KESTRA MEDICAL TECHNOLOGIES, LTD.

Previous wording

This Management’s Discussion and Analysis of Financial Condition and Results of Operation should be read in conjunction with our unaudited interim condensed consolidated financial statements and the related notes to those statements included in this Quarterly Report and our audited consolidated financial statements and the related notes and the discussion under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for the fiscal years ended April 30, 2025 and 2024 included in our Annual Report. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under the sections entitled “Special Note Regarding Forward-Looking Statements” and Part II, Item 1A, ““Risk Factors” included in this Quarterly Report and in the sections entitled “Risk Factors” and “Special Note Regarding Forward-Looking Statements” in our Annual Report.

Current wording

This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our unaudited interim condensed consolidated financial statements and the related notes to those statements included in this Quarterly Report and our audited consolidated financial statements and the related notes and the discussion under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for the fiscal years ended April 30, 2026 and 2025 included in our Annual Report. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under the sections entitled “Special Note Regarding Forward-Looking Statements” included in this Quarterly Report and in the sections entitled “Special Note Regarding Forward-Looking Statements” and Part I, Item 1A "Risk Factors" in our Annual Report.

Previous wording

We have been issued a Medicare Provider Number by the CMS, which enables us to bill Medicare for reimbursement for our ASSURE WCD as an accredited supplier to the extent the claim meets Medicare medical necessity and coverage requirements. We derive nearly all our revenue from the direct billing of various third-party payors, including Medicare, Medicaid, private payors and other healthcare-related organizations, for the lease of our ASSURE WCD to patients. We also bill patients for co-insurance payments and deductibles. As WCD therapy has existed for over 20 years in the United States, reimbursement codes are well-established, and WCDs are covered by Medicare, Medicaid and many private payors.

Current wording

We have been issued a Medicare Provider Number by the CMS, which enables us to bill Medicare for reimbursement for our ASSURE® WCD as an accredited supplier to the extent the claim meets Medicare medical necessity and coverage requirements. We derive nearly all our revenue from the direct billing of various third-party payors, including Medicare, Medicaid, private payors and other healthcare-related organizations, for the lease of our ASSURE® WCD to patients. Any costs associated with our solution that are not covered by third-party payors, such as co-payments, are billed directly to the patient by our team. As WCD therapy has existed for over 20 years in the United States, reimbursement codes are well-established, and WCDs are covered by Medicare, Medicaid and many private payors.

Previous wording

Our fiscal year ends on April 30 of each year. We incurred net losses of $34.2 million and $21.8 million for the three months ended January 31, 2026 and 2025, respectively. We incurred net losses of $92.8 million and $62.7 million for the nine months ended January 31, 2026 and 2025, respectively. For the three months ended January 31, 2026, we generated revenue of $24.6 million, with a gross profit of $12.9 million, compared to revenue of $15.1 million, with a gross profit of $6.5 million, for the three months ended January 31, 2025. For the nine months ended January 31, 2026, we generated revenue of $66.5 million, with a gross profit of $33.2 million, compared to revenue of $42.6 million, with a gross profit of $16.6 million, for the nine months ended January 31, 2025. As of January 31, 2026, we had cash and cash equivalents balances of $291.3 million, and an accumulated deficit of $613.0 million.

Current wording

Our fiscal year ends on April 30 of each year. We incurred net losses of $44.1 million and $25.8 million for the three months ended July 31, 2026 and 2025, respectively. For the three months ended July 31, 2026, we generated revenue of $31.0 million, with a gross profit of $17.5 million, compared to revenue of $19.4 million, with a gross profit of $8.9 million, for the three months ended July 31, 2025. As of July 31, 2026, we had cash and cash equivalents and investment balances of $244.7 million, and an accumulated deficit of $695.9 million.

Previous wording

From our inception to the consummation of the IPO, our operations were primarily funded by proceeds from capital contributions made by West Affum Holdings, L.P., our direct parent prior to the Organizational Transactions (as defined in Note 1, “The Company,” to our unaudited interim condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report), in the form of common stock and redeemable preferred stock, and borrowings under our Term Loan 2024 (as defined below). For more information, see “—Liquidity and Capital Resources—Sources of Liquidity”.

Current wording

From our inception to the consummation of our initial public offering ("IPO"), our operations were primarily funded by proceeds from capital contributions made by West Affum Holdings, L.P., our direct parent prior to the Organizational Transactions (as defined in Note 1, “The Company,” to our unaudited interim condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report), in the form of common stock and redeemable preferred stock, and borrowings under our Term Loan 2024 (as defined below). For more information, see “—Liquidity and Capital Resources—Sources of Liquidity”.

Previous wording

In the IPO, we issued and sold an aggregate of 13,664,704 Common Shares at an offering price to the public of $17.00 per share for net proceeds of $215.8 million, after deducting underwriting discounts and commissions, which includes the net proceeds from the underwriters’ exercise in full of the over-allotment option. The Organizational Transactions and IPO were completed on March 7, 2025 and the proceeds from the shares sold pursuant to the underwriters’ over-allotment option were received on March 14, 2025.

Current wording

In connection with the IPO, we issued and sold an aggregate of 13,664,704 Common Shares at an offering price to the public of $17.00 per share for net proceeds of $215.8 million, after deducting underwriting discounts and commissions, which includes the net proceeds from the underwriters’ exercise in full of the over-allotment option. The Organizational Transactions and IPO were completed on March 7, 2025 and the proceeds from the shares sold pursuant to the underwriters’ over-allotment option were received on March 14, 2025.

Previous wording

We have invested heavily in developing and commercializing our Cardiac Recovery System platform. We have also made significant investments in clinical studies to demonstrate the safety and effectiveness of our ASSURE WCD and to support applications for regulatory approvals. We have made and will continue to make significant investments to build our sales and marketing organization, and we intend to continue to increase the size of our commercial team to market our product in the United States. Based on our current operating plan, we believe that our existing cash and cash equivalents and cash generated from revenue transactions with customers will be sufficient to fund our operating and capital needs for at least the next 12 months. We may experience lower than expected cash generated from operating activities or greater than expected capital expenditures, cost of revenue or operating expenses and may require additional funding to execute on our growth plans, which may include future equity and debt financings. Adequate funding may not be available to us on acceptable terms or at all. Our failure to obtain sufficient funds on acceptable terms when needed could have a material and adverse effect on our business, financial condition, results of operations and prospects.

Current wording

We have invested heavily in developing and commercializing our Cardiac Recovery System platform. We have also made significant investments in clinical studies to demonstrate the safety and effectiveness of our ASSURE® WCD and to support applications for regulatory approvals. We have made and will continue to make significant investments to build our sales and marketing organization, and we intend to continue to increase the size of our commercial team to market our product in the United States. Based on our current operating plan, we believe that our existing cash, cash equivalents, investments, and cash generated from revenue transactions with customers will be sufficient to fund our operating and capital needs for at least the next 12 months. We may experience lower than expected cash generated from operating activities or greater than expected capital expenditures, cost of revenue or operating expenses and may require additional funding to execute on our growth plans, which may include future equity and debt financings. Adequate funding may not be available to us on acceptable terms or at all. Our failure to obtain sufficient funds on acceptable terms when needed could have a material and adverse effect on our business, financial condition, results of operations and prospects.

Previous wording

The following discussion describes certain key components of our consolidated statement of operations.

Current wording

The following discussion describes certain key components of our interim unaudited condensed consolidated statements of operations and comprehensive loss.

Previous wording

We received FDA approval for the commercialization of our ASSURE WCD on July 27, 2021 and fully commercially launched our ASSURE WCD in August 2022. We generate revenue by leasing our ASSURE WCD to patients for a fixed amount on a month-to-month basis. The lease payments generally consist of the contracted amounts based on reimbursement arrangements with third-party payors, comprising Medicare, Medicaid, private payors and other healthcare-related organizations, and patient payments. The patient has the right to cancel the lease at any time during the lease period. We recognize lease revenue over the term of the lease when collectability is probable. If collectability of the lease payments is not deemed to be probable, the lease revenue is limited to the lesser of the income that would have been recognized if collectability was probable or the lease payments collected. If the lease payments are not deemed to be probable at inception, lease revenue is recognized when cash payments are received. We expect that our revenue will continue to increase as the number of patients that use our product increases.

Current wording

We generate revenue by leasing our ASSURE® WCD to patients for a fixed amount on a month-to-month basis. The lease payments generally consist of the contracted amounts based on reimbursement arrangements with third-party payors, comprising Medicare, Medicaid, private payors and other healthcare-related organizations, and patient payments. The patient has the right to cancel the lease at any time during the lease period. We recognize lease revenue over the term of the lease when collectability is probable. If collectability of the lease payments is not deemed to be probable, the lease revenue is limited to the lesser of the income that would have been recognized if collectability was probable or the lease payments collected. If the lease payments are not deemed to be probable at inception, lease revenue is recognized when cash payments are received. We expect that our revenue will continue to increase as the number of patients that use our product increases.

Previous wording

We expect that our overall selling, general and administrative expenses will increase in the foreseeable future as we increase our headcount to support the continued growth of our business. We also anticipate incurring additional expenses associated with operating as a public company, including increased expenses related to audit, legal, regulatory, compliance, director and officer insurance, investor and public relations, and tax-related services associated with maintaining compliance with the rules and regulations of the SEC and standards applicable to companies listed on a national securities exchange. These expenses may further increase when we no longer qualify as an “emerging growth company” under the JOBS Act, which will require us to comply with certain reporting requirements from which we are currently exempt. However, we expect overall general and administrative expenses to decrease as a percentage of revenue primarily as, and to the extent, our revenue grows.

Current wording

We expect that our overall selling, general and administrative expenses will increase in the foreseeable future as we increase our headcount to support the continued growth of our business. We have incurred additional expenses associated with operating as a public company, including increased expenses related to audit, legal, regulatory, compliance, director and officer insurance, investor and public relations, and tax-related services associated with maintaining compliance with the rules and regulations of the SEC and standards applicable to companies listed on a national securities exchange. These expenses may further increase when we no longer qualify as an “emerging growth company” under the JOBS Act, which will require us to comply with certain reporting requirements from which we are currently exempt. However, we expect overall general and administrative expenses to decrease as a percentage of revenue primarily as, and to the extent, our revenue grows.

Previous wording

Interest and other expense (income) consists of cash and non-cash components. The cash component of interest expense (income) is attributable to borrowings under our term loan as well as interest received from various interest-bearing bank accounts. The non-cash component consists of interest expense recognized from the amortization of debt discounts, debt issuance costs and warrant fair value adjustments.

Current wording

Interest and other expense (income), net consists of cash and non-cash components. The cash component of interest expense (income) is attributable to borrowings under our term loans as well as interest received from various interest-bearing bank accounts and investments in marketable securities.

Previous wording

The following tables set forth our results of operations for the three and nine months ended January 31, 2026 and 2025. We have derived the data for the three and nine months ended January 31, 2026 and 2025 from our unaudited interim condensed consolidated financial statements included elsewhere in this Quarterly Report. This information should be read in conjunction with our unaudited interim condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report. The results for historical periods are not necessarily indicative of the results of operations for any future period, and our interim results are not necessarily indicative of the results to be expected for the full year.

Current wording

The following tables set forth our results of operations for the three months ended July 31, 2026 and 2025. We have derived the data for the three months ended July 31, 2026 and 2025 from our unaudited interim condensed consolidated financial statements included elsewhere in this Quarterly Report. This information should be read in conjunction with our unaudited interim condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report. The results for historical periods are not necessarily indicative of the results of operations for any future period, and our interim results are not necessarily indicative of the results to be expected for the full year.

Previous wording

Comparison of the Three and Nine Months Ended January 31, 2026 and 2025

Current wording

Comparison of the Three Months Ended July 31, 2026 and 2025

Previous wording

Revenue for the three months ended January 31, 2026 increased by $9.5 million, or 63%, compared to the three months ended January 31, 2025. Revenue growth was primarily driven by a 58% increase in the number of patients using our products.

Current wording

Revenue for the three months ended July 31, 2026 increased by $11.6 million, or 60%, compared to the three months ended July 31, 2025. Revenue growth was primarily driven by an increase in the number of patients using our products.

Previous wording

Cost of revenue for the three months ended January 31, 2026 increased by $3.1 million, or 36%, compared to the three months ended January 31, 2025. The increase in cost of revenue was primarily driven by a $1.9 million increase in the cost of disposable medical equipment supplies and equipment reconditioning, attributable to the increase in the number of patients using our product, a $0.9 million increase in depreciation expense due to an increased number of systems and equipment in use, a $0.5 million increase in reserve for lost or damaged equipment, and a $0.5 million increase in other costs, partially offset by a $0.7 million decrease in depreciation expense from increased useful lives of our components.

Current wording

Cost of revenue for the three months ended July 31, 2026 increased by $3.0 million, or 28%, compared to the three months ended July 31, 2025. The increase in cost of revenue was primarily driven by a $1.0 million increase in the cost of disposable medical equipment supplies and equipment reconditioning, attributable to the increase in the number of patients using our product, a $0.9 million increase in depreciation expense due to an increased number of systems and equipment in use, a $1.1 million increase in reserve for lost or damaged equipment, and a $0.3 million increase in other costs, partially offset by a $0.3 million decrease in depreciation expense from increased useful lives of our components.

Previous wording

Gross profit for the three months ended January 31, 2026 increased by $6.4 million, or 97%, compared to the three months ended January 31, 2025. The increase in gross profit was primarily due to growth in our total revenue. The increase in gross profit was also driven by a decrease in cost of revenues per patient by 14% for the three months ended January 31, 2026 compared to the three months ended January 31, 2025, due to further improvements in the utilization of our rental pool of medical equipment and lower disposable costs driven by volume and implementation of manufacturing cost improvement programs, and longer useful lives of our medical rental equipment components.

Current wording

Gross profit for the three months ended July 31, 2026 increased by $8.6 million, or 98%, compared to the three months ended July 31, 2025. The increase in gross profit was primarily due to growth in our total revenue. The increase in gross profit was also driven by a decrease in cost of revenues per patient by 9% for the three months ended July 31, 2026 compared to the three months ended July 31, 2025, due to further improvements in the utilization of our rental pool of medical equipment and lower disposable costs driven by volume and implementation of manufacturing cost improvement programs, and longer useful lives of our medical rental equipment components.

Previous wording

Research and development costs for the nine months ended January 31, 2026 increased by $3.6 million, or 35%, compared to the nine months ended January 31, 2025. The increase was primarily driven by a $2.8 million increase in personnel expenses such as salaries, benefits and share-based compensation expense, and a $0.7 million increase in contractor costs.

Current wording

Research and development costs for the three months ended July 31, 2026 increased by $2.8 million, or 70%, compared to the three months ended July 31, 2025. The increase was primarily driven by a $0.9 million increase in personnel expenses such as salaries, benefits, and share-based compensation expense, resulting from increased headcount, and a $0.9 million increase in contractor costs, and $1.0 million of development expenses from our strategic collaboration with Biobeat Technologies.

Previous wording

Selling, general and administrative expenses for the three months ended January 31, 2026 increased by $18.9 million, or 79%, compared to the three months ended January 31, 2025. The increase was primarily driven by a $15.3 million increase in personnel expenses such as salaries, benefits and share-based compensation, resulting from an increase in headcount to support commercial growth, a $0.9 million increase in travel and entertainment expenses due to an increase in headcount, a $0.8 million increase in commercial support costs including contractors and external recruitment costs, a $0.6 million increase related to shipping and logistics costs, a $0.5 million increase related to increased software licensing fees driven by increased headcount, a $0.4 million increase related to conference fees, a $0.3 million increase in commercial training costs, and a $0.2 million increase in other costs.

Current wording

Selling, general and administrative expenses for the three months ended July 31, 2026 increased by $14.6 million, or 43%, compared to the three months ended July 31, 2025. The increase was primarily driven by a $10.7 million increase in personnel expenses such as salaries, benefits and share-based compensation, resulting from an increase in headcount to support commercial growth, a $1.4 million increase in commercial support costs including contractors, a $0.6 million increase in travel and entertainment expenses due to an increase in headcount, a $0.6 million increase in commercial training costs, a $0.5 million increase related to shipping and logistics costs, a $0.5 million increase related to increased software licensing fees driven by increased headcount, and a $0.3 million increase in other costs.

Previous wording

Interest expense for the three months ended January 31, 2026 increased by $0.1 million compared to the three months ended January 31, 2025.

Current wording

Interest income and interest expense for the three months ended July 31, 2026 were consistent with the three months ended July 31, 2025.

Previous wording

For each of the three and nine months ended January 31, 2026 and 2025, the tax provision was less than $0.1 million, which was primarily related to state tax liabilities in the United States.

Current wording

For each of the three months ended July 31, 2026 and 2025, the tax provision was less than $0.1 million, which was primarily related to state tax liabilities in the United States.

Previous wording

Since inception, we have devoted substantially all our efforts to research and development, undertaking clinical trials, enabling manufacturing activities in support of our product development efforts, hiring personnel, organizing and staffing our company, performing business planning, establishing our intellectual property portfolio, building and expanding a commercial team to market our Cardiac Recovery System platform in the United States, and raising capital to support and expand such activities. We have incurred net losses in each year since inception and expect to continue to incur net losses in the foreseeable future. Our net loss and comprehensive loss were $34.2 million and $21.8 million for the three months ended January 31, 2026 and 2025, respectively. Our net loss and comprehensive loss were $92.8 million and $62.7 million for the nine months ended January 31, 2026 and 2025, respectively. As of January 31, 2026, we had an accumulated deficit of $613.0 million. For the nine months ended January 31, 2026 and 2025, we generated negative operating cash flows of $63.0 million and $53.6 million, respectively.

Current wording

Since inception, we have devoted substantially all our efforts to research and development, undertaking clinical trials, enabling manufacturing activities in support of our product development efforts, hiring personnel, organizing and staffing our company, performing business planning, establishing our intellectual property portfolio, building and expanding a commercial team to market our Cardiac Recovery System platform in the United States, and raising capital to support and expand such activities. We have incurred net losses in each year since inception and expect to continue to incur net losses in the foreseeable future. Our net loss and comprehensive loss was $44.1 million and $25.8 million for the three months ended July 31, 2026 and 2025, respectively. As of July 31, 2026, we had an accumulated deficit of $695.9 million. For the three months ended July 31, 2026 and 2025, we generated negative operating cash flows of $32.3 million and $26.3 million, respectively.

Previous wording

As of January 31, 2026 and April 30, 2025, our principal sources of liquidity consisted of $291.3 million and $237.6 million of cash and cash equivalents, respectively. Based on our current operating plan, we believe that our existing cash and cash equivalents, which includes the net proceeds from our IPO, as well as cash generated from revenue transactions with customers, will be sufficient to fund our operating and capital needs for at least the next 12 months.

Current wording

As of July 31, 2026 and April 30, 2026, respectively, our principal sources of liquidity consisted of $244.7 million and $262.2 million of cash, cash equivalents, and investments. Based on our current operating plan, we believe that our existing cash and cash equivalents, which includes the net proceeds from our IPO and follow on offering, as well as cash generated from revenue transactions with customers, will be sufficient to fund our operating and capital needs for at least the next 12 months.

Previous wording

We obtained the PMA for our ASSURE WCD from the FDA on July 27, 2021 and fully commercially launched our ASSURE WCD in August 2022. We will continue to scale the business and therefore expect operating losses to continue. Based on our current operating plan, we believe that our existing cash and cash equivalents, which includes the net proceeds from our IPO, as well as cash generated from revenue transactions with customers, will be sufficient to fund our operating and capital needs for at least the next 12 months. We may experience lower than expected cash generated from operating activities or greater than expected capital expenditures, cost of revenue or operating expenses and may require additional funding to execute on our growth plans, which may include future equity and debt financings. Our assessment of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement and involves risks and uncertainties.

Current wording

We obtained the PMA for our ASSURE® WCD from the FDA on July 27, 2021 and fully commercially launched our ASSURE® WCD in August 2022. We will continue to scale the business and therefore expect operating losses to continue. Based on our current operating plan, we believe that our existing cash, cash equivalents, and investments, as well as cash generated from revenue transactions with customers, will be sufficient to fund our operating and capital needs for at least the next 12 months. We may experience lower than expected cash generated from operating activities or greater than expected capital expenditures, cost of revenue or operating expenses and may require additional funding to execute on our growth plans, which may include future equity and debt financings. Our assessment of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement and involves risks and uncertainties.

Previous wording

Our future obligations primarily consist of our debt obligations. From our inception to the consummation of the IPO, our operations were primarily funded by proceeds from our capital contributions made by West Affum Holdings, L.P., our direct parent prior to the Organizational Transactions, borrowings under our Term Loan 2024 and our revenues. We expect the proceeds from our IPO and secondary offering, cash generation from operations, and future ability to refinance or secure additional equity or financing to be sufficient to repay our outstanding debt obligations. As of January 31, 2026, the outstanding principal amount under the Term Loan 2024 was approximately $45.0 million. For further information, see Note 7, “Long-Term Debt,” to our unaudited interim condensed consolidated financial statements included elsewhere in this Quarterly Report.

Current wording

Our future obligations primarily consist of our debt obligations. From our inception to the consummation of the IPO, our operations were primarily funded by proceeds from our capital contributions made by West Affum Holdings, L.P., our direct parent prior to the Organizational Transactions, borrowings under our Term Loan 2024 and our revenues. We expect the proceeds from our IPO and secondary offering, cash generation from operations, and future ability to refinance or secure additional equity or financing to be sufficient to repay our outstanding debt obligations. As of July 31, 2026, the outstanding principal amount under the 2026 Term Loan was approximately $75.0 million. For further information, see Note 7, “Long-Term Debt,” to our unaudited interim condensed consolidated financial statements included elsewhere in this Quarterly Report.

Previous wording

As of January 31, 2026, we had cash and cash equivalents and restricted cash balances of $291.3 million and an accumulated deficit of $613.0 million.

Current wording

As of July 31, 2026, we had cash, cash equivalents, and investments of $244.7 million and an accumulated deficit of $695.9 million.

Previous wording

On December 4, 2025, the Company completed a public underwritten offering and issued an aggregate of 6,900,000 Common Shares at a price of $23.00 per share, resulting in net proceeds to the Company of $149.3 million, after deducting underwriting discounts but before expenses paid by the Company. The aggregate number of Common Shares offered pursuant to the public offering included 900,000 Common Shares issued pursuant to the exercise in full of the underwriters’ option to purchase additional shares. The Common Shares were sold pursuant to an Underwriting Agreement, dated December 2, 2025, between the Company and BofA Securities, Inc., Piper Sandler & Co., J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC as representatives of the underwriters named therein.

Current wording

On December 4, 2025, the Company completed a public underwritten offering and issued an aggregate of 6,900,000 Common Shares at a price of $23.00 per share, resulting in net proceeds to the Company of $149.3 million, after deducting underwriting discounts but before expenses paid by the Company. The Common Shares were sold pursuant to an Underwriting Agreement, dated December 2, 2025, between the Company and BofA Securities, Inc., Piper Sandler & Co., J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC as representatives of the underwriters named therein.

Previous wording

On February 25, 2025, we entered into the Second Amendment to Credit Agreement and Guaranty, by and among Kestra Medical Technologies, Inc., the Company, the guarantors party thereto, the lenders party thereto and Perceptive Credit Holdings IV, LP, as administrative agent (the “Second Amendment to Credit Agreement”) which amended the Term Loan 2024 to adjust the revenue milestones set forth in the Term Loan 2024 and to amend our ability to draw on additional funds. Under the Second Amendment to Credit Agreement, an additional $15.0 million term loan draw is available to us through July 31, 2026 upon achievement of a twelve-month trailing revenue run rate of $60.0 million. In connection with the Second Amendment to Credit Agreement and the IPO, the warrant issued to Perceptive Credit Holdings IV, LP on September 29, 2023 was cancelled and replaced with the 2033 Warrant to purchase up to 325,847 of our Common Shares with an exercise price of $11.54 per share. On September 4, 2025, Perceptive Credit Holdings IV, LP fully exercised the 2033 Warrant to purchase Common Shares on a cashless basis, resulting in the issuance of 100,397 Common Shares and the cancellation of the 2033 Warrant.

Current wording

On September 29, 2023, we entered into a Credit Agreement with Perceptive Credit Holdings IV, LP, as administrative agent, which provides for a senior secured delayed draw term loan facility in an aggregate principal amount of up to $60.0 million (“Term Loan 2024”). The Term Loan 2024 bears interest on outstanding balances of Term SOFR plus a margin of 7.25% per annum. All interest is due and payable quarterly in arrears. On September 29, 2023, we drew the initial $45.0 million under the Term Loan 2024. On February 25, 2025, we entered into the Second Amendment to Credit Agreement and Guaranty, by and among Kestra Medical Technologies, Inc., the Company, the guarantors party thereto, the lenders party thereto and Perceptive Credit Holdings IV, LP, as administrative agent (the “Second Amendment to Credit Agreement”) which amended the Term Loan 2024 to adjust the revenue milestones set forth in the Term Loan 2024 and to amend our ability to draw on additional funds.

Previous wording

For further information, see Note 7, “Long-Term Debt,” to our unaudited interim condensed consolidated financial statements included elsewhere in this Quarterly Report and our consolidated financial statements for the fiscal years ended April 30, 2025 and 2024 included in the Annual Report.

Current wording

For further information, see Note 7, “Long-Term Debt,” to our unaudited interim condensed consolidated financial statements included elsewhere in this Quarterly Report.

Previous wording

For the nine months ended January 31, 2025, cash used in operating activities was $53.6 million, which primarily consisted of a net loss of $62.7 million and a net decrease of $4.4 million in operating assets and liabilities, offset by $13.6 million in net non-cash charges. The net change in our operating assets and liabilities was primarily due to changes in accounts receivable of $7.8 million, disposable medical equipment supplies of $2.8 million, and prepaid expenses and other current assets of $0.4 million, partially offset by changes in accounts payable of $3.7 million, accrued liabilities of $2.7 million, operating lease liabilities of $0.2 million. The non-cash charges primarily consisted of depreciation and amortization expense of $6.1 million, share-based compensation expense of $2.0 million, provision for uncollectible accounts receivable of $1.9 million, amortization of debt discounts and issuance costs of $1.0 million, loss on disposal of property and equipment of $0.9 million, reserve for lost equipment and supplies of $0.6 million, interest paid-in-kind of $0.7 million related to the Term Loan 2024, and non-cash lease expense of $0.3 million .

Current wording

For the three months ended July 31, 2026, cash used in operating activities was $32.3 million, which primarily consisted of a net loss of $44.1 million and a net decrease of $7.5 million in operating assets and liabilities, offset by $19.3 million in net non-cash charges. The net change in our operating assets and liabilities consisted of changes in disposable medical equipment and supplies of $0.9 million, prepaid expenses and other current assets of $0.2 million, accounts payable of $1.9 million, accrued liabilities of $4.7 million, and operating lease liabilities of $0.2 million. The non-cash charges primarily consisted of share-based compensation expense of $9.5 million, loss on debt extinguishments of $6.3 million, depreciation and amortization of $2.7 million, reserve for lost equipment and supplies of $1.5 million, (recovery) provision for uncollectible accounts receivable of $0.8 million, amortization of debt discounts and issuance costs of $0.4 million, loss on disposal of property and equipment of $0.3 million, change in fair value of warrant liability of $0.3 million, and non-cash lease expense of $0.1 million, partially offset by net accretion of discounts on marketable securities of $0.9 million.

Previous wording

For the nine months ended January 31, 2026, cash used in operating activities was $63.0 million, which primarily consisted of a net loss of $92.8 million and a net decrease of $3.1 million in operating assets and liabilities, offset by $32.9 million in net non-cash charges. The net change in our operating assets and liabilities consisted of changes in account receivables of $6.1 million, accounts payable of $0.6 million, disposable medical equipment supplies of $0.5 million, and operating lease liabilities of $0.5 million, partially offset by accrued liabilities of $4.2 million and prepaid expenses and other current assets of $0.4 million. The non-cash charges primarily consisted of share-based compensation expense of $23.3 million, depreciation and amortization of $6.4 million, reserve for lost equipment and supplies of $1.6 million. provision for uncollectible accounts receivable of $1.5 million, amortization of debt discounts and issuance costs of $1.4 million, loss on disposal of property and equipment of $0.7 million, and non-cash lease expense of $0.3 million, partially offset by change in fair value of warrant liability of $2.3 million.

Current wording

For the three months ended July 31, 2025, cash used in operating activities was $26.3 million, which primarily consisted of a net loss of $25.8 million and a net decrease of $6.1 million in operating assets and liabilities, offset by a net increase of $5.6 million in non-cash charges. The net change in our operating assets and liabilities consisted of changes in accounts payable of $2.9 million, accounts receivables of $1.8 million, accrued liabilities of $0.8 million, disposable medical equipment supplies of $0.5 million, and operating lease liabilities of $0.1 million, partially offset by prepaid expenses and other current assets of $0.1 million. The non-cash charges primarily consisted of share-based compensation expense of $4.6 million, depreciation and amortization of $2.0 million, provision for uncollectible accounts receivable of $0.6 million, amortization of debt discounts and issuance costs of $0.5 million, reserve for lost medical supplies of $0.4 million, loss on disposal of property and equipment of $0.3 million, and non-cash lease expense of $0.1 million, partially offset by change in fair value of warrant liability of $2.9 million.

Previous wording

For the nine months ended January 31, 2026, cash used in investing activities was $30.6 million, which primarily consisted of $25.2 million of purchases of property and equipment such as medical rental equipment, computer hardware, test equipment and other research and development activities, and leasehold improvements, $5.0 million in the purchase of an equity security, and $0.3 million of deposits paid for medical rental equipment.

Current wording

For the three months ended July 31, 2025, cash used in investing activities was $8.2 million, which primarily consisted of $8.1 million of purchases of property and equipment such as medical rental equipment, computer hardware, test equipment and other research and development activities, and leasehold improvements, and $0.1 million of deposits paid for medical rental equipment.

Previous wording

For the nine months ended January 31, 2026, cash provided by financing activities was $147.3 million, which primarily consisted of proceeds of $149.3 million from the secondary offering offset by $2.0 million of payments of equity offering costs.

Current wording

For the three months ended July 31, 2025, cash used in financing activities was $1.9 million, which primarily consisted of payments of IPO offering costs.

Previous wording

Our management’s discussion and analysis of our financial condition and results of operations are based on our unaudited interim condensed consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles. The preparation of our consolidated financial statements and related disclosures requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, costs and expenses and related disclosures. We base our estimates on historical experience, known trends and events and various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ materially from these estimates under different assumptions or conditions, could have a material impact on the Company’s business, financial condition, results of operations and prospects.

Current wording

Our management’s discussion and analysis of our financial condition and results of operations are based on our unaudited interim condensed consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles. The preparation of our unaudited interim condensed consolidated financial statements and related disclosures requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, costs and expenses and related disclosures. We base our estimates on historical experience, known trends and events and various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ materially from these estimates under different assumptions or conditions, and such conditions could have a material impact on the Company’s business, financial condition, results of operations and prospects.