Mobia Medical, Inc.

Notes to Condensed Unaudited Interim Financial Statements

Note 1 – Description of Business

Mobia Medical, Inc. (the “Company”) was incorporated in Delaware in March 2007. Effective February 23, 2026, the Company amended its certificate of incorporation to change its name from MicroTransponder, Inc. to Mobia Medical, Inc. The change was solely a corporate name change and had no impact on the Company’s financial statements.

The Company develops, markets, and sells devices for the treatment of medical conditions. The first device brought to market, the Vivistim Paired VNS System (“Vivistim System”), received U.S. Food and Drug Administration premarket approval in 2021 and is intended to be used by chronic ischemic stroke survivors with moderate to severe upper extremity impairments to reduce upper extremity motor deficits and improve motor function. The Vivistim System was first brought to market in 2022, with the first commercial implant in May 2022, and commenced full commercial launch in 2023.

Initial Public Offering –In May 2026, the Company completed its initial public offering (“IPO”) in which it sold 10,000,000 shares of its common stock at a public offering price of $15.00 per share. The Company received net proceeds of approximately $134.0 million, after deducting the underwriters’ discounts and commissions, and estimated offering costs paid by the Company. In addition, immediately prior to the completion of the IPO, all the outstanding shares of the Company’s redeemable convertible preferred stock were converted into an aggregate of 18,831,853 shares of common stock, and the Company's convertible promissory notes issued during the three months ended March 31, 2026 were converted into an aggregate of 3,333,324 shares of common stock.

Risks and Uncertainties –The Company’s activities are subject to significant risks and uncertainties, including, but not limited to, failure to manage growth effectively, reliance on the success of the Vivistim System, new technological innovations, dependence upon third-party payers to provide adequate coverage and reimbursement to its customers, the absence of a national coverage determination or local coverage determinations applicable to its device administered by the Centers for Medicare and Medicaid Services (“CMS”), dependence on key personnel, dependence on key suppliers, protection of proprietary technology, product liability, and compliance with government regulations. The Company is also subject to risks relating to cybersecurity and the protection of confidential information and personal information, as well as risks relating to evolving regulatory requirements (including potential additional clinical evidence requirements) that could affect commercialization of existing or future products. These risks and uncertainties, as well as failure to secure additional funding, if needed, can adversely affect the Company’s future financial results, financial position, and cash flow.

In addition, economic conditions in the United States, including any economic disruptions, inflationary, or supply chain pressures, may adversely impact the Company’s future financial results. The Company uses contract manufacturers in Uruguay to supply key products. Political instability or the deterioration of trade relations, including implementation of new tariffs and trade restrictions, could adversely impact the Company’s business.

Concentration of credit risk –The Company maintains its cash deposits with high credit quality financial institutions. At times, such deposits may be in excess of the Federal Deposit Insurance Corporation insured limits; however, management does not believe it is exposed to any significant credit risk. All such accounts are monitored by management to mitigate risk and cash equivalents are invested in highly rated money market funds.

Supplier concentration risk – The Company depends on a small number of third-party contract manufacturers and suppliers, some of which are single source, to produce and package all elements comprising the Vivistim System as well as certain implantation tools. A failure by these suppliers and manufacturers to supply the Vivistim System or its components or subcomponents in sufficient quantities or at all, could adversely affect the Company’s financial condition, results of operations, and cash flows.

Note 2 – Liquidity and Going Concern

These condensed unaudited interim financial statements were prepared on a going concern basis. The going concern basis assumes that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business.

The Company has incurred operating losses and negative cash flows from operations since its inception. For the nine months ended September 30, 2026, the Company had a net loss of $56.1 million and negative cash flows from operations of $46.3 million, and had an accumulated deficit of $213.9 million as of September 30, 2026.

Since inception, the Company has financed its activities principally from the issuance of preferred stock, debt financing arrangements, revenue from sales of the Vivistim System and net proceeds from the IPO completed in May 2026. The Company believes that its operating losses and negative operating cash flows will continue into the foreseeable future. There can be no assurance that the Company’s products will generate sufficient revenue for the Company to achieve profitable operations.

Based on its current operating plan, the Company expects to continue to incur significant expenditures to increase awareness and adoption of the Vivistim System, support research and development activities, including regulatory affairs and clinical studies, scale its commercial operations and infrastructure, and operate as a public company. In prior reporting periods, the Company concluded that recurring operating losses, negative cash flows from operations, and future expenditures raised substantial doubt about its ability to continue as a going concern. In May 2026, the Company completed its IPO and received net proceeds of approximately $134.0 million. As a result of the additional liquidity provided by the completed IPO, management concluded that the existing cash and cash equivalents are sufficient to fund its operations and meet its obligations for at least one year from the date these condensed unaudited interim financial statements are issued. Accordingly, management concluded that the conditions and events described above do not raise substantial doubt about the Company’s ability to continue as a going concern.

If future revenue is not sufficient or if sufficient funds on acceptable terms are not available when needed, the Company may be required to curtail planned activities to significantly reduce its operating expenses. Failure to manage discretionary spending or raise additional financing, as needed, may have a material adverse effect on the Company’s future viability and results of operations.

Note 3 – Summary of Significant Accounting and Reporting Policies

Basis of Presentation – The condensed unaudited interim financial statements do not include all disclosures, including certain notes required by accounting principles generally accepted in the United States of America (“GAAP”) on an annual reporting basis. The condensed unaudited interim financial statements have been prepared on the same basis as the annual financial statements. In management’s opinion, the condensed unaudited interim financial statements reflect all adjustments (consisting only of normal recurring adjustments) necessary for a fair statement of the condensed balance sheets, condensed statements of operations, condensed statements of redeemable convertible preferred stock and stockholders’ equity (deficit), and condensed statements of cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full fiscal year or any future period. The condensed unaudited interim financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2025 included in the Company’s prospectus dated May 7, 2026 filed pursuant to Rule 424(b)(4) with the U.S. Securities and Exchange Commission (the “SEC”) on May 8, 2026.

The financial statements are presented in thousands, except for share and per share amounts. Certain prior period amounts presented in the Company’s Registration Statement on Form S-1 have been rounded to the nearest thousand to conform to the current period’s presentation. Accordingly, certain prior period figures may differ slightly from previously filed reports presented in whole dollars.

Reverse Stock Split – In connection with the IPO, on May 1, 2026, the Company effected a 1-for-3.483 reverse stock split of its issued and outstanding common stock. All references to common stock issued and outstanding, stock options, loss per share and per share amounts presented in the accompanying financial statements and notes thereto have been retroactively adjusted for all periods presented to reflect the reverse stock split. The per share par value, authorized numbers of shares of the Company’s common stock and redeemable convertible preferred stock, issued and outstanding number of shares of redeemable convertible preferred stock, and redeemable convertible preferred stock warrants were not adjusted as a result of the reverse stock split. Instead, the conversion ratio was updated whereby each share of each series of redeemable convertible preferred stock was convertible into shares of common stock on a 1-for-3.483 basis.

Use of Estimates – The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant estimates and assumptions include, but are not limited to, share-based compensation, valuations of common and preferred stock, valuation of warrant liabilities, product warranty liability, and the redeemable convertible preferred stock tranche liability. Actual results could differ from those estimates.

Emerging Growth Company Status – The Company is an emerging growth company (“EGC”), as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”), enacted in 2012. Under the JOBS Act, EGCs can delay adopting new or revised accounting standards issued after the enactment of the JOBS Act until those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an EGC or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act.

Segment Reporting – The Company operates and manages its business as asingle reportable and operating segment. Operating segments are defined as components of an enterprise where separate financial information is evaluated regularly by the chief operating decision maker (CODM) in deciding how to allocate resources and assess performance. The Company’s CODM is the Chief Executive Officer. The CODM regularly reviews company-wide revenue, net loss, cost of goods sold, research and development costs, selling, general and administrative expenses, and cash and cash equivalents to assess performance, compare actual results with expectations, establish performance metrics, support the Company’s budgeting and forecasting process, and make resource-allocation decisions. For additional segment reporting information, refer to Note 14.

Significant Accounting Policies – There have been no material changes to the Company’s significant accounting policies as described in the Company’s audited financial statements for the year ended December 31, 2025.

Deferred Offering Costs – Deferred offering costs consisted of legal and accounting fees incurred directly related to the Company's IPO. Upon completion of the IPO, these costs were recorded as a reduction of the offering proceeds included within additional paid-in capital. There wereno unpaid offering costs as of September 30, 2026.

Inventory – Inventory costs are comprised primarily of finished goods and raw materials and include the acquisition costs of raw materials and components, in addition to direct labor and overhead. All inventory is stated at the lower of cost or net realizable value and is accounted for on a first in, first out (FIFO) basis.

The balance of inventory is as follows (in thousands):

The Company performs an assessment of the recoverability of inventory during each reporting period, and, if applicable, writes down any excess and obsolete inventories to their estimated net realizable value in the period in which the impairment is first identified. The determination of whether inventory costs will be realizable requires estimates by management. If actual market conditions are less favorable than projected by management, additional write-downs of inventory may be required. There were no expenses recorded for excess inventory for each of the three and nine months ended September 30, 2026 and 2025. During the three and nine months ended September 30, 2025, the Company recorded inventory write-offs of $0.1 million and $0.2 million, respectively, related to components determined to be non-saleable. Inventory write-offs during the corresponding periods in 2026 were not material.

Related Party Transactions – The Company's Chief Financial Officer held an indirect ownership interest in Exceller Hunt MicroTransponder 2017, LP ("Exceller Hunt") and the Curnes Fund 2001 ("Curnes Fund"), both of which are stockholders of the Company. Jordan Curnes, the Company's Co-founder and a former member of the Board of Directors, also held an indirect ownership interest in the Curnes Fund. At the time of the Company's issuance of convertible promissory notes discussed in Note 6, entities affiliated with U.S. Venture Partners, GPG Healthcare Opportunities Fund, LLC, and Osage University Partners were principal stockholders of the Company.

During the nine months ended September 30, 2026, Exceller Hunt and the Curnes Fund participated in the Company's issuance of convertible promissory notes discussed in Note 6 and purchased approximately $4.0 million and $2.1 million of such notes, respectively. Entities affiliated with U.S. Venture Partners, GPG Healthcare Opportunities Fund, LLC, Osage University Partners, and Casey Tansey, a member of the Board of Directors, also participated in the Company's issuance of convertible promissory notes discussed in Note 6 and purchased approximately $3.8 million, $7.4 million, $6.6 million, and $2.0 million of such notes, respectively. The convertible promissory notes were issued on the same terms and conditions as those offered to other investors in the financing. In connection with the Company's initial public offering in May 2026, the convertible promissory notes automatically converted into shares of the Company's common stock in accordance with their terms, and no principal amount of the notes remained outstanding as of September 30, 2026.

During the nine months ended September 30, 2025, Exceller Hunt and the Curnes Fund acquired 569,973 and 427,480 shares of the Company's Series F redeemable convertible preferred stock, respectively, at a price of $2.6317 per share. Entities affiliated with U.S. Venture Partners, GPG Healthcare Opportunities Fund, LLC, and Osage University Partners also participated in the Company's Series E and Series F redeemable convertible preferred stock financings on the same terms and conditions as other investors.

Recently Issued Accounting Standards– On December 14, 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires enhanced income tax disclosures, including specific categories and disaggregation of information in the effective tax rate reconciliation, disaggregated information related to income taxes paid, income or loss from continuing operations before income tax expense or benefit, and income tax expense or benefit from continuing operations. This guidance is effective for annual periods beginning after December 15, 2024; however, as an EGC, the Company has elected to use the extended transition period for adopting new or revised accounting standards, and therefore the guidance will be effective for the Company for the year ended December 31, 2026. The adoption of ASU 2023-09 is expected to have a disclosure-only impact on the Company’s financial statements for the year ended December 31, 2026. The Company is currently evaluating the impact of this pronouncement on the disclosures in its financial statements.

On November 4, 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires more detailed disclosures about specified categories of expenses (including employee compensation, depreciation, and amortization) included in certain expense captions presented on the face of the income statement. This ASU is effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The amendments may be applied either (i) prospectively to financial statements issued for reporting periods after the effective date of this ASU or (ii) retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact of this pronouncement on the disclosures in its financial statements.

On November 26, 2024, the FASB issued ASU 2024-04, Debt – Debt with Conversion and Other Options (Subtopic 470-20), which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion rather than as extinguishments of debt. The amendments may be applied on either a prospective or a retrospective basis. This ASU is effective for fiscal years beginning after December 15, 2025, and interim periods within those annual reporting periods. The Company adopted ASU 2024-04 as of January 1, 2026, on a prospective basis and itdid not have a material impact on its financial statements.

On December 8, 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270) Narrow-Scope Improvements, which is intended to improve the navigability of interim disclosures, clarifies when Topic 270 applies, and provides additional interim disclosure guidance, including a principle to disclose material events since the most recent annual reporting period. The amendments do not change the underlying objectives of interim reporting but are designed to enhance clarity in application. This ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027; however, as an EGC, the Company has elected to use the extended transition period for adopting new or revised accounting standards, and therefore the guidance will be effective for the Company for interim periods within annual periods beginning after December 15, 2028. The Company is currently evaluating the impact of this pronouncement on its financial statements.

Note 4 – Fair Value Measurements

ASC 820, Fair Value Measurements and Disclosures, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under ASC 820 are described below:

Level 1– This level consists of quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

Level 2– This level consists of directly or indirectly observable inputs as of the reporting date through correlation with market data, including quoted prices for similar assets and liabilities in active markets and quoted prices in markets that are not active. Level 2 also includes assets and liabilities that are valued using models or other pricing methodologies that do not require significant judgment since the input assumptions used in the models, such as interest rates and volatility factors, are corroborated by readily observable data from actively quoted markets for substantially the full term of the financial instrument.

Level 3– This level consists of unobservable inputs that are supported by little or no market activity and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions.

In determining the fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the unobservable inputs to the extent possible, as well as considers counterparty credit risk in its assessments of fair value.

Fair Value of Cash Equivalents –The Company’s cash equivalents include investments in money market funds which are unrestricted as to withdrawal or use and are classified as Level 1 of the fair value hierarchy. To value its money market funds, the Company values the funds at $1 stable net asset value, which is the quoted price in active markets for identical assets that the Company has the ability to access. The Company’s cash equivalents are held in institutions in the United States. The following table sets forth the Company’s financial instruments that were measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands):

Fair Value of Liabilities –The following tables represent the Company’s financial liabilities according to the fair value hierarchy, measured at fair value (in thousands):

The Company’s warrant liabilities consisted of warrants issued in connection with certain preferred stock financings and warrants issued in connection with the Company’s Loan and Security Agreement with Horizon Technology Finance Corporation (“Horizon”). The warrant liabilities were categorized within Level 3 of the fair value hierarchy because their valuation included significant inputs that were not observable in active markets. The classification of a financial instrument within the fair value hierarchy is based on the lowest-level input that is significant to the fair value measurement.

Prior to the IPO, the fair value of the warrant liability was estimated using the option-pricing model based on the Black-Scholes-Merton model with the following inputs:

The Company estimated volatility based upon analysis of the historical volatility of peer public companies as well as factors specific to the Company, including, but not limited to, size, expected growth and relative risk. The expected life assumption was based on the remaining contractual terms of the warrants. The risk-free rate as of December 31, 2025 was based on the 1.5 year U.S. Treasury bond yield. The expected dividend yield used iszero, because the Company hasno present intention to pay cash dividends.

Immediately prior to the IPO, the fair value of the warrant liability was estimated by multiplying the number of equivalent common shares by the difference between the common stock offering price and the exercise price. All of the redeemable convertible preferred stock warrants were exercised or expired upon the completion of the IPO.

As of September 30, 2026, the Company’s warrant liability consisted solely of warrants issued in connection with the Loan and Security Agreement with Horizon Technology Finance Corporation (the “Horizon Warrants”). The fair value of the Horizon Warrants was estimated by multiplying the number of equivalent common shares by the difference between the Company’s closing stock price and the exercise price. Changes in the estimated fair value of the warrant liabilities were recognized within Other income (expense), net in the condensed statements of operations.

In January and February 2026, the Company issued convertible promissory notes in an aggregate principal amount of $40.0 million (the “Convertible Notes”). The Company elected the fair value option under ASC 825 for the Convertible Notes. At issuance, the fair value of the Convertible Notes was determined based on the transaction price, which the Company concluded represented an orderly transaction between market participants. Prior to the Company’s IPO, subsequent fair value measurements were determined using a scenario-based valuation model that incorporates probability-weighted outcomes across multiple potential scenarios, including an initial public offering, financing, change of control, maturity, and default. The model incorporated discounted cash flow techniques and option-pricing methodologies to reflect the embedded conversion features, and was calibrated to the transaction price at issuance and was updated at the pre-IPO measurement date. Significant unobservable inputs included discount rate (including a company-specific credit spread), equity volatility, and the probability and timing of potential liquidity events. Accordingly, the Convertible Notes are recurring Level 3 liabilities measured under the ASC 825 fair value option.

As of issuance, key assumptions included a discount rate of approximately 21.2%, equity volatility of approximately 85%, and expected term of 1.0 –2.0 years. As of March 31, 2026, key assumptions included a discount rate of approximately 21.5%, equity volatility of approximately 80% and expected timing of liquidity events of 0.8 –1.5 years. At issuance and as of March 31, 2026, the estimated probability of an initial public offering was 40% and a change of control was 20%.

The following table summarizes the change in the fair value of the Convertible Notes (in thousands):

In May 2026, all of the Convertible Notes were converted into an aggregate of 3,333,324 shares of common stock upon the Company’s IPO. Immediately prior to conversion, the Convertible Notes had an estimated fair value of $44.9 million. The estimated fair value reflected the $15.00 per share IPO price, adjusted for a 10.3% discount for lack of marketability associated with the 180-day contractual restriction on the shares issued upon conversion. The discount for lack of marketability was estimated using an option-pricing model that incorporated the contractual restriction period and expected equity volatility. No Convertible Notes remained outstanding as of September 30, 2026.

Note 5 – Product Warranties

The Company provides an assurance-type warranty that its products will conform to agreed-upon technical and quality specifications. The warranty provides for repair or replacement of products that fail to meet specifications or become unusable during the warranty period, which generally ranges fromone totwo years, depending on the product.

The Company maintains a warranty reserve for implanted pulse generators (“IPGs”) and leads and began recording a warranty liability in 2024 based on historical product replacement experience. A warranty liability is recorded at the time revenue is recognized for all periods presented and is separately presented as product warranty liability on the face of the balance sheets. The warranty reserve is estimated based on historical product replacement experience. The Company establishes product replacement rates separately for IPGs and leads using historical replacement data beginning with the first full period of commercial shipments. The replacement rate represents the average historical rate of product replacement and is applied to units sold during each reporting period to estimate expected warranty obligations.

In developing its replacement rate assumptions, the Company evaluates historical replacement patterns over the expected product life cycle. The warranty accrual is calculated quarterly. The Company evaluates and updates its replacement rate assumptions annually, or more frequently if actual experience or product performance trends indicate that revisions are necessary. A reconciliation of the changes in the product warranty liability is as follows (in thousands):

Note 6 – Convertible Notes and Notes Payable

Convertible Notes

As described in Note 4, in January and February 2026, the Company issued the Convertible Notes in an aggregate principal amount of $40.0 million. The Convertible Notes were scheduled to mature two years from their respective issuance dates unless earlier converted or repaid. The Convertible Notes bore no interest during the first six months following issuance and thereafter provided for payment-in-kind (“PIK”) interest at a rate of 7.0% per annum. In connection with the initial public offering, any accrued PIK interest was contractually waived immediately prior to conversion. The Convertible Notes provided for conversion upon the occurrence of specified events, including a qualified financing, non-qualified financing, change of control, or initial public offering.

The Company elected the fair value option under ASC 825 for the Convertible Notes in order to account for the Convertible Notes as a single unit of account, which reflects the combined effect of the debt host and the embedded features within the overall fair value measurement. Accordingly, the Convertible Notes were initially recorded at fair value and subsequently remeasured at fair value at each reporting date through the date of conversion, with changes in fair value recognized in the statement of operations within “Change in fair value of convertible notes payable.” No portion of the change in fair value was attributed to instrument-specific credit risk. Because the Convertible Notes were accounted for under the fair value option, no separate interest expense was recognized.

Prior to conversion, the Convertible Notes were presented as a separate line item on the balance sheet titled “Convertible notes payable.” At issuance, the Company determined that the transaction price represented the best evidence of fair value and recorded the Convertible Notes at the proceeds received. Immediately prior to the conversion in May 2026, the estimated fair value was $44.9 million. The estimated fair value reflected the $15.00 per share IPO price, adjusted for a 10.3% discount for lack of marketability associated with the 180-day contractual restriction applicable to the shares issued upon conversion. See Note 4 –Fair Value Measurements for the discussion on the methodology and assumptions used in assessing the fair value of the Convertible Notes.

Immediately prior to the completion of the Company’s IPO in May 2026, all Convertible Notes were converted into an aggregate of 3,333,324 shares of common stock in accordance with their contractual terms. Following the conversion, no Convertible Notes remained outstanding as of September 30, 2026.

Notes

On December 29, 2023, the Company entered into a Loan and Security Agreement (the “Loan and Security Agreement”) with Horizon Technology Finance Corporation. On June 1, 2024, Horizon Technology Finance Corporation assigned all of its right, title and interest in and to the loans outstanding under the Loan and Security Agreement and related warrants to Horizon Funding II, LLC, its wholly-owned subsidiary (together with Horizon Technology Finance Corporation, “Horizon”). The Loan and Security Agreement provides for term loans of up to an aggregate principal amount of $30.0 million, available in four equal tranches of $7.5 million. Each tranche comprises two equal loans of $3,750,000. The Company’s ability to draw additional loans under the Agreement expired on

December 31, 2025. As of September 30, 2026, the Company had $7.5 million in principal outstanding under the Loan and Security Agreement (the “Notes”).

Borrowings under the Loan and Security Agreement accrue interest at an annual rate equal to the greater of (i) the Wall Street Journal (or any successor thereto) prime rate (subject to a floor of 8.50%) plus 3.75% and (ii)12.25%. The Company is required to make monthly payments of interest through January 1, 2028, followed by amortizing principal and interest payments through the maturity date of January 1, 2029. The unpaid balance of principal and accrued interest is due at maturity. The borrowings are secured by substantially all of the Company’s assets, excluding intellectual property.

In connection with the Company’s draw down of the first tranche under the Loan and Security Agreement, the Company issued warrants to purchase such number of securities representing an aggregate of $262,500 to the lender. The warrants are exercisable at the election of the holder for (i) shares of Series E-2 redeemable convertible preferred stock at an exercise price of $2.5443 per share or, (ii) shares of Series F redeemable convertible preferred stock at an exercise price of $2.6317 per share, and expireten years from the date of issuance. The warrants allow for settlement in shares and are transferable at the holder’s discretion. The value of the warrants is capped at $2.5443 per share, a total of $262,500, but the number of shares is not limited. Immediately prior to the completion of the IPO, the warrants automatically converted into warrants to purchase 29,620 shares of common stock with an average exercise price of $8.8618 per share. As of September 30, 2026, these warrants remain outstanding.

As of September 30, 2026 and December 31, 2025, the carrying value of the borrowings under the Loan and Security Agreement was $7.3 million and $7.1 million, respectively, net of unamortized debt discount and deferred financing costs. The Company amortizes deferred financing costs associated with the Notes to interest expense over the term of the Notes. The amortization of debt discount was not material for each of thethree months ended September 30, 2026 and 2025 and was $0.1 million and not material for the nine months ended September 30, 2026 and 2025, respectively. The amortization of deferred financing costs was not material for each of the three months ended September 30, 2026 and 2025 and each of the nine months ended September 30, 2026 and 2025.

There were no additional borrowings, repayments, or material modifications regarding the Loan and Security Agreement during the nine months ended September 30, 2026. Total contractual interest expense was $0.2 million for each of the three months ended September 30, 2026 and 2025 and was $0.7 million for each of the nine months ended September 30, 2026 and 2025.

Note 7 – Leases

On March 7, 2023, the Company entered into a noncancellable operating lease for office space and warehouse space. The commencement date of this lease was July 1, 2023, with an end date of July 31, 2028. Leases for all prior years were month to month. The original lease contained a renewal option to extend the term for a period offive years. Because the Company was reasonably certain it would exercise its renewal option, the optional period was included in determining the lease term, and associated payments under these renewal options were included in lease payments. The Company’s lease does not include termination options for either party to the lease or restrictive financial or other covenants. Payments due under the lease contract include fixed payments plus variable payments. The Company’s office space lease requires it to make variable payments for the Company’s proportionate share of the building’s property taxes, and common area operating expenses. These variable lease payments are not included in lease payments used to determine lease liability and are recognized as variable costs when incurred.

On March 20, 2025 the Company entered into a modification of its existing operating lease. The modification extended the lease term to April 30, 2030, expanded the office space and revised the future lease payments. Although the modification grants the Company an additional right of use at a stand-alone price, the modification also changes the scope of the original lease by extending ittwo additional years while also removing the renewal option. As such, the modification has been accounted for as a single contract.

On August 8, 2025, the Company entered into an additional non-cancellable operating lease for office space. The commencement date of the lease was September 1, 2025, with an end date of August 31, 2028. Payments due under the lease contract include fixed payments plus variable payments. The Company’s office space lease requires it to make variable payments for the Company’s proportionate share of the building’s property taxes, and common area operating expenses. These variable lease payments are not includedin lease payments used to determine lease liability and are recognized as variable costs when incurred in accordance with ASC 842.

Supplemental lease cost information is as follows (in thousands):

The following table presents the lease balances within the balance sheet (in thousands):

The following table presents undiscounted future minimum lease payments as of September 30, 2026, which reconcile to the total lease liability as follows (in thousands):

The weighted average lease terms and discount rates are as follows:

Supplemental cash flow information related to leases was as follows (in thousands):

Note 8 – Income Taxes

The Company accounts for income taxes in accordance with ASC 740, Income Taxes. The income tax provision for interim periods is determined using an estimate of the Company’s annual effective tax rate, adjusted for discrete items recognized in the period. The Company had an effective tax rate of 0% for each of thethree and nine months ended September 30, 2026 and 2025. The Company continues to incur operating losses.

For the periods ended September 30, 2026 and 2025, the Company continued to maintain a full valuation allowance against its deferred tax assets as management believes it is more likely than not that these assets will not be realized based on the Company’s history of operating losses. The Company’s tax provision for interim periods primarily reflects state income taxes and other minimum taxes.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted, introducing various federal tax changes, including extensions of certain 2017 Tax Cuts and Jobs Act (“TCJA”) provisions and updates to individual and business tax rules. Management evaluated the provisions applicable to the Company and determined that OBBBA did not have a significant impact on the Company’s condensed unaudited interim financial statements for the three and nine months ended September 30, 2026.

Note 9 – Redeemable Convertible Preferred Stock

Prior to the Company’s IPO, the Company had issued Series A redeemable convertible preferred stock (“Series A”), Series B redeemable convertible preferred stock (“Series B”), Series C redeemable convertible preferred stock (“Series C”), Series D redeemable convertible preferred stock (“Series D”), Series E-1 redeemable convertible preferred stock (“Series E-1”), Series E-2 redeemable convertible preferred stock (“Series E-2”), and Series F redeemable convertible preferred stock (“Series F”), collectively the (“Preferred Stock”).

In March 2025, the Company entered into a Series F preferred stock purchase agreement (the “Series F Agreement”) pursuant to which the Company issued 12,349,423 shares of Series F redeemable convertible preferred stock at a price of $2.6317 per share for gross cash proceeds of $32,499,977. The Series F Agreement also required the Company to issue, and the investors to purchase, an additional 12,349,423 shares of Series F redeemable convertible preferred stock at the same price per share on or around October 15, 2025 for additional gross cash proceeds of $32,499,977 (the “Series F preferred stock tranche obligation”).

The Company classified the Series F preferred stock tranche obligation as a liability on its balance sheets as it represents a freestanding financial instrument that may require the Company to transfer assets to settle its obligation (upon events that are outside of its control). The Series F preferred stock tranche obligation was initially recorded at fair value upon the date of issuance and was subsequently remeasured to fair value at each reporting date until settlement. Changes in the fair value of the Series F preferred stock tranche obligation were recognized as a component of other income (expense), net in the statements of operations.

The Series F preferred stock tranche obligation had an initial fair value of $680,600. As a result of the initial issuance of Series F in March 2025,12,349,423 shares of Series F were recorded at their fair value of $31,532,110, net of issuance costs of $287,267. The Series F preferred stock tranche obligation was subsequently remeasured to a fair value of $797,908 as of June 30, 2025, and $915,216 as of September 30, 2025, with changes in fair value of $117,308 for the three months ended June 30, 2025 and $117,308 for the three months ended September 30, 2025 recognized as a component of other income (expense), net in the statements of operations.

The Series F preferred stock tranche obligation was settled in October 2025, with the issuance of 12,349,423 shares of Series F at a price of $2.6317 per share for gross cash proceeds of $32,499,977. The fair value of the Series F preferred stock tranche obligation at settlement was $915,216. As a result of the October 2025 issuance of Series F, as well as the settlement of the Series F preferred stock tranche obligation,12,349,423 shares of Series F were recorded at their fair value of $33,415,193. Issuance costs related to the October 2025 Series F issuance were immaterial.

Immediately prior to the completion of the Company’s IPO in May 2026, all the outstanding shares of Preferred Stock automatically converted into an aggregate of 18,831,853 shares of common stock in accordance with their terms, and all related liquidation preferences and other preferential rights terminated. Following the conversion, no shares of Preferred Stock remained outstanding as of September 30, 2026.

As of December 31, 2025, Preferred Stock consists of the following (in thousands, except for share and per share amounts):

Dividends

Prior to the conversion of the Preferred Stock in connection with the IPO, holders of the Preferred Stock were entitled to receive non-cumulative dividends, pro rata with holders of common stock on an as-converted basis, if and when dividends (other than dividends payable in shares of common stock) were declared by the Board of Directors on the common stock. No dividends were declared or paid on the Preferred Stock prior to its conversion.

Redeemable Convertible Preferred Stock Warrants

As of December 31, 2025, the Company had 908,000 warrants for Series B redeemable convertible preferred stock (“Series B Preferred Warrants”) outstanding. These warrants were issued during 2012 and 2013 in connection with the issuances of Series B redeemable convertible preferred stock. In addition, as of December 31, 2025, the Company had 258,000 warrants for Series D redeemable convertible preferred stock (“Series D Preferred Warrants”) outstanding.

In connection with the Company’s IPO in May 2026, certain outstanding redeemable convertible preferred stock warrants were exercised in accordance with their terms, and all remaining redeemable convertible preferred stock warrants expired. Accordingly no warrants to purchase redeemable convertible preferred stock remained outstanding as of September 30, 2026.

Note 10 – Common Stock

In March 2025, the Company amended and restated the Company’s Certificate of Incorporation to increase the number of authorized shares of common stock to 86,600,000 shares at $0.01 per share. In May 2026, in connection with the IPO, the Company amended and restated its Certificate of Incorporation to, among other things, increase the number of authorized shares of common stock to 950,000,000 shares at $0.01 per share.

Note 11 – Share-Based Compensation

In April 2026, the Board of Directors approved the Company’s 2026 Incentive Award Plan (the “2026 Plan”) and 2026 Employee Stock Purchase Plan (the “2026 ESPP”). The stockholders of the Company approved the 2026 Plan and the 2026 ESPP in May 2026. Both plans became effective in connection with the Company’s IPO. The 2026 Plan provides for the grant of equity-based awards and authorizes an initial share reserve of 6,440,000 shares, as well as annual increases in the number of shares available for issuance thereunder. The 2026 ESPP provides eligible employees with the opportunity to purchase shares of the Company’s common stock and includes an initial share reserve of 460,000 shares and annual increases based on a percentage of outstanding shares.

On December 15, 2022, the Board of Directors approved the Company’s 2022 Equity Incentive Plan (the “2022 Plan”) providing for the grants of non-qualified stock options, incentive stock options and other stock-based awards up to an aggregate of 7,575,181 shares of common stock, $0.01 par value per share. This consisted of the available reserve from the 2007 Equity Incentive Plan (the “2007 Plan”) plus all returned shares. The 2022 Plan serves as the successor to and continuation of the 2007 Plan, and all options that were granted under the 2007 Plan (unless forfeited, exercised or expired) remained outstanding as of December 31, 2022. Awards issued under the 2007 Plan remain subject to the terms of the 2007 Plan, and unissued authorized 2007 shares became available under the 2022 Plan. No issued 2007 Plan awards were converted. The 2007 Plan contained an antidilution provision. Following a 1,000-for-1 common stock split in June 2022, the number of option shares for prior periods was retrospectively adjusted to reflect the split. No other terms of these existing awards were changed except for the number of option shares and the exercise price to reflect the stock split. Because the modification did not result in incremental fair value under ASC 718, no additional compensation expense was recognized in 2022.

Under the 2022 Plan, stock options generally vest and become exercisable in respect of 25% of the total number of Shares initially subject to the Options on the first anniversary of the Vesting Commencement Date, and in respect of 1/48th of the total number of Shares initially subject to the Option on each monthly anniversary of the Vesting Commencement Date thereafter, so that 100% of the Shares subject to the Option shall be vested on the fourth anniversary of the Vesting Commencement Date, in each case, subject to the Optionee remaining as a Service Provider (as defined in the Plan) through the applicable vesting date. Certain awards may vest immediately upon grant or may be subject to performance-based vesting conditions, as determined by the Board of Directors. During the year ended 2025, the Company grantedtwo executive awards that include performance-based vesting conditions. Share-based compensation expense related to these awards was not material for the periods presented. The Board of Directors administers the 2022 Plan and determines the exercise prices of options based on the fair value of the Company’s common stock on the grant date. In certain instances, options have been granted with exercise prices in excess of fair market value at the date of grant.

All share and per-share amounts presented in the note have been retrospectively adjusted to reflect the Company’s 1-for-3.483 reverse stock split effected on May 1, 2026.

The fair market value of stock options was estimated using the Black-Scholes valuation model. Because the Company has limited trading history as a public company, expected volatility is estimated using the historical volatility of a group of comparable publicly traded companies over a period of time equal to the expected life of the options. The Company uses the simplified method to calculate the expected term and contractual terms. Under the simplified method, the expected life is equal to the average of the share-based award’s weighted average vesting period and its contractual term. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. There wereno expected dividends. The following assumptions were used in estimating the fair value of option grants issued:

The following assumptions were used to estimate the fair value of common stock to be purchased under the 2026 ESPP in 2026:

Stock options— A summary of stock options activity under the 2007, 2022, and 2026 Plans is presented below (in thousands, except for share and per share amounts):

The following table summarizes information about stock options outstanding as of September 30, 2026:

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock options and the fair value of the Company’s common stock for stock options that were in-the-money at period end. The aggregate intrinsic value of all options exercised was $0.3 million and less than $0.1 million for thethree months ended September 30, 2026 and 2025, respectively, and was $1.3 million and $0.1 million for thenine months ended September 30, 2026 and 2025, respectively. The total fair value of options vested was $0.3 million and $0.2 million for thethree months ended September 30, 2026 and 2025, respectively, and $1.1 million and $0.7 million for thenine months ended September 30, 2026 and 2025, respectively. The options granted had a weighted average grant date fair value of $6.71 per share and $2.02 per share for thethree months ended September 30, 2026 and 2025, respectively, and $8.24 per share and $1.96 per share for thenine months ended September 30, 2026 and 2025, respectively. The options forfeited had a weighted average grant date fair value of $5.94 per share and $1.71 per share for thethree months ended September 30, 2026 and 2025, respectively, and $3.50 per share and $1.73 per share for thenine months ended September 30, 2026 and 2025, respectively. The total compensation cost related to non-vested stock options to be recognized in the future as of September 30, 2026, was $28.2 million over a weighted-average period of approximately 3.26 years.

Restricted stock units— A summary of officer, employee, and non-employee restricted stock units granted and outstanding, under the 2026 Plan is presented below (in thousands, except for share and per share amounts):

Share-based compensation expense recognized in the condensed statements of operations was classified as follows (in thousands):

Share-based compensation expense by award type was as follows (in thousands):

Note 12 – Net Loss Per Share

Net loss per share is calculated by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share is calculated similarly but includes potential dilution from the exercise of stock options and warrants, vesting and settlement of restricted stock units, purchases of shares under the employee stock purchase plan, and conversion of convertible securities, if dilutive. For the periods presented, the Company reported losses from continuing operations and, consistent with its established accounting policy, excluded potential common shares from diluted net loss per share. Accordingly, basic and diluted net loss per share were the same.

The following is a reconciliation of the numerators and denominators of the basic and diluted net loss per share computations for the periods presented (in thousands, except for share and per share amounts):

The following table summarizes the as-converted securities that were excluded from the diluted net loss per share calculation because the effect of including these potential shares would have been anti-dilutive:

Purchase rights outstanding under the employee stock purchase plan were also considered and excluded from diluted net loss per share under the Company’s loss-period accounting policy. These rights are not included in the totals in the preceding table. No shares were purchased under the plan during the nine months ended September 30, 2026, and the first purchase date is scheduled for November 15, 2026.

In connection with the IPO, on May 1, 2026, the Company effected a 1-for-3.483 reverse stock split. All share and per share amounts for all periods presented have been retroactively adjusted to reflect this reverse stock split.

Note 13 – Commitments and Contingencies

From time to time, the Company may become a party to claims, legal actions, and complaints arising in the ordinary course of business. Management is not aware of any such matters which would have a material effect on its financial position, results of operations, or cash flows. The Company relies on third-party manufacturers for the production of its IPGs and stimulation leads. Certain of these arrangements include non-cancelable purchase commitments and binding forecast obligations. The Company issues purchase orders based on production requirements, which are generally non-cancelable once accepted by the supplier. As of September 30, 2026, the Company had outstanding non-cancelable purchase orders totaling approximately $16.8 million, which are expected to be fulfilled in the next twelve months. As of December 31, 2025, the Company had outstanding non-cancelable purchase orders totaling approximately $7.1 million, which are expected to be fulfilled during 2026.

In September 2024, the Company entered into an updated IPG supply agreement that expanded the scope of its supply arrangements with the third-party manufacturer. The agreement includes minimum annual purchase commitments over a five-year period commencing upon the first commercial shipment of product under the agreement. The first commercial shipment is currently expected to occur in 2028. The agreement also requires the Company to provide rolling twelve-month forecasts, portions of which may become binding. As of September 30, 2026, no binding forecast commitments had been established under this agreement. The aggregate minimum purchase obligation over thefive-year commitment period totals approximately $5.8 million.

The Company also has software service agreements entered into in the ordinary course of business. These amounts were not recorded as liabilities on the condensed balance sheets as the Company had not yet received the related services. As of September 30, 2026, the Company had an estimated commitment for services of $4.6 million over the next five years.

Note 14 – Segment Information

The Company operates as a single operating and reportable segment focused on the development and commercialization of the Vivistim System. The Company’schief executive officer serves as its chief operating decision maker (“CODM”). The Company’s measure of segment profit or loss is net loss, which is used by the CODM to measure actual results versus expectations, set performance metrics, and during the Company’s budgeting and forecasting process to assess segment performance and make decisions regarding the allocation of resources. Significant segment expenses within net loss include cost of goods sold, research and development, and selling, general and administrative expenses. The only segment asset regularly reviewed by the CODM is cash and cash equivalents, which is reported on the balance sheets. No individual customer accounted for 10% or more of the Company’s revenue for any of thethree and nine months ended September 30, 2026 and 2025.

The following table presents segment revenue and significant segment expense categories regularly provided to the CODM for purposes of managing the Company’ssingle operating and reportable segment. Segment revenue and net loss are consistent with the statements of operations (in thousands).

(1)

Selling, general and administrative expenses include depreciation and amortization expense of $0.2 million and $35,000 for thethree months ended September 30, 2026 and 2025, respectively and $0.3 million and $0.1 million for thenine months ended September 30, 2026 and 2025.

(2)

Other segment items represent the net effect of the change in fair value of convertible notes payable, interest expense, other income, net, and provision for income taxes, as shown on the statements of operations.