costs recognized in cost of goods sold during the period.
Research and development costs. Research and development costs increased by $1.2 million, or 43.2%, to $4.0 million for the six months ended June 30, 2026, compared to $2.8 million for the six months ended June 30, 2025. The increase was primarily due to an increase of $0.8 million in personnel related expenses associated with increased headcount and a $0.4 million increase in product and related software development expenses, including external development services.
Selling, general and administrative expenses. Selling, general and administrative expenses increased by $23.9 million, or 85.1%, to $52.1 million for the six months ended June 30, 2026, compared to $28.1 million for the six months ended June 30, 2025. The increase was primarily due to a $15.1 million increase in compensation and benefits and share-based compensation associated with increased headcount, primarily in our commercial organization, and higher commissions related to increased sales of Vivistim Systems. The increase also included $4.2 million in travel, meeting, marketing and branding expenses, including costs associated with our name change, and $2.5 million in audit, legal and other professional fees.
31
Total other income (expense), net. Total other expense, net was $3.9 million for the six months ended June 30, 2026, compared to total other expense, net of $0.4 million for the six months ended June 30, 2025. The increase was primarily attributable to a $4.9 million loss from changes in the fair value of our Convertible Notes and $0.1 million of higher interest expense, partially offset by $0.9 million of higher interest income resulting from a higher average cash balance and a $0.2 million gain from changes in the value of warrant liabilities.
Liquidity and Capital Resources
Overview
To date, our primary sources of capital have been private placements of preferred stock, debt financing arrangements, revenue from sales of our Vivistim System, and net proceeds from our IPO in May 2026. As of June 30, 2026, we had cash and cash equivalents of $177.1 million and an accumulated deficit of approximately $196.6 million. During the three months ended March 31, 2026, we issued Convertible Promissory Notes in an aggregate principal amount of $40.0 million. In May 2026, we completed our IPO and received proceeds of approximately $134.0 million.
Funding Requirements
We expect our operating expenses to continue to increase for the foreseeable future as we continue to make significant investments in our commercial organization, seek to expand our marketing programs to help facilitate further awareness and adoption of our Vivistim System, continue to make investments in research and development, including regulatory affairs and clinical studies, and as we continue to scale our infrastructure. Moreover, we expect to incur additional expenses associated with operating as a public company, including costs related to legal, accounting, insurance, exchange listing and SEC requirements, and investor relations.
Our future liquidity and capital requirements will depend on numerous factors, including:
32
Based on our current operating plan, we believe that our cash and cash equivalents, which include the net proceeds from our IPO in May 2026, will be sufficient to fund our planned operating expenses and meet our obligations for at least the next 12 months from the issuance date of the condensed financial statements. We have based this estimate on assumptions that may prove to be incorrect, and we could use our available capital resources sooner than we currently expect.
If these sources are insufficient to satisfy our liquidity requirements, we may seek additional financing or to raise any necessary additional capital through public or private equity offerings or debt financings, credit or loan facilities or a combination of one or more of these or other funding sources. Additional funds may not be available to us on acceptable terms or at all. If we fail to obtain necessary capital when needed on acceptable terms, or at all, we could be forced to delay, limit, reduce or terminate our commercial efforts, product development programs or other operations, and such failure would have a negative impact on our financial condition and our ability to execute our business plan. If we raise additional funds by issuing equity securities or convertible debt, our stockholders will suffer dilution and the terms of any financing may adversely affect the rights of our stockholders. In addition, as a condition to providing additional funds to us, future investors may demand, and may be granted, rights superior to those of existing stockholders. If we raise additional capital through collaboration agreements, licensing arrangements or marketing and distribution or other similar arrangements, we may have to relinquish valuable rights, future revenue streams, research programs or product or grant licenses that may not be favorable to us. Debt financing, if available, is likely to involve restrictive covenants limiting our flexibility in conducting future business activities, and, in the event of insolvency, debt holders would be repaid before holders of our equity securities received any distribution of our corporate assets.
Cash Flows
The following table summarizes our cash flows for the six months ended June 30, 2026 and 2025:
|
|
Six Months Ended June 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
(in thousands) |
|
|
|
|
|
|
||
Net cash provided by (used in) |
|
|
|
|
|
|
||
Operating activities |
|
$ |
(33,398 |
) |
|
$ |
(20,722 |
) |
Investing activities |
|
|
(1,582 |
) |
|
|
(23 |
) |
Financing activities |
|
|
178,483 |
|
|
|
32,435 |
|
Net increase in cash and cash equivalents |
|
$ |
143,503 |
|
|
$ |
11,690 |
|
Operating Activities
Net cash used in operating activities was $33.4 million for the six months ended June 30, 2026, compared to $20.7 million for the six months ended June 30, 2025. Net cash used in operating activities for the six months ended June 30, 2026 was primarily due to our net loss of $38.8 million, as well as increases in accounts receivable, inventory, and other assets of $1.2 million, $1.5 million, and $1.0 million, respectively. These uses of cash were partially offset by non-cash adjustments for the change in fair value of convertible notes payable of $4.9 million and share-based compensation of $2.0 million, as well as increases in accounts payable and accrued liabilities and other of $2.1 million. Net cash used for the six months ended June 30, 2025 was primarily due to our net loss of $21.1 million and increases in inventory of $1.1 million, partially offset by non-cash adjustments for share-based compensation of $0.6 million, as well as other changes in operating assets and liabilities.
33
Investing activities
Net cash used in investing activities was $1.6 million for the six months ended June 30, 2026, compared to $23.0 thousand for the six months ended June 30, 2025. Net cash used in investing activities in each case consisted of purchases of property and equipment.
Financing activities
Net cash provided by financing activities was $178.5 million for the six months ended June 30, 2026, attributable primarily to $139.5 million in proceeds from the issuance of common stock in our initial public offering, net of underwriting discounts and commissions, $40.0 million in aggregate proceeds from the issuance of Convertible Notes, including $25.9 million from related parties, $0.5 million received upon the exercise of common stock options, and $0.4 million received upon the cash exercise of redeemable convertible preferred stock warrants. The proceeds were offset by the payments of $2.0 million of deferred offering costs.
Net cash provided by financing activities was $32.4 million for the six months ended June 30, 2025, attributable primarily to $29.6 million in net proceeds from the issuance of Series F redeemable convertible preferred stock, $2.6 million in net proceeds from the related party issuance of Series F redeemable convertible preferred stock, and $0.2 million received upon the exercise of common stock options.
Loan and Security Agreement with Horizon
On December 29, 2023, we entered into a Loan and Security Agreement (the “Loan and Security Agreement”) with Horizon Technology Finance Corporation. On June 1, 2024, Horizon Technology Finance Corporation assigned all of its right, title and interest in and to the loans outstanding under the Loan and Security Agreement and related warrants to Horizon Funding II, LLC, its wholly-owned subsidiary (together with Horizon Technology Finance Corporation, “Horizon”). The Loan and Security Agreement provides for term loans of up to an aggregate principal amount of $30.0 million, available in four equal tranches of $7.5 million. Each tranche comprises two equal loans of $3,750,000. As of June 30, 2026, we had $7.5 million in aggregate principal outstanding under the Loan and Security Agreement. Although the Loan and Security Agreement initially provided for term loans of up to $30.0 million in four tranches of $7.5 million each, the availability period for the remaining tranches expired on December 31, 2025, and no additional amounts are available to be drawn.
The tranches are subject to various conditions and requirements set out in the Loan and Security Agreement. The availability of the first tranche was subject to, among other things, our completing an equity offering of at least $15.0 million on or before December 31, 2023. We satisfied the conditions of the first tranche and drew down $7.5 million in December 2023. The availability of the second tranche was subject to, among other things, our completing an equity offering of at least $15.0 million on or before December 31, 2024. We did not draw down this second tranche. The availability of the third tranche was subject to, among other things, (i) our achievement of at least $20.0 million of trailing 12-month revenue as of the funding date and (ii) our completing an equity offering of at least $30.0 million on or before June 20, 2025. We did not draw down this third tranche. The availability of the fourth tranche is subject to, among other things, (i) our achievement of at least $25.0 million of trailing 12-month revenue as of the funding date and (ii) our completing an equity offering of at least $30.0 million on or before December 31, 2025. We did not draw down this fourth tranche. Our ability to draw additional loans under the Loan and Security Agreement expired on December 31, 2025.
Pursuant to the Loan and Security Agreement, we are required to issue a warrant to purchase shares of our securities in the event that we draw down a tranche following satisfaction of the applicable conditions. In connection with our draw down of the first tranche under the Loan and Security Agreement, we issued first tranche warrants to purchase such number of securities representing an aggregate of $262,500 to Horizon. The first tranche warrants are exercisable, at the election of Horizon, for (i) shares of Series E-2 redeemable convertible preferred stock at an exercise price of $2.5443 per share or (ii) shares of Series F redeemable convertible preferred stock at an exercise price of $2.6317 per share, and expire ten years from the date of issuance.
The Loan and Security Agreement matures on January 1, 2029. Borrowings under the Loan and Security Agreement accrue interest at an annual rate equal to the greater of (i) The Wall Street Journal (or any successor thereto) prime rate (subject to a floor of 8.50%) plus 3.75% and (ii) 12.25%. We are required to make monthly payments of interest only through January 1, 2028. Following
34
such date, we are required to make monthly payments of principal and accrued interest through maturity. The unpaid balance of principal and accrued interest is due at maturity.
The Loan and Security Agreement provides that we can at any time prepay, in whole but not in part, amounts outstanding under the Loan and Security Agreement, subject to a prepayment premium on the outstanding principal amount of the loans being repaid equal to (i) 3.0% if such prepayment occurs on or prior to the second anniversary of the Loan and Security Agreement; (ii) 2.0% if such prepayment occurs after the second anniversary, and on or prior to the fourth anniversary, of the Loan and Security Agreement; and (iii) 1.0% if such prepayment occurs after the fourth anniversary of the Loan and Security Agreement and prior to maturity.
We are required to make a final payment of $131,250 for each loan funded on the earlier of (i) the date that we prepay all of the outstanding principal of such loan, (ii) the date of acceleration of the balance of such loan by the Lender, and (iii) the maturity.
Amounts outstanding under the Loan and Security Agreement are secured by substantially all of our assets, excluding intellectual property.
The Loan and Security Agreement includes customary affirmative and negative covenants and events of default. Upon the occurrence and continuance of an event of default, Horizon may demand immediate repayment of all principal and unpaid interest under the Loan and Security Agreement, and exercise remedies against us and the collateral securing our obligations under the Loan and Security Agreement. Events of default under the Loan and Security Agreement include, among other things: (i) insolvency, bankruptcy or similar proceedings subject to a certain grace period in respect of any involuntary insolvency, bankruptcy or similar proceedings; (ii) failure to pay any debts due under the Loan and Security Agreement or other indebtedness on a timely basis; (iii) failure to observe any covenant or other terms under the Loan and Security Agreement or the other Loan Documents (as defined in the Loan and Security Agreement), some of which are subject to a certain cure period; (iv) occurrence of a material adverse change; (v) material misrepresentations; and (vi) entry of certain final, non-appealable judgments against us in excess of $250,000 not paid or bonded within 10 days of such entry.
As of June 30, 2026, we were in compliance with all covenants contained in the Loan and Security Agreement.
2026 Convertible Notes
From January 30, 2026 through February 11, 2026, we issued convertible promissory notes to certain investors in an aggregate principal amount of $40.0 million (the “Convertible Notes”). The Convertible Notes were scheduled to mature on January 30, 2028 (the “Maturity Date”) and bore no interest for the first six months following the date of issuance, after which they would have accrued paid-in-kind interest at 7.0% per annum. Immediately prior to the closing of our IPO in May 2026, all outstanding Convertible Notes automatically converted into an aggregate of 3,333,324 shares of our common stock in accordance with their terms. No Convertible Notes remained outstanding as of June 30, 2026.
Contractual Obligations and Commitments
As of June 30, 2026, our contractual obligations and commitments consist primarily of obligations under our Loan and Security Agreement, operating leases and purchase commitments with third-party suppliers.
As of June 30, 2026, we had approximately $7.5 million in principal outstanding under the Loan and Security Agreement. Borrowings under the Loan and Security Agreement accrue interest at an annual rate equal to the greater of (i) The Wall Street Journal (or any successor thereto) prime rate (subject to a floor of 8.50%) plus 3.75% and (ii) 12.25%. We are required to make monthly payments of interest only through January 1, 2028. Following such date, we are required to make monthly payments of principal and accrued interest through maturity. The unpaid balance of principal and accrued interest is due at maturity. Amounts outstanding under the Loan and Security Agreement are secured by substantially all of our assets, excluding intellectual property. Because the interest rate is variable, future interest obligations are not fixed. For additional information, see Note 6 – Convertible Notes and Notes Payable to our condensed financial statements included in this Quarterly Report.
35
We lease office and warehouse space under non-cancellable operating lease agreements. These leases require fixed monthly payments and may also include variable payments for our proportionate share of property taxes and common area operating expenses. Variable lease payments are not included in the measurement of lease liabilities and are recognized as incurred. For additional information, see Note 7 – Leases to our condensed financial statements included in this Quarterly Report.
We rely on third-party contract manufacturers and suppliers and enter into purchase commitments in the ordinary course of business. These arrangements are generally executed through purchase orders and, in certain cases, include non-cancelable purchase commitments and binding forecast obligations. As of June 30, 2026, we had approximately $9.3 million of outstanding non-cancelable purchase commitments expected to be fulfilled within the next twelve months. For additional information, see Note 13 – Commitments and Contingencies to our condensed financial statements included in this Quarterly Report.
From time to time, we may become a party to claims, legal actions and complaints arising in the ordinary course of business. As of June 30, 2026, we are not aware of any material pending legal proceedings that we believe would have a material adverse effect on our financial condition, results of operations or cash flows. For additional information, see Note 13 – Commitments and Contingencies to our condensed financial statements included in this Quarterly Report.
Off-Balance Sheet Arrangements
Through June 30, 2026, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structured finance or special purpose entities that would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
Critical Accounting Policies, Significant Judgments and Use of Estimates
The preparation of our financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires us to make estimates and judgments that affect the amounts reported in the financial statements and related notes thereto. Critical accounting estimates are those estimates that, in accordance with GAAP, involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial statements. Management has determined that our most critical accounting estimates are those relating to share-based compensation. Although we believe that the estimates we use are reasonable, due to the inherent uncertainty involved in making these estimates, actual results reported in future periods could differ materially from those estimates. For further discussion about our accounting policies, see Note 3 to our condensed financial statements included in this Quarterly Report and the section titled “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” in our prospectus dated May 7, 2026. There have been no significant or material changes in our critical accounting policies since December 31, 2025, except that, following our IPO, the fair value of our common stock is based on its publicly quoted market price and is no longer determined using valuation methodologies applicable to a privately held company.
Emerging Growth Company and Smaller Reporting Company Status
The JOBS Act permits EGCs such as us to take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an EGC to delay the adoption of some accounting standards until those standards would otherwise apply to private companies. We have elected to use the extended transition period for any other new or revised accounting standards during the period in which we remain an EGC; however, we may adopt certain new or revised accounting standards early. As a result, we will not be subject to the same new or revised accounting standards as other public companies that are not EGCs and our financial statements may not be comparable to other public companies that comply with new or revised accounting pronouncements as of public company effective dates.
We will remain an emerging growth company until the earliest of: (i) the last day of the fiscal year following the fifth anniversary of the consummation of our IPO (i.e., the fiscal year ended December 31, 2031); (ii) the last day of the fiscal year in which we have total annual gross revenue of at least $1.235 billion; (iii) the last day of the fiscal year in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
36
which would occur if the market value of our common stock held by non-affiliates exceeded $700.0 million as of the last business day of the second fiscal quarter of such year; or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
We are also a “smaller reporting company” as defined by Rule 12b-2 of the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an EGC. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as our voting and non-voting common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100.0 million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter. We cannot predict if investors will find our shares of common stock less attractive because we may rely on these exemptions. If some investors find our shares of common stock less attractive as a result, there may be a less active trading market for shares of our common stock and our share price may be more volatile.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As of June 30, 2026, our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that the Company’s disclosure controls and procedures were not effective as of June 30, 2026 due to the material weakness in internal control over financial reporting described below.
Material Weakness in Internal Control over Financial Reporting
Our management identified a material weakness in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. Specifically, we did not design and maintain effective controls over the review of the inputs in the calculation of net loss per share attributable to common stockholders. The material weakness resulted in a revision to the weighted average number of shares and net loss per share attributable to common stockholders within the statement of operations and related disclosures for the year ended December 31, 2025. Additionally, this material weakness could result in misstatements to net loss per share attributable to common stockholders and related disclosures that would result in a material misstatement to the annual or interim financial statements that would not be prevented or detected.
Plan to Remediate the Material Weakness
In response to the previously identified material weakness, in the quarter ended March 31, 2026, our management implemented a new control and enhanced our internal control over financial reporting. These remediation measures include the design and implementation of a control over the calculation of weighted-average shares outstanding and net loss per share, including additional review by qualified accounting personnel. We have applied this control in connection with the preparation of our financial information for each of the quarters ended March 31, 2026 and June 30, 2026. Our management continues to evaluate the effectiveness of these remediation efforts and will continue to monitor the design and operating effectiveness of the new control. The material weakness will
37
not be considered remediated until the applicable control have been designed, implemented, and operated effectively for a sufficient period of time.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended June 30, 2026 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. The Company continued to operate and evaluate the remediation control implemented during the quarter ended March 31, 2026.
Limitations on Effectiveness of Controls and Procedures
In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
38
PART II: OTHER INFORMATION
Item 1. Legal Proceedings
We are not currently subject to any material legal proceedings. From time to time, we are and may in the future be involved in legal proceedings or subject to claims incident to the ordinary course of business. Regardless of the outcome, such proceedings or claims can have an adverse impact on us because of defense and settlement costs, diversion of resources and other factors, and there can be no assurances that favorable outcomes will be obtained.
Item 1A. Risk Factors
Investing in our common stock involves a high degree of risk. In addition to the information set forth in this Quarterly Report, including our financial statements and the related notes and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” you should consider carefully the factors discussed in Part II, Item 1A, “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, filed with the SEC on June 4, 2026. During the three months ended June 30, 2026, there were no material changes to the risk factors previously disclosed in that report. The occurrence of any of the events or developments described in that report could harm our business, financial condition, results of operations and growth prospects. In such an event, the market price of our common stock could decline, and you may lose all or part of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations and the market price of our common stock.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Unregistered Sales of Equity Securities
Immediately prior to the completion of our IPO on May 11, 2026: (i) all outstanding shares of our redeemable convertible preferred stock automatically converted into an aggregate of 18,831,853 shares of common stock; and (ii) our outstanding convertible promissory notes, together with any accrued paid-in-kind interest, automatically converted into an aggregate of 3,333,324 shares of common stock.
The shares of common stock issued upon the conversions described above were issued to existing security holders in reliance on the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”) because no commission or other remuneration was paid or given, directly or indirectly, for soliciting the conversions and, to the extent applicable, Section 4(a)(2) of the Securities Act as transactions by an issuer not involving a public offering.
Use of Proceeds from our Public Offering of Common Stock
On May 11, 2026, we completed our IPO of common stock, pursuant to which we issued and sold 10,000,000 shares of our common stock at a public offering price of $15.00 per share.
All shares issued and sold in the IPO were registered under the Securities Act pursuant to a Registration Statement on Form S-1 (File No. 333-295160), as amended (the “Registration Statement”), declared effective by the SEC on May 7, 2026.
We received net proceeds of approximately $134.0 million after deducting underwriting discounts and commissions of $10.5 million and offering expenses of $5.5 million. None of the expenses associated with the IPO were paid to directors, officers, persons owning 10% or more of any class of equity securities, or to our affiliates. BofA Securities, Inc., J.P. Morgan Securities LLC, Goldman Sachs & Co. LLC, BTIG, LLC, Nomura Securities International, Inc. and WR Securities, LLC acted as managing underwriters for the offering.
39
The net proceeds from our IPO have been invested primarily in savings and money market accounts. There has been no material change in the expected use of the net proceeds from our IPO as described in our prospectus filed pursuant to Rule 424(b)(4) under the Securities Act with the SEC on May 8, 2026.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
(a) None.
(b) None.
(c) During the three months ended June 30, 2026,
Item 6. Exhibits
Exhibit |
|
|
|
Incorporated by Reference |
||||||||
Number |
|
Description of Document |
|
Form |
|
Date |
|
Number |
|
Exhibit |
|
Filed / Furnished Herewith |
|
|
|
|
|
|
|
|
|
|
|
|
|
3.1 |
|
|
8-K |
|
5/11/2026 |
|
001-43275 |
|
3.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3.2 |
|
|
8-K |
|
5/11/2026 |
|
001-43275 |
|
3.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.1 |
|
|
S-1 |
|
4/17/2026 |
|
333-295160 |
|
4.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.2 |
|
|
S-1 |
|
4/17/2026 |
|
333-295160 |
|
4.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.3 |
|
|
S-1 |
|
4/17/2026 |
|
333-295160 |
|
4.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.1# |
|
|
S-1 |
|
4/17/2026 |
|
333-295160 |
|
10.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.2# |
|
|
S-1 |
|
4/17/2026 |
|
333-295160 |
|
10.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.2.1# |
|
Form of Stock Option Agreement under the 2007 Stock Option Plan, as amended. |
|
S-1 |
|
4/17/2026 |
|
333-295160 |
|
10.2.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.3# |
|
|
S-1 |
|
4/17/2026 |
|
333-295160 |
|
10.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.3.1# |
|
Form of Stock Option Agreement under the 2022 Equity Incentive Plan, as amended. |
|
S-1 |
|
4/17/2026 |
|
333-295160 |
|
10.3.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.3.2#
|
|
Form of Restricted Stock Purchase Agreement under the 2022 Equity Incentive Plan, as amended. |
|
S-1 |
|
4/17/2026 |
|
333-295160 |
|
10.3.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.4# |
|
|
S-8 |
|
5/8/2026 |
|
333-295709 |
|
10.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.4.1# |
|
Form of Option Award Agreement under the 2026 Incentive Award Plan. |
|
S-8 |
|
5/8/2026 |
|
333-295709 |
|
10.3.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40
Exhibit |
|
|
|
Incorporated by Reference |
||||||||
Number |
|
Description of Document |
|
Form |
|
Date |
|
Number |
|
Exhibit |
|
Filed / Furnished Herewith |
10.4.2# |
|
Form of Restricted Stock Unit Award Agreement under the 2026 Incentive Award Plan. |
|
S-8 |
|
5/8/2026 |
|
333-295709 |
|
10.3.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.5# |
|
|
S-8 |
|
5/8/2026 |
|
333-295709 |
|
10.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.6# |
|
|
S-1 |
|
4/17/2026 |
|
333-295160 |
|
10.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.7# |
|
Restated Employment Agreement between the Registrant and Richard Foust, dated April 3, 2026. |
|
S-1 |
|
4/17/2026 |
|
333-295160 |
|
10.12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.8# |
|
Restated Employment Agreement between the Registrant and Nelson Bunker Curnes, dated April 3, 2026. |
|
S-1 |
|
4/17/2026 |
|
333-295160 |
|
10.13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.9# |
|
|
S-1 |
|
4/17/2026 |
|
333-295160 |
|
10.14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.10# |
|
|
S-1 |
|
4/17/2026 |
|
333-295160 |
|
10.15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.11# |
|
Restated Employment Agreement between the Registrant and Prashant Rawat, dated April 3, 2026. |
|
S-1 |
|
4/17/2026 |
|
333-295160 |
|
10.16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.12# |
|
Restated Employment Agreement between the Registrant and Chase Leavitt, dated April 3, 2026. |
|
S-1 |
|
4/17/2026 |
|
333-295160 |
|
10.17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.13# |
|
Executive and Key Employee Severance and Change in Control Plan. |
|
S-1 |
|
4/17/2026 |
|
333-295160 |
|
10.18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.14^ |
|
|
S-1 |
|
4/17/2026 |
|
333-295160 |
|
4.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.15^ |
|
|
S-1 |
|
4/17/2026 |
|
333-295160 |
|
4.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.1 |
|
|
|
|
|
|
|
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.2 |
|
|
|
|
|
|
|
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32.1 |
|
|
|
|
|
|
|
|
|
|
** |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.INS |
|
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
|
|
|
|
|
|
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
|
|
|
101.SCH |
|
Inline XBRL Taxonomy Extension Schema Document |
|
|
|
|
|
|
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
|
|
|
41
Exhibit |
|
|
|
Incorporated by Reference |
||||||||
Number |
|
Description of Document |
|
Form |
|
Date |
|
Number |
|
Exhibit |
|
Filed / Furnished Herewith |
101.CAL |
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
|
|
|
|
|
|
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
|
|
|
101.DEF |
|
Inline XBRL Taxonomy Extension Definition Linkbase Document |
|
|
|
|
|
|
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
|
|
|
101.LAB |
|
Inline XBRL Taxonomy Extension Label Linkbase Document |
|
|
|
|
|
|
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
|
|
|
101.PRE |
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document |
|
|
|
|
|
|
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
|
|
|
104 |
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
|
|
|
|
|
|
|
|
|
|
# Indicates management contract or compensatory plan.
^ Pursuant to Item 601(a)(5) of Regulation S-K, the registrant has omitted certain of the schedules (or similar attachments) to this exhibit.
* Filed herewith.
** Furnished herewith.
42
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
MOBIA MEDICAL, INC. |
|
|
(Registrant) |
|
|
|
Date: August 11, 2026 |
|
/s/ RICHARD FOUST |
|
|
Richard Foust |
|
|
Chief Executive Officer (Principal Executive Officer) |
|
|
|
Date: August 11, 2026 |
|
/s/ BUNKER CURNES |
|
|
Bunker Curnes |
|
|
Chief Financial Officer (Principal Financial Officer) |
43
Exhibit 31.1
CERTIFICATION PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Richard Foust, certify that:
Date: August 11, 2026 |
|
By: |
/s/ RICHARD FOUST |
|
|
|
Richard Foust |
|
|
|
Chief Executive Officer (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Bunker Curnes, certify that:
Date: August 11, 2026 |
|
By: |
/s/ BUNKER CURNES |
|
|
|
Bunker Curnes |
|
|
|
Chief Financial Officer (Principal Financial Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Mobia Medical, Inc. (the “Company”) on Form 10-Q for the fiscal quarter ended June 30, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Richard Foust, Chief Executive Officer of the Company, and Bunker Curnes, Chief Financial Officer of the Company, respectively, do each hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
Date: August 11, 2026 |
|
|
|
|
|
|
|
/s/ RICHARD FOUST |
|
|
|
Richard Foust |
|
|
|
Chief Executive Officer (Principal Executive Officer) |
|
|
|
|
|
|
|
/s/ BUNKER CURNES |
|
|
|
Bunker Curnes |
|
|
|
Chief Financial Officer (Principal Financial Officer) |
|
|
|
|
|
|
|