PULSE BIOSCIENCES, INC.

1. Description of the Business

Pulse Biosciences, Inc. is a novel ablation company committed to health innovation using its patented Nano-pulse Stimulation (“NPS”) technology, a revolutionary energy modality that delivers nanosecond-duration pulses of electrical energy, each less than a millionth of asecond long, to nonthermally clear or kill targeted cells. NPS technology, also referred to as Nanosecond Pulsed-Field Ablation (“nsPFA”) energy when used to ablate cellular tissue, can be used to treat a variety of medical conditions for which an optimal solution remains unfulfilled. The Company developed its proprietary nPulse System (formerly known as CellFX), a novel nsPFA delivery platform, and commercialized the initial application of its nsPFA energy to treat benign lesions of the skin. In parallel, the Company has designed a variety of applicators, or disposables, to explore the potential use of the nPulse platform to treat disorders in other medical specialties, such as cardiology, gastroenterology, gynecology, and otolaryngology. These applicators include devices for open surgical procedures, endoscopic or minimally invasive procedures, and endoluminal catheters, and each has been used in preclinical studies. Based on its preclinical experience and the potential to significantly improve outcomes for patients in a large and growing market, the Company decided in2022 to focus its primary efforts on the use of nsPFA energy and the nPulse platform in the treatment of atrial fibrillation ("AF") and in a select few other markets where it could have a profound positive impact on healthcare for both patients and providers, such as surgical soft tissue ablation.

The Company is incorporated in the State of Delaware. It is located in Miami, Florida, and continues to maintain its offices in Hayward, California. The Company maintains a website at www.pulsebiosciences.com where general information about the Company is available.

The Company’s activities are subject to significant risks and uncertainties, including the need for additional capital. The Company doesnot currently have any material cash flows from operations. It has recently commenced revenue-generating operations and will need to raise additional capital to finance its operations. However, there can beno assurances that the Company will be able to obtain additional financing on acceptable terms and in the amounts necessary to fully fund its operating requirements.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared on a basis consistent with the Company’s* December 31, 2024* audited consolidated financial statements and include all adjustments, consisting of only normal recurring adjustments, necessary to fairly state the information set forth herein. The condensed consolidated financial statements have been prepared in accordance with the applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) and, as permitted by such rules and regulations, omit certain information and footnote disclosures necessary to present the financial statements in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The condensed consolidated balance sheet as of* December 31, 2024* was derived from the audited consolidated financial statements as of that date but doesnot include all of the information and footnotes required by U.S. GAAP for complete financial statements. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form10-K for the year ended* December 31, 2024*. The results of operations for thethree andnine-months ended* September 30, 2025*, arenot necessarily indicative of the results to be expected for the entire year or any future periods.

Principles of Consolidation

The accompanying condensed consolidated financial statements include the financial statements of Pulse Biosciences, Inc. and its wholly-owned subsidiaries. Intercompany balances and transactions, if any, have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates that affect the amounts reported in the financial statements and accompanying notes to the financial statements. Estimates include, but arenot limited to, the valuation and recognition of stock-based compensation, the valuation of equity-classified subscription rights, inventory valuation, income taxes, and the useful lives assigned to long-lived assets. The Company evaluates its estimates and assumptions based on historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could differ materially from these estimates.

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Significant Accounting Policies

The Company’s significant accounting policies are described in the Company’s Annual Report on Form10-K for the year ended* December 31, 2024*. The Company continually evaluates the accounting policies and estimates used in preparing the consolidated financial statements.

Stock-Based Compensation

The Company's stock-based compensation programs include stock options and an employee stock purchase program.

The Company periodically issues stock options to officers, directors, employees, and consultants for services rendered. Such issuances vest and expire according to terms established at the issuance date. Stock-based payments to officers, directors and employees, including grants of employee stock options, are recognized in the financial statements based on their grant date fair values, which are estimated using the Black-Scholes option-pricing model. Stock-based compensation expense is charged to operations on a straight-line basis over the vesting period. The Company has granted stock options with both time-based as well as performance-based vesting conditions. For stock awards with performance-based vesting conditions, the Company doesnot recognize compensation expense until it is probable that the performance-based vesting condition will be achieved. The analysis to determine such probability involves estimates and judgements from management and the estimate of expense* maybe revised periodically. In October 2024,*the Board approved changes to the vesting conditions of certain outstanding common stock option awards so that the performance-based vesting criteria of those particular awards were modified to either time-based or market-based vesting criteria.

During2024, the Company issued certain stock options with market-based vesting conditions and modified certain performance-based stock option awards to market-based options. These vesting conditions relate to the achievement of certain market capitalization targets of the Company. Using a Monte Carlo simulation model, the Company estimated the fair value of the market-based options on the grant date or modification date, with the associated stock-based compensation expense recognized over the requisite service period. The requisite service period is the service period derived from the Monte Carlo simulation model. If the market capitalization targets are met sooner than the derived service period, the Company will accelerate the recognition of stock-based compensation expense to reflect the cumulative expense associated with the vested shares.

In thefirst quarter of2025, the Company issued certain executives stock options with both market-based and performance-based vesting conditions. These vesting conditions relate to both the achievement of certain market capitalization targets of the Company, as well as the achievement of certain revenue and margin metrics. Using a Monte Carlo simulation model, the Company estimated the fair value of the market-based options on the grant date, along with a derived service period. Compensation expense for the awards is recognized over the requisite service period, which is the longer of the derived service period or the implicit service period (the period when the performance condition is expected to be met). Compensation expense is recognized only once it becomes probable that the associated performance condition will be achieved and the employee is expected to render the requisite service. Once these criteria are met, the Company will recognize expense using the accelerated attribution method over the requisite service period. If, at any point, the performance condition isno longer probable of being achieved or the employee isno longer expected to complete the requisite service period, any previously recognized expense will be reversed. Additionally, if both the market and performance conditions are satisfied before the end of the requisite service period, any remaining unrecognized expense will be recognized immediately, provided that the employee is still providing service.

The Monte Carlo simulation models require the Company to make assumptions and judgements about the variables used in the calculations including the expected volatility, the risk-free interest rate, cost of equity, and the expected term. The assumptions used in the option-pricing model represent management’s best estimates. If factors change and different assumptions are used, the Company's stock-based compensation expense could be materially different in the future.

See Note6 for a detailed discussion of the Company’s stock plans and stock-based compensation expense.

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Valuation of Inventory

During thenine-months ended* September 30, 2025,the Company determined that costs had future economic benefit subsequent to receiving FDA approval, and as such, it began to capitalize inventory in preparation of its limited market release of percutaneous electrodes for its Vybrance Percutaneous Electrode System. Prior to capitalizing inventory, all direct and indirect manufacturing costs were charged to research and development expenses in the period incurred or written off as excess and obsolete inventory in2022,* including previously manufactured consoles.

Inventory is stated at lower of cost or net realizable value. The Company establishes the inventory basis by determining the cost based on standard costs approximating the purchase costs on afirst-in,first-out basis. Net realizable value is the estimated selling price in the ordinary course of the Company’s business, less reasonably predictable costs of completion, disposal, and transportation. The cost basis of the Company’s inventory will be reduced for any products that are considered excessive or obsolete based upon assumptions about future demand and market conditions. During thenine-months ended* September 30, 2025,*there wasno reduction to the balance of inventory for excessive and obsolete inventory.

Revenue from Contracts with Customers

The Company accounts for a contract with a customer when the rights and obligations of the parties are identifiable, the contract has commercial substance, and the collectability of the consideration to be received from the customer is considered probable. Contracts with customers are for the sale of the nPulse Vybrance system, which includes system components, software, and system accessories. Instruments and other accessories* mayalso be included with the system or may*be sold on a standalone basis. These products are considered performance obligations to the extent they are separately identifiable from other products in the contract and when the customer can either benefit from the product on its own or with other goods or services that are readily available to the customer.

The Company recognizes revenue at a point in time when it satisfies performance obligations by transferring control of promised goods to its customers. Transfer of control occurs based on shipping terms as contractually negotiated. The amount of revenue recognized is equal to the consideration to which the Company expects to be entitled in exchange for the promised goods. Though some products* maybe sold on a stand-alone basis, initial customer contracts will likely involve the bundling of products which will be delivered concurrently to the customer for a single price. The initial limited market release period will also include evaluation agreements with customers that allow either the Company or the customer to terminate the contract at any point without penalty. The termination right limits the effective contract term to the period for which the contract wasnot* terminated. The Company generally extends payment terms to customers after the Company performs a necessary credit evaluation to ensure future collectability of the outstanding balance. Payment generally occurs within a relatively short period of time after delivery of products.

The transaction price is the consideration to which the Company expects to be entitled in exchange for providing the promised goods to customers. Though most customer orders are for a fixed amount of consideration, the Company evaluates the possible impact of variable consideration in determining the transaction price, in particular the possibility of future returns. Sales agreements allow for a right of return only if the product doesnot conform to the agreed upon quality standards or if the product was shipped due to Company error. The Company anticipates such returns will be minimal and has madeno adjustments to the transaction price for any estimated returns. The transaction price is determined at contract execution and updated each quarter for any changes in circumstances (e.g., changes in estimated return amount).

The Company has made an accounting policy election to exclude from the measurement of the transaction price all taxes which are imposed on and concurrent with a specific revenue-producing transaction and collected by the entity from a customer.

When there are multiple performance obligations present, the total transaction price shall be allocated to each of the performance obligations based upon the relative standalone selling price (“SSP”) of those performance obligations. The Company establishes SSPs based on multiple factors including prices charged by the Company for similar offerings, product-specific business objectives, and the estimated cost to provide the performance obligation.

Shipping and handling activities arenot considered to be a separate performance obligation. The Company has made an accounting policy election to account for shipping and handling activities as fulfillment activities when these activities occur after the customer obtains control of the product.

The Company has determined that certain promises in the multiple-element arrangements, such as installation, training, and certain ancillary products, are immaterial in the context of the contract and donot represent separate performance obligations to which transaction price is allocated.

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The Company utilizes the practical expedient under ASC606 and doesnot disclose unsatisfied performance obligations for contracts as the contracts generally have an original duration of less thanone year. Additionally, the Company doesnot currently have significant contract assets or deferred revenue.

The Company doesnot incur contract origination costs.

Net Loss per Share

The Company calculates basic net loss per share by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by giving effect to all potential dilutive common stock equivalents outstanding during the period. For purposes of this calculation, options to purchase common stock and common stock warrants are considered common stock equivalents. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted net loss per share.

Basic and diluted net loss per common share is the same for all periods presented because all warrants, stock options and restricted stock units outstanding are anti-dilutive.

The following outstanding stock options and warrants were excluded from the computation of diluted net loss per share for the periods presented because including them would have had an anti-dilutive effect:

Reclassification

Certain reclassifications have been made to the prior period presentation of the cash flows from operating activities within the condensed consolidated statements of cash flows to conform to current period presentation. Specifically, the presentation of operating lease expenses has been reclassified from “Right-of-use assets” within “Changes in operating assets and liabilities” to “Non-cash lease expense” within “Adjustments to reconcile net loss to net cash used in operating activities”. Additionally, certain reclassifications have been made to the prior period presentation of other income within the condensed consolidated statements of operations and comprehensive loss to conform to current period presentation. Specifically, the presentation of "Other expense" has been reclassified out of "Interest income, net." As a result of these changes, the presentation of these expenses in the comparative periods has been changed to conform to the current period. These reclassifications didnot have an impact on the Company’s results of operations and total cash flows from operating activities for thethree andnine-months ended* September 30, 2025and2024*, respectively, or the Company's financial position as of* September 30, 2025and December 31, 2024.*

Recent Accounting Pronouncements

In* December 2023,the FASB issued ASU2023*-09, Income Taxes (Topic740*):* Improvements to Income Tax Disclosures. This ASU requires greater disaggregation of information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. This ASU applies to all entities subject to income taxes and is intended to help investors better understand an entity’s exposure to potential changes in jurisdictional tax legislation and assess income tax information that affects cash flow forecasts and capital allocation decisions. This ASU is effective for annual periods beginning after* December 15, 2024,with early adoption permitted. This ASU should be applied on a prospective basis although retrospective application is permitted. While the Company is still evaluating the full impact of the adoption of this ASU, it doesnot* expect it to have a material impact on its consolidated financial statements and related disclosures.

In* November 2024,the FASB issued ASU2024*-03, Disaggregation of Income Statement Expenses, which aims to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions. The guidance is effective for the Company's annual periods beginning in2027 and interim periods beginning in thefirst quarter of fiscal year2028. The Company is currently evaluating the impact of the new guidance.

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In* July 2025,the FASB issued ASU2025*-05, Financial Instruments-Credit Losses (Topic326*): Measurement of Credit Losses for Accounts Receivable and Contract Assets*, which provides a practical expedient to measure credit losses on current accounts receivable and current contract assets under Accounting Standards Codification606, Revenue from Contracts with Customers. The practical expedient assumes that current conditions as of the balance sheet date donot change for the remaining life of the asset. The guidance is effective for the Company's interim and annual periods beginning in2026. The Company is currently evaluating the impact of the new guidance.

Recent Tax Legislation

During thethree months ended* September 30, 2025,the One Big Beautiful Bill Act ("OBBBA") was enacted. The Company doesnot* anticipate a material impact to income tax expense for the year ended* December 31, 2025*as a result of OBBBA.

3. Fair Value of Financial Instruments

The authoritative guidance with respect to fair value established a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value intothree levels, and requires that assets and liabilities carried at fair value be classified and disclosed inone ofthree categories, as presented below.

Level1 - Observable inputs such as quoted prices in active markets for an identical asset or liability that the Company has the ability to access as of the measurement date. Financial assets and liabilities utilizing Level1 inputs include money market funds.

Level2 - Inputs, other than quoted prices included within Level1, which are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. The Company didnot classify any of its investments within Level2 of the fair value hierarchy.

Level3 - Unobservable inputs for which there is little orno market data for the asset or liability which requires the reporting entity to develop its own assumptions. The Company didnot classify any of its investments within Level3 of the fair value hierarchy.

The following table sets forth the fair value of the Company’s financial instruments measured on a recurring basis as of* September 30, 2025* and* December 31, 2024*, respectively (in thousands):

The Company didnot have any financial liabilities measured on a recurring basis as of* September 30, 2025* or* December 31, 2024*.

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4. Balance Sheet Components

Property and Equipment, Net

Property and equipment, net consisted of the following (in thousands):

Depreciation expense was $0.1 million for each of thethree-months ended* September 30, 2025and2024*, and $0.3 million and $0.4 million for thenine-months ended* September 30, 2025and2024*, respectively.

Intangible Assets, Net

Intangible assets primarily consist of acquired licenses to utilize certain patents, know-how and technology relating to the Company’s NPS technology for biomedical applications acquired from Old Dominion University Research Foundation (“ODURF”), Eastern Virginia Medical School, and the University of Southern California. In addition, the Company entered into a Sponsored Research Agreement with Old Dominion University’s Frank Reidy Research Center for Bioelectrics, which includes certain intellectual property rights arising from the research. The Company is amortizing the intangible assets straight-line over an estimated useful life of12 years.

Intangible assets, net consisted of the following (in thousands):

A schedule of the amortization of intangible assets for the remainder of2025 and the succeeding final year is as follows (in thousands):

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Accrued Expenses

Accrued expenses consisted of the following (in thousands):

5. Goodwill

In2014, the Company acquired three companies (the “Acquisitions”) for aggregate consideration of $5.5 million. In accordance with ASC Topic805, Business Combinations, the Company recorded goodwill of $2.8 million in connection with the Acquisitions as the consideration paid exceeded the fair value of the net tangible assets and the intangible assets acquired.

In accordance with ASC Topic350, Intangibles-Goodwill and Other, the Company reviews goodwill for impairment at least annually or whenever any events or circumstances indicate that it is more likely thannot that the fair value of a reporting unit is less than its carrying amount. As of* September 30, 2025*, there wereno indicators of impairment and it was determined thatno impairment of goodwill existed.

6. Stockholders’** Equity and Stock-Based Compensation**

2024 Rights Offering and Subscription Rights

On* March 28, 2024,the Company announced that its Board unanimously approved plans to initiate a rights offering, whereby the Company would distribute non-transferable subscription rights atno* charge to all holders of the Company's common stock, par value $0.001 per share (the "Common Stock"), as of the close of business on a record date to be determined. On* May 20, 2024,the Company announced that the Board had set May 31, 2024as the record date (the "Record Date"). All holders of Common Stock as of the Record Date received non-transferable subscription rights to purchase up to an aggregate ofsix million units (the"2024* Units") with an aggregate offering value of up to $60 million (the*"2024* Rights Offering") at a price per2024 Unit equal to the lesser of: (i) $10 (the "Initial Price") and (ii) the volume weighted average price of the Common Stock for theten trading day period through and including the expiration date,* June 26, 2024 (the "Expiration Date"), of the Rights Offering (the "Alternate Price"). Each subscription right entitled the holder to purchase 0.10864186 2024 Units for each share of Common Stock owned as of the Record Date. Each2024* Unit consisted ofone share of Common Stock andtwo warrants, each being a warrant to purchaseone-half ofone share of Common Stock. The subscription rights were to expire and haveno value if they werenot exercised prior to the Expiration Date. The Company determined that the equity-classified subscription rights represent a pro-rata distribution issued to existing stockholders as of the Record Date, which is based on a purchase price of $10 per2024 Unit as compared to (1) the price of $11.55 perone share of Common Stock on the Record Date, plus (2) the value of the warrants on the Record Date. The Company determined the fair value of the equity-classified subscription rights as of the Record Date, which involved the use of a Monte Carlo simulation model to value the underlying warrants. The Monte Carlo simulation model was based on certain significant unobservable inputs, such as a risk-free interest rate, stock price volatility, dividend yield, and expected term of the rights offering. The fair value of the equity-classified subscription rights was $47.7 million and was recorded in equity on the balance sheet as part of additional paid-in capital. The deemed pro-rata distribution to shareholders of $47.7 million was reflected as an offsetting reduction in additional paid-in capital. The Company is in an accumulated deficit position and has elected a policy of recognizing the deemed pro-rata distribution to shareholders as a reduction to additional paid-in capital rather than a further increase to its accumulated deficit.

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On* July 3, 2024,the Company announced the closing of its2024* Rights Offering. The2024 Rights Offering resulted in the sale ofsix million 2024 Units, at a price of $10.00 per2024 Unit. Each2024 Unit consisted ofone share of the Company’s common stock, par value $0.001 per share, andtwo warrants, each being a warrant to purchaseone-half ofone share of common stock. The common stock and warrants comprising the2024 Units separated upon the closing of the2024 Rights Offering and were issued individually. A total of 5,999,998 shares of common stock and warrants to acquire up to approximately an additionalsix million shares of common stock were issued in the offering. The Company received aggregate gross proceeds from the2024 Rights Offering of $60 million. See2024 Rights Offering Warrants below for additional details of the warrants. Robert W. Duggan, the Company’s majority stockholder and Co-Chairman, purchased approximately 88% of the units offered through the2024 Rights Offering.

Common Stock** **Warrants

2024 Rights Offering Warrants

In connection with the2024 Rights Offering, the Company issued2024 Rights Offering Warrants to purchase a total of 5,999,999 shares of its common stock at an exercise price of $11.00 per whole share, which equaled 110% of the subscription price for the Units. The aggregate number of shares of our common stock issuable upon the exercise of each set of warrants included in a given subscription for Units was rounded up to the nearest whole share. Warrants are exercisable immediately and will expire on thefifth anniversary of the closing of the2024 Rights Offering. Half of the warrants issued in the rights offering were redeemable for $0.01 per underlying share of common stock, onnot less thanthirty days’ written notice, if the volume-weighted average price ("VWAP") of the Company’s common stock equaled or exceeded 150% of the exercise price for the warrants, or $16.50, fortwenty consecutive trading days. In* December 2024,the Company delivered an irrevocable notice of redemption to redeem thisfirst* tranche of common stock warrants because the VWAP of the Company's common stock over thetwenty consecutive trading days before the notice was $18.85. Accordingly, pursuant to the 150% redemption feature, the Company redeemed 18,221 warrants on the redemption date,* February**5,* 2025, andnone of these warrants are still outstanding. The other half of the warrants issued in the rights offering remain redeemable for $0.01 per underlying share of common stock, onnot less thanthirty days’ written notice, but only if the VWAP of the Company’s common stock equals or exceeds 200% of the exercise price for the warrants, or $22.00, fortwenty consecutive trading days. As of* September 30, 2025*, there wereno outstanding2024 Rights Offering Warrants subject to the 150% redemption feature and there were 411,907 outstanding2024 Rights Offering Warrants subject to the 200% redemption feature, entitling holders to purchase up to approximately 205,953 shares of common stock. During thenine-months ended* September 30, 2025*, we have received a total of $14.1 million in gross proceeds from exercises of the2024 Rights Offering Warrants. Cumulatively, as of* September 30, 2025*, we have received a total of $63.5 million in gross proceeds from exercises of the2024 Rights Offering Warrants.

Equity Plans

2017 Equity Incentive Plan and2017 Inducement Equity Incentive Plan**

The Board previously adopted, and the Company’s stockholders approved, the Company’s2017 Equity Incentive Plan (the*“2017* Plan”).

The2017 Plan has a 10-year term and provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units ("RSUs"), performance units, and performance shares to employees, directors and consultants of the Company and any parent or subsidiary of the Company, as the Compensation Committee of the Board* maydetermine. Subject to an annual evergreen increase and adjustment in the case of certain capitalization events, the Company initially reserved 1,500,000 shares of the Company’s common stock for issuance pursuant to awards under the2017* Plan. In addition, shares remaining available under the Company’s2015 Equity Incentive Plan, as amended (the*“2015* Plan”), and shares reserved butnot issued pursuant to outstanding equity awards that expire or terminate without being exercised or that are forfeited or repurchased by the Company will be added to the shares of common stock available for issuance under the2017 Plan. The2017 Plan is administered by the Board’s Compensation Committee. Effective at both* January 1, 2025and2024,* the number of shares of common stock available under the2017 Plan increased by 1,200,000, respectively, pursuant to the evergreen provision of the2017 Plan. Under the evergreen provision of the2017 Plan, the share increase is determined based on the least of (i)1,200,000 shares, (ii)4% of the Company’s common stock outstanding at* December 31of the immediately preceding year, or (iii) such number of shares as determined by the Board. Additionally, the number of shares of common stock available under the2017* Plan increased by 1,375,000 shares as a result of a stockholder vote held at a special meeting of stockholders in* December 2023.On September 30, 2025,the Company's stockholders approved an amendment to the2017* Plan, which provided for an increase in the number of shares of common stock reserved for issuance thereunder by 2,000,000 shares. As of* September 30, 2025*, a total of 1,072,564 of common stock remained available for issuance under the2017 Plan.

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During* November 2017,the Board adopted the2017* Inducement Equity Incentive Plan (the “Inducement Plan”) and reserved 1,000,000 shares of the Company’s common stock for issuance pursuant to equity awards granted under the Inducement Plan. The Inducement Plan was adopted without stockholder approval.

The Inducement Plan has a 10-year term and provides for the grant of equity-based awards, including non-statutory stock options, RSUs, restricted stock, stock appreciation rights, performance shares, and performance units, and its terms are substantially similar to the2017 Plan, including with respect to treatment of equity awards in the event of a “merger” or “change in control” as defined under the Inducement Plan. Options issued under the Inducement Plan* mayhave a term up toten years and have variable vesting provisions. New hire stock option grants to non-executive employees generally vest 25% per year starting upon thefirst anniversary of the grant. New hire stock option grants to executive employees maycontain time-based, performance-based, and/or market-based vesting. Equity-based awards issued under the Inducement Plan are only issuable to individualsnot* previously engaged as employees or individuals returning to employment with the Company following a bona-fide period of non-employment. In* May 2021,the Board approved an amendment to the Inducement Plan to reserve an additional1,000,000* shares of the Company’s common stock for issuance pursuant to the Inducement Plan. And, in* March 2024,the Board approved asecond* amendment to the Inducement Plan to reserve an additional 2,000,000 shares of the Company’s common stock for issuance pursuant to the Inducement Plan. As of* September 30, 2025*,2,328,709 shares of common stock remained available for issuance under the Inducement Plan.

A summary of stock option activity under the2015 Plan,2017 Plan, and Inducement Plan for thenine-months ended* September 30, 2025* is presented below:

Time-based Options

The Company awards time-based options which vest and become exercisable, subject to the individual’s continued employment or service through the applicable vesting date. Time-based options can have various vesting schedules, most commonly new hire grants which generally vest 25% per year starting upon thefirst anniversary of the grant. As of* September 30, 2025,and December 31, 2024,time-based options outstanding were 8,939,677 and 8,075,265 shares, respectively. During thenine*-months ended* September 30, 2025,*the Company granted 1,424,343 time-based options with an aggregate grant date fair value of $20.9 million.

Performance-based Options

Certain stock options awarded by the Company contain performance conditions related to certain financial measures and achievements of strategic and operational milestones. Once a specific performance condition is fulfilled, the associated options will fully vest and become exercisable. As of* September 30, 2025and December 31, 2024,performance-based options outstanding were 442,678 shares. There wereno performance-based options granted during thenine*-months ended* September 30, 2025.*

The fair value of time-based and performance-based stock options granted were determined using the Black-Scholes option pricing model. The following summarizes the range of assumptions used in calculating the fair value of the awards:

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Market-based Options

Certain stock options awarded by the Company contain market conditions related to achievement of certain market capitalization targets. The options will vest and become exercisable once the specific market capitalization targets are fulfilled. As of* September 30, 2025,and December 31, 2024,market-based options outstanding were 2,721,389 and 2,461,389 shares, respectively. During thenine*-months ended* September 30, 2025,*the Company granted 260,000 market-based options with an aggregate grant date fair value of $4.0 million.

The fair value of market-based stock options granted were determined using the Monte Carlo simulation model. The following summarizes the range of assumptions used in calculating the fair value of the awards:

Market and Performance-based Options

Certain stock options awarded by the Company contain market conditions related to the achievement of certain market capitalization targets as well as the achievement of certain revenue and margin metrics. The options will vest and become exercisable once both the specific market capitalization targets as well as the specific revenue and margin targets are fulfilled. As of* September 30, 2025,market and performance-based options outstanding were 1,200,000 shares. There wereno market and performance-based options outstanding as of December 31, 2024.During thenine*-months ended* September 30, 2025,the Company granted 1,200,000 market and performance-based options with an aggregate grant date fair value of $18.9 million. There wereno* market and performance-based options granted during thethree-months ended* September 30, 2025.*

As of* September 30, 2025*, the Company determined it isnot probable that any of the performance conditions in these grants will be achieved and therefore didnot recognize any associated stock-based compensation expense during thenine-months ended* September 30, 2025.*The Company will reassess the probability of these performance conditions at each reporting period. The fair value of market-based stock options granted was determined using the Monte Carlo simulation model. The following summarizes the range of assumptions used in calculating the fair value of the awards:

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2017 Employee Stock Purchase Plan

The Board previously adopted, and the Company's stockholders approved, the Company’s2017 Employee Stock Purchase Plan (the*“2017* ESPP”).

The2017 ESPP is a broad-based plan that provides employees of the Company and its designated affiliates with the opportunity to become stockholders through periodic payroll deductions that are applied towards the purchase of Company common shares at a discount from the then-current market price. Subject to adjustment in the case of certain capitalization events, a total of 250,000 common shares of the Company were available for purchase at adoption of the2017 ESPP. Pursuant to the2017 ESPP, the annual share increase pursuant to the evergreen provision is determined based on the least of (i)450,000 shares, (ii)1.5% of the Company’s common stock outstanding at* December**31* of the immediately preceding year, or (iii) such number of shares as determined by the Board. In* January 2025and2024,* the Company reserved an additional 450,000 shares, respectively, under the2017 ESPP pursuant to the evergreen provision. During thenine-months ended* September 30, 2025*, the Company issued 44,596 shares of common stock under the2017 ESPP. As of* September 30, 2025*,851,183 shares of common stock remained available for issuance under the2017 ESPP.

The fair value of ESPP grants was determined using the Black-Scholes option pricing model. The following summarizes the range of assumptions used in calculating the fair value of the awards:

Stock-based Compensation

Total stock-based compensation expense consisted of the following (in thousands):

As of* September 30, 2025*,none of the performance conditions of the performance-based and market and performance-based options are probable to be achieved, and as such, no expense has been recognized during thethree andnine-months ended* September 30, 2025*.

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

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7. Commitments and Contingencies

Operating Leases

The Company leases office and laboratory facilities for its principal operations in Hayward, California, and office facilities for its corporate headquarters in Miami, Florida. These lease arrangements are both classified as operating leases.

Supplemental balance sheet information related to leases (in thousands):

Total cash paid for operating lease liabilities (in thousands):

Maturities of operating lease liabilities were as follows (in thousands):

Weighted-average remaining lease term and discount rate, as of* September 30, 2025*, were as follows:

Rent expense, including common area maintenance charges, was approximately $0.6 million for each of thethree-months ended* September 30, 2025and2024*, and approximately $1.9 million and $1.8 million for thenine-months ended* September 30, 2025and2024*, respectively.

Legal Proceedings

From time to time, we* maybe involved in various legal proceedings arising in the ordinary course of business. We arenot* presently a party to any legal proceedings that, in the opinion of management, could have a material adverse effect on our results of operations or financial condition. Regardless of outcome, however, any litigation could have an adverse impact on us because of defense and settlement costs, diversion of management resources, negative publicity, reputational harm, and other factors.

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8. Segment Reporting

The Company conducts business asone operating and reportable segment relating to the research and development of the Company’s NPS technology. The Company's chief executive officer, who is the chief operating decision maker ("CODM"), views the Company’s operations and manages its business inone operating segment. The CODM uses the Company’s consolidated net loss to monitor actual results as compared to the budget in assessing segment performance and allocation of resources. Managing and allocating resources on an entity-wide basis enables the CODM to assess the overall level of resources available and how to best deploy these resources across functions and research and development projects that are in line with the Company’s long-term company-wide strategic goals. Consistent with this decision-making process, the CODM uses financial information for purposes of evaluating performance, forecasting future period financial results, allocating resources, and setting incentive targets. Operating expenses are used to monitor budget versus actual results. The CODM is regularly provided with more detailed expense information than what is included in our condensed consolidated statement of operations and comprehensive loss. All product sales are in the United States and there areno significant groupings of product revenue the CODM considers or reviews when making operating decisions and assessing performance.

The table below shows a reconciliation of the Company’s net loss, including the significant expense categories regularly provided to and reviewed by the CODM, as computed under U.S. GAAP to the Company’s total net loss in the statements of operations (in thousands).

1 Adjusted cost of product revenue includes material costs, cash compensation costs, fees paid to consultants and outside service providers and organizations, and other expenses relating to manufacturing the Company’s commercial products. It doesnot include stock-based compensation, depreciation, amortization, IT and facilities costs - see descriptions of Other segment items in footnote7 and General and administrative in footnote5 below.

2 Cross platform research and engineering includes compensation costs, fees paid to consultants and outside service providers and organizations, prototype spending and other expenses relating to the acquisition, design and development of the Company’s clinical stage devices.

3 R&D manufacturing and engineering includes compensation costs, fees paid to consultants and outside service providers and organizations, and costs associated with the procurement of materials and the manufacturing of the Company’s clinical stage devices.

4 Clinical and regulatory includes compensation costs, fees paid to consultants and outside service providers and organizations, and costs associated with clinical trials and regulatory approvals required for the development of the Company’s clinical stage devices.

5 General and administrative includes compensation costs and fees paid to consultants and outside service providers and organizations in support of the administrative functions of the Company, including finance, legal, human resources, IT and facilities.

6 Sales and marketing includes compensation costs, fees paid to consultants and outside service providers and organizations, costs associated with marketing and sales strategy as well as execution of marketing and sales initiatives for the Company's products.

7 Other segment items includes stock-based compensation, depreciation and amortization.

As of* September 30, 2025,*all of the Company’s long-lived assets are located in the United States.

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**9. ** Related Party Transactions

On* July 3, 2024,the Company announced the closing of its2024* Rights Offering. The2024 Rights Offering resulted in the sale ofsix million 2024 Units, at a price of $10.00 per2024 Unit. Each2024 Unit consisted ofone share of the Company’s common stock, par value $0.001 per share, andtwo warrants, each being a warrant to purchaseone-half ofone share of common stock. The common stock and warrants comprising the2024 Units separated upon the closing of the2024 Rights Offering and were issued individually. A total of 5,999,998 shares of common stock and warrants to acquire up to approximately an additionalsix million shares of common stock were issued in the offering. The Company received aggregate gross proceeds from the2024 Rights Offering of $60 million. Robert W. Duggan, the Company’s majority stockholder and Co-Chairman, purchased approximately 88% of the units offered through the2024 Rights Offering. See Note6 for further details.