CapsoVision, Inc
For the period ended Sep 30, 2025. Filed Nov 13, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 13, 2025
CV$6.32+1.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-14.
0001378325-25-000010
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-13.
0001378325-25-000040
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 111 previous paragraphs and 119 current paragraphs.
79 unchanged; 31 reworded; 9 added; 1 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 5 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (9)
Current report
In the second quarter of 2025 we filed our 510(k) submission to the FDA for our initial CapsoCam Colon capsule endoscopy solution (“the First-Generation Product”) review. In the third quarter of 2025 we began the second arm of our CapsoCam Colon pivotal study involving the second-generation of CapsoCam Colon capsule (the "Second-Generation Product", which incorporates further advanced features designed to improve the accuracy of CapsoCam Colon) with the study population expected to involve approximately 250 patients enrolled at up to 10 sites, in the U.S. We are working closely with FDA on addressing their review follow-up inquiries about the abovementioned 510(k) for the First-Generation Product. Based on the FDA comments received so far, we are refining the second arm study. This revision impacts the previous expectation to have the study for the Second-Generation Product ready for FDA submission in the first quarter 2026 and the FDA submission is now planned for the second quarter of 2026, with a goal of obtaining FDA 510(k) clearance for the Second-Generation Product in the fourth quarter of 2026.
Current report
Since we continue to invest in AI to improve our existing products, we made significant progress with a clinical study to demonstrate the benefits of our incorporation of AI technology into CapsoCam Plus, our existing product for small bowel. We currently plan to submit the related 510(k) application to the FDA by year end 2025. We experienced a slight delay in submission from our previously anticipated timing due to resource constraints from our third-party biostatistician. To mitigate further delays, we have contracted with an additional biostatistical consulting group. We expect that it will take approximately 6 months for the FDA to review our application, and issue their pending clearance, commercialization is planned to begin shortly thereafter.
Current report
Longer term, we believe our CapsoCam family of products, incorporating our panoramic imaging solution, can be adapted to address new GI medical indications. Potential new medical indications include esophageal medical conditions (such as esophageal varices) and pancreatic cancer. In connection with our efforts to address pancreatic cancer, we submitted an FDA “Breakthrough Device Designation” application for our capsule endoscopy solution on November 6, 2025. A Breakthrough Device Designation prioritizes a device in the FDA’s review queue for all future regulatory submissions and accelerates communications (i.e., negotiations and feedback) with the FDA, thereby expediting the marketing application process.
Current report
On July 15, 2025, the Company entered into a development agreement with Canon Inc, for the development of complementary metal-oxide-semiconductor (“CMOS”) image sensor samples with higher resolution and higher dynamic range to allow the Company to evaluate functionality and performance, conduct clinical evaluation of capsule endoscopies that incorporate Canon image sensors and obtain FDA 510(k) clearance thereof. The image sensors developed under this Agreement will be incorporated in future versions of the Company’s capsule endoscopies.
Current report
In late August 2025, Kevin Lundquist stepped down as Chief Financial Officer of the Company. The responsibilities of principal financial officer and principal accounting officer were assumed by David Garcia, Senior VP of Finance who joined the Company on November 3, 2025.
Current report
On September 22, 2025, Rebecca Petersen, the Company’s Senior Director of Clinical Affairs, notified the Company of her planned retirement as effective October 15, 2025. Concurrently, the Company promoted Keri Jorgenson to Director of Clinical Operations and, Ms.Jorgenson, together with the other members of the clinical operations team, assumed responsibility for the Company’s clinical development operations and activities.
Current report
Due to the potential increase in cost of revenue, expected as a result of U.S. trade policies changes, including increasing tariffs on imports, our gross profit/gross margin may be adversely impacted.
Current report
Results of Operations for the Three and Nine Months Ended September 30, 2025 and 2024
Current report
The Company had no off-balance-sheet arrangements that have or are reasonably likely to have a material effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources.
Removed paragraphs (1)
Previous report
Results of Operations for the Three and Six Months Ended June 30, 2025 and 2024
Reworded paragraphs (31)
Previous wording
We are a global medical technology company that develops advanced imaging and AI technologies, deployed in our capsule endoscopy solutions to identify abnormalities of the GI tract for diagnostic and screening purposes. Our capsule endoscope system, currently comprising the CapsoCam Plus single-use capsule and the CapsoCloud and CapsoView software, including 360 degree panoramic visualization of the small-bowel mucosa to investigate abnormalities such as obscure GI bleeding and Crohn’s disease, while our AI assisted reading tools detect and highlight suspected abnormalities for a clinician, reducing their time to review the video and making capsule endoscopy more financially attractive to their practice.
Current wording
We are a global medical technology company that develops advanced imaging and AI technologies, deployed in our capsule endoscopy solutions to identify abnormalities of the GI tract for diagnostic and screening purposes. Our capsule endoscope system, currently comprising the CapsoCam Plus single-use capsule and the CapsoCloud and CapsoView software, including 360 degree panoramic visualization of the small-bowel mucosa to investigate abnormalities such as obscure GI bleeding and Crohn’s disease, while our AI assisted pathology detection tools detect and highlight suspected abnormalities for a clinician, reducing their time to review the video and making capsule endoscopy more financially attractive to their practice. Our Cloud solution enables medical professionals to access their patients’ videos and review those videos anytime, anywhere, 24/7, without a need to have an on-site server and maintain it, while accumulating an immense data trove on the Cloud storage for AI training.
Previous wording
As part of our effort to expand and grow our revenues beyond small-bowel-related, we are developing our next pipeline capsule endoscope product, CapsoCam Colon. Our CapsoCam Colon capsule (i) leverages CapsoCam Plus’s existing capsule design with its panoramic view and (ii) incorporates both our self-developed AI to automatically detect polyps and polyp-size measurement tool enabled by a 3D sensor in the capsule (polyp size being highly correlated with a polyp’s risk of becoming cancer). In the second quarter of 2025 we filed our 510(k) submission to the FDA for our initial CapsoCam Colon capsule endoscopy solution review and anticipate approval in the first quarter of 2026. Longer term, we believe our CapsoCam family of products, incorporating our panoramic imaging solution, can be adapted to address new GI medical indications. Potential new medical indications include esophageal medical conditions (such as esophageal varices) and pancreatic cancer.
Current wording
As part of our effort to expand and grow our revenues beyond small-bowel-related, we are developing our next pipeline capsule endoscope product, CapsoCam Colon. Our CapsoCam Colon capsule (i) leverages CapsoCam Plus’s existing capsule design with its panoramic view and (ii) incorporates both our self-developed AI to automatically detect polyps and polyp-size measurement tool enabled by a 3D sensor in the capsule (polyp size being highly correlated with a polyp’s risk of becoming cancer).
Previous wording
As of June 30, 2025, we had an accumulated deficit of $140.4 million. To date, we have funded our operations primarily through proceeds from the sale of shares of our convertible preferred stock and cash generated from the sale of CapsoCam capsules and the use of CapsoCloud or CapsoView, CapsoCloud data access, and capsule video reading service.
Current wording
As of September 30, 2025, we had an accumulated deficit of $148.3 million. To date, we have funded our operations primarily through proceeds from the sale of shares of our convertible preferred stock, IPO proceeds and cash generated from the sale of CapsoCam capsules and the use of CapsoCloud or CapsoView, CapsoCloud data access, and capsule video reading service.
Previous wording
Success in further penetrating the small bowel capsule endoscopy market. Until commercialization of our CapsoCam Colon capsule (targeted for mid-2026), to grow our revenues (and, in turn, reduce our expected losses and negative cash flows), we intend to grow our small-bowel-related revenues by, among other things: (i) retaining and growing our customer base; (ii) cost-effectively increasing the size and effectiveness of our U.S. and international sales teams and our customer-support function; (iii) pursuing the pediatric market (with children comprising a significant portion of the Crohn’s disease patient population); (iv) introducing complementary products such as our (a) capsule delivery device (availability expected in 2025) and (b) patency capsule (for verifying a capsule endoscope can pass through the bowel without retention prior to an exam) (tentative FDA 510(k) submission planned by the end of 2025); (v) facilitating increased telemedicine adoption following recent FDA clearance of remote ingestion of our CapsoCam Plus, allowing patients to ingest our capsules in the comfort of their own homes with remote provider supervision; and (vi) following related FDA 510(k) clearance (targeted for late 2025), commercializing our updated CapsoCam Plus which incorporates our AI assisted reading technology.
Current wording
Success in further penetrating the small bowel capsule endoscopy market. Until commercialization of our CapsoCam Colon capsule (targeted forend of 2026), to grow our revenues (and, in turn, reduce our expected losses and negative cash flows), we intend to grow our small-bowel-related revenues by, among other things: (i) retaining and growing our customer base; (ii) cost-effectively increasing the size and effectiveness of our U.S. and international sales teams and our customer-support function; (iii) pursuing the pediatric market (with children comprising a significant portion of the Crohn’s disease patient population); (iv) introducing complementary products such as our (a) capsule delivery device (availability expected in the first quarter of 2026) and (b) patency capsule (for verifying a capsule endoscope can pass through the bowel without retention prior to an exam) (FDA 510(k) submission planned in the first quarter of 2026); (v) facilitating increased telemedicine adoption following recent FDA clearance of remote ingestion of our CapsoCam Plus, allowing patients to ingest our capsules in the comfort of their own homes with remote provider supervision; and (vi) following related FDA 510(k) clearance (targeted for mid-2026), commercializing our updated CapsoCam Plus which incorporates our AI assisted pathology detection technology.
Previous wording
In the near term, we expect our clinical development expenses to vary as a percent of revenue as, among others, we (i) finalize the first arm of our CapsoCam Colon large-scale pivotal study and begin the second arm of our CapsoCam Colon pivotal study involving the second generation of that capsule (incorporating further advanced features designed to improve the accuracy of CapsoCam Colon) with the second arm expected to involve approximately 200 patients enrolled at up to 10 sites in the U.S and (ii) commence clinical development of our updated small bowel CapsoCam Plus capsule incorporating our AI assisted reading technology.
Current wording
In the near term, we expect our clinical development expenses to vary as a percent of revenue as, among others, we (i) finalized the first arm of our CapsoCam Colon large-scale pivotal study and began the second arm of our CapsoCam Colon pivotal study involving the second generation of that capsule (incorporating further advanced features designed to improve the accuracy of CapsoCam Colon) with the second arm expected to involve approximately 250 patients enrolled at up to 10 sites in the U.S. and plan to refine the study based on the FDA comments to the first arm pivotal study and (ii) continued clinical development of our updated small bowel CapsoCam Plus capsule incorporating our AI assisted pathology detection technology.
Previous wording
Our revenue has increased in each year since we began U.S. direct sales in 2020. Our revenues for the three months ended June 30, 2025 and 2024 was $3.3 million and $2.8 million, respectively, representing a period-over-period growth of $0.5 million or approximately 17% (17% in the U.S. and 16% internationally). Our revenues for the six months ended June 30, 2025 and 2024 was $6.1 million and $5.3 million, respectively, representing a period-over-period growth $0.8 million or approximately 14% (in the U.S. and internationally). The primary driver for our revenue growth was an increase in the number of CapsoCam Plus capsules sold: a period-over-period increase of 17% for the three months ended June 30, 2025 and 2024 and period-over-period increase of 15% for the six months ended June 30, 2025 and 2024.
Current wording
Our revenue has increased in each year since we began U.S. direct sales in 2020. Our revenues for the three months ended September 30, 2025 and 2024 was $3.5 million and $3.0 million, respectively, representing a period-over-period growth of $0.6 million or approximately 19% (25% in the U.S. and 3% internationally). Our revenues for the nine months ended September 30, 2025 and 2024 was $9.6 million and $8.3 million, respectively, representing a period-over-period growth $1.3 million or approximately 16% (18% in the U.S. and 10% internationally). The primary driver for our revenue growth was an increase in the number of CapsoCam Plus capsules sold: a period-over-period increase of 20% for the three months ended September 30, 2025 and 2024 and period-over-period increase of 17% for the nine months ended September 30, 2025 and 2024.
Previous wording
For the three and six months ended June 30, 2025 and 2024, international sales accounted 23% of total revenue.
Current wording
For the three and nine months ended September 30, 2025 and 2024, international sales accounted for 22% and 23% of total revenue.
Previous wording
As we continued to scale our business, costs of revenue increased $0.3 million, or 20%, for the three months ended June 30, 2025, compared to the three months ended June 30, 2024 from $1.3 million to $1.5 million. For the six months ended June 30, 2025, compared to the six months ended June 30, 2024 the cost of revenue was $2.8 million and $2.4 million, respectively, which represented an increase of $0.4 million, or 19% period-over-period. The increased costs of revenue was attributable to increased unit sales of CapsoCam Plus for the small-bowel and the related services.
Current wording
As we continued to scale our business, costs of revenue increased $0.3 million, or 24%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024 from $1.3 million to $1.6 million. For the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024 the cost of revenue was $4.4 million and $3.7 million, respectively, which represented an increase of $0.8 million, or 21% period-over-period. The increased costs of revenue was attributable to increased unit sales of CapsoCam Plus for the small-bowel and the related services and to increased customs and tariffs due to the change in U.S. customs enforcement.
Previous wording
Gross profit increased $0.2 million, or 14%, for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, from $1.6 million to $1.8 million. For the six months ended June 30, 2025 and 2024, the total gross profit was $3.3 million and $3.0 million respectively, representing a gross profit increase of $0.3 million, or 11% period-over-period. For the three months ended June 30, 2025 and 2024, the gross margin was 55% and 56%, respectively. For the six months ended June 30, 2025 and 2024, the gross margin was 54% and 56%, respectively. The increase in gross profit was a result of increased CapsoCam Plus unit sales and the related software component, when the decline of the gross margin is due to a pressure on selling prices we have when operating in high competitive market.
Current wording
Gross profit increased $0.3 million, or 16%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, from $1.7 million to $1.9 million. For the nine months ended September 30, 2025 and 2024, the total gross profit was $5.2 million and $4.6 million respectively, representing a gross profit increase of $0.6 million, or 12% period-over-period. For the three months ended September 30, 2025 and 2024, the gross margin was 54% and 56%, respectively. For the nine months ended September 30, 2025 and 2024, the gross margin was 54% and 56%, respectively. The increase in gross profit was a result of increased CapsoCam Plus unit sales and the related software component, while the decline of the gross margin is due to a pressure on selling prices we have when operating in a highly competitive market and changes the U.S. government made to the trade policies and tariffs at the beginning of the year resulting in increase of expenses for customs and tariffs.
Previous wording
The following tables provide a summary for our key operating expenses forthe three and six months ended June 30, 2025 and 2024.
Current wording
The following tables provide a summary for our key operating expenses forthe three and nine months ended September 30, 2025 and 2024.
Previous wording
Selling and marketing expenses increased $0.1 million, or 3%, for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, from $1.78 million to $1.85 million. For the six months ended June 30, 2025 and 2024, selling and marketing expenses amounts were $3.8 million and $3.4 million respectively, representing an increase of $0.4 million, or 11% period-over-period. The increase was was due to the addition to the sales force headcount and increase commission payouts in response to revenue growth.
Current wording
Selling and marketing expenses increased $0.028 million, or 2%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, from $1.75 million to $1.77 million. For the nine months ended September 30, 2025 and 2024, selling and marketing expenses amounts were $5.6 million and $5.2 million respectively, representing an increase of $0.4 million, or 8% period-over-period. The increase was was due to the addition to the sales force headcount and increase commission payouts in response to revenue growth.
Previous wording
Research and development expenses decreased $0.8 million, or 20%, for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, from $4.2 million to $3.4 million. For the six months ended June 30, 2025 and 2024, research and development expenses were $6.5 million and $7.5 million respectively, representing a decrease of $1.0 million, or 13% period-over-period. The decrease was primarily due to the completion of the CapsoCam Colon pivotal study at the end of 2024. We continued incurring expenses associated with ongoing clinical trials in 2025 and our clinical trial expenses in the three and six months ended June 30, 2025 of $1.1 million and $1.8 million, respectively, were primarily related to standalone clinical performance assessment of our AI assisted reading technology for CapsoCam Colon.
Current wording
Research and development expenses increased $1.6 million, or 35%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, from $4.5 million to $6.1 million. For the nine months ended September 30, 2025 and 2024, research and development expenses were $12.6 million and $12.0 million respectively, representing a increase of $0.6 million, or 5% period-over-period. The increase was primarily due to the development of the new CMOS under the development agreement with Canon Inc.. We continued incurring expenses associated with ongoing clinical trials in 2025 and our clinical trial expenses in the three and nine months ended September 30, 2025 of $2.4 million and $4.1 million, respectively, were primarily related to standalone clinical performance assessment of our AI assisted pathology detection technology for CapsoCam Plus and CapsoCam Colon.
Previous wording
General and administrative expenses increased $0.4 million, or 43%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024, from $0.9 million to $1.2 million. The increase was primarily due to higher professional service expenses, including audit, legal and consulting fees.
Current wording
General and administrative expenses increased $0.9 million, or 74%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, from $1.2 million to $2.1 million. The increase was primarily due to higher payroll and benefits expenses and stock-based compensation expenses.
Previous wording
For the six months ended June 30, 2025 and 2024, general and administrative expenses were $3 million and $1.6 million respectively, representing an increase of $1.5 million, or 94% period-over-period. Of the total increase, approximately $1.1 million was attributable to higher professional service expenses, including audit, legal and consulting fees, $0.2 million was due to stock-based compensation expenses primarily due to new stock options granted at the end of 2024 and April 2025, and $0.5 million was due to headcount related expenses and increased recruitment expenses, offset by $0.2 million received from the U.S. federal government as part of a COVID-19 relief program (see Note 9 of the Quarterly Report on the Form 10-Q).
Current wording
For the nine months ended September 30, 2025 and 2024, general and administrative expenses were $5.1 million and $2.8 million respectively, representing an increase of $2.3 million, or 85% period-over-period. Of the total increase, approximately $0.9 million was attributable to higher professional service expenses, including audit, legal and consulting fees, $0.4 million was attributable to stock-based compensation expenses primarily due to new stock options granted at the end of 2024 and April 2025, as well as acceleration of stock option awards associated with the executive officer departure, and $0.9 million was associated with higher payroll and benefits expenses.
Previous wording
Our reported net loss attributable to CapsoVision common stockholders for the three months ended June 30, 2025 and 2024 totaled approximately $4.6 million and $5.3 million, respectively, representing a period-over-period decline of $0.6 million or 12%. Our reported net loss attributable to CapsoVision common stockholders for the six months ended June 30, 2025 and 2024 was $10 million and $9.5 million, respectively, representing a period-over-period growth of $0.5 million or 6%.
Current wording
Our reported net loss attributable to CapsoVision common stockholders for the three months ended September 30, 2025 and 2024 totaled approximately $7.9 million and $5.8 million, respectively, representing a period-over-period increase of $2.1 million or 37%. Our reported net loss attributable to CapsoVision common stockholders for the nine months ended September 30, 2025 and 2024 was $18 million and $15.3 million, respectively, representing a period-over-period increase of $2.7 million or 17%.
Previous wording
To date, we have financed our operations primarily through the net proceeds we have received from the sales of our convertible preferred stock and common stock as well as cash generated from sales of our CapsoCam Plus capsule endoscopy solution. We have generated losses from our operations as reflected in our accumulated deficit of $140.4 million as of June 30, 2025. Net cash used in operating activities was $4.5 million and $3.6 million for the three months ended June 30, 2025 and 2024, respectively. For the six months ended June 30, 2025 and 2024, net cash used in operating activities was $9.5 million and $7.6 million, respectively.
Current wording
To date, we have financed our operations primarily through the net proceeds we have received from the sales of our convertible preferred stock and IPO common stock as well as cash generated from sales of our CapsoCam Plus capsule endoscopy solution. We have generated losses from our operations as reflected in our accumulated deficit of $148.3 million as of September 30, 2025. Net cash used in operating activities was $5.7 million and $7.1 million for the three months ended September 30, 2025 and 2024, respectively. For the nine months ended September 30, 2025 and 2024, net cash used in operating activities was $15.2 million and $14.7 million, respectively.
Previous wording
Our losses primarily resulted from the costs incurred in the development and sales and marketing of our products and providing general and administrative support for our operations. We expect to continue to incur losses in the foreseeable future and to expend significant amounts of cash in the foreseeable future as we continue to scale our business, invest in research and development activities, increase sales and marketing expenses to support commercial expansion, and increase general and administrative expenses to support being a publicly-traded company.
Current wording
Our losses primarily resulted from the costs incurred in the development and sales and marketing of our products and providing general and administrative support for our operations. We expect to continue to incur losses in the foreseeable future and to expend significant amounts of cash as we continue to scale our business, invest in research and development activities, increase sales and marketing expenses to support commercial expansion, and increase general and administrative expenses to support being a publicly-traded company.
Previous wording
Our interim (unaudited) financial statements for the six months ended June 30, 2025 included in this Quarterly Report on Form 10-Q note that there is substantial doubt about our ability to continue as a going concern within one year after the date of issuance of those financial statements (see Note 2, Going Concern). This means that we have expressed substantial doubt about our ability to continue our operations without an additional infusion of capital from external sources. Our interim (unaudited) financial statements have been prepared on a going concern basis and do not include any adjustments to reflect the future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may be necessary should we be unable to continue as a going concern. If we are unable to finance our operations, our business would be in jeopardy and we might not be able to continue operations and might have to liquidate our assets. In that case, investors might receive less than the value at which those assets are carried on our interim (unaudited) financial statements for the six months ended June 30, 2025, and it is likely that investors would lose all or a part of their investment. See “Risk Factors—Risks Relating to Our Business and Industry—Our interim (unaudited) financial statements for the six months ended June 30, 2025 include a footnote raising substantial doubt about our ability to continue as a 'going concern' and we will likely need to raise additional financing to fund our business and revenue growth plans.”
Current wording
Our interim (unaudited) financial statements for the nine months ended September 30, 2025 included in this Quarterly Report on Form 10-Q note that there is substantial doubt about our ability to continue as a going concern within one year after the date of issuance of those financial statements (see Note 2. GOING CONCERN). This means that we have expressed substantial doubt about our ability to continue our operations without an additional infusion of capital from external sources. Our interim (unaudited) financial statements have been prepared on a going concern basis and do not include any adjustments to reflect the future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may be necessary should we be unable to continue as a going concern. If we are unable to finance our operations, our business would be in jeopardy and we might not be able to continue operations and might have to liquidate our assets. In that case, investors might receive less than the value at which those assets are carried on our interim (unaudited) financial statements for the nine months ended September 30, 2025, and it is likely that investors would lose all or a part of their investment. See “Risk Factors—Risks Relating to Our Business and Industry—Our interim (unaudited) financial statements for the nine months ended September 30, 2025 include a footnote raising substantial doubt about our ability to continue as a 'going concern' and we will likely need to raise additional financing to fund our business and revenue growth plans."
Previous wording
We have lease obligations and other contractual obligations and commitments as part of our ordinary course of business. See Note 8 to our financial statements included elsewhere in this Quarterly Report on Form 10-Q for information about our lease obligations. In addition, see Note 9 to our financial statements included elsewhere in this Quarterly Report on Form 10-Q for information about our other commitments and contingencies.
Current wording
We have lease obligations and other contractual obligations and commitments as part of our ordinary course of business. See Note 8. LEASES to our financial statements included elsewhere in this Quarterly Report on Form 10-Q for information about our lease obligations. In addition, see Note 9. COMMITMENTS AND CONTINGENCIES to our financial statements included elsewhere in this Quarterly Report on Form 10-Q for information about our other commitments and contingencies.
Previous wording
As of June 30, 2025, we had approximately $1.1 million in cash and cash equivalents. From our inception through June 30, 2025, we have received aggregate gross proceeds of $143.6 million from sales of our convertible preferred stock, which were automatically converted into shares of our common stock in connection with the completion of our IPO. To provide for additional liquidity prior to the completion of our IPO, on May 28, 2025 we received $1 million as a note payable from an existing investor. The note payable, together with interest thereon (at 1% per month) was repaid shortly after completion of our IPO. In consideration for providing the note, we issued the investor 7,508 shares of our common stock.
Current wording
As of September 30, 2025, we had approximately $17.8 million in cash and cash equivalents. From our inception through September 30, 2025, we have received aggregate gross proceeds of $143.6 million from sales of our convertible preferred stock, which were automatically converted into shares of our common stock in connection with the completion of our IPO. To provide for additional liquidity prior to the completion of our IPO, on May 28, 2025 we received $1 million as a note payable from an existing investor. The note payable, together with interest thereon (at 1% per month) was repaid shortly after completion of our IPO. In consideration for providing the note, we issued the investor 7,508 shares of our common stock.
Previous wording
As of June 30, 2025, we had an accumulated deficit of $140.4 million and cash and cash equivalents of $1.1 million. On July 3, 2025, we completed our IPO with the net proceeds to us of approximately $23.4 million after deducting underwriting discounts and commissions and offering expenses payable by us. Based on our current operating plan, we believe that the net proceeds from our IPO together with existing cash balances, will not be sufficient to fund our operations for at least the next 12 months after the date of issuance of these financial statements.
Current wording
As of September 30, 2025, we had an accumulated deficit of $148.3 million and cash and cash equivalents of $17.8 million. On July 3, 2025, we completed our IPO with the net proceeds to us of approximately $23.4 million after deducting underwriting discounts and commissions, and offering expenses payable by us. Based on our current operating plan, we believe that our existing cash balances will not be sufficient to fund our operations for at least the next 12 months after the date of issuance of these financial statements.
Previous wording
If we are unable to obtain additional funding on a timely basis, we will be required to scale back our plans and place certain activities on hold. We currently do not have any commitments to obtain additional funds. Our management continues to evaluate different strategies to obtain the required funding for future operations. These strategies may include public and private placements of equity and/or debt securities. Additionally, we continue to pursue the plan to seek an FDA “Breakthrough Device Designation” for our capsule endoscopy solution.
Current wording
If we are unable to obtain additional funding on a timely basis, we will be required to scale back our plans and place certain activities on hold. We currently do not have any commitments to obtain additional funds. Our management continues to evaluate different strategies to obtain the required funding for future operations. These strategies may include public and private placements of equity and/or debt securities.
Previous wording
For the six months ended June 30, 2025, net cash used in operating activities totaled $9.5 million, primarily driven by the net loss of $10 million for the period. Additional contributing factors included a $0.4 million increase in inventory to support increasing demand, offset by a $1 million increase in accrued expenses and other current liabilities, mainly due to research and development expenses and increased headcount related expenses.
Current wording
For the nine months ended September 30, 2025, net cash used in operating activities totaled $15.2 million, primarily driven by the net loss of $17.9 million for the period. Additional contributing factors included a $0.6 million increase in inventory to support increasing demand, offset by a $2.2 million increase in accrued expenses and other current liabilities, mainly due to research and development expenses and increased headcount related expenses, as well as $0.6 million increase in stock-based compensation expenses due to new grants and stock option accelerations.
Previous wording
For the six months ended June 30, 2024, net cash used in operating activities was $7.6 million, also primarily attributable to the net loss of $9.5 million. Cash outflows were further impacted by a $0.2 million increase in inventory to meet increased demand, a $1.3 million increase in accrued expenses and other current liabilities, mainly due to research and development expenses, including on-going clinical trials, and a $0.4 million increased in accounts payable driven primarily by on-going clinical trials.
Current wording
For the nine months ended September 30, 2024, net cash used in operating activities was $14.7 million, primarily attributable to the net loss of $15.3 million. Cash outflows were further impacted by a $0.6 million increase in inventory to meet increased demand, a $0.5 million increase in accrued expenses and other current liabilities, mainly due to research and development expenses, including on-going clinical trials, and a $0.2 million increased in accounts payable driven primarily by on-going clinical trials.
Previous wording
Net cash used in investing activities during the six months ended June 30, 2025 and 2024 was $0.1 million and $0.1 million, respectively, and consisted of purchases of property and equipment.
Current wording
Net cash used in investing activities during the nine months ended September 30, 2025 and 2024 was $0.1 million and $0.2 million, respectively, and consisted of purchases of property and equipment.
Previous wording
Net cash provided by financing activities during the six months ended June 30, 2025, consisted primarily of $1 million from note payable received from an existing investor and $0.2 million in proceeds from the exercise of options on common stock and warrants. For the six months ended June 30, 2024, net cash provided by financing activities was $0.1 million in proceeds from the exercise of options on common stock.
Current wording
Net cash provided by financing activities during the nine months ended September 30, 2025 consisted primarily of $23.4 million in net proceeds from the IPO, and $0.2 million in proceeds from the exercise of options on common stock and warrants. For the nine months ended September 30, 2024, net cash provided by financing activities was $10.1 million, which consisted of proceeds primarily from the sales of our preferred stocks.
Previous wording
Our contractual obligations at June 30, 2025 include operating lease payments of $1.1 million due within 30 months.
Current wording
Our contractual obligations at September 30, 2025 include operating lease payments of $1.1 million due within 27 months and $2.5 million in outstanding purchase commitment for the development agreement with Canon Inc. due in 18 months. We expect to fund these obligations through our existing cash balances and cash flows from operations.
Previous wording
Our management’s discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with U.S. GAAP. Preparation thereof requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses, and certain items included in the footnotes to our financial statements. See Note 3 to our financial statements included elsewhere in this Quarterly Report on Form 10-Q for information about our significant accounting policies. While we believe the processes used in developing our estimates to be reasonable, actual amounts may differ from estimates. The following reflects the critical accounting estimates used in the preparation of our financial statements. The term “critical accounting estimates” refers to those estimates that involve a significant level of estimation uncertainty that have had, or are reasonably likely to have, a material impact on our financial condition or results of operations.
Current wording
Our management’s discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with U.S. GAAP. Preparation thereof requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses, and certain items included in the footnotes to our financial statements. See Note 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES to our financial statements included elsewhere in this Quarterly Report on Form 10-Q for information about our significant accounting policies. While we believe the processes used in developing our estimates to be reasonable, actual amounts may differ from estimates. The following reflects the critical accounting estimates used in the preparation of our financial statements. The term “critical accounting estimates” refers to those estimates that involve a significant level of estimation uncertainty that have had, or are reasonably likely to have, a material impact on our financial condition or results of operations.
Previous wording
We maintain equity incentive plans to provide long-term incentives for employees, consultants and members of our board of directors. These plans allow for the issuance of non-statutory and incentive stock options to employees and non-statutory stock options to consultants and non-employee directors. We are required to determine the fair value of equity incentive awards and recognize compensation expense for all equity incentive awards granted, including employee stock options.
Current wording
We maintain equity incentive plans to provide long-term incentives for employees, consultants and members of our board of directors. These plans allow for the issuance of non-statutory and incentive stock options to employees, non-statutory stock options to consultants and restricted stock units to non-employee directors. We are required to determine the fair value of equity incentive awards and recognize compensation expense for all equity incentive awards granted.
Previous wording
We account for stock-based compensation awards, including stock options to employees and non-employees, based on their estimated grant date fair value. We recognize the fair value of stock options, which vest based on continued service, on a straight-line basis over the requisite service period, which is generally four years. As described in detail in Note 11 to our financial statements included elsewhere in this Quarterly Report on Form 10-Q, determining the fair value of stock-based compensation to be recorded typically involves the use of an option-pricing model (which, for our Company, is the Black-Scholes option-pricing model).
Current wording
We account for stock-based compensation awards, including stock options to employees and non-employees, based on their estimated grant date fair value. We recognize the fair value of stock options, which vest based on continued service, on a straight-line basis over the requisite service period, which is generally four years. As described in detail in Note 12. STOCK-BASED COMPENSATION to our financial statements included elsewhere in this Quarterly Report on Form 10-Q, determining the fair value of stock-based compensation to be recorded typically involves the use of an option-pricing model (which, for our Company, is the Black-Scholes option-pricing model).
Previous wording
See Note 3 to our financial statements included elsewhere in this Quarterly Report on Form 10-Q for a description of recent accounting pronouncements applicable to our financial statements.
Current wording
See Note 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES to our financial statements included elsewhere in this Quarterly Report on Form 10-Q for a description of recent accounting pronouncements applicable to our financial statements.