Pulmonx Corp

1. Formation and Business of the Company

The Company

Pulmonx Corporation (the “Company”) was incorporated in the state of California in December 1995 as Pulmonx and reincorporated in the state of Delaware in December 2013. The Company is a commercial-stage medical technology company that provides a minimally invasive treatment for patients with severe emphysema, a form of chronic obstructive pulmonary disease (“COPD”). The Company’s solution, which is comprised of the Zephyr Endobronchial Valve (“Zephyr Valve”), the Chartis Pulmonary Assessment System (“Chartis System”) and the LungTraX Platform, is designed to treat a broad pool of patients for whom medical management has reached its limits and either do not want or are ineligible for surgical approaches. The Company has subsidiaries in Germany, Switzerland, Australia, the United Kingdom, Italy, France, Hong Kong and Japan.

Liquidity and Going Concern

The Company has incurred operating losses and negative cash flows from operations to date and has an accumulated deficit of $553.7 million as of September 30, 2026. During the nine months ended September 30, 2026 and September 30, 2025, the Company used $18.5 million and $25.3 million of cash in its operating activities, respectively. As of September 30, 2026, the Company had cash and cash equivalents of $52.7 million. Historically, the Company’s activities have been financed through the sale of its products, the sale of equity securities, and debt financing arrangements.

The Company’s unaudited interim condensed consolidated financial statements have been prepared on the basis of the Company continuing as a going concern for the next 12 months. Management believes that the Company’s existing cash and cash equivalents will allow the Company to continue its planned operations for at least the next 12 months from the date of the issuance of these unaudited interim condensed consolidated financial statements.

2. Summary of Significant Accounting Policies

Basis of Presentation

The Company’s unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”).

Principles of Consolidation

The unaudited interim condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Unaudited Interim Financial Information

The condensed consolidated balance sheet as of December 31, 2025 was derived from the Company’s audited financial statements, but does not include all disclosures required by U.S. GAAP. The accompanying unaudited interim condensed consolidated financial statements as of September 30, 2026 and for the three and nine months ended September 30, 2026 and 2025, have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), for interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. Accordingly, these financial statements should be read in conjunction with the audited financial statements as of and for the fiscal year ended December 31, 2025 and notes thereto, included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 filed with the SEC on March 10, 2026. In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the Company’s condensed consolidated financial position as of September 30, 2026 and condensed consolidated results of operations for the three and nine months ended September 30, 2026 and 2025 and condensed consolidated cash flows for the nine months ended September 30, 2026 and 2025 have been made. The results of operations for the three and nine months ended September 30, 2026 are not necessarily indicative of the results of operations that may be expected for the fiscal year ending December 31, 2026.

Use of Estimates

The preparation of unaudited interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited interim condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results may ultimately materially differ from these estimates and assumptions.

Significant estimates and assumptions include reserves and write-downs related to inventories, classification of short-term and long-term inventories, the recoverability of long-term assets, stock-based compensation, goodwill, fair value of warrant liability, deferred tax assets and related valuation allowances and impact of contingencies.

Fair Value of Financial Instruments

The carrying amounts of the Company’s financial instruments consisting of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate fair value due to their relatively short maturities. Based on the borrowing rates currently available to the Company for debt with similar terms and consideration of default and credit risk, the carrying value of the term loan approximates its fair value. The fair value of marketable debt securities is estimated using Level 1 and Level 2 inputs, and the fair value of the warrant liability is estimated using Level 3 inputs (Note 4).

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of risk consist principally of cash, cash equivalents and accounts receivable. The Company maintains its cash and cash equivalents balances with established financial institutions and, at times, such balances with any one financial institution may be in excess of the Federal Deposit Insurance Corporation (“FDIC”) insured limits. As of September 30, 2026 and December 31, 2025, the Company also had cash on deposit with foreign banks of approximately $9.5 million and $13.4 million, respectively, that was not federally insured.

The Company earns revenue primarily from the sale of its products to hospitals and other customers such as distributors. Sales of Zephyr Valves and delivery catheters accounted for most of the Company’s revenue for the nine months ended September 30, 2026 and September 30, 2025. The Company’s accounts receivable are derived from revenue earned from customers. The Company performs ongoing credit evaluations of its customers’ financial condition and generally requires no collateral from its customers. For the three and nine months ended September 30, 2026 and September 30, 2025, no customer accounted for more than 10% of revenue. As of September 30, 2026 and December 31, 2025, no customer accounted for more than 10% of accounts receivable.

The Company relies on single source suppliers for the components, sub-assemblies and materials for its products. These components, sub-assemblies and materials are critical and there are no or relatively few alternative sources of supply. The Company’s suppliers have generally met the Company’s demand for their products and services on a timely basis in the past.

Foreign Currency Translation and Transaction Gains and Losses

The functional currencies of the Company’s wholly owned subsidiaries in Switzerland, Germany, Australia, the United Kingdom, France and Hong Kong are the Swiss franc. The functional currency of the Company’s subsidiaries in Italy and Japan is the Euro and Yen, respectively. Accordingly, asset and liability accounts of Switzerland, France, Germany, Australia, the United Kingdom, Italy, Hong Kong and Japan operations are translated into U.S. dollars using the current exchange rate in effect at the balance sheet date and equity accounts are translated into U.S. dollars using historical rates. The revenues and expenses are translated using the average exchange rates in effect during the period, and gains and losses from foreign currency translation adjustments are included as a component of accumulated other comprehensive income in the condensed consolidated balance sheet. Foreign currency translation adjustments are recorded in other comprehensive (loss) income in the condensed consolidated statements of operations and comprehensive loss and were $(0.3) million and $(0.4) million during the three months ended September 30, 2026 and September 30, 2025, respectively, and $(0.6) million and $0.1 million during the nine months ended September 30, 2026 and September 30, 2025, respectively.

Foreign currency transaction gains and losses are included in other income, net in the condensed consolidated statements of operations and comprehensive loss and were $0.2 million and $0.8 million during the three months ended September 30, 2026 and September 30, 2025, respectively, and less than $0.1 million and $0.8 million during the nine months ended September 30, 2026 and September 30, 2025, respectively.

Credit Losses—Accounts Receivable

Accounts receivable are recorded at the amounts billed less estimated allowances for credit losses for any potential uncollectible amounts. The Company continually monitors customer payments and maintains an allowance for estimated losses resulting from a customer’s inability to make required payments. The Company considers factors such as historical experience, credit quality, age of the accounts receivable balances, geographic related risks and economic conditions that may affect a customer’s ability to pay. Accounts receivable are written-off and charged against an allowance for credit losses when the Company has exhausted collection efforts without success. As of September 30, 2026 and December 31, 2025, accounts receivable is presented net of an allowance for credit losses of less than $0.1 million and less than $0.1 million, respectively.

Common stock warrants

The Company accounts for common stock warrants as either equity-classified or liability-classified instruments based on an assessment of the common stock warrant’s specific terms and applicable authoritative guidance included in ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the common stock warrants are freestanding financial instruments pursuant to ASC 480, whether the common stock warrants meet the definition of a liability pursuant to ASC 480, and whether the common stock warrants meet all of the requirements for equity classification under ASC 815. This assessment, which requires the use of professional judgment, is conducted at the time of common stock warrant issuance and as of each subsequent reporting date while the common stock warrants are outstanding.

The common stock warrants that meet all of the criteria for equity classification are required to be recorded as a component of additional paid-in capital at the time of issuance, or when the conditions for equity classification are met, and are not remeasured. The common stock warrants that do not meet the required criteria for equity classification are classified as liabilities. The Company adjusts such common stock warrants to fair value at each reporting period until the common stock warrants are exercised or expire. Any change in fair value is recognized in other income, net in the Company’s condensed consolidated statements of operations and comprehensive loss.

Net Loss per Share Attributable to Common Stockholders

Basic net loss per common share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of common stock outstanding during the period, without consideration of potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common stock and potentially dilutive securities assuming the dilutive effect of outstanding stock options, unvested restricted stock units, shares issuable related to the employee stock purchase plan, and common stock warrants. Because the Company has reported a net loss for all periods presented, diluted net loss per common share is the same as basic net loss per common share for those periods.

3. Recent Accounting Pronouncements

Recent Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires disclosure in the notes to the financial statements of specified information about certain costs and expenses. The amendments are effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments should be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU, or retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements and related disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted improvements to the Accounting for Internal-Use Software, to modernize the accounting for software costs that are accounted for under Subtopic 350-40. ASU 2025-06 removes all references to prescriptive and sequential software development stages throughout Subtopic 350-40. Therefore, an entity is required to start capitalizing software costs when both of the following occur: 1) Management has authorized and committed to funding the software project and 2) It is probable that the project will be completed and the software will be used to perform the function intended. The amendments in ASU 2025-06 are effective for fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements and related disclosures.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. This ASU clarifies and improves existing interim reporting guidance by consolidating disclosure requirements within Topic 270 and introducing a disclosure principle requiring entities to disclose events and changes occurring after the most recent annual reporting period that are expected to have a material effect on the entity’s financial condition or results of operations. The ASU does not introduce significant changes to recognition or measurement guidance. This ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact the adoption of this ASU will have on its consolidated financial statements’ disclosures.

In December 2025, the FASB issued ASU 2025-12, Codification Improvements. This ASU addresses suggestions received from stakeholders regarding the ASC and makes other incremental improvements to GAAP. The update represents changes to the ASC that clarify, correct errors in or make other improvements to a variety of topics that are intended to make it easier to understand and apply. This ASU is effective for fiscal years beginning after December 15, 2026 and interim periods within those fiscal years. Entities are required to apply the amendments to ASC 260 retrospectively. All other amendments may be applied prospectively or retrospectively. The Company is currently evaluating the impact the adoption of this ASU will have on its consolidated financial statements and related disclosures.

All other newly issued accounting pronouncements not yet effective have been deemed either immaterial or not applicable.

4. Fair Value Measurements

Assets and liabilities recorded at fair value in the consolidated financial statements are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels which are directly related to the amount of subjectivity associated with the inputs to the valuation of these assets or liabilities are as follows:

Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date.

Level 2—Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.

Level 3—Unobservable inputs for the asset or liability only used when there is little, if any, market activity for the asset or liability at the measurement date. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value.

Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis—Financial assets and liabilities held by the Company measured at fair value on a recurring basis include money market funds and marketable securities.

Assets and Liabilities Measured and Recorded at Fair Value on a Nonrecurring Basis—The Company determines the fair value of long-lived assets held and used by reference to independent appraisals, quoted market prices (e.g., an offer to purchase) and other factors. An impairment charge is recorded when the carrying value of the asset exceeds its fair value. There have been no impairment charges recorded to date. Based on the borrowing rates currently available to the Company for debt with similar terms and consideration of default and credit risk, the carrying value of the term loan approximates the fair value. The fair value of the term loan is estimated using Level 2 inputs.

Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability.

The following tables summarize the types of assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands):

There wereno liabilities measured at fair value on a recurring and non-recurring basis as of December 31, 2025.

As of September 30, 2026 and December 31, 2025, the Company didnot hold any marketable securities.

The Company values the common stock warrant liability using the probability-weighted Black-Scholes Merton option-pricing model using unobservable inputs including the expected term, expected volatility, risk-free interest rate, dividend yield and probability of Additional Loan Draws occurring (see Notes 6 and 7). The common stock warrant liability was valued using the following assumptions:

The probability assessment considers both the likelihood of the Company satisfying certain conditions, including specified revenue milestones, which give the Company the option to draw future debt tranches, as well as the likelihood that the Company will exercise the right to draw one or more future debt tranches. The probability was not a material input to the value of the common stock warrant liability.

The change in fair value of the common stock warrant liability is summarized below (in thousands):

5. Balance Sheet Components

Cash and Cash Equivalents

The Company’s cash and cash equivalents consist of the following (in thousands):

Inventory

Inventory consists of the following (in thousands):

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following (in thousands):

Capitalized Implementation Costs of a Hosting Arrangement

The Company has several software systems that are cloud-based hosting arrangements with service contracts. The Company accounts for costs incurred in connection with the implementation of these various software systems under ASU 2018-15, Intangibles—Goodwill and Other—Internal Use Software (Subtopic 350–40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. The Company expenses all costs (internal and external) that are incurred in the planning and post-implementation operation stages. As of September 30, 2026 and December 31, 2025, the Company has capitalized $0.8 million and $0.9 million in implementation costs, net of amortization, respectively. The capitalized costs are amortized on a straight-line basis over the non-cancelable contract terms, which are generally three tofive years. As of September 30, 2026, the capitalized costs of $0.2 million and $0.6 million were included in prepaid expenses and other current assets, and other long-term assets, respectively. Amortization expense, which was included in selling, general and administrative expenses, was $0.1 million and $0.1 million for the three months ended September 30, 2026 and September 30, 2025, respectively, and $0.2 million and $0.1 million for the nine months ended September 30, 2026 and September 30, 2025, respectively.

Property and Equipment, Net

Property and equipment, net consist of the following (in thousands):

Depreciation expense was $0.2 million and $0.3 million for the three months ended September 30, 2026 and September 30, 2025, respectively. Depreciation expense was $0.7 million and $0.8 million for the nine months ended September 30, 2026 and September 30, 2025, respectively.

Goodwill

Goodwill was $2.3 million as of September 30, 2026 and December 31, 2025. There wereno acquisitions or dispositions of goodwill in the nine months ended September 30, 2026 and September 30, 2025. The Company assesses goodwill for impairment annually, or more frequently, when events or changes in circumstances indicate there may be impairment. Through September 30, 2026, there have been no events or changes in circumstances that indicated that the carrying value of goodwill may not be recoverable. As a result, no impairment charge was recorded during the nine months ended September 30, 2026.

Accrued Liabilities

Accrued liabilities consist of the following (in thousands):

6. Long Term Debt

CIBC Loan

In February 2020, the Company executed a Loan and Security Agreement with Canadian Imperial Bank of Commerce (“CIBC”), which the Company subsequently amended in April 2020 and December 2020 (as amended, the “CIBC Agreement”). The CIBC Agreement originally provided the Company with the ability to borrow up to $32.0 million in debt financing (“CIBC Loan”) consisting of $17.0 million advanced at the closing of the agreement (“Tranche A”), with the option to draw up to an additional $8.0 million (“Tranche B”) and an additional financing tranche (“Tranche C”) of up to $7.0 million on or prior to February 20, 2022. Neither Tranche B nor Tranche C was drawn before the option expired.

In March 2021, the Company entered into an Amended and Restated Loan and Security Agreement with CIBC (as amended, the “Amended and Restated CIBC Agreement”) which, among other things, extended the loan maturity date of the CIBC Loan from March 15, 2022 to February 20, 2025, and modified certain financial covenants.

In October 2021, the Company entered into a Second Amendment to the Amended and Restated CIBC Agreement, which extended the interest only period of the loan from 24 months to 36 months and provided for principal repayment to begin in February 2023.

In October 2022, the Company entered into a Third Amendment to the Amended and Restated CIBC Agreement (the “Third Amendment”) with CIBC, which, among other things, extended the maturity date of the CIBC Loan to October 31, 2027; provided a commitment for a new $20.0 million tranche of term loans that may be drawn at the Company’s option through October 31, 2023, subject to the satisfaction of certain conditions; and provided for a new interest only period of 24 months from the signing date of the Third Amendment, with the possibility of an additional extension of such interest only period of up to 12 months, subject to satisfaction of certain conditions.

In February 2023, the Company drew $20.0 million of the Amended Tranche B.

In May 2024, as a result of satisfying certain conditions set forth in the Third Amendment, the Company extended the interest-only period of the CIBC Loan from 24 months to 36 months. There was no change to the loan interest rate, maturity date, or other terms of the loan.

In April 2025, the Company further amended the terms of the CIBC Loan (the “Fifth Amendment”) to extend the interest-only period through maturity, with full principal repayment due in October 2027. There was no change to the interest rate or the maturity date of the loan. The Fifth Amendment was accounted for as a debt modification. The Fifth Amendment contained a financial covenant requiring that, when cash and cash equivalents of the Company is less than $80.0 million, revenue for the trailing twelve-month period be at least 10.0% greater than the amount of revenue for the corresponding trailing twelve-month period in the prior year. Further, the Company was required to maintain unrestricted cash in an aggregate amount equal to the greater of $20.0 million and the absolute value of Adjusted EBITDA loss as defined in the Amended and Restated CIBC Agreement for thesix-month period ending on any date of determination.

In January 2026, the Company further amended the terms of the CIBC Loan to 1) modify the Company’s obligations regarding cash such that the Company was required to maintain cash in an aggregate amount equal to or greater than (i)1.25 multiplied by (ii) the then outstanding principal balance of the CIBC Loan and 2) require regular updates to CIBC on its efforts to refinance the CIBC Loan. In addition, CIBC agreed not to test one of the financial covenants as of December 31, 2025. The Company paid to CIBC an amendment fee of less than $0.1 million. As of December 31, 2025, the Company was in compliance with all other covenants contained in the Amended and Restated CIBC Agreement.

As of December 31, 2025, the CIBC Loan had an annual effective interest rate of 8.2% per year.

The CIBC Loan consisted of the following (in thousands):

The Company paid $0.5 million fees to the lender and third parties which was reflected as a discount on the CIBC Loan and was being accreted over the life of the term loan using the effective interest method.

During the three months ended September 30, 2026 and September 30, 2025, the Company recorded interest expense related to debt discount and debt issuance costs of the CIBC Loan of $0 and less than $0.1 million, respectively. During the nine months ended September 30, 2026 and September 30, 2025, the Company recorded interest expense related to debt discount and debt issuance costs of the CIBC Loan of less than $0.1 million and less than $0.1 million, respectively.

Interest expense on the CIBC Loan was $0 and $0.8 million during the three months ended September 30, 2026 and September 30, 2025, respectively. Interest expense on the CIBC Loan was $0.5 million and $2.4 million during the nine months ended September 30, 2026 and September 30, 2025, respectively.

In March 2026, the Company repaid its entire obligation under the CIBC Loan amounting to $37.2 million, including principal of $37.0 million and interest of $0.2 million, using the proceeds from the Perceptive Loan (as defined below). The repayment of the obligation under the CIBC Loan was accounted for as a debt extinguishment and the Company recorded a loss on extinguishment of $0.1 million included in interest expense on the condensed consolidated statements of operations and comprehensive loss.

Perceptive Loan

On March 2, 2026 (the “Closing Date”), the Company entered into a Credit Agreement and Guaranty (the “Perceptive Agreement”) and a Security Agreement (the “Security Agreement”), with Perceptive Credit Holdings V, LP (“Perceptive”), as the initial lender, administrative agent and collateral agent. The Perceptive Agreement provides for a senior secured term loan facility in an aggregate principal amount of up to $60.0 million (the “Loan Facility”).

On the Closing Date, the Company borrowed an initial loan under the Perceptive Agreement in an aggregate principal amount of $40.0 million (the “Perceptive Loan”). The Loan Facility permits the Company to borrow up to an additional $20.0 million, intwo additional equal tranches (the “Additional Loan Draws”). The first $10.0 million Additional Loan Draw becomes available if the Company reaches at least $92.5 million in revenue for any trailing twelve-month period ending as of the end of the last day of any fiscal quarter through, and including, the fiscal quarter ending September 30, 2027, and the second $10.0 million Additional Loan Draw becomes available if the Company reaches at least $100.0 million in revenue for any trailing twelve-month period ending as of the end of the last day of any fiscal quarter through, and including, the fiscal quarter ending December 31, 2027.

The Loan Facility has a maturity date of March 2, 2031 (the “Maturity Date”). The Loan Facility accrues interest, payable monthly in arrears, at an annual rate equal to the sum of (a) an applicable margin of 7.00% (the “Applicable Margin”) plus (b) the greater of (i) one-month term SOFR and (ii)3.75%. Upon the occurrence and during the continuance of an event of default under the Perceptive Agreement, the Applicable Margin will increase by an additional 3.00% per annum at Perceptive’s election (retroactive to the date of such event of default), or automatically in the case of a payment or bankruptcy event of default.

On each interest payment date occurring on or prior to March 2, 2029, the Company has the option to pay interest as follows:2.0% per annum paid-in-kind (“PIK”) by increasing the principal of the Perceptive Loan and the remaining interest payable paid in cash. For each payment date through September 30, 2026, the Company elected the PIK option, increasing the principal of the Perceptive Loan by $0.5 million.

Prior to the Maturity Date, there will be no scheduled principal payments under the Loan Facility. On the Maturity Date, the Company is required to pay Perceptive the aggregate outstanding principal amount of the loans thereunder and all accrued and unpaid interest thereon. The loans under the Loan Facility may be prepaid at any time, subject to a prepayment premium ranging from 2% to 10% if such prepayment occurs on or prior to the fourth anniversary of the Closing Date. On each date when any outstanding principal under the Loan Facility is repaid or required to be repaid, the Company will be required to pay an exit fee equal to 1.50% of such principal amount.

The Company’s obligations under the Perceptive Agreement are guaranteed by Pulmonx International Sàrl, the Company’s wholly-owned Swiss subsidiary, and will be guaranteed by all subsidiaries of the Company organized in the United States or Switzerland, and any other material subsidiaries. The Loan Facility is collateralized by substantially all of the Company’s and subsidiary guarantors’ assets, subject to customary exceptions. The Perceptive Agreement contains certain representations and warranties, affirmative covenants, negative covenants, and events of default that are customarily required for similar financings. In addition, the Perceptive Agreement contains financial covenants requiring the Company to (i) at all times prior to the Maturity Date, maintain minimum unrestricted cash and certain types of marketable securities of at least $4.0 million and (ii) maintain minimum annual trailing consolidated revenue of the Company and its subsidiaries determined in accordance with U.S. GAAP, tested on a quarterly basis, starting from $85.0 million over a trailing 12-month period ending March 31, 2026, and increasing to $107.5 million for the trailing 12-month period ending December 31, 2030. The occurrence of an event of default under the Perceptive Agreement could result in, among other things, the declaration that all outstanding principal and interest thereunder are immediately due and payable in whole or in part. As of September 30, 2026, the Company was in compliance with the covenants contained in the Perceptive Agreement.

The Company paid $1.6 million in fees to Perceptive and third parties which is reflected as a discount on the Perceptive Loan and is being accreted over the life of the loan using the effective interest method. Also, on the Closing Date, the Company issued to Perceptive a warrant to purchase up to 1,000,000 shares of the Company’s common stock (the “Initial Warrants”), and will issue warrants to purchase up to 500,000 shares of the Company’s common stock (which number of shares will be adjusted for any stock splits, stock combinations and the like that take place after the Closing Date and prior to the applicable funding date) if the Company borrows additional tranches of loan under the Perceptive Agreement (the “Additional Warrants” and together with the “Initial Warrants”, the “Warrants”, see Note 7 and 11, respectively). The Initial Warrants are classified as a component of permanent equity and the Additional Warrants classified as liabilities on the Company's condensed consolidated balance sheets. The Warrants had a fair value of $1.4 million as of the issuance date, which was accounted for as debt discount. The Warrants, regardless of issuance date, have an expiration date of March 2, 2033, may be exercised on a cashless or “net” basis, and will be automatically exercised, on a cashless basis, prior to their expiration if the value of the shares underlying the Warrants is greater than the then-applicable exercise price.

As of September 30, 2026, the Perceptive Loan had an annual effective interest rate of 14.0% per year.

The Perceptive Loan consisted of the following (in thousands):

Interest expense on the Perceptive Loan was $1.2 million and $2.8 million during the three and nine months ended September 30, 2026, respectively, including interest expense related to debt discount and debt issuance costs of the Perceptive Loan of $0.1 million and $0.2 million, respectively.

Swiss COVID-19 Credit Agreement

In May 2020, Pulmonx International Sàrl, a wholly owned subsidiary of the Company, received 0.5 million Swiss Francs ($0.5 million U.S. dollar equivalent) from a COVID-19 Credit Agreement under a Swiss Federal Government program. The COVID-19 Credit Agreement currently bears interest at a rate of 1.5% per year, payable at the end of each calendar quarter. The loan principal is being repaid intwelve equal installments, paid semi-annually, which began in March of 2022. Interest expense was immaterial during the three and nine months ended September 30, 2026 and September 30, 2025. As of September 30, 2026, Pulmonx International Sàrl has repaid 0.4 million Swiss Francs to the lender.

Contractual Maturities of Financing Obligations

As of September 30, 2026, the aggregate future payments under the Perceptive Agreement and Swiss COVID-19 Credit Agreement (including interest payments) are as follows (in thousands):

7. Common Stock Warrant Liability

On the date of the funding of each Additional Loan Draw under the Perceptive Agreement, the Company will issue to Perceptive the Additional Warrants to purchase a number of shares of common stock equal to 0.025 times the dollar amount of delayed draw term loans funded on such date, with an exercise price equal to a 25% premium to the 10-day volume weighted average price of the Company’s common stock for the period ending on the business day immediately preceding such date.

The Additional Warrants will not be issued legally until the Additional Loan Draws occur but are considered issued for accounting purposes upon execution of the Perceptive Agreement. The Additional Warrants do not meet the requirements for equity classification, and are recorded as liabilities on the condensed consolidated balance sheets. The Additional Warrants are recorded at fair value upon issuance, are subject to remeasurement to fair value at each reporting date, with any changes in fair value recognized in other income, net in the condensed consolidated statements of operations and comprehensive loss, and were accounted for as debt discount. The Additional Warrants had a fair value of $0.3 million and $0.3 million as of the issuance date and September 30, 2026, respectively. The change in fair value was $0.1 million during both the three and nine months ended September 30, 2026. The Company values the common stock warrant liability using a probability-weighted Black-Scholes Merton option-pricing model (Note 4).

8. Revenue

The Company’s contract liabilities consist of deferred revenue for remaining performance obligations by the Company to the customer after delivery, which was less than $0.1 million and less than $0.1 million as of September 30, 2026 and December 31, 2025, respectively. The deferred revenue as of December 31, 2025 of less than $0.1 million was recognized as revenue during the nine months ended September 30, 2026. The deferred revenue as of December 31, 2024 of $0.1 million was recognized as revenue during the nine months ended September 30, 2025.

The Company disaggregates its revenue by major geographic region, which has been disclosed in Note 13, “Segment Information.”

9. Commitments and Contingencies

Leases

The Company has a lease for its headquarters location in Redwood City, California, which consists of approximately 24,591 square feet of office space (the “existing premises”) and was scheduled to expire on July 31, 2025 (the “Office Lease”). The Company leases additional facilities in Redwood City, California, under a sublease agreement, which consist of approximately 25,254 square feet of office space (the “expansion premises”) and was scheduled to expire on September 30, 2024 (the “Sublease”).

In the second quarter of 2024, the Company entered into a third amendment to Sublease (the “Third Amendment to Sublease”) to extend the lease term of the expansion premises through May 31, 2028. The Third Amendment to Sublease contains a rent-free period between November 1, 2024 and February 28, 2025, after which rent is approximately $0.1 million per month and is subject to an annual increase of approximately 3%.

The Company also entered into a third amendment to Office Lease (the “Third Amendment to Office Lease”) to extend the lease term of the existing premises through July 31, 2035. The Third Amendment to Office Lease contains a rent-free period, as further described below, after which rent is approximately $0.1 million per month and is subject to an annual increase of approximately 3.5%. Additionally, under the Third Amendment to Office Lease, the Company and the landlord have agreed to expand the existing premises to include the expansion premises, effective as of June 1, 2028, through July 31, 2035 (coterminous with the existing premises as referenced above). Commencing on June 1, 2028, the monthly base rent for the expansion premises will be $0.1 million per month and is subject to an annual increase of approximately 3.5%.

Under the Third Amendment to Office Lease, the Company hastwo options to extend the lease term on the leased premises for a period offive years each. The Company did not include the renewal options in the lease terms for calculating lease liability, as it was not reasonably certain that the Company will exercise these renewal options. The amendments were accounted for as modifications that resulted in additional right of use assets in exchange for lease liabilities of $16.3 million.

In the fourth quarter of 2024, the Company entered into an amendment to the Third Amendment to Office Lease, which modified the rent-free period from the original dates of August 1, 2025 through November 30, 2025, to a new period from October 1, 2024 through December 31, 2024. There was no change to the other terms of the lease agreement that would materially impact the condensed consolidated financial statements. The amendment was accounted for as a modification that resulted in additional right of use assets in exchange for lease liabilities of $0.4 million.

In the fourth quarter of 2024, the Company entered into afive-year lease for a new office facility in Switzerland. The lease commenced in the first quarter of 2025, with total future minimum rent payments of $0.5 million. The Company recognized right of use assets in exchange for lease liabilities of $0.4 million related to this new lease in the first quarter of 2025.

As of September 30, 2026, the Company has leases ontwenty-three vehicles with an average lease term of 3.0 years.

Operating lease cost consists of the following (in thousands):

The following table summarizes a maturity analysis of the Company’s lease liabilities showing the aggregate lease payments as of September 30, 2026 (in thousands):

The following table summarizes additional information related to the Company’s operating leases (in thousands, except weighted average data):

The following table summarizes other supplemental information related to the Company’s operating leases (in thousands):

Contingencies

From time to time, the Company may be a party to various litigation claims in the normal course of business. Legal fees and other costs associated with such actions are expensed as incurred. The Company assesses, in conjunction with legal counsel, the need to record a liability for litigation and contingencies. Accrual estimates are recorded when and if it is determinable that such a liability for litigation and contingencies are both probable and reasonably estimable.

In December 2022, the Company received a civil investigative demand (“CID”) from the U.S. Department of Justice (“US DOJ”), in connection with an investigation under the False Claims Act. The CID requested information and documents regarding our relationships with certain health care providers, medical practices, and hospitals in connection with the sales and marketing of the Zephyr Valves and related products and services. Subsequently, on or about January 27, 2025 the US DOJ filed on behalf of itself and certain states attorneys general, a Notice of Election to Decline Intervention in and to unseal the underlying action that was the basis of the CID, filed by an individual (the “Relator”) in U.S. District Court for the Northern District of California (the “Qui Tam Action”). In December 2025, the Company entered into a settlement agreement with the Relator, with approval by the US DOJ and the various states’ attorneys general who were parties to the Qui Tam Action. The Qui Tam Action was dismissed on December 22, 2025.

10. Income Taxes

The income tax expense for the three months ended September 30, 2026 and September 30, 2025 was $0.2 million and $0.1 million, respectively. The income tax expense for the nine months ended September 30, 2026 and September 30, 2025 was $0.4 million and $0.4 million, respectively. The income tax expense was determined based upon estimates of the Company’s effective income tax rates in various jurisdictions. The difference between the Company’s effective income tax rate and the U.S. federal statutory rate is primarily attributable to state income taxes, foreign income taxes, and non-recognition of US tax benefit because of a full valuation allowance against US deferred tax assets.

The income tax expense for the nine months ended September 30, 2026 and September 30, 2025 relates primarily to state minimum income tax and income tax on the Company’s earnings in foreign jurisdictions.

On July 4, 2025, the One Big Beautiful Bill Act (the “Act”) was signed into law. The Act contains significant tax law changes with various effective dates after its enactment date. The Company has evaluated the impact of the Act as part of its income tax provision for the nine months ended September 30, 2026. Given the Company’s current loss position and the full valuation allowance recorded against its deferred tax assets, the enactment of the Act did not have a material impact on the Company’s condensed consolidated financial statements.

11. Stockholders’ Equity

Common Stock

As of September 30, 2026 and December 31, 2025, the Company’s certificate of incorporation authorized the Company to issue up to 200,000,000 shares of common stock. Common stockholders are entitled to dividends as and when declared by the Company’s board of directors, subject to the rights of holders of all classes of stock outstanding having priority rights as to dividends. There have beenno dividends declared to date. The holder of each share of common stock is entitled toone vote.

Shares Reserved for Future Issuance

The Company has reserved shares of common stock for future issuances as follows:

Stock Options

A summary of stock option activity for the nine months ended September 30, 2026 is set forth below:

The aggregate intrinsic value of options outstanding as of September 30, 2026 was less than $0.1 million.

Total aggregate intrinsic value of options vested and exercisable as of September 30, 2026 was less than $0.1 million.

Service-Based Restricted Stock Units

The Company estimates the fair value of service-based restricted stock units based on the closing price of the Company’s common stock on the grant date. A summary of service-based restricted stock units activity for the nine months ended September 30, 2026 is set forth below:

The fair value as of the respective vesting dates of restricted stock units that vested during the three months ended September 30, 2026 and September 30, 2025 was $1.0 million and $0.6 million, respectively. The fair value as of the respective vesting dates of restricted stock units that vested during the nine months ended September 30, 2026 and September 30, 2025 was $2.8 million and $4.9 million, respectively.

Performance-Based Restricted Stock Units

In fiscal year 2025, the Company granted 326,848 performance-based restricted stock units (“PSUs”) to employees. The final number of PSUs awarded will be determined based on the Company’s consolidated cumulative revenue over atwo-year performance period and may vest at a rate ranging from 0% to 200% of the target number of shares. Any PSUs awarded at the end of the performance period will vest in equal installments over the following four quarters. The Company estimates the fair value of these performance-based restricted stock units based on the closing price of its common stock on the grant date. Compensation expense for these awards is calculated based on the expected achievement of the target revenue metrics and is recognized over the requisite service period.

In December 2025, the Company granted 1,200,000 restricted stock units with service and market conditions to certain employees. The vesting of the market-based restricted stock units will be met 33% after one year and the remainder thereunder in equal installments quarterly over the following two years subject to continued employment. Vesting is also contingent on the average closing price of the Company’s common stock being greater than $4.00 over a period of 60 consecutive trading days within three years. The Company estimated the fair value of these market-based restricted stock units on the date of grant using a Monte Carlo simulation including the following assumptions: expected volatility of 100.0%; a risk-free rate of 3.6%; and a cost of equity of 16%. Compensation expense for these awards is recognized over the requisite service period for each tranche based on the graded vesting method. The requisite service period is the longer of the explicit service period or the derived service period based on the market condition for each tranche. The derived service period was estimated to be 0.98 years.

Activity with respect to performance-based and market-based restricted stock units was as follows:

Total Stock-Based Compensation

Stock-based compensation expense is reflected in the statements of operations and comprehensive loss as follows (in thousands):

The above stock-based compensation expense related to the following equity-based awards (in thousands):

Stock-based compensation of $0.3 million and $0.4 million was capitalized into inventory for the three months ended September 30, 2026 and September 30, 2025, respectively. Stock-based compensation of $0.9 million and $1.3 million was capitalized into inventory for the nine months ended September 30, 2026 and September 30, 2025, respectively. Stock-based compensation capitalized in prior periods of $0.4 million and $0.5 million was recognized as cost of sales in the three months ended September 30, 2026 and September 30, 2025, respectively. Stock-based compensation capitalized in prior periods of $1.1 million and $1.6 million was recognized as cost of sales in the nine months ended September 30, 2026 and September 30, 2025, respectively.

As of September 30, 2026, there was $18.9 million of unrecognized compensation costs related to unvested common stock options and restricted stock units, expected to be recognized over a weighted-average period of 2.1 years.

As of September 30, 2026, the Company had unrecognized stock-based compensation relating to the employee stock purchase plan of less than $0.1 million, which is expected to be recognized over a weighted-average period of 0.4 years.

Common stock warrants

On March 2, 2026, in connection with entering into the Perceptive Agreement, the Company issued to Perceptive the Initial Warrants to purchase up to 1,000,000 shares of the Company’s common stock with an exercise price of $1.92 per share.

The Initial Warrants are classified as a component of permanent equity within the Company's condensed consolidated balance sheets as they meet the criteria for equity classification. The Initial Warrants were initially recorded at their relative fair value of $1.1 million as of the issuance date as a debt discount and are not subject to subsequent remeasurement. The Initial Warrants were valued using the following assumptions under the Black-Scholes Merton option pricing model: expected term of 7 years, volatility of 81.7%, a risk-free rate of 3.8%, and a dividend yield of 0%. None of the Initial Warrants have been exercised.

12. Net Loss per Share Attributable to Common Stockholders

The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders which excludes shares which are legally outstanding, but subject to repurchase by the Company (in thousands, except share and per share amounts):

The following potentially dilutive securities outstanding have been excluded from the computation of diluted weighted average shares outstanding because such securities have an antidilutive impact due to the Company’s net loss, in common stock equivalent shares:

13. Segment Information

The chief operating decision maker (“CODM”) for the Company is the Chief Executive Officer. The Company’s Chief Executive Officer reviews financial information presented on a consolidated basis, accompanied by information about revenue by geographic region, for purposes of allocating resources and evaluating financial performance. The Company hasone business activity and there are no segment managers who are held accountable for operations, operating results or plans for levels or components below the consolidated unit level. Accordingly, the Company has determined that it has a single reportable and operating segment structure. The Company’s Chief Executive Officer evaluates performance based primarily on revenue in the geographic locations in which the Company operates.

Revenue by geographic area is based on the billing address of the customer. The following table sets forth the Company’s revenue by geographic area (in thousands):

The CODM also utilizes the Company’s long-range plan as a key input for resource allocation. The CODM makes decisions on resource allocation, assesses performance of the business, and monitors budget versus actual results using consolidated net loss. Significant expenses within consolidated net loss include cost of goods sold, research and development, and selling, general and administrative expenses, which are each separately presented on the Company’s condensed consolidated statements of operations and comprehensive loss. In addition, the CODM is provided with the stock-based compensation expense included in research and development expenses and selling, general and administrative expenses. See Note 11, “Stockholders’ Equity” for more information. Other segment items included in consolidated net loss are interest income, interest expense, and other income, net, and income tax expense.

Long-lived assets by geographic area are based on physical location of those assets. The following table sets forth the Company’s long-lived assets by geographic area (in thousands):