NeuroPace Inc

Previous wording

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q. This discussion and other parts of this report contain forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions, which are based on the beliefs of our management, as well as assumptions made by, and information currently available to, our management. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section of this report entitled “Risk Factors,” under Part II, Item 1A of this report and those discussed in our other disclosures and filings.

Current wording

You should read the following discussion and analysis of our financial condition and results of operations together with ourunaudited interim condensed financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q. This discussion and other parts of this report contain forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions, which are based on the beliefs of our management, as well as assumptions made by, and information currently available to, our management. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section of this report entitled “Risk Factors,” under Part II, Item 1A of this report and those discussed in our other disclosures and filings.

Previous wording

Our RNS System is currently indicated in the United States for use in adult epilepsy patients, meaning patients who are 18 years of age or older, with drug-resistant focal epilepsy. Primary effectiveness endpoint data from our Post-approval Study in this patient population demonstrated that the RNS System efficacy improved over time, with a 62.5% median seizure reduction at six months after implant (n=314) and an 82.0% median seizure reduction at 36 months after implant (n=255). Additionally, 42.5% of patients experienced a period of seizure-freedom for at least six months, and 22% of patients were seizure free for at least one year. These data points from the Post-approval Study were presented at the American Academy of Neurology Annual Meeting in April 2025.

Current wording

Our RNS System is currently indicated in the United States for use in adult epilepsy patients, meaning patients who are 18 years of age or older, with drug-resistant focal epilepsy. Primary effectiveness endpoint data from our Post-approval Study in this patient population demonstrated that the RNS System efficacy improved over time, with a 62.5% median seizure reduction at six months after implant (n=314) and an 82.0% median seizure reduction at 36 months after implant (n=255). Additionally, 42.5% of patients experienced a period of seizure-freedom for at least six months, and 22% of patients were seizure free for at least one year. These results from the Post-approval Study were published in April 2026 in Neurology.

Previous wording

We are conducting studies to expand our indication for use in patients with drug-resistant idiopathic generalized epilepsy and patients with drug-resistant focal epilepsy under the age of 18. In March 2025, the last patient in our NAUTILUS study for drug-resistant idiopathic generalized epilepsy completed one year of follow up. In May 2025, we announced the preliminary results from the NAUTILUS study based on analysis of the one-year data. The study met the 12-week post-implant primary safety endpoint, demonstrating excellent safety outcomes and confirming the favorable safety profile of the RNS System. While the primary effectiveness endpoint did not reach statistical significance in the overall study, pre-specified secondary endpoints did show meaningful and clinically significant seizure reduction. In December 2025, we filed the Premarket Approval Supplement, or PMA-S, to support label expansion for our RNS System in patients who have drug-resistant idiopathic generalized epilepsy. The PMA-S is supported by pre-specified secondary endpoint data, which demonstrated robust 77% median GTC seizure reduction and a favorable safety profile in this highly refractory patient population at 18 months of therapy. Patients in the NAUTILUS trial continue to participate in the study through the completion of two years after the device implant, with prespecified collection of safety and effectiveness data occurring upon completion of the two years post-implant, and we anticipate the final patient two-year completion in the first half of 2026. We anticipate potential NAUTILUS PMA-S approval in mid-2026.

Current wording

We are conducting studies to expand our indication for use in patients with drug-resistant idiopathic generalized epilepsy and patients with drug-resistant focal epilepsy under the age of 18. In May 2025, we announced the preliminary results from the NAUTILUS study based on analysis of the one-year data. The study met the 12-week post-implant primary safety endpoint, demonstrating excellent safety outcomes and confirming the favorable safety profile of the RNS System. While the primary effectiveness endpoint did not reach statistical significance in the overall study, pre-specified secondary endpoints did show meaningful and clinically significant seizure reduction. In December 2025, we filed the Premarket Approval Supplement, or PMA-S, to support label expansion for our RNS System in patients who have drug-resistant idiopathic generalized epilepsy. The PMA-S is supported by pre-specified secondary endpoint data, which demonstrated robust 77% median GTC seizure reduction and a favorable safety profile in this highly refractory patient population at 18 months of therapy. In June 2026, this data was published in Epilepsia. The final participant completed the two years of the study, and all prespecified collection of safety and effectiveness data has been concluded. As disclosed on July 28, 2026, the Company received correspondence from the FDA notifying it that the PMA-S is not approvable in its current form and requesting additional information and further interactive communication. The Company will submit a Submission Issue Request to the FDA to further discuss its planned approach with the FDA, and it intends to amend its PMA-S with supplemental information, including additional data and context regarding the patient populations evaluated in the NAUTILUS clinical trial.

Previous wording

Since our inception, we have generated significant losses. We have financed our operations primarily through sales of our products, issuance of equity securities, and debt financing. As of March 31, 2026, we had an accumulated deficit of $559.1 million, cash, cash equivalents and short-term investments of $54.0 million, and $59.0 million of outstanding debt under a term loan, net of debt discount and issuance costs.

Current wording

Since our inception, we have generated significant losses. We have financed our operations primarily through sales of our products, issuance of equity securities, and debt financing. As of June 30, 2026, we had an accumulated deficit of $565.3 million, cash, cash equivalents and short-term investments of $51.7 million, and $59.0 million of outstanding debt under a term loan, net of debt discount and issuance costs.

Previous wording

As previously announced, our exclusive distribution agreement with DIXI Medical USA Corp., or DIXI Medical, expired on September 30, 2025. Under the agreement, entered into in August 2022, we served as the exclusive U.S. distributor of DIXI Medical’s stereo electroencephalography, or Stereo EEG, product line beginning in October 2022. These products are used in the epilepsy monitoring units, or EMUs, of comprehensive epilepsy centers to determine where epileptic seizures originate. The Distribution Agreement had an initial term of three years. In March 2025, we notified DIXI Medical of our intent to not renew the Distribution Agreement. Although the Distribution Agreement provided for a six-month wind down period following the expiration, the parties amended the terms to end the wind down on December 31, 2025. We sold DIXI products through December 31, 2025, have substantially completed the return of remaining inventory, and held $0.4 million DIXI inventory as of March 31, 2026. We expect to complete the return of all remaining DIXI inventory to DIXI Medical and cease all commercial partnership activities related to our Distribution Agreement with DIXI Medical by June 30, 2026. See Note 12 to our unaudited condensed financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information.

Current wording

As previously announced, our exclusive distribution agreement with DIXI Medical USA Corp., or DIXI Medical, expired on September 30, 2025. Under the agreement, entered into in August 2022, we served as the exclusive U.S. distributor of DIXI Medical’s stereo electroencephalography, or Stereo EEG, product line beginning in October 2022. These products are used in the epilepsy monitoring units, or EMUs, of comprehensive epilepsy centers to determine where epileptic seizures originate. The Distribution Agreement expired on September 30, 2025. Although it provided for a six-month wind-down period following the expiration, the parties amended the terms to end the wind-down on December 31, 2025. We sold DIXI Medical products through December 31, 2025, completed the return of remaining inventory, and did not hold any DIXI Medical product inventory as of June 30, 2026. We determined that the abandonment of our DIXI Medical product operations represented a strategic shift that is expected to have a major effect on our operations and financial results. As a result, the operating results, assets and liabilities of the DIXI Medical product operations are presented as discontinued operations for all periods presented in this Quarterly Report on Form 10‑Q. See Note 11 to our unaudited interim condensed financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information.

Previous wording

We continue to perform under our collaboration agreement with Rapport Therapeutics, Inc., or Rapport, including the extension executed in June 2025, to provide data, biomarker monitoring, and analysis services in support of Rapport’s clinical trial. The arrangement is expected to continue through the first half of 2028. There were no material changes to the agreement during the three months ended March 31, 2026.

Current wording

We continue to perform under our collaboration agreement with Rapport Therapeutics, Inc., or Rapport, including the extension executed in June 2025, to provide data, biomarker monitoring, and analysis services in support of Rapport’s clinical trial. The arrangement is expected to continue through the first half of 2028. There were no material changes to the agreement during the three and six months ended June 30, 2026.

Previous wording

We have made significant investments in, and will continue to invest in, recruiting, training and retaining our experienced and specialized direct sales team, which includes Therapy Consultants and Field Clinical Engineers. Significant education and training is required for our team to achieve the level of technical competency with our products that is expected by clinicians and to gain experience building demand for our RNS System. Upon completion of initial training, our personnel typically require time in the field to grow their network of accounts, build relationships with clinicians and increase their productivity to the levels we expect. We believe successfully training, developing and retaining our Therapy Consultants and Field Clinical Engineers will be required to achieve growth. In addition, the loss of any productive sales personnel would have a negative impact on our ability to grow our business.

Current wording

We have made significant investments in, and will continue to invest in, recruiting, training and retaining our experienced and specialized direct sales team, which includes Therapy Consultants and Field Clinical Engineers. Significant education and training are required for our team to achieve the level of technical competency with our products that is expected by clinicians and to gain experience building demand for our RNS System. Upon completion of initial training, our personnel typically require time in the field to grow their network of accounts, build relationships with clinicians and increase their productivity to the levels we expect. We believe successfully training, developing and retaining our Therapy Consultants and Field Clinical Engineers will be required to achieve growth. In addition, the loss of any productive sales personnel would have a negative impact on our ability to grow our business.

Previous wording

We derive revenue from sales of our RNS System to hospital facilities both for initial RNS System implant procedures and for replacement procedures when our implanted devices reach end of service. We launched our current neurostimulator model in 2018. This device has an average battery life of nearly eleven years, an increase from the previous model of the device. We have experienced and may continue to experience changes in the percentage of our revenue from replacement procedures over the next few years as a result of the extended replacement cycle of the newer device, which may cause variability in our gross margin. With the termination of the Distribution Agreement and cessation of DIXI product sales on December 31, 2025, there is no further revenue from DIXI product sales, reducing future variability in our gross margin.

Current wording

We derive revenue from sales of our RNS System to hospital facilities both for initial RNS System implant procedures and for replacement procedures when our implanted devices reach end of service. We launched our current neurostimulator model in 2018. This device has an average battery life of nearly eleven years, an increase from the previous model of the device. We have experienced and may continue to experience changes in the percentage of our revenue from replacement procedures over the next few years as a result of the extended replacement cycle of the newer device, which may cause variability in our gross margin. With the expiration of the Distribution Agreement and cessation of DIXI Medical product sales on December 31, 2025, there is no further revenue from DIXI Medical product sales, reducing future variability in our gross margin.

Previous wording

We derived revenue from sales of DIXI Medical products, primarily to our current customer base. The Distribution Agreement expired on September 30, 2025, and under an amendment to the agreement, we exercised our right to continue to sell DIXI Medical products in our inventory through December 31, 2025, after which DIXI Medical is contractually obligated to repurchase remaining DIXI product inventory held by us that has at least six month of remaining shelf life at cost.

Current wording

In addition, from the fourth quarter of 2022 through the fourth quarter of 2025, we derived revenue from sales of DIXI Medical products, primarily to our current customer base. The Distribution Agreement expired on September 30, 2025, and under an amendment to the agreement, we exercised our right to continue to sell DIXI Medical products in our inventory through December 31, 2025, after which DIXI Medical was contractually obligated to repurchase remaining DIXI Medical product inventory held by us that had at least six months of remaining shelf life at cost. As of June 30, 2026, we did not hold any DIXI Medical product inventory.

Previous wording

Cost of goods sold consists primarily of costs related to materials, components and subassemblies, personnel-related expenses for our manufacturing and quality assurance employees, including stock-based compensation, manufacturing overhead and charges for excess, obsolete and non-sellable inventories. Overhead costs include the cost of quality assurance, testing, material procurement, inventory control, operations supervision and management personnel, an allocation of facilities and information technology expenses, including rent and utilities, and equipment depreciation. Cost of goods sold also includes certain direct costs such as those incurred for shipping our RNS System. We record adjustments to our inventory valuation for estimated excess, obsolete and non-sellable inventories based on assumptions about future demand, past usage, changes to manufacturing processes and overall market conditions.

Current wording

Cost of goods sold consists primarily of costs related to materials, components and subassemblies, personnel-related expenses for our manufacturing and quality assurance employees, including stock-based compensation, manufacturing overhead and charges for excess, obsolete and non-sellable inventories. Overhead costs include the cost of quality assurance, testing, material procurement, inventory control, operations supervision and management personnel, an allocation of facilities and information technology expenses, including rent and utilities, and equipment depreciation. Cost of goods sold also includes certain direct costs such as those incurred for shipping our RNS System. We record adjustments to our inventory valuation for estimated excess, obsolete and non-sellable inventories based on assumptions about future demand, past usage, changes to manufacturing processes and overall market conditions. Through December 31, 2025, cost of goods sold also included costs of procuring and shipping DIXI Medical products. These amounts have been reclassified to discontinued operations for all periods presented.

Previous wording

Our sales and marketing expenses consist primarily of personnel-related costs for our sales and marketing employees, including stock-based compensation and sales-based variable compensation, travel expenses, consulting, public relations costs, direct marketing, customer training, trade show and promotional expenses and allocated facility and information technology expenses. We expense sales variable compensation when revenue related to the underlying sale is recognized. We intend to continue to increase our sales and marketing spending to support increased adoption of our RNS System. We expect our sales and marketing expenses will increase in absolute dollars as we hire additional personnel and add programs in order to more fully penetrate the market opportunity. Through December 31, 2025, sales and marketing expenses also included costs of selling DIXI Medical products.

Current wording

Our sales and marketing expenses consist primarily of personnel-related costs for our sales and marketing employees, including stock-based compensation and sales-based variable compensation, travel expenses, consulting, public relations costs, direct marketing, customer training, trade show and promotional expenses and allocated facility and information technology expenses. We expense sales variable compensation when revenue related to the underlying sale is recognized. We intend to continue to increase our sales and marketing spending to support increased adoption of our RNS System. We expect our sales and marketing expenses will increase in absolute dollars as we hire additional personnel and add programs in order to more fully penetrate the market opportunity. Through December 31, 2025, sales and marketing expenses also included costs of selling DIXI Medical products. These amounts have been reclassified to discontinued operations for all periods presented.

Previous wording

Sales and marketing expenses increased by $0.6 million, or 5%, to $11.6 million during the three months ended March 31, 2026, compared to $11.0 million during the three months ended March 31, 2025, primarily due to an increase of 0.4 million in personnel-related expenses resulting from an increase in sales and field support personnel headcount, and $0.2 million in marketing expenses, including travel.

Current wording

Sales and marketing expenses increased by $0.6 million, or 6%, to $12.1 million for the three months ended June 30, 2026, compared to $11.5 million for the three months ended June 30, 2025, primarily due to an increase of $0.6 million in personnel-related expenses resulting from an increase in sales and field support personnel costs, including sales commissions and increase in headcount.

Previous wording

Interest expense decreased to $1.5 million for the three months ended March 31, 2026, compared to $2.2 million for the three months ended March 31, 2025, due to the lower annual effective interest rate pursuant to the MidCap Term Loan compared to CRG Term Loan. Interest income decreased by $0.2 million for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily due to lower cash and cash equivalents balances.

Current wording

Interest expense decreased to $1.5 million for the three months ended June 30, 2026, compared to $2.1 million for the three months ended June 30, 2025, due to the lower annual effective interest rate pursuant to the MidCap Term Loan compared to the CRG Term Loan. Interest income decreased by $0.2 million for the three months ended June 30, 2026, compared to the three months ended June 30, 2025, primarily due to lower cash and cash equivalents balances.

Previous wording

Other income (expense), net decreased by $0.1 million to $0.2 million during the three months ended March 31, 2026, compared to less than $0.1 million during the three months ended March 31, 2025, primarily due to unrealized loss, net on short-term investments in the three months ended March 31, 2026.

Current wording

Other income (expense), net decreased by $0.4 million to less than $0.1 million for the three months ended June 30, 2026, compared to less than $0.5 million for the three months ended June 30, 2025, primarily due to a loss on extinguishment of the CRG Term Loan of $0.5 million in the three months ended June 30, 2025.

Previous wording

Revenue decreased by $0.5 million, or 2%, to $22.1 million during the three months ended March 31, 2026, compared to $22.5 million during the three months ended March 31, 2025. The decrease in revenue was primarily due to the termination of the Distribution Agreement with DIXI Medical, offset by an increase in the number of RNS System units sold resulting from a higher number of initial implants and replacements. All of our revenue, with the exception of $0.7 million and $0.1 million for the three months ended March 31, 2026 and 2025, respectively, was generated from sales in the United States.

Current wording

Revenue increased by $7.0 million, or 19%, to $44.8 million for the six months ended June 30, 2026, compared to $37.8 million for the six months ended June 30, 2025. The increase in revenue was primarily due to an increase in the number of RNS System units sold resulting from a higher number of initial implants and replacements, partially offset by a $0.5 million decrease in service revenue. All of our revenue, with the exception of $1.1 million and $0.4 million for the six months ended June 30, 2026 and 2025, respectively, was generated from sales in the United States.

Previous wording

We have financed our operations primarily through sales of our products, issuance of equity securities and debt financing. As of March 31, 2026, we had cash, cash equivalents and short-term investments of $54.0 million and $59.0 million outstanding under the MidCap Term Loan, net of debt discount and issuance costs.

Current wording

We have financed our operations primarily through sales of our products, issuance of equity securities and debt financing. As of June 30, 2026, we had cash, cash equivalents and short-term investments of $51.7 million and $59.0 million outstanding under the MidCap Term Loan, net of debt discount and issuance costs.

Previous wording

The Loans mature on June 4, 2030, and are due in one installment on June 4, 2030. The MidCap Term Loan bears interest at an annual rate of 30-day forward-looking term Secured Overnight Financing Rate, or SOFR, plus 5.5%, subject to a SOFR floor of 2.0%. Borrowing under the Revolver will accrue interest at an annual rate of 30-day forward-looking term SOFR plus 3.75%, subject to a SOFR floor of 2.0%. Following the initial borrowing of the Revolver, we will pay an unused line fee equal to 0.25% per annum of the average unused portion of the Revolver. Interest and unused line fee, if any, are payable monthly in arrears.

Current wording

The Loans mature on June 4, 2030, and are due in one installment on June 4, 2030. The MidCap Term Loan bears interest at an annual rate of 30-day forward-looking term Secured Overnight Financing Rate, or SOFR, plus 5.5%, subject to a SOFR floor of 2.0%. Borrowing under the Revolver will accrue interest at an annual rate of 30-day forward-looking term SOFR plus 3.75%, subject to a SOFR floor of 2.0%. Following the initial borrowing of the Revolver, we will pay an unused line fee equal to 0.25% per annum of the average unused portion of the Revolver. Interest and unused line fee, if any, are payable monthly in arrears. The date by which the Revolver must be implemented was extended from June 4, 2026 to December 31, 2026. The extension had no impact on our financial statements.

Previous wording

The Loans are collateralized by substantially all of our assets. The Credit Agreement contains customary representations and warranties, covenants, events of default and termination provisions. See Notes 1 and 6 to our unaudited condensed financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information.

Current wording

The Loans are collateralized by substantially all of our assets. The Credit Agreement contains customary representations and warranties, covenants, events of default and termination provisions. See Notes 1 and 6 to ourunaudited interim condensed financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information.

Previous wording

We have future minimum payments for the MidCap Term Loan totaling $85.6 million, with $5.7 million due within twelve months of March 31, 2026. In addition, we lease our office and manufacturing facilities in Mountain View, California under a non-cancelable operating lease which expires in June 2030. Future minimum lease payments under non-cancelable operating leases were $13.6 million as of March 31, 2026. See Note 5 to our unaudited condensed financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information.

Current wording

We have future minimum payments for the MidCap Term Loan totaling $83.9 million, with $5.7 million due within twelve months of June 30, 2026. In addition, we lease our office and manufacturing facilities in Mountain View, California under a non-cancelable operating lease which expires in June 2030. Future minimum lease payments under non-cancelable operating leases were $12.9 million as of June 30, 2026. See Note 5 to ourunaudited interim condensed financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information.

Previous wording

Based on our current planned operations, we expect that our cash, cash equivalents and short-term investments will enable us to fund our operating expenses for at least twelve months from the issuance of our unaudited condensed financial statements included elsewhere in this Quarterly Report on Form 10-Q. We have based these estimates on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect.

Current wording

Based on our current planned operations, we expect that our cash, cash equivalents and short-term investments will enable us to fund our operating expenses for at least twelve months from the issuance of ourunaudited interim condensed financial statements included elsewhere in this Quarterly Report on Form 10-Q. We have based these estimates on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect.

Previous wording

The following table summarizes the primary sources and uses of cash and cash equivalents for the periods presented:

Current wording

The following table summarizes the primary sources and uses of cash and cash equivalents for the periods presented. Cash flows from discontinued operations are included within these amounts. Additional information regarding cash flows from the DIXI Medical product operations as discontinued operations is included in Note 11 to theunaudited interim condensed financial statements.

Previous wording

Net cash used in operating activities was $5.9 million for the three months ended March 31, 2026. Cash used in operating activities was primarily a result of the net loss of $6.7 million, adjusted for non-cash charges of $3.2 million and change in operating assets and liabilities of $2.4 million. The non-cash charges primarily consisted of $2.3 million of stock-based compensation, $0.5 million of amortization of right-of-use assets, and $0.2 million of unrealized loss on short-term investments. The change in operating assets and liabilities was primarily due to a decrease in accrued liabilities of $4.0 million largely due to accrued payroll and personnel expenses, and a decrease in operating lease liabilities of $0.5 million, partially offset by an increase in accounts payable of $2.2 million primarily due to the timing of payments to our vendors.

Current wording

Net cash used in operating activities was $9.8 million for the six months ended June 30, 2026. Cash used in operating activities was primarily a result of the net loss of $12.9 million, adjusted for non-cash charges of $6.3 million and change in operating assets and liabilities of $3.2 million. The non-cash charges primarily consisted of $4.6 million of stock-based compensation, $0.9 million of amortization of right-of-use assets, and $0.2 million of unrealized loss on short-term investments. The change in operating assets and liabilities was primarily due to a decrease in accrued liabilities of $2.5 million largely due to accrued payroll and personnel expenses, and a decrease in operating lease liabilities of $1.0 million, partially offset by an increase in accounts payable of $2.0 million primarily due to the timing of payments to our vendors.

Previous wording

Net cash used in operating activities was $7.5 million for the three months ended March 31, 2025. Cash used in operating activities was primarily a result of the net loss of $6.6 million, adjusted for non-cash charges of $3.5 million and change in operating assets and liabilities of $4.4 million. The non-cash charges primarily consisted of $2.6 million of stock-based compensation, $0.4 million of amortization of right-of-use assets, and $0.2 million of non-cash interest expense related to our Term Loan. The change in operating assets and liabilities was due to an increase in accounts receivable of $2.6 million primarily due to an increase in sales of our products including our RNS System and DIXI Medical products, an increase in inventories of $0.2 million largely due to an increase in work-in-process inventory, a decrease in accrued liabilities of $2.3 million largely due to accrued payroll and related expenses, and a decrease in operating lease liabilities of $0.5 million, offset in part by an increase in accounts payable of $1.0 million primarily due to the timing of payments to our vendors, and a decrease in in prepaid expenses and other assets of $0.2 million.

Current wording

Net cash used in operating activities was $9.6 million for the six months ended June 30, 2025. Cash used in operating activities was primarily a result of the net loss of $15.2 million, adjusted for non-cash charges of $7.9 million and change in operating assets and liabilities of $2.3 million. The non-cash charges primarily consisted of $5.9 million of stock-based compensation, $0.8 million of amortization of right-of-use assets, $0.5 million of loss on extinguishment of the CRG Term Loan, and $0.4 million of non-cash interest expense related to our term loans. The change in operating assets and liabilities was due to an increase in accounts receivable of $0.7 million primarily due to an increase in sales of our products including our RNS System and DIXI Medical products, an increase in inventories of $3.1 million largely due to an increase in raw materials and finished goods, and a decrease in operating lease liabilities of $0.9 million, offset in part by an increase in accounts payable of $1.7 million primarily due to the timing of payments to our vendors, and a decrease in prepaid expenses and other assets of $0.7 million.

Previous wording

Net cash used in investing activities was $0.1 million for the three months ended March 31, 2026, and primarily consisted of purchases of property and equipment.

Current wording

Net cash used in investing activities was $0.2 million for the six months ended June 30, 2026, and primarily consisted of purchases of property and equipment.

Previous wording

Net cash used in investing activities was less than less than $0.1 million for the three months ended March 31, 2025, and primarily consisted of purchases of property and equipment.

Current wording

Net cash used in investing activities was $0.2 million for the six months ended June 30, 2025, and primarily consisted of purchases of property and equipment.

Previous wording

Net cash used in financing activities was $0.2 million for the three months ended March 31, 2026, which primarily consisted of taxes withheld and paid related to net share settlement of equity awards.

Current wording

Net cash provided by financing activities was $1.0 million for the six months ended June 30, 2026, which primarily consisted of proceeds from the issuance of common stock under employee plans of $1.4 million, partially offset by taxes withheld and paid related to net share settlement of equity awards of $0.2 million and annual debt fee of $0.2 million.

Previous wording

Net cash provided by financing activities was $21.1 million for the three months ended March 31, 2025, which primarily consisted of $70.3 million in proceeds, net of underwriting discounts and commissions, from our February 2025 follow-on offering of common stock, proceeds from the issuance of common stock under employee plans of $0.4 million and $0.2 million of net cash proceeds from our at-the-market offering, partially offset by a repurchase of our common stock of $49.5 million, and taxes withheld and paid related to net share settlement of equity awards of $0.2 million.

Current wording

Net cash provided by financing activities was $19.2 million for the six months ended June 30, 2025, which primarily consisted of $69.7 million in proceeds, net of underwriting discounts and commissions, from our February 2025 follow-on offering of common stock, proceeds of $58.6 million from the MidCap Term Loan, net of discounts and issuance costs, proceeds from the issuance of common stock under employee plans of $1.2 million and $0.2 million of net cash proceeds from our at-the-market offering, partially offset by repayment of the CRG Term Loan of $60.5 million, a repurchase of common stock of $49.5 million, and taxes withheld and paid related to net share settlement of equity awards of $0.4 million.

Previous wording

See “Recent Accounting Pronouncements” in Note 2 to our unaudited condensed financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information.

Current wording

See “Recent Accounting Pronouncements” in Note 2 to ourunaudited interim condensed financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information.