EBR Systems, Inc.

Previous wording

Our WiSE CRT System received approval from the FDA for commercial distribution in April 2025, and we began commercializing WiSE during the second quarter of 2025. During the three months ended March 31, 2026, we had 41 commercial implants at 19 hospitals in the US, and recognized revenue of $2.4 million. An additional 22 physicians were trained to implant the WiSE CRT System, and 16 additional purchase agreements were signed with target LMR sites during the three months ended March 31, 2026. The commercial potential of and our ability to successfully commercialize WiSE is unproven and will require, among other things, effective sales, marketing, manufacturing, distribution, information systems and pricing strategies, as well as compliance with applicable laws and regulations.

Current wording

Our WiSE CRT System received approval from the FDA for commercial distribution in April 2025, and we began commercializing WiSE during the second quarter of 2025. During the three months ended June 30, 2026, we had 46 commercial implants at 23 hospitals in the US, and recognized net sales of $2.6 million. During the six months ended June 30, 2026, we had 87 commercial implants at 29 hospitals in the US, and recognized net sales of $5.0 million. An additional 48 physicians were trained to implant the WiSE CRT System, and 32 additional purchase agreements were signed with target Limited Market Release (“LMR”) sites during the six months ended June 30, 2026. The commercial potential of and our ability to successfully commercialize WiSE is unproven and will require, among other things, effective sales, marketing, manufacturing, distribution, information systems and pricing strategies, as well as compliance with applicable laws and regulations.

Previous wording

Since inception, we have incurred significant net losses and expect to continue to incur net losses until we are able to generate sufficient revenue. Since our inception, our operations have been financed primarily by net proceeds from the sale of our CDIs, common stock, convertible preferred stock, and indebtedness. As of March 31, 2026, we had $30.9 million in cash, cash equivalents, and marketable securities and an accumulated deficit of $419.3 million. For a more comprehensive discussion see “Liquidity and Capital Resources” and “Future Funding Requirements” below.

Current wording

Since inception, we have incurred significant net losses and expect to continue to incur net losses until we are able to generate sufficient revenue. Since our inception, our operations have been financed primarily by net proceeds from the sale of our CDIs, common stock, convertible preferred stock, and indebtedness. As of June 30, 2026, we had $86.9 million in cash, cash equivalents, and marketable securities and an accumulated deficit of $436.7 million. For a more comprehensive discussion see “Liquidity and Capital Resources” and “Future Funding Requirements” below.

Previous wording

We derive most of our revenue from sales of WiSE to the hospital facilities that implant our WiSE CRT System. We recognize revenue upon the transfer of goods or services to a customer at an amount that reflects the expected consideration to be received in exchange for those goods or services. Specifically, revenue from the sale of WiSE is recognized at an amount that reflects the expected consideration upon notice that our products have been used in a surgical procedure. Our revenue fluctuates primarily based on the volume of procedures performed. Our revenue is expected to continue to fluctuate in the future from quarter-to-quarter due to a variety of factors, including the success of our sales force in expanding adoption of WiSE in new hospitals and the number of physicians who are aware of and implant WiSE.

Current wording

We derive most of our revenue from sales of WiSE to the hospital facilities that implant our WiSE CRT System. We recognize revenue upon the transfer of goods or services to a customer at an amount that reflects the expected consideration to be received in exchange for those goods or services, net of rebates. Specifically, revenue from the sale of WiSE is recognized at an amount that reflects the expected consideration upon notice that our products have been used in a surgical procedure. We account for rebates as a reduction to revenue, calculated based on the terms agreed with the customer. Our revenue fluctuates primarily based on the volume of procedures performed. Our revenue is expected to continue to fluctuate in the future from quarter-to-quarter due to a variety of factors, including the success of our sales force in expanding adoption of WiSE in new hospitals and the number of physicians who are aware of and implant WiSE.

Previous wording

We calculate gross margin as gross profit divided by revenue. Our gross margin has been and will continue to be affected by a variety of factors, primarily by our manufacturing costs, pricing, and the use of inventory that was previously expensed during our clinical trial. Our gross margin is expected to decrease over the near term as we continue to utilize inventory that was previously expensed as research and development costs, but over the long term our gross margin may increase to the extent our production volume increases as our fixed manufacturing costs would be spread over a larger number of units, thereby reducing our per-unit manufacturing costs. We expect our gross margin will fluctuate from period to period based upon the factors described above.

Current wording

We calculate gross margin as gross profit divided by net sales. Our gross margin has been and will continue to be affected by a variety of factors, primarily by our manufacturing costs, pricing, and the use of inventory that was previously expensed during our clinical trial. Our gross margin is expected to decrease over the near term as we continue to utilize inventory that was previously expensed as research and development costs, but over the long term our gross margin may increase to the extent our production volume increases as our fixed manufacturing costs would be spread over a larger number of units, thereby reducing our per-unit manufacturing costs. We expect our gross margin will fluctuate from period to period based upon the factors described above.

Previous wording

Interest income consists of interest income, including accretion of discounts, generated from our cash, cash equivalent, and marketable securities.

Current wording

Interest income consists of interest income, including amortization of premiums and accretion of discounts, generated from our cash, cash equivalent, and marketable securities.

Previous wording

We recorded a net loss of $17.1 million in the three-month period ended March 31, 2026, an increase of $6.5 million, or 61.8%, from the three-month period ended March 31, 2025. The increased loss in 2026 was due to an increase in selling, general and administrative expenses, and research and development expenses, as discussed below. Other (expense), net also increased in 2026, primarily due to a decrease in interest income, as discussed below.

Current wording

We recorded a net loss of $17.5 million in the three months ended June 30, 2026, an increase of $5.5 million, or 45.8%, from the three months ended June 30, 2025. The increased loss in 2026 was due to an increase in selling, general and administrative expenses, and research and development expenses, as discussed below. Other expense, net also increased in 2026 primarily due to a decrease in interest income, as discussed below.

Previous wording

Revenue, Cost of Goods Sold, Gross Profit, and Gross Margin:

Current wording

Net Sales, Cost of Goods Sold, Gross Profit, and Gross Margin:

Previous wording

Revenue and cost of goods sold was $2.4 million and $2.2 million, respectively, during the three-month period ended March 31, 2026, resulting from the Company completing commercial implants at nineteen hospitals in the US. There was no revenue or cost of goods sold during the three-month period ended March 31, 2025, resulting from the FDA approval of our WiSE CRT System in April 2025.

Current wording

Net sales and cost of goods sold was $2.6 million and $2.3 million, respectively, during the three months ended June 30, 2026, resulting from the Company completing commercial implants at twenty-three hospitals in the US. Net sales and cost of goods sold were significantly lower during the three months ended June 30, 2025, resulting from then-recent FDA approval of our WiSE CRT System in April 2025. During the three months ended June 30, 2025, we had commercial implants at three hospitals in the US.

Previous wording

Gross profit increased to $0.2 million, or 100% during the three-month period ended March 31, 2026, as compared to the three-month period ended March 31, 2025, resulting from the FDA approval of our WiSE CRT System in April 2025. Gross margin was 7.8% for the three-month period ended March 31, 2026. Our gross margin was positively affected and will continue to be affected in the near future by the use of inventory that was previously expensed during our clinical trial. Excluding the use of previously expensed inventory, we would have had a negative gross margin of 25.4%.

Current wording

Gross profit increased by $0.3 million, or 303.5% during the three months ended June 30, 2026, as compared to the three months ended June 30, 2025, resulting from an increase in sales volume and a higher average selling price. Our gross margin was positively affected and will continue to be affected in the near future by the use of inventory that was previously expensed during our clinical trial, although the benefit continues to decrease over time as previously expensed inventory is utilized. Gross margin was 13.0% for the three months ended June 30, 2026, compared to 50% for the three months ended June 30, 2025. Excluding the use of previously expensed inventory, we would have had a negative gross margin of 16.9% for the three months ended June 30, 2026, compared to a negative gross margin of 51.2% for the three months ended June 30, 2025. The improvement in gross margin, excluding the use of previously expensed inventory, is the result of a higher average selling price, a lower standard cost, and increased manufacturing efficiencies during the three months ended June 30, 2026, as compared to the three months ended June 30, 2025.

Previous wording

Research and development expenses increased by $1.0 million, or 18.4% during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. The increase was primarily due to a $0.4 million increase in contract manufacturing, materials and components as a result of higher expenses related to research and development projects. Clinical expenses increased by $0.2 million as a result of higher expenses related to WiSE CRT post-approval study. Facility-related expenses increased by $0.3 million in support of our continuing expansion of research and development activities.

Current wording

Research and development expenses increased by $0.7 million, or 11.2%, during the three months ended June 30, 2026, as compared to the three months ended June 30, 2025. Clinical expenses increased by $0.6 million as a result of higher expenses related to WiSE CRT post-approval study. Facility-related expenses and depreciation increased by $0.3 million in support of our continuing expansion of research and development activities. These increases were offset by $0.2 million decrease in personnel-related expenses due to an increase in capitalized labor costs during the three months ended June 30, 2026, as compared to the three months ended June 30, 2025.

Previous wording

Other (expense) income, net increased by $0.2 million during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. This increase primarily resulted from a $0.2 million decrease in interest income earned on investments in marketable securities, including the accretion of discounts on marketable securities.

Current wording

Other expense, net increased by $0.2 million during the three months ended June 30, 2026, as compared to the three months ended June 30, 2025. This increase primarily resulted from a $0.3 million decrease in interest income earned on investments in marketable securities, including the accretion of discounts on marketable securities, which was partially offset by a $0.1 million decrease in interest expense.

Previous wording

Selling, general and administrative expenses increased by $5.6 million, or 127.8%, during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. Personnel-related expenses including salaries, bonuses, stock-based compensation and certain fringe benefits increased by $2.8 million as a result of the expansion of our workforce to support increased adoption of our WiSE CRT System. Travel-related expenses increased by $1.7 million due to increased travel to support our sales and marketing efforts. Professional fees increased by $0.4 million, primarily resulting from higher accounting and legal services fees. Facility-related and other expenses increased by $0.4 million, primarily resulting from the higher rent and common area maintenance costs for our new corporate headquarters and manufacturing facility. Corporate expenses increased by $0.2 million, primarily resulting from the higher expenses related to investor relations, and computer software licenses.

Current wording

Selling, General and administrative expenses increased by $10.4 million, or 108.3%, during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025. Personnel-related expenses including salaries, bonuses, stock-based compensation and certain fringe benefits increased by $5.5 million, as a result of the expansion of our workforce to support increased adoption of our WiSE CRT System. Travel-related expenses increased by $2.9 million due to increased travel to support our sales and marketing efforts. Professional fees increased by $0.7 million, primarily resulting from higher legal and consulting services fees. Corporate expenses increased by $0.5 million, primarily resulting from the higher expenses related to insurance premiums, investor relations, and computer software licenses. Facility related and other expenses increased by $0.8 million, primarily resulting from the higher expenses for our new corporate headquarters and manufacturing facility.

Previous wording

We manage our cash and capital structure to maximize shareholder return, maintain its financial condition and maintain flexibility for future strategic initiatives. We continuously assess our working capital needs, debt and leverage levels, debt maturity schedule, capital expenditure requirements and future investments. As of March 31, 2026 and December 31, 2025, we had approximately $30.9 million and $54.2 million, respectively, in cash, cash equivalents, and marketable securities. Based on our cash, cash equivalents, and marketable securities as of March 31, 2026, and our expectation to generate operating losses and negative operating cash flows in the foreseeable future, there exists substantial doubt regarding our ability to continue as a going concern for a period of at least twelve months from the date of this Form 10-Q.

Current wording

We manage our cash and capital structure to maximize shareholder return, maintain our financial condition, and maintain flexibility for future strategic initiatives. We continuously assess our working capital needs, debt and leverage levels, debt maturity schedule, capital expenditure requirements and future investments. As of June 30, 2026 and December 31, 2025, we had approximately $86.9 million and $54.2 million, respectively, in cash, cash equivalents, and marketable securities. Based on our cash, cash equivalents, and marketable securities as of June 30, 2026, and our expectation to generate operating losses, negative operating cash flows in the foreseeable future, and the repayment of notes payable, there exists substantial doubt regarding our ability to continue as a going concern for a period of at least twelve months from the date of this Form 10-Q.

Previous wording

The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities during the normal course of business. For the three months ended March 31, 2026 and 2025, we incurred a net loss of $17.1 million and $10.6 million, respectively. During the three months ended March 31, 2026 and 2025, we had negative cash flows from operations of $20.3 million and $13.6 million, respectively. As of March 31, 2026, we had working capital of $42.0 million and accumulated deficit of $419.3 million. These factors raise substantial doubt about our ability to continue as a going concern. Until we are able to generate consistent and sufficient revenue from sales of our WiSE CRT System, our ability to continue as a going concern is dependent on our ability to raise additional capital through the issuance of additional common stock or borrowings from financial institutions. Our ability to obtain additional capital in the equity capital markets is subject to several factors, including market and economic conditions, our performance, and investor sentiment with respect to our company and our industry.

Current wording

The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities during the normal course of business. For the six months ended June 30, 2026 and 2025, we incurred a net loss of $34.5 million and $22.5 million, respectively. During the six months ended June 30, 2026 and 2025, we had negative cash flows from operations of $37.4 million and $25.0 million, respectively. As of June 30, 2026, we had working capital of $58.1 million and accumulated deficit of $436.7 million. Additionally, the Company has $41.8 million of debt obligations coming due within the next twelve months. These factors raise substantial doubt about our ability to continue as a going concern. Until we are able to generate consistent and sufficient revenue from sales of our WiSE CRT System, our ability to continue as a going concern is dependent on our ability to raise additional capital through the issuance of additional common stock or borrowings from financial institutions. The Company has received an irrevocable commitment to purchase 92,105,270 CDIs, representing 9,210,527 shares of common stock, at a purchase price of $0.38 Australian dollars (“A$”) per CDI (A$3.80 per share of common stock), from BCP3 Pty Ltd, a related party of Dr. Chris Nave, a non-executive director of the Company, subject to shareholder approval at the Special Meeting of Stockholders to be held on August 18, 2026. In addition, the Company expects to refinance its long-term debt obligations prior to scheduled maturity date. Our ability to obtain additional financing is subject to several factors, including market and economic conditions, our performance, and investor sentiment with respect to our company and our industry, however no assurance can be given as to whether additional needed financing will be available on terms acceptable to the Company, or at all.

Previous wording

As of March 31, 2026, we had $0.4 million in operating lease obligations for our corporate headquarters and laboratory space located in Sunnyvale, California. Additionally, in January 2025, we entered into a new lease agreement for our new corporate headquarters, laboratory and manufacturing facility in Santa Clara, California, for which we had recorded $18.1 million in operating lease obligations as of March 31, 2026.

Current wording

As of June 30, 2026, we had $0.3 million in operating lease obligations for our corporate headquarters and laboratory space located in Sunnyvale, California. Additionally, in January 2025, we entered into a new lease agreement for our new corporate headquarters, laboratory and manufacturing facility in Santa Clara, California, for which we had recorded $18.2 million in operating lease obligations as of June 30, 2026.

Previous wording

In addition, we have agreements with suppliers and other parties to purchase inventory. Product inventory obligations consist primarily of purchase order commitments for raw materials and sub-assemblies used in the production of the WiSE CRT System. In certain instances, our purchase agreements allow us to cancel, reschedule, or adjust our purchase requirements based on our business needs prior to firm orders being placed. As of March 31, 2026, our obligations under such arrangements were approximately $14.0 million.

Current wording

In addition, we have agreements with suppliers and other parties to purchase inventory. Product inventory obligations consist primarily of purchase order commitments for raw materials and sub-assemblies used in the production of the WiSE CRT System. In certain instances, our purchase agreements allow us to cancel, reschedule, or adjust our purchase requirements based on our business needs prior to firm orders being placed. As of June 30, 2026, our obligations under such arrangements were approximately $10.6 million.

Previous wording

As of March 31, 2026, we had working capital of $42.0 million, comprised of current assets of $54.0 million and current liabilities of $12.0 million. Current assets, consisting of cash and cash equivalents, marketable securities, accounts and other receivables, inventory, prepaid expenses, and other current assets, decreased by $19.1 million as of March 31, 2026, compared to December 31, 2025. The capitalization of inventory resulted in a $1.7 million increase in working capital. An increase in accounts and other receivables, primarily due to the amounts outstanding from customers from sales of Company’s product, as well as the reimbursements for leasehold improvements, resulted in a $2.8 million increase in working capital as of March 31, 2026. Additionally, an increase in other current assets, primarily due to an increase in deferred costs of goods sold, which was offset by a decrease in deposits to vendors for the purchases of machinery and equipment for the new manufacturing facility, resulted in a $0.2 million increase in working capital as of March 31, 2026. These increases in current assets were offset by $0.5 million decrease in prepaid expenses, and a $23.3 million decrease in cash, cash equivalents and marketable securities which were used to support our working capital and capital expenditure requirements.

Current wording

As of June 30, 2026, we had working capital of $58.1 million, comprised of current assets of $110.1 million and current liabilities of $52.0 million. Current assets, consisting of cash and cash equivalents, marketable securities, accounts and other receivables, inventory, prepaid expenses, and other current assets, increased by $37.0 million as of June 30, 2026, compared to December 31, 2025. The recent capital raise completed in June 2026 contributed to the overall increase in cash, cash equivalents and marketable securities, resulting in a $32.8 million increase in working capital as of June 30, 2026. The capitalization of inventory resulted in a $3.8 million increase in working capital. A $0.5 million increase in accounts receivable was primarily due to a $1.0 million increase in amounts outstanding from customers and contract manufacturers, offset by a $0.5 million decrease accounts receivable from reimbursements for leasehold improvements. Additionally, a $0.8 million increase in other current assets, primarily due to an increase in deferred costs of goods sold, which was offset by a $0.9 million decrease in prepaid expenses attributable to higher amortization of prepaid expenses in 2026, resulted in a $0.1 million decrease in working capital as of June 30, 2026.

Previous wording

Current liabilities, consisting primarily of accounts payable, accrued liabilities, lease obligations, and interest payable, decreased by approximately $2.0 million as of March 31, 2026, compared to December 31, 2025. The decrease primarily resulted from a $1.3 million decrease in accounts payable, which was mainly due to the activity related to construction of leasehold improvements at the new corporate headquarters, as well as the purchases of raw materials. Accrued expenses decreased by approximately $0.6 million as of March 31, 2026, compared to December 31, 2025. The decrease primarily resulted from the payout of annual bonuses, which was partially offset by an increase in deferred revenue from sales of our WiSE CRT System. Additionally, operating lease liabilities decreased by approximately $0.1 million, which contributed to the overall decrease in current liabilities.

Current wording

Current liabilities, consisting primarily of accounts payable, accrued liabilities, lease obligations, interest payable, and current portion of notes payable increased by approximately $38.0 million as of June 30, 2026, compared to December 31, 2025. The increase primarily resulted from a $41.2 million increase in notes payable which was reclassified into current liability, as it becomes due within the next twelve months. This increase was partially offset by a $3.1 million decrease in accounts payable and accrued expenses, which were mainly due to the activity related to construction of leasehold improvements at the new corporate headquarters and purchases of raw materials, and a $0.1 million decrease in operating lease liabilities.

Previous wording

The following table summarizes our cash flows for the three months ended March 31, 2026 and 2025:

Current wording

The following table summarizes our cash flows for the six months ended June 30, 2026 and 2025:

Previous wording

Net cash used in operating activities during the three months ended March 31, 2026, was $20.3 million, compared to $13.6 million during the three months ended March 31, 2025, representing an increase in use of $6.7 million. This increase is primarily attributed to an increase in net loss of $6.5 million, a decrease in cash from changes in working capital of $0.8 million, which were partially offset by an increase in non-cash adjustments of $0.6 million.

Current wording

Net cash used in operating activities during the six months ended June 30, 2026, was $37.4 million, compared to $25.0 million during the six months ended June 30, 2025, representing an increase in use of $12.4 million. This increase is primarily attributed to an increase in net loss of $12.0 million and an increase in use of cash from changes in working capital of $1.4 million, which were partially offset by an increase in non-cash adjustments of $1.0 million.

Previous wording

Net cash provided by investing activities during the three months ended March 31, 2026, was $20.9 million, compared to $17.9 million during the three months ended March 31, 2025, representing an increase in cash provided of $3.0 million. The increase was attributable to a $6.2 million increase in cash from the maturities and sales of marketable securities during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. This change was partially offset by a $3.2 million increase in purchase of property and equipment during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025.

Current wording

Net cash provided by investing activities during the six months ended June 30, 2026, was $14.7 million, compared to $18.8 million during the six months ended June 30, 2025, representing a decrease in cash provided of $4.1 million. The decrease was attributable to a $12.8 million increase in the purchase of marketable securities, as well as a $5.2 million increase in purchases of property and equipment during the six months ended June 30, 2026, as compared to the six months ended June 30, 2026. These increases in cash used for investing activities were partially offset by a $13.9 million increase in cash from the maturities and sales of marketable securities during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025.