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 a 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 its website at www.pulsebiosciences.com where general information about the Company is available.

Liquidity and Capital Resources

The Company has incurred net operating losses and negative cash flows from operations since its inception and had an accumulated deficit of $463.3 million as of* December 31, 2025.As of December 31, 2025,the Company had cash and cash equivalents of $80.7 million. The Company believes that the existing financial resources are sufficient to continue operating activities at leastone* year past the issuance date of these consolidated financial statements.

The Company has historically financed its operations primarily through the sale of common stock and debt. To date, the Company has generated limited revenue from product sales and has incurred significant operating losses in each year since inception. The Company* may*continue to incur additional losses for the next several years.

While the Company has been able to raise multiple rounds of financing, there can beno assurance that in the event the Company requires additional financing, such financing will be available on terms which are favorable or at all. Failure to raise sufficient capital when needed or generate sufficient cash flow from operations would impact the ability to pursue business strategies and could require the Company to delay, scale back or discontinueone or more product development programs, or other aspects of the Company's business objectives.

2. Summary of Significant Accounting Policies

Principles of Consolidation

The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the United States Securities Exchange Commission (the “SEC”). The consolidated financial statements include the financial statements of the Company and its wholly-owned subsidiaries and intercompany balances and transactions 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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Concentration of Credit Risk

Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. The Company places its cash equivalents with high credit quality financial institutions and, by policy, limits the amounts invested with anyone financial institution or issuer. Deposits held with banks* mayexceed the amount of insurance provided on such deposits. The Company hasnot* experienced any losses since inception.

Fair Value of Financial Instruments

The Company applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, athree-tier fair value hierarchy has been established, which prioritizes the inputs used in measuring fair value as follows:

Level1—Observable inputs, such as quoted prices in active markets for identical assets or liabilities at the measurement date.

Level2—Observable inputs other than Level1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that arenot active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level3—Unobservable inputs which reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

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

Financial instruments carried at fair value include cash and cash equivalents. The carrying amounts of accounts receivable, prepaid expenses and other current assets, accounts payable and accrued liabilities approximate fair value due to their relatively short maturities.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity ofthree months or less from the date of purchase to be cash and cash equivalents. Cash equivalents consist primarily of amounts invested in money market funds and are stated at fair value.

Accounts Receivable

Accounts receivable are recorded at invoice value, net of any allowance for credit losses. The allowance for doubtful accounts is based on the Company’s assessment of the collectability of customer accounts. The Company’s expected loss allowance methodology for receivables considers factors such as historical collection experience, credit quality, age of the accounts receivable balances, and current economic conditions that* mayaffect a customer’s ability to pay. Specific allowance amounts are established to record the appropriate allowance for customers that have an identified risk of default. Balances are written off when they are ultimately determined to be uncollectible. The Company hadno* allowance for doubtful accounts as of* December 31, 2025and2024.*

Inventory

Inventory is stated at the lower of cost or net realizable value and based on standard costs approximating the purchase costs on afirst-in,first-out basis. Inventory costs include direct materials, direct labor, and normal manufacturing overhead. The cost basis of the Company’s inventory is reduced for any products that are considered excessive or obsolete based upon assumptions about future demand and market conditions. Additionally, the cost basis of the Company’s inventory doesnot include any fixed overhead costs associated with abnormally low utilization of its manufacturing facility.

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During the year ended* December 31, 2025,the Company determined that costs had future economic benefit subsequent to receiving FDA approval, and as such, it began to capitalize inventory for 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.

Property and Equipment

Property and Equipment is recorded at cost and depreciated using the straight-line method over their estimated useful lives, ranging from three tofive years. Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or estimated useful life. Upon the sale or retirement of property and equipment, the costs and related accumulated depreciation and amortization are removed from the consolidated balance sheet and the resulting gain or loss is reflected in operating expenses. Maintenance and repairs are charged to operations as incurred.

Intangible Assets

The Company’s intangible assets consist of acquired patents and licenses, which are amortized over their estimated useful lives oftwelve years.

Impairment of Long-Lived Assets

The Company reviews long-lived assets, consisting of property and equipment and intangible assets, for impairment during each fiscal year or when events or changes in circumstances indicate the carrying value of these assets* may*exceed their current fair values. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. No impairment losses were incurred during the periods presented.

Goodwill

The Company records goodwill when the consideration paid in a business acquisition exceeds the fair value of the net tangible assets and the identified intangible assets acquired. The Company reviews goodwill for impairment at the reporting unit level, of which there isone reportable unit, at least annually or whenever changes in circumstances indicate that the carrying value of the goodwill* may**not* be recoverable. To date, there has beenno impairment of goodwill.

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.

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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.

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.

Research and Development Expenses

Research and development expenses consist primarily of compensation expenses, fees paid to consultants and outside service providers and organizations (including university research institutes), costs associated with clinical trials, development prototypes and other expenses relating to the acquisition, design, development and testing of the Company’s product candidates, and certain facilities related costs. Research and development expenses incurred by the Company are expensed as incurred.

Accrued Research and Development Expenses

The Company accrues liabilities for estimated costs of research and development activities conducted by itsthird-party service providers, which include the conduct of preclinical and clinical studies. The estimated costs of research and development activities are recorded based upon the estimated amount of services provided butnot yet invoiced, and these costs are included in accrued liabilities on the consolidated balance sheets and within research and development expense on the consolidated statements of operations and comprehensive loss.

These costs are accrued based on factors such as estimates of the work completed and budget provided and in accordance with agreements established withthird-party service providers. Significant judgments and estimates are made in determining the accrued liabilities balance in each reporting period. Accrued liabilities are adjusted as actual costs become known. Changes in these estimates that result in material changes to the Company’s accruals could materially affect its financial condition and results of operations. There havenot been any material differences between accrued costs and actual costs incurred since the Company’s inception.

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Patent Expenses

The Company is the owner of numerous domestic and foreign patents. Due to the significant uncertainty associated with the successful development ofone or more commercially viable products based on the Company’s research efforts and any related patent applications, patent costsnot related to acquired patents, including patent-related legal fees, filing fees and other costs, including internally generated costs, are expensed as incurred. During both of the years ended* December 31, 2025and2024*, patent expenses totaled $0.5 million, respectively. Patent expenses are included in selling, general and administrative expenses in the consolidated statements of operations and comprehensive loss.

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. In general, 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 or the Monte Carlo simulation model. The Company accounts for forfeitures as they occur. The Company has granted stock options with time-based, performance-based, market-based, and both market-based and performance-based vesting conditions.

For stock options with time-based and performance-based vesting conditions, the grant date fair value of each grant is determined using the Black-Scholes option pricing model which requires a number of assumptions. Each of these assumptions is subjective and generally requires significant judgment and estimation by management.

Expected Term - The Company’s expected term represents the period that the Company’s stock-based awards are expected to be outstanding and is determined using the simplified method (based on the mid-point between the vesting date and the end of the contractual term). The Company utilizes this method due to lack of historical exercise data of the Company’s stock-based awards.

Expected Volatility - The computation of expected volatility was based on a calculation using the historical volatility of the Company's common stock.

Risk-Free Interest Rate- The risk-free interest rate is based on the Treasury Constant Maturities as provided by the Federal Reserve in effect at the time of grant for periods corresponding with the expected term of option.

Expected Dividend -The Company has never paid dividends on its common stock and hasno plans to pay dividends on its common stock. Therefore, the Company used an expected dividend yield of zero.

Stock-based compensation expense for stock options with time-based vesting conditions is recognized on a straight-line basis over the requisite service period, which is generally the vesting period. For stock options 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 related to certain financial measures and achievements of strategic and operational milestones, which involve inherent risk and uncertainty regarding the future outcomes of the milestones. If actual results arenot consistent with the Company’s estimates or assumptions, the Company* may*be exposed to changes in stock-based compensation expense that could be material.

For stock options with market-based vesting conditions, the 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.

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For stock options with both market-based and performance-based vesting conditions, the 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 service period derived from the Monte Carlo simulation model 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, expected dividend yield, 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.

Income Taxes

The Company accounts for income taxes using the liability method, whereby deferred tax asset and liability account balances are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance when it is more likely thannot that some portion, or all of the Company’s deferred tax assets willnot be realized.

The Company accounts for income tax contingencies using a benefit recognition model. If it considers that a tax position is more likely thannot to be sustained upon audit, based solely on the technical merits of the position, it recognizes the benefit. The Company measures the benefit by determining the amount that is greater than50% likely of being realized upon settlement, presuming that the tax position is examined by the appropriate taxing authority that has full knowledge of all relevant information. The Company is subject to taxation in the United States federal jurisdiction, and various state jurisdictions. The net operating loss and research and development credit carryforwards that are available for utilization in future years* maybe subject to examination by federal and state tax authorities. The Company’s policy is to recognize interest expense and penalties related to income tax matters as a component of income tax expense. As of December 31, 2025and2024,* there wereno significant accruals for interest related to unrecognized tax benefits or tax penalties.

Comprehensive Loss

The Company displays comprehensive loss, and if applicable its components, as part of the consolidated statements of operations and comprehensive loss.

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. 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.

Reclassification

Certain reclassifications have been made to the prior period presentation of the cash flows from operating activities within the 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 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 the years ended* December 31, 2025and2024,* respectively, or the Company's financial position as of* December 31, 2025and2024,* respectively.

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Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In* December 2023,the FASB issued ASUNo.* 2023-09, 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. The Company adopted this ASU retrospectively in the fiscal year ended December 31, 2025.See Note12* for further details.

Recent Accounting PronouncementsNot* Yet Adopted*

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 on our consolidated financial statements and related disclosures.

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 on our consolidated financial statements and related disclosures.

3. Fair Value Measurement

The Company measures and reports certain financial instruments as assets and liabilities at fair value on a recurring basis. The following tables set forth the fair value of the Company’s financial assets, which consist of cash equivalents measured and recognized at fair value (in thousands):

During the years ended* December 31, 2025and2024*, the Company didnot record impairment charges related to its cash equivalents. During the years ended* December 31, 2025and2024*, the Company didnot have any transfers between Level1, Level2 or Level3 of the fair value hierarchy. Additionally, the Company didnot have any financial liabilities measured on a recurring basis as of* December 31, 2025* or2024.

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4. Property and Equipment, Net

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

Depreciation expense for the years ended* December 31, 2025and2024*, was $0.4 million and $0.5 million, respectively.

5. Intangible Assets, Net

Intangible assets primarily consist of acquired licenses to utilize certain patents, know-how and technology relating to the Company’s NPS for biomedical applications acquired from Old Dominion University Research Foundation (ODURF), Eastern Virginia Medical School (EVMS), and the University of Southern California. In addition, the Company entered into a sponsored research agreement (“SRA”) with Old Dominion University’s Frank Reidy Research Center for Bioelectrics, a leading research organization in the field, which includes certain intellectual property rights arising from the research. The Company is amortizing the intangible assets straight-line over an estimated useful life of 12 years.

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

A schedule of the amortization of intangible assets as of* December 31, 2025*is as follows (in thousands):

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6. Accrued Liabilities

Accrued liabilities consisted of the following (in thousands):

7. 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 net tangible and intangible assets acquired.

In accordance with ASC Topic350, Intangibles-Goodwill and Other, the Company reviews goodwill for impairment at least annually or whenever changes in circumstances indicate that it is more likely thannot that the fair value of a reporting unit is less than its carrying amount. As of* December 31, 2025*, there wereno indicators of impairment and it was determined thatno impairment of goodwill existed.

8. Leases

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 leases require monthly lease payments that* maybe subject to annual increases throughout the lease term. Certain of these leases also include renewal options at the election of the Company. These optional periods havenot* been considered in the determination of the right-of-use assets or lease liabilities associated with these leases as the Company didnot consider it reasonably certain it would exercise the options. The Company conducted evaluations of its contracts and determined it has only operating leases. Variable lease expense for these leases primarily consists of common area maintenance and other operating costs.

Total lease costs and cash paid for the Company's leases were as follows (in thousands):

The weighted-average remaining lease term and discount rates for the Company’s leases were as follows:

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The maturities of the Company’s lease liabilities as of* December 31, 2025*were as follows (in thousands):

9. Stockholders' Equity

Preferred Stock

The Company has authorized a total of 50,000,000 shares of preferred stock, par value $0.001 per share, none of which were outstanding as of* December 31, 2025and2024*. The Company’s Board of Directors (the “Board”) has the authority to issue preferred stock and to determine the rights, preferences, privileges, and restrictions, including voting rights, without any further vote or action by the Company’s stockholders.

Common Stock

The Company has authorized a total of 500,000,000 shares of common stock, par value $0.001 per share.

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.

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.

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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 36,442 warrants on the redemption date,* February 5, 2025,which would have entitled holder to purchase up to 18,221 shares of common stock, 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* December 31, 2025,there wereno outstanding2024* Rights Offering Warrants subject to the 150% redemption feature and there were 405,624 outstanding2024 Rights Offering Warrants subject to the 200% redemption feature, entitling holders to purchase up to approximately 202,812 shares of common stock. During the year ended* December 31, 2025,we have received a total of $14.1 million in gross proceeds from exercises of the2024* Rights Offering Warrants. Cumulatively, as of* December 31, 2025,we have received a total of $63.6 million in gross proceeds from exercises of the2024* Rights Offering Warrants.

A summary of total warrant activity for the year ended* December 31, 2025* is presented below:

10. Stock-Based Compensation

2017 Equity Incentive Plan

In* May 2017,the Company's Board of Directors (the "Board") 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, RSUs, performance units, and performance shares to employees, directors and consultants of the Company and any parent or subsidiary of the Company.

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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 Compensation Committee of the Board. The number of shares of the Company’s common stock available for issuance under the2017 Plan also include an annual increase on thefirst day of each fiscal year, equal to 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. 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* December 31, 2025,1,215,439 shares of common stock remained available for issuance under the2017* Plan.

2017 Inducement Equity Incentive Plan

In* November 2017,the Board adopted the2017* Inducement Equity Incentive Plan (the “Inducement Plan”) without stockholder approval and initially reserved 1,000,000 shares of the Company’s common stock for insurance pursuant to equity awards granted under the Inducement Plan. 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 grants generally vest 25% per year starting upon thefirst anniversary of the grant. Equity-based awards issued under the Inducement Plan are only issuable to individualsnot* previously engaged as employees or non-employee directors of the Company prior to the Inducement Plan’s adoption date. As of* December 31, 2025*,2,304,109 shares of common stock were available for issuance under the Inducement Plan.

2017 Employee Stock Purchase Plan

In* May 2017,the Board 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 as of* December 31of the immediately preceding year, or (iii) such number of shares as determined by the Board. As of December 31, 2025*,851,582 shares of common stock were available for issuance under the2017 ESPP.

A summary of stock option activity under the2015 Plan,2017 Plan and Inducement Plan for the year ended* December 31, 2025* is presented below:

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The aggregate intrinsic value of all stock options exercised during the years ended* December 31, 2025and2024* was $7.3 million and $2.0 million, respectively. Intrinsic values of options exercised are calculated as the difference between the exercise price of the underlying options and the fair value of the common stock on the date of exercise. Intrinsic values of options outstanding are calculated as the difference between the exercise price of the underlying options and the fair value of the common stock as of the reporting date.

For the years ended* December 31, 2025and2024,* the weighted-average grant date fair value of options granted was $15.16 and $8.35, respectively.

The Company has granted stock options with time-based, performance-based, market-based, and both market-based and performance-based vesting conditions. The Company grants 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.

Performance-based stock options granted to certain Company executives and other employees contain performance conditions related to financial measures and achievements of strategic and operational milestones. The options will vest and become exercisable once the specific performance condition is fulfilled.

Market-based stock options granted to certain Company executives and other employees contain market conditions related to achievement of market capitalization targets. The options will vest and become exercisable once the specific market capitalization target is fulfilled.

Both market-based and performance-based stock options granted to certain Company executives contain market conditions related to the achievement of market capitalization targets as well as the achievement of 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.

Modifications

In* October 2024,*the Board approved changes to the performance-based vesting conditions of certain unvested outstanding common stock option awards that were improbable of vesting. Specifically,600,113 performance-based stock option awards were modified to time-based vesting criteria and 206,389 performance-based stock option awards were modified to market-based vesting criteria. The modified time-based awards will vest and become exercisable, subject to the individual’s continued employment or service through the applicable vesting date, based upon individually specific vesting schedules with annual vesting milestones. The vesting schedules have a range fromtwo tofour years. The modified market-based awards will vest and become exercisable, subject to the individual’s continued employment and service through the applicable vesting date, based upon the achievement of certain market capitalization targets.

Additionally, in* October 2024,the Board approved a modification to certain market-based awards to adopt a uniform methodology for calculating its market capitalization whereas they aligned all awards to use consecutive calendar days andnot* consecutive trading days in the calculation. These modifications resulted in approximately $3.2 million of additional stock-based compensation expense for the year ended* December 31, 2024.*

Stock-Based Compensation Expense

Total stock-based compensation expense recorded in the consolidated statements of operations and comprehensive loss was as follows (in thousands):

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As of* December 31, 2025,*not all of the performance conditions of the performance options are probable to be achieved. Stock-based compensation expense has only been recognized for those conditions that are assumed to be probable.

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

As of* December 31, 2025and2024,* the Company had a total of $29.5 million and $18.1 million of unrecognized compensation cost for time-based stock options outstanding, respectively, which is expected to be recognized over a weighted average period of 5.3 and 5.4 years, respectively.

As of* December 31, 2025and2024,* the Company had a total of $27.6 million and $11.0 million of unrecognized compensation cost for performance-based, market-based, and both market-based and performance-based stock options outstanding, respectively, which is expected to be recognized over a weighted average period of 2.7 and 1.6 years, respectively.

The fair value of time-based and performance-based stock options granted under the2017 Plan and Inducement Plan and the shares available for purchase under the ESPP were determined using the Black-Scholes option pricing model on the grant date and modification date. The Company estimated the fair value of market-based stock options and both market and performance-based stock options using a Monte Carlo simulation model on the grant date and modification date. The following summarizes the range of assumptions used in calculating the fair value of the awards with stock options grouped by valuation methodology:

1 Assumptions for the year ended* December 31, 2024,under this header apply only to market-based stock options as market and performance-based stock options werenot* outstanding during the year ended* December 31, 2024.*

11. Defined Contribution Plan

The Company sponsors a401(k) retirement plan for its employees under which it* maymake discretionary contributions. The plan provides for tax-deferred salary deductions for all employees and employee contributions are voluntary. The Company didnot make any employer matching contributions to the plan during the years ended December 31, 2025and2024.*

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12. Income Taxes

Total loss before income taxes for the years ended* December 31, 2025and2024* were $72.8 million and $53.6 million, respectively. All losses were domestic and there wereno foreign losses.

During the years ended* December 31, 2025and2024*, the Company didnot recognize an income tax provision.

The provision for income taxes differs from the amount estimated by applying the statutory federal income tax rate to net loss before taxes as follows:

1 State taxes in California comprise the majority (greater than50 percent) of the state and local income taxes, net of federal effect category for both2024 and2025.

Deferred income taxes reflect the impact of carryforwards and temporary differences between the amounts of assets and liabilities for financial reporting purposes and such amounts as measured by tax laws. The carryforwards and temporary differences, which give rise to a significant portion of the Company’s deferred tax assets and liabilities as of* December 31, 2025and2024,* are as follows (in thousands):

The Company’s unrecognized tax benefits as of* December 31, 2025and2024* were $18.5 million and $17.4 million, respectively. If recognized, none of the unrecognized tax benefits would impact income tax expense to the extent that the Company continues to maintain a full valuation allowance against its deferred tax assets.

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A reconciliation of the beginning and ending amounts of unrecognized tax benefit is as follows (in thousands):

The Company’s policy is to recognize interest and penalties related to income taxes as components of interest expense and other expense, respectively. The Company didnot accrue interest and penalties related to unrecognized tax benefits as of* December 31, 2025and doesnot* anticipate any significant change withintwelve months of this reporting date.

The Company’s valuation allowance increased by $21.7 million in the year ended* December 31, 2025* and increased by $11.7 million in the year ended* December 31, 2024*.

As of* December 31, 2025*, the Company had federal and state net operating loss (“NOL”) carryforwards of $575.0 million which begin to expire in2034. Of the $281.9 million of federal NOLs, $256.3 million is carried forward indefinitely but is limited to80% of the taxable income.

As of* December 31, 2025*, the Company had U.S. federal and California research and development (“R&D”) tax credits of approximately $10.5 million, and $10.6 million, respectively. The federal R&D credits begin to expire in2035, while California credits donot expire.

The Company is subject to taxation in the United States for Federal and State. All jurisdictions and tax years currently remain open for IRS examination. As of* December 31, 2025,the Company wasnot* under examination by the Internal Revenue Service or any state tax jurisdiction.

Internal Revenue Code Section382 ownership change generally occurs ifone or more stockholders or groups of stockholders who own at least5% of our stock increase their ownership by more than50 percentage points over their lowest ownership percentage within a rollingthree-year period. Similar rules* mayapply under state tax laws. We believe that we have hadone* or more ownership changes prior to2018, but recently performed a Section382 study to analyze fiscal years2018 through2024, and we donot believe that we have had any additional ownership changes over that period. Possible future changes in our stock ownership could result in limitations.

On* July 4, 2025,H.R.1, a U.S. budget reconciliation bill, was signed into law. The Company has assessed the provisions of the new legislation and has integrated the resulting impacts into its effective income tax rate. Management has concluded that the bill doesnot* have an impact on the Company's consolidated financial statements for the current period.

13. 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 warrants converted into common stock 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.

The following outstanding equity instruments 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:

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14. 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 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* December 31, 2025and2024,* all of the Company’s long-lived assets are located in the United States.

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15. 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 Note9 for further details.

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