EBR Systems, Inc.

Notes to the Unaudited Condensed Consolidated Financial Statements

Note 1 -Business and organization

Business overview

EBR Systems, Inc. and subsidiaries (collectively, “EBR”, “we”, “our” or the “Company”) is a United States based medical device company that developed the WiSE CRT System (“WiSE”), an implantable cardiac device able to provide stimulation to endocardial heart tissue for the correction of heart rhythm conditions without requiring the use of leads. This implantable device delivers left-ventricle endocardial pacing for cardiac resynchronization therapy (“CRT”), without the use of wires or leads going into the heart. On April 11, 2025, the Company received notification that the U.S. Food and Drug Administration (“FDA”) has completed its review of the premarket approval application (“PMA”) and approved WiSE for commercial distribution in the United States.

The Company completed its initial public offering of CHESS Depository Interests (“CDIs”) and began trading on the Australian Securities Exchange (“ASX”) on November 24, 2021, under the symbol “EBR”.

The Company operates wholly owned foreign subsidiary entities in Australia, EBR Systems (AUST) Pty Ltd (“EBR-AU”), and the United Kingdom, EBR Systems (UK) Limited (“EBR-UK”), which establish clinical trials in Australia and the United Kingdom, respectively, and work on intellectual property development. EBR-AU was incorporated on February 23, 2017, and EBR-UK was incorporated on July 31, 2015.

Reverse stock split

The Company held a Special Meeting of Stockholders (the "Special Meeting") on March 11, 2026. In that Special Meeting, stockholders of the Company approved an amendment to the Company’s amended and restated certificate of incorporation (the "Amendment”) to effect the reverse stock split of its common stock and the transmutation ratio of CDIs to common stock at a ratio in the range of 1-for-5 to 1-for-20, with such ratio to be determined in the discretion of the Company’s board of directors and with such reverse stock split to be effected at such time and date, if at all, as determined by the Company’s board of directors in its sole discretion.

Pursuant to such authority granted by the Company’s stockholders, the Company’s board of directors approved a 1-for-10 (1:10) reverse stock split (the "Reverse Stock Split”) of the Company’s common stock and the filing of the Amendment to effectuate the Reverse Stock Split. The Amendment was filed with the Secretary of State of the State of Delaware and the Reverse Stock Split became effective in accordance with the terms of the Amendment at 4:00 a.m. Eastern Time on April 1, 2026 (the "Effective Time”), and the Company commenced normal trading on ASX on April 13, 2026, on a post-split basis under the existing ticker symbol “EBR”. The Amendment provided that, at the Effective Time, every ten shares of the Company’s issued and outstanding common stock automatically combined into one issued and outstanding share of common stock, without any change in par value per share, which remained at $0.0001. The Company’s CDIs were not consolidated as part of the Reverse Stock Split, but rather the transmutation ratio of the CDIs to shares was changed from 1-to-1 to 10-to-1. See Note 10, “Common Stock” for additional information on CDIs.

The number of authorized shares of common stock remained at 600 million shares. As a result of the Reverse Stock Split, proportionate adjustments were made to the per share exercise price and/or the number of shares issuable upon the exercise or vesting of all outstanding stock options and warrants, which resulted in a proportional decrease in the number of shares of the Company’s common stock reserved for issuance upon exercise or vesting of such stock options and warrants and a proportional increase in the exercise price of all such stock options and warrants. The Company did not recognize any additional compensation expense as a result of the adjustment to outstanding stock options.

In addition, the number of shares reserved for issuance under the Company’s equity incentive plan immediately prior to the Effective Time was reduced proportionately.

No fractional shares were issued as a result of the Reverse Stock Split. Any stockholder who would have been entitled to receive a fractional share as a result of the process was entitled to the rounding up of the fractional share to the nearest whole number.

The Reverse Stock Split has been retroactively adjusted throughout these unaudited condensed consolidated financial statements for all periods presented, including exercise prices and share data. As a result of the Reverse Stock Split, the Company reclassified approximately $41 thousand between common stock par value and additional paid-in capital.

Note 2 -Going concern

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. At each reporting period, the Company evaluates whether there are conditions or events that raise substantial doubt about its ability to continue as a going concern within one year after the date that the financial statements are issued. The Company’s evaluation entails analyzing prospective operating budgets and forecasts for expectations of its cash needs and comparing those needs to the current cash, cash equivalents and marketable securities balances. The Company is required to make certain additional disclosures if it concludes substantial doubt exists and it is not alleviated by its plans or when its plans alleviate substantial doubt about its ability to continue as a going concern.

For the nine months ended September 30, 2026 and 2025, the Company incurred a net loss of $51.2 million and $34.7 million, respectively. During the nine months ended September 30, 2026 and 2025, the Company had negative cash flows from operations of $54.7 million and $38.2 million, respectively. As of September 30, 2026, the Company had working capital of $58.3 million and accumulated deficit of $453.4 million. The Company has $41.8 million of debt obligations coming due within the next twelve months.

Based on the Company’s cash, cash equivalents, and marketable securities as of September 30, 2026, and its expectation to generate operating losses and negative operating cash flows in the foreseeable future, as well as potential liquidity to become less than the $2.5 million required under its existing debt covenants during the next twelve months, there exists substantial doubt regarding the Company’s ability to continue as a going concern for a period of at least twelve months from the date of issuance of these unaudited condensed consolidated financial statements. The Company was in compliance with its debt covenant as of September 30, 2026. Upon the occurrence of a breach of debt covenants, Runway Growth Finance Corp may, at its option, declare all obligations immediately due and payable.

In an effort to alleviate these conditions, the Company will need to raise capital through the issuance of additional common stock or borrowings from financial institutions. As the Company seeks additional sources of financing, no assurance can be given as to whether additional needed financing will be available on terms acceptable to the Company, or at all. The unaudited condensed consolidated financial statements of the Company do not include any adjustments that may result from the outcome of these aforementioned uncertainties.

Note 3 -Summary of significant accounting policies

Basis of presentation

These unaudited condensed consolidated financial statements as of September 30, 2026, and for the three and nine months ended September 30, 2026 and 2025, have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. These unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the notes thereto for the year ended December 31, 2025.

The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements. In the opinion of management, the included disclosures are adequate, and the accompanying unaudited condensed consolidated financial statements contain all adjustments which are necessary for a fair presentation of our unaudited condensed consolidated financial position as of September 30, 2026, unaudited condensed consolidated results of operations and comprehensive loss for the three and nine months ended September 30, 2026 and 2025, and unaudited condensed consolidated cash flows for the nine months ended September 30, 2026 and 2025. The unaudited condensed consolidated results of operations for the three and nine months ended September 30, 2026, are not necessarily indicative of the consolidated results of operations that may be expected for the year ending December 31, 2026.

In the fourth quarter of 2025, the Company changed its rounding presentation of these condensed consolidated financial statements to the nearest thousands, except share or per share data or as otherwise indicated. The accompanying notes to the financial statements are denominated in millions of dollars, except share or per share data or as otherwise indicated. The change in rounding presentation has been applied to all prior year amounts presented. In certain circumstances, this change adjusted previously reported balances, however, these changes were not significant, and no other changes were made to previously reported financial information. Additionally, certain columns and rows within the financial statements and tables presented may not add due to rounding. Percentages have been calculated from the underlying whole-dollar amounts for all periods presented.

Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates, judgments, and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. Significant estimates and assumptions made by management include the fair value of stock-based awards issued. Estimates are based on historical experience, where applicable and other assumptions believed to be reasonable by management. Actual results could differ materially from those estimates.

Significant Accounting Policies

The Company’s significant accounting policies are disclosed in the 2025 Annual Report on Form 10-K. There have been no material changes to these accounting policies, except as noted below.

Revenue Recognition

The following table summarizes net sales from contracts with customers disaggregated by product for the three and nine months ended September 30, 2026 and 2025 (in thousands):

The Company offers volume rebates to certain group purchasing organizations (“GPOs”). Volume rebates offered to customers are recorded as a reduction to sales and an obligation to the customer, which is recorded as accounts payable, as the amounts are expected to be paid within thirty days of the end of the quarter. Due to the introduction of rebate agreements, the Company changed the caption from “Revenue” to “Net sales” in its condensed consolidated statements of operations and related disclosures during the three and nine months ended September 30, 2026 and 2025.

Deferred revenue

The timing of revenue recognition for WiSECRT System and battery replacements differ from the timing of invoicing to customers. The Company invoices customers upon shipment or delivery of WiSE and battery replacements to the customer, while the revenue is recognized upon completion of the procedure. Therefore, the Company recognizes a contract liability resulting from the timing of revenue recognition and invoicing. Deferred revenue is equivalent to billings for WiSE performance obligations that are unsatisfied as of the balance sheet date. The Company expects to recognize revenue from these unfulfilled performance obligations within one year or less. The movement in the deferred revenue balance during the three and nine months ended September 30, 2026 and 2025, was as follows(in thousands):

Interest Income

The Company’s interest income was generated from its cash, cash equivalent, and marketable securities, including accretion of discounts. The following table provides a summary of the components of interest income for the three and nine months ended September 30, 2026 and 2025 (in thousands):

Recently adopted accounting pronouncements

In July 2025, the FASB issued ASU 2025-05,Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which amends ASC 326-20 to provide a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606. The practical expedient permits all entities to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset. The amendments are effective for annual periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. The Company adopted this ASU in the first quarter of 2026, ona prospective basis and elected the practical expedient for the calculation of current expected credit losses. The adoption did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures.

Recently issued accounting pronouncements not yet adopted

In December 2025, the FASB issuedASU 2025-12, Codification Improvements. ASU 2025-12 addresses suggestions received from stakeholders regarding the Accounting Standards Codification and makes other incremental improvements to U.S. GAAP. The update represents changes to the Codification that clarify, correct errors or make other improvements to a variety of topics. ASU 2025-12 is effective for fiscal years beginning after December 15, 2026, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of this ASU on its unaudited condensed consolidated financial statements and related disclosures.

In December 2025, the FASB issued ASU 2025-11,*Interim Reporting (Topic 270) Narrow-Scope Improvements.*The ASU is intended to clarify the applicability of interim reporting guidance and addresses the form and content of interim financial statements and interim disclosure requirements. ASU 2025-11 is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, and early adoption is permitted. The Company is currently evaluating the impact of this ASU on its unaudited condensed consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03,Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The amendments in ASU 2024-03 address investor requests for more detailed expense information and require additional disaggregated disclosures in the notes to financial statements for certain categories of expenses that are included on the face of the income statement. This guidance is effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. In January 2025, the FASB issued an update 2025-01 “*Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date”,*which revises the effective date of ASU 2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact of this standard on its disclosures.

Note 4 -Cash, cash equivalents, and marketable securities

Cash, cash equivalents, and marketable securities consisted of the following as of September 30, 2026 and December 31, 2025 (in thousands):

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within our unaudited condensed consolidated balance sheets as of September 30, 2026 and 2025, to the total of such amounts as presented in the unaudited condensed consolidated statements of cash flows(in thousands):

During the nine months ended September 30, 2026 and 2025, marketable securities were sold or matured for proceeds of $49.9 million and $50.1 million, respectively. The Company recorded an immaterial amount of realized gain during the three and nine months ended September 30, 2026 and 2025. See Note 5, “Fair value measurements” for additional information regarding the fair value of cash equivalents and marketable securities.

The following tables summarizes the unrealized gains and losses related to the Company’s available-for-sale marketable securities, by major security type, as of September 30, 2026 and December 31, 2025(in thousands):

The following table shows the unrealized losses and fair values for those marketable securities that were in an unrealized loss position as of September 30, 2026 and December 31, 2025, aggregated by major security type and the length of time the marketable securities have been in a continuous loss position (in thousands):

Contractual maturities of the Company’s marketable securities as of September 30, 2026, were as follows (in thousands):

Note 5 –Fair value measurement

Management’s assessment of the significance of a particular input to the fair value measurement requires judgement and may affect the valuation of financial assets and liabilities and their placement within the three-tier fair value hierarchy. As of September 30, 2026 and December 31, 2025, the fair value measurement of the Company’s financial assets measured on a recurring basis were as follows (in thousands):

In the Company’s unaudited condensed consolidated balance sheets, the carrying values of accounts and other receivables, other assets, accounts payable and accrued expenses approximated their fair values due to the nature and relatively short maturities. The fair value of debt approximates its carrying value as it is variable rate debt or has relatively short maturities. There are no other financial assets and liabilities that require fair value hierarchy measurements and disclosures for the periods presented.

Note 6 -Condensed consolidated balance sheet components

Accounts and other receivables, net

Accounts and other receivables includes amounts due from sales of Company’s product to customers, sales of materials to contract manufacturers, and reimbursements for leasehold improvements. Accounts and other receivables, net were as follows as of September 30, 2026 and December 31, 2025(in thousands):

During the three and nine months ended September 30, 2026 and 2025, the Company recordedno provision for credit losses.

Inventory

Inventory consisted of the following as of September 30, 2026 and December 31, 2025(in thousands):

The Company’s non-current inventory consist of raw materials, and work in process that are expected to be sold or consumed beyond the next twelve months.

Property and equipment, net

Property and equipment consisted of the following as of September 30, 2026 and December 31, 2025 (in thousands):

As of December 31, 2025, construction in progress balance pertained to tenant improvements and manufacturing equipment, not yet available for use for the Company’s new corporate headquarters, laboratory, and manufacturing facility in Santa Clara, California. These assets were placed in service as of September 30, 2026. Depreciation and amortization expense for the three months ended September 30, 2026 and 2025 was $0.4 million and $0.1 million, respectively. Depreciation and amortization expense for the nine months ended September 30, 2026 and 2025 was $0.8 million and $0.3 million, respectively.

Accrued expenses and other liabilities

Accrued expenses and other liabilities consisted of the following as of September 30, 2026 and December 31, 2025(in thousands):

Changes in accrued warranty reserves were as follows for the three and nine months ended September 30, 2026 and 2025(in thousands):

Note 7 –Leases

The Company has an operating lease for its corporate headquarters and laboratory space, located in Sunnyvale, California, with an original lease period expiring June 30, 2024. In January 2024, the Company signed an addendum to the operating lease, extending the expiration of the lease through June 30, 2025. In March 2024, the Company signed an additional addendum to the operating lease, extending the expiration of the lease through December 31, 2025. In July 2024, the Company signed an additional addendum to the operating lease, extending the expiration of the lease through December 31, 2026. The Company accounted for these lease addendums as lease modifications, which resulted in an increase in the right of use operating asset and a corresponding increase in operating lease liabilities.

In October 2026, the Company signed an additional addendum to the operating lease, extending the expiration of the lease through January 31, 2027, on the same terms as the original lease.

In April 2025, the Company signed an addendum to lease additional office space on a short-term basis for an adjacent office space, which expired August 2026. The Company accounted for the modification as a separate contract and recognized associated lease payments in net loss over the lease term.

In January 2025, the Company executed an operating lease for its new corporate headquarters, laboratory and manufacturing facility in Santa Clara, California. The term of the lease commenced on January 17, 2025, the date on which the landlord made the property available to the Company for the purpose of constructing leasehold improvements that will remain the property of the Company during the lease term. As a result of entering into this lease agreement, the Company recorded a right-of-use asset and corresponding lease liability of $12.9 million, net of the tenant improvement allowance of $4.1 million on the commencement date. As of September 30, 2026, the Company had utilized the total tenant improvement allowance and had been fully reimbursed. Lease payments began in January 2026. The lease provides for a term of 132 months and includes an option to extend the lease for an additional five years, which was used in the calculation of the right of use asset and lease liability, as the Company is reasonably certain that the option will be exercised. The Company determined the probability of the exercise of a lease extension option based on its long-term strategic business outlook, significant leasehold improvements that are expected to have significant economic value to the Company, and costs relating to signing a new lease, among other factors.

The Company also leases office equipment under an immaterial finance lease agreement.

Amounts reported in the unaudited condensed consolidated balance sheets for operating leases in which the Company is the lessee as of September 30, 2026 and December 31, 2025, were as follows (in thousands):

The following table presents the components of lease costs in our unaudited statements of operations for three and nine month ended September 30, 2026 and 2025 (in thousands):

Future lease payments for non-cancelable operating leases as of September 30, 2026, were as follows (in thousands):

Note 8 -Notes payable

At September 30, 2026 and December 31, 2025, notes payable consisted of the following (in thousands):

The following table presents information regarding the Company’s notes payable principal repayment obligations as of September 30, 2026 (in thousands):

Runway Growth Finance Corp

On June 30, 2022, the Company entered into a loan and security agreement with Runway Growth Finance Corp. The debt is secured against substantially all assets of the Company, except for the Company’s intellectual property but includes all proceeds from the sale of intellectual property. As of September 30, 2026 and December 31, 2025, the outstanding principal balance was $41.8 million and $41.8 million, respectively.

Interest on the term loan accrues on the principal amount outstanding at a floating per annum rate equal to the greater of the rate of interest noted in The Wall Street Journal Money Rates section, as the “Prime Rate” or 4.00% plus a margin of 4.9% and is payable monthly in arrears and shall be computed on the basis of a 360-day year for the actual number of days elapsed. The Company is required to make interest only payments from July 2022 to May 2027. The note payable has a maturity date of June 15, 2027, at which time any unpaid interest, outstanding principal balance, and a final payment of 4.5% of the original principal amount borrowed shall be due in full. If the Company repays the loan prior to maturity, the Company will be required to pay a prepayment fee of 0.5% of the outstanding principal balance. The Company is also required to pay a 3% success fee of the funded principal amount of the term loan at the time of a liquidity event, as defined in the loan and security agreement. The success fee is enforceable within 10 years from the execution date of the agreement.

The Company has accounted for the final payment of $1.8 million as a discount of the note that will be amortized over the life of the loan using the effective interest method. Amortization of the discount was $0.1 million and $0.1 million for the three months ended September 30, 2026 and 2025, respectively. Amortization of the discount was $0.3 million and $0.3 million for the nine months ended September 30, 2026 and 2025, respectively. This amount was recorded as additional interest expense in the accompanying unaudited condensed consolidated statements of operations. As of September 30, 2026 and December 31, 2025, the note has been shown net of unamortized discounts of $0.3 million and $0.6 million, respectively.

The Company incurred loan costs of $1.0 million, which are being amortized over the life of the loan using the effective interest method. Amortization of loan costs was $0.1 million and $0.1 million for the three months ended September 30, 2026 and 2025, respectively. Amortization of loan costs was $0.2 million and $0.2 million for the nine months ended September 30, 2026 and 2025, respectively. As of September 30, 2026 and December 31, 2025, the note has been shown net of unamortized loan costs of $0.2 million and $0.3 million, respectively.

The Company is subject to customary financial and reporting covenants under the loan and security agreement. As of September 30, 2026 and December 31, 2025, the Company was in compliance with all debt covenants.

Note 9 -Convertible preferred stock

As of September 30, 2026 and December 31, 2025,10,000,000 shares of convertible preferred stock were authorized, of whichno shares were issued or outstanding.

Note 10 -Common stock

Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders. Common stockholders are entitled to receive dividends, as may be declared by the Company’s board of directors. As of September 30, 2026 and December 31, 2025, no dividends have been declared.

As of September 30, 2026 and December 31, 2025,600,000,000 shares were authorized, of which 84,546,086 shares and 45,025,917 shares, respectively, were outstanding. See Note 1, “Business and organization –Reverse stock split” for additional information regarding the Reverse Stock Split that was effective April 1, 2026.

The Company completed its initial public offering and began trading on the ASX on November 24, 2021, under the symbol “EBR”. The ASX uses a Clearing House Electronic Subregister System (“CHESS”) for the clearance and settlement of trades on the ASX. The State of Delaware does not recognize the CHESS system of holding securities or electronic transfers of legal title to shares. To enable companies to have their securities cleared and settled electronically through CHESS, CDIs are issued. CDIs are units of beneficial ownership in shares and are traded in a manner similar to shares of Australian companies listed on the ASX. The legal title to the shares are held by a depository, CHESS Depositary Nominees (“CDN’), which is a wholly owned subsidiary of the ASX, and is an approved general participant of ASX Settlement.

On May 22, 2025 (Sydney time), the Company completed an institutional placement of 55,900,000 CDIs, representing 5,590,000 shares of common stock, at a purchase price of $0.64 per CDI ($6.40 per share of common stock), for proceeds of $33.5 million, net of $2.5 million of related issuance costs. On June 19, 2025 (Sydney time), the Company completed a non-underwritten rights offering to existing stockholders, or Securities Purchase Plan, and issued an additional 20,000,000 CDIs representing the 2,000,000 shares of common stock, at a purchase price of $0.64 per CDI ($6.40 per share of common stock), for proceeds of $12.8 million, net of $0.1 million of related issuance costs.

On June 5, 2026 (Sydney time), the Company completed a fully underwritten institutional placement to institutional and sophisticated investors (“Institutional Placement”), comprising: (a) an institutional placement to institutional and sophisticated investors (“Tranche 1”); and (b) a conditional placement to BCP3 Pty Ltd, a related party of Dr. Chris Nave, a non-executive director of the Company, which was approved by stockholders at the Special Meeting of Stockholders held on August 18, 2026 (“Tranche 2”). As a result of the Tranche 1 Institutional Placement, the Company issued 77,352,890 CDIs, representing 7,735,289 shares of common stock, at a purchase price of A$0.38 per CDI (A$3.80 per share of common stock), for proceeds of $19.5 million, net of $1.2 million of related issuance costs.

On June 5, 2026 (Sydney time), the Company also completed a fully underwritten 1-for-2 pro rata non-renounceable entitlement offer to eligible institutional stockholders (“Institutional Entitlement Offer”), and issued 110,582,160 CDIs, representing 11,058,216 shares of common stock, at a purchase price of A$0.38 per CDI (A$3.80 per share of common stock), for proceeds of $28.0 million, net of $1.5 million of related issuance costs.

On June 24, 2026 (Sydney time), the Company completed a fully underwritten 1-for-2 pro rata non-renounceable retail entitlement offer to existing retail stockholders (“Retail Entitlement Offer”), and issued 114,699,930 CDIs, representing 11,469,993 shares of common stock, at a purchase price of $0.38 per CDI (A$3.80 per share of common stock), for proceeds of $28.3 million, net of $1.7 million of related issuance costs. Host-Plus Pty Ltd and H.E.S.T. Australia Ltd., related parties of Dr. Chris Nave, a non-executive director of the Company, participated in the Retail Entitlement Offer purchasing 25,630,389 CDIs and 5,027,499 CDIs, respectively.

On August 24, 2026 (Sydney time), the Company completed Tranche 2 of the fully underwritten institutional placement, and issued 92,105,270 CDIs, representing 9,210,527 shares of common stock at a purchase price of A$0.38 per CDI (A$3.80 per share of common stock), for proceeds of $23.7 million, net of $1.4 million of related issuance costs. Host-Plus Pty Ltd and H.E.S.T. Australia Ltd., related parties of Dr. Chris Nave, a non-executive director of the Company, were the only participants in the Tranche 2 placement, purchasing 77,001,190 CDIs and 15,104,080 CDIs, respectively.

Additionally, the Company has reserved the following shares of common stock for issuance as of September 30, 2026:

Note 11 -Warrants

The following warrants were outstanding as of September 30, 2026 and December 31, 2025:

As of September 30, 2026, the weighted-average exercise price of outstanding warrants was $5.64, with a weighted-average remaining contractual life of 3.60 years.

Note 12 -Stock-based compensation

The Company and its stockholders adopted the 2013 Equity Incentive Plan (the “2013 Plan”) June 18, 2013, which reserved shares of the Company’s common stock for the granting of incentive and nonqualified stock options to employees, directors, and consultants. On October 14, 2021, the Company replaced the 2013 Plan with the 2021 Equity Incentive Plan (the “2021 Plan”) in connection with its initial public offering. On May 6, 2026, stockholders approved the addition of 1,801,036 shares of common stock, as adjusted for the Reverse Stock Split, to the number of shares of common stock reserved for issuance under the 2021 Plan, by operation of the “evergreen” provision set forth in the 2021 Plan. Under the 2021 Plan,5,411,631 shares of common stock are reserved. The Company may grant options to purchase common stock, stock appreciation rights, restricted stock awards and other forms of stock-based compensation. Stock options generally vest over four years and expire no later than 10 years from the date of grant. The Board of Directors has the authority to select the employees to whom options are granted and determine the terms of each option, including: i) the number of shares of common stock subject to the option; ii) when the option becomes exercisable; iii) the option exercise price, which must be at least 100% of the fair market value of the common stock as of the date of grant; and iv) the duration of the option, which may not exceed 10 years.

As of September 30, 2026, options to purchase a total of 4,161,118 shares of common stock remained outstanding and 1,250,513 shares remain available for grant under the 2021 Plan and 158,180 remained outstanding outside of the 2021 Plan. As of September 30, 2026, options to purchase a total of 1,589,564 shares of common stock remained outstanding under the 2013 Plan. As of September 30, 2026, no shares of common stock remain available for grant under the 2013 Plan.

Stock option activity for the nine months ended September 30, 2026, was as follows:

The fair value of the options granted to employees is estimated on the grant date using the Black-Scholes option valuation model. This valuation model for stock-based compensation expense requires the Company to make assumptions and judgments about the variables used in the calculation, including the expected term (weighted-average period of time that the options granted are expected to be outstanding), the volatility of the Company’s common stock, an assumed risk-free interest rate and expected dividends. The Company uses the simplified calculation of expected life and volatility is derived from the combination of the average historical stock volatilities of several publicly traded companies with characteristics similar to those of the Company, and on the Company’s stock price, as quoted on the ASX. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option. The Company uses the straight-line method for expense attribution. The weighted-average grant-date fair values of stock options granted during the nine months ended September 30, 2026 and 2025, was $2.29 per share and $5.52 per share, respectively.

The following assumptions were used to calculate the grant-date fair value of employee stock options granted during the nine months ended September 30, 2026 and 2025:

The following table presents classification of stock-based compensation expense within theaccompanying unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2026 and 2025:

At September 30, 2026, there was $7.6 million of unamortized stock-based compensation cost, related to unvested stock options which is expected to be recognized over a weighted-average period of 2.55 years.

Note 13 -Income taxes

During the three and nine months ended September 30, 2026 and 2025, the Company does not have an income tax benefit or expense. The Company has historically incurred net operating losses and maintains a full valuation allowance against its net deferred tax assets. Valuation allowances are recorded when the expected realization of the deferred tax assets does not meet a “more likely than not” criterion. Realization of the Company’s deferred tax assets are dependent upon the generation of future taxable income, the amount and timing of which are uncertain.

The Company’s effective tax rate was 0% for the three and nine months ended September 30, 2026 and 2025. The difference between the effective tax rate and the federal statutory rate of 21% was primarily due to the full valuation allowance recorded on the Company’s net deferred tax assets, state and foreign tax benefits, research and development tax credits, and other non-deductible expenses.

During the three and nine months ended September 30, 2026, there wereno material changes to the Company’s uncertain tax positions.

The One Big Beautiful Bill Act (“OBBA”) includes significant U.S. tax provisions, including the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework, and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates from 2025 through 2027. The Company continues to monitor any new tax laws and notes those effective in 2026 do not have a material impact on the Company’s unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2026.

Note 14 –Net loss per share

The following tables sets forth the computation of basic and diluted net loss per share attributable to common stockholders for the three and nine months ended September 30, 2026 and 2025 (in thousands, except per share amounts):

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

Note 15 -Segment information

The Company's chief operating decision maker (“CODM”) is the Chief Executive Officer. The Company has determined that it has a single operating and reportable segment. The CODM uses net sales, gross margin and operating expenses at the consolidated level to allocate resources, monitor budget versus actual results, and manage operations. Significant expenses within operating expenses include engineering and development, clinical and regulatory, sales and marketing, and general and administrative expenses at the consolidated level.

Substantially all of the segment net sales are derived from sales to customers in the U.S. Net sales by geography is based on billing address of the customer. International net sales accounted for less than 1% of the total net sales during the three and nine months ended September 30, 2026. Long-lived assets held and used outside the U.S. are immaterial.

The following table summarizes the Company's net sales by geography for the three and nine months ended September 30, 2026 and 2025 (in thousands):

The following table disaggregates amounts that comprise research and development, and selling, general and administrative expenses within the accompanying unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2026 and 2025 (in thousands):

The segment's net loss equals the Company’s net loss as presented in the unaudited condensed consolidated statements of operations. Other segment items within net loss include interest expense, interest income, other (expense) / income, and loss on foreign currency at the consolidated level.

Note 16 -Commitments and contingencies

Purchase commitments

The Company purchases raw materials, manufacturing equipment, and various services from a variety of vendors. During the normal course of business, in order to manage manufacturing lead times and help ensure an adequate supply of certain items, we enter into agreements with suppliers that either allow us to procure goods and services when we choose or that establish purchase requirements over the term of the agreement. 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. Consequently, only a portion of our purchase commitments are firm and non-cancelable. As of September 30, 2026, the Company’s obligations under such arrangements were approximately $14.0 million.

Cybersecurity

As previously disclosed in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, the Company detected a cybersecurity incident in which an unauthorized third party gained access to certain information systems of the Company on or around February 13, 2026. Upon detection, the Company promptly initiated response protocols and began taking steps to contain, assess and remediate the cybersecurity incident, including launching an investigation with external cybersecurity experts. Although the Company believes that the cybersecurity incident has not had a material impact on its overall financial condition or results of operations, its evaluation and response to this incident are ongoing and the Company may discover other impacts or new events related to this incident may occur that could affect the Company’s financial condition or results of operations. As of September 30, 2026, incurred cybersecurity expenses limited to the Company’s insurance deductibles have been recorded and reflected within the Company’s unaudited condensed consolidated financial statements and such amounts are not material.

Contingencies

The Company is party to various legal proceedings from time to time. A liability is accrued when a loss is both probable and can be reasonably estimated. Management believes that the probability of a material loss with respect to any currently pending legal proceeding is remote. However, litigation is inherently uncertain, and it is not possible to definitively predict the ultimate disposition of any of these proceedings. The Company does not believe that there are any pending legal proceedings or other loss contingencies that will, either individually or in the aggregate, have a material adverse impact on the Company’s unaudited condensed consolidated financial statements.

Note 17 –Related party transactions

See Note 10 “Common stock”