HELIUS MEDICAL TECHNOLOGIES, INC.

1. BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements of Helius Medical Technologies, Inc. (together with its wholly owned subsidiaries the “Company”) have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission ("SEC") and should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 that was filed with the Securities and Exchange Commission on March 25, 2025 (“2024 10-K”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") have been condensed or omitted.

There have been no material changes to the Company's significant accounting policies from those described in the 2024 Form 10-K.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from those estimates.

In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments necessary for a fair statement of the results for the interim periods presented. All such adjustments, unless otherwise noted herein, are of a normal, recurring nature. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year.

Reverse Stock Splits

On April 21, 2025, at the annual meeting of stockholders the stockholders of the Company approved a potential reverse stock split at a ratio of 1-to-2 to 1-to-30. The Board subsequently approved a reverse stock split of 1-for-15, which became effective on May 2, 2025 (the “May 2025 Reverse Stock Split”).

On May 23, 2025, at a special meeting of stockholders the stockholders of the Company approved a potential reverse stock split at a ratio of 1-to-2 to 1-to-250. The Board subsequently approved a reverse stock split of 1-for-50, which became effective on July 1, 2025 (the “July 2025 Reverse Stock Split” and together with the May 2025 Reverse Stock Split, the “Reverse Stock Splits”). Refer to Note 6 for additional information.

All issued and outstanding common stock and per share amounts contained in the unaudited condensed consolidated financial statements have been retroactively adjusted to reflect the Reverse Stock Splits for all periods presented. In addition, a proportionate adjustment was made to the per share exercise price and the number of shares issuable upon the exercise of all outstanding stock options and warrants to purchase shares of common stock. A proportionate adjustment was also made to the number of shares reserved for issuance pursuant to the Company’s equity incentive compensation plans to reflect the Reverse Stock Splits. Any fraction of a share of common stock that was created as a result of the Reverse Stock Splits was rounded down to the next whole share and stockholders received cash settlement equal to the market value of the fractional share, determined by multiplying such fraction by the closing sales price of the Company’s common stock as reported on Nasdaq on the last trading day before the Reverse Stock Splits effective dates. The authorized shares and par value of the common stock and preferred stock were not adjusted as a result of the Reverse Stock Splits.

Going Concern Uncertainty

As of June 30, 2025, the Company had cash and cash equivalents of $6.1 million. For the six months ended June 30, 2025, the Company had an operating loss of $7.3 million, and as of June 30, 2025, its accumulated deficit was $185.4 million. For the six months ended June 30, 2025, the Company had $71 thousand of net revenue from the commercial sale of products. The Company expects to continue to incur operating losses and net cash outflows until such time as it generates a level of revenue to support its cost structure. There is no assurance that the Company will achieve profitable

operations, and, if achieved, whether it will be sustained on a continued basis. These factors indicate substantial doubt about the Company’s ability to continue as a going concern within one year after the date the unaudited condensed consolidated financial statements are filed. The Company’s unaudited condensed consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets and satisfaction of liabilities in the ordinary course of business; no adjustments have been made relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company not continue as a going concern.

The Company intends to fund ongoing activities by utilizing its current cash and cash equivalents on hand, cash received from the sale of its PoNS device in the U.S. and Canada and by raising additional capital through equity or debt financings. There can be no assurance that we will be successful in raising additional capital or that such capital, if available, will be on terms that are acceptable to us. If we are unable to raise sufficient additional capital, we may be compelled to reduce the scope of our operations and planned capital expenditures or sell certain assets, including intellectual property, and we may be forced to cease or wind down operations, seek protection under the provisions of the U.S. Bankruptcy Code, or liquidate and dissolve our company.

Global Economic Conditions

Generally, worldwide economic conditions remain uncertain, particularly due to geopolitical conflicts in Ukraine and in the Middle East, disruptions in the banking system and financial markets, increased inflation, sustained high interest rates and unpredictable trade policies, including tariffs, customs regulations and other trade restrictions. The general economic and capital market conditions both in the United States and worldwide, have been volatile in the past and at times have adversely affected the Company’s access to capital and increased the cost of capital. The capital and credit markets may not be available to support future capital raising activity on favorable terms. If economic conditions decline, the Company’s future cost of equity or debt capital and access to the capital markets could be adversely affected.

Changes in economic conditions, trade restrictions, high interest rates, supply chain constraints, logistics challenges, labor shortages, the effects of conflicts in Ukraine and the Middle East, disruptions in the banking system and financial markets, high levels of inflation and an increase in interest rates have increased costs and have had and may continue to have a negative impact on the Company’s business. Although the Company has taken and may continue to take measures to mitigate these impacts, if these measures are not effective, the Company’s business, financial condition, results of operations, and liquidity could be materially adversely affected.

2. RECENT ACCOUNTING PRONOUNCEMENTS

In November 2024, the FASB issued Accounting Standards Update (“ASU”) 2024-03,Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). ASU 2024-03 requires interim and annual tabular disclosure of disaggregated information for certain income statement expense captions. Specific expense categories required to be disclosed quantitatively include inventory purchases, employee compensation, depreciation, and intangible asset amortization, as well as other specified expense categories currently disclosed under existing disclosure requirements. Additionally, any remaining amounts that are not separately disaggregated are required to be described qualitatively. ASU 2024-03 also requires separate disclosure of total selling expenses incurred each reporting period, with annual disclosure of the entity's definition of selling expenses. The annual disclosures required by ASU 2024-03 are effective for the Company beginning in its fiscal year ending December 31, 2027, with interim disclosures effective beginning in its fiscal year ending December 31, 2028. The provisions of ASU 2024-03 are to be applied prospectively, although retrospective application is permitted. Early adoption is also permitted. The Company is currently evaluating the ASU to determine its impact on the Company’s disclosures.

In December 2023, the FASB issued ASU 2023-09,Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The guidance requires expanded annual disclosures including the standardization and disaggregation of income tax rate reconciliation categories and the amount of income taxes paid by jurisdiction. The guidance is effective for the Company

beginning in its fiscal year ending December 31, 2025. The Company is currently evaluating the ASU to determine its impact on the Company’s disclosures.

In March 2024, the SEC adopted rules under SEC Release No. 33-11275,The Enhancement and Standardization of Climate-Related Disclosures for Investors, which requires the disclosure of material Scope 1 and Scope 2 greenhouse gas emissions and other climate-related topics in annual reports and registration statements. For non-accelerated filers and smaller reporting companies, disclosure requirements will begin phasing in for fiscal years beginning on or after January 1, 2027, subject to legal challenges and the SEC's voluntary stay of the disclosure requirements. The Company is currently evaluating the impact these rules will have on its consolidated financial statements and related disclosures.

3. SUPPLEMENTAL BALANCE SHEET DISCLOSURES

Components of selected captions in the unaudited condensed consolidated balance sheets consisted of the following:

Accounts receivable

Accounts receivable from product sales are net of allowance for credit losses. The allowance for credit losses was $0 as of both June 30, 2025 and December 31, 2024.

Inventory, net (in thousands)

During the six months ended June 30, 2025, no inventory was written off to the inventory reserve.

Prepaid expenses and other current assets (in thousands)

Accrued and other current liabilities (in thousands)

Deferred revenue

Exclusive Distribution Agreement

Pursuant to an Exclusive Distribution Agreement with Health Tech Connex Inc. (“HTC”) (“Exclusivity Agreement”) entered into on March 3, 2023, subject to certain terms and conditions, the Company granted to HTC the exclusive right to provide PoNS Therapy in the Fraser Valley and Vancouver metro regions of British Columbia. HTC will purchase the PoNS devices for use in these regions exclusively from the Company and on terms no less favorable than the then-current standard terms and conditions. This Exclusivity Agreement replaced the previous Clinical Research and Co-Promotion Agreement (“Co-Promotion Agreement”) between the parties entered into in October 2019 that included a similar exclusive right provision. The exclusive right under the Exclusivity Agreement was granted for a value of CAD$273 thousand, which is represented by the unamortized up-front payment under the former Co-Promotion Agreement. The initial term of the Exclusivity Agreement expires on December 31, 2027, and is renewable by HTC forone additional five-year term upon sixty days’ written notice to the Company.

Deferred revenue as of both June 30, 2025 and December 31, 2024 is comprised of the remaining unamortized amount under the Exclusivity Agreement. Revenue recognized is included in other revenue in the unaudited condensed consolidated statements of operations and comprehensive loss.

On July 13, 2025, the Company sent HTC a termination letter, terminating the Exclusivity Agreement effective immediately, due to material breach by HTC in fulfilling its obligations under the Exclusivity Agreement.

4. LEASES

On January 16, 2025, the Company entered into an agreement to extend the operating lease for the Company’s headquarters through March 31, 2026, at a rate of $4 thousand per month effective April 1, 2025. The lease does not contain anyoptions to extend. Operating lease costs for the three and six months ended June 30, 2025 and 2024 were $12 thousand and $23 thousand, $10 thousand and $20 thousand, respectively.

Expected operating lease costs as of June 30, 2025 were as follows (in thousands):

5. FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Fair value of an asset or liability considers assumptions that market participants would use in pricing the asset or liability, including consideration of non-performance risk. The inputs used to determine fair values are categorized in one of the following three levels of the fair value hierarchy:

Level 1 – Quoted market prices in active markets for identical assets or liabilities.

Level 2 – Inputs, other than quoted prices in active markets, that are observable, either directly or indirectly.

Level 3 – Unobservable inputs that are not corroborated by market data.

The unaudited condensed consolidated financial statements include financial instruments for which the fair market value of such instruments may differ from amounts reflected on a historical cost basis. As of June 30, 2025 and December 31, 2024, financial instruments of the Company consist of cash equivalents, which were comprised of deposits of excess cash in an unrestricted money market savings account and a money market mutual fund. The carrying value of cash equivalents generally approximates fair value due to their short-term nature.

The Company’s derivative liability as of December 31, 2024 is comprised of warrants issued in connection with the registered public offering completed in August 2022 and the warrants issued in connection with the offering in June 2025, discussed in more detail in Note 6 to our unaudited condensed consolidated financial statements. The derivative liability relating to the August 2022 and June 2025 warrants is classified as Level 3 within the fair value hierarchy and is required to be recorded at fair value at inception and on a quarterly recurring basis.

The majority of the Company’s non-financial instruments, which include intangible assets, lease assets, inventories and property and equipment, are not required to be carried at fair value on a recurring basis. However, if certain triggering events occur (or at least annually for indefinite-lived intangible assets), a non-financial instrument is required to be evaluated for impairment. If the Company determines that the non-financial instrument is impaired, the Company would be required to write down the non-financial instrument to its fair value.

6. COMMON STOCK, PREFERRED STOCK AND WARRANTS

2025 Offering

On June 6, 2025 (the “Issuance Date”), we completed the issuance and sale of an aggregate of 52,241 shares of common stock and pre-funded warrants to purchase up to 3,131 shares of common stock (“2025 Pre-funded Warrants”) and accompanying common warrants to purchase up to 55,372 shares of common stock (the “Common Warrants”) (the “2025 Offering”). We also issued warrants to the placement agent to purchase 2,769 shares of common stock on the same terms as the Common Warrants (the “Placement Agent Warrants” and together with the Common Warrants, the “2025 Warrants”). The 2025 Pre-funded Warrants have an exercise price of $0.001 per share and 3,131 were exercised on the closing date. The 2025 Offering price per share of common stock and accompanying Common Warrant was $163.50, the offering price per 2025 Pre-funded Warrant was $163.499. The Common Warrants have an exercise price of $367.875 per share, are immediately exercisable upon issuance and will expire two and one-half (2.5) years after the original issuance date.

Following the issue date of the 2025 Warrants, a holder of the Common Warrants has the right to receive, without payment of any additional cash to the Company (the “Zero Cash Provision”), an aggregate number of shares equal to the product of (x) the aggregate number of shares of common stock that would be issuable upon a cash exercise of the common warrant and (y)two. In addition, at 4:01 p.m. Eastern time on the 5th trading day after the date of issuance (the “First Reset Date”), the exercise price of the Common Warrants reset to $79.25 per share, and on the 10th calendar day after the date of issuance (the “Second Reset Date”), the exercise price of the Common Warrants reset to $47.55 per share. Under the terms of the 2025 Warrants, following the price resets the number of shares of common stock issuable upon exercise of the 2025 Warrants was increased such that the aggregate exercise price of the 2025 Warrants remained unchanged. The aggregate increase in shares available for purchase on the First Reset Date and Second Reset date was 237,863 for the Common Warrants and 18,650 for the Placement Agent Warrants. In connection with the Common Warrants,293,233 shares were exercised for 586,466 shares of common stock issued and 2 Common Warrants are outstanding as of June 30, 2025. In connection with the Placement Agent Warrants,12,548 shares were exercised for 25,093 shares of common stock issued and 8,871 Placement Agent Warrants are outstanding as of June 30, 2025.

At inception, the 2025 Warrants provisions were analyzed under Accounting Standards Codification (“ASC”) 718, ASC 840 and ASC 815 and the Company concluded that the Common Warrants did not meet the guidance for being classified as an equity instrument due to the Zero Cash Provision. The fair value of the Common Warrants as of the Issuance Date and as of each Common Warrant exercise was determined using a Monte Carlo simulation model, which uses multiple input variables to determine the probability of a price reset. The gross proceeds were allocated based on the fair value as of the Issuance Date resulting in a derivative liability at the Issuance Date of $3.4 million. Offering costs allocated to the derivative liability of $0.5 million were expensed as Other (expense)/income, net. The related change in fair value due to the exercise price and share resets resulted in a loss due to the change in fair value of the derivative liability of $6.2 million. The fair value of the derivative liability associated with the Common Warrants as of June 30, 2025 was $0.

The following table includes the share price and the inputs used to estimate the fair value of the warrants at the Issuance Date and as of each exercise date and before and after each exercise price and share reset:

Maxim Group LLC served as the placement agent in the 2025 Offering, pursuant to the terms of a placement agency agreement and received 7% of the gross proceeds of the Offering (the “Cash Transaction Fee”) and reimbursement of the legal fees of its counsel of up to $100 thousand. Maxim Group LLC paid $100 thousand to B. Riley Securities for financial advisory services which was deducted from the Cash Transaction Fee and the remaining $50 thousand financial advisory services fee was paid for by the Company from the net proceeds of the 2025 Offering.

The aggregate gross proceeds to the Company were $9.1 million, before deducting placement agent fees and other expenses of $1.2 million and repayment of promissory notes of $1.56 million.

Private Placement

On April 24, 2025, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain investors (the “Purchasers”) pursuant to which the Company sold, in a private placement (the “2025 Private Placement”), unsecured 20% original issue discount promissory notes with an aggregate principal amount of $1.56 million (the “Notes”) with a maturity date of the earlier of a) July 24, 2025, b) the closing date of the Company’s next registered offering of securities on Form S-1. The Purchase Agreement also provides for the issuance of an aggregate of 1,760 shares of common stock of the Company, par value $0.001 per share (the “Private Placement Shares”) to the Purchasers. The transaction closed on April 25, 2025.

Maxim Group LLC served as the placement agent in the 2025 Private Placement, pursuant to the terms of a placement agency agreement and received 7% of the gross proceeds of the Offering and reimbursement of the legal fees of its counsel of up to $15,000.

The aggregate gross proceeds to the Company were $1.3 million, before deducting placement agent fees and expenses of $0.1 million.

2024 Public Offering

On May 9, 2024, the Company closed on a registered public offering consisting of 939 shares of common stock (the “2024 Public Offering”), pre-funded warrants to purchase 2,859 shares of common stock (the “Pre-funded Warrants”) and accompanying Series A Warrants to purchase up to 3,802 shares of its common stock (“Series A Warrants”) and Series B Warrants to purchase up to 3,802 shares of its common stock (“Series B Warrants”, and together with the Series A Warrants, the “2024 Public Warrants”). The 2024 Public Offering price per share of common stock and accompanying Series A Warrants and Series B Warrants was $1,687.50, the public offering price per Pre-funded Warrant and accompanying Series A and Series B warrant was $1,687.499.

The Pre-funded Warrants have an exercise price of $0.001 per share and 1,435 were exercised on the closing date. Net proceeds from the 2024 Public Offering, after deducting placement agent fees and expenses and other offering costs, were approximately $5.5 million.

The 2024 Public Warrants have an exercise price of $1,687.50 per share and are exercisable upon issuance. The Series A Warrants will expire five years following the date of issuance and the Series B Warrants will expire twelve months following the date of issuance and expired in May 2025. The Pre-funded Warrants are exercisable upon issuance and may be exercised at any time until the Pre-funded Warrants are exercised in full.

Warrant inducement

On January 21, 2025, the Company entered into warrant exercise inducement offer letters (the “Inducement Letters”) with certain holders (the “Holders”) of its existing 2024 Public Warrants to purchase shares of the Company’s Class A common stock (the “Existing Warrants”), pursuant to which the Holders agreed to exercise for cash their Existing Warrants to purchase an aggregate of 6,628 shares of the Company’s common stock, in the aggregate, at a reduced exercise price of $563.25 per share, in exchange for the Company’s agreement to issue new Series C Warrants and Series D Warrants (the “Inducement Warrants”) on substantially the same terms as the Existing Warrants described below, to purchase up to 8,281 shares of the Company’s common stock (the “Inducement Warrant Shares”). The Company received aggregate gross proceeds of approximately $3.7 million from the exercise of the Existing Warrants by the Holders. The Company engaged Roth Capital Partners, LLC (“Roth”) to act as its financial advisor with the transactions summarized above and has paid Roth $0.2 million for its services, in addition to reimbursement for certain expenses along with other legal and regulatory expenses of $0.1 million resulting in net proceeds of $3.4 million and non-cash share issuance costs of $1.0 million and $3.1 million related to the modification of the Existing Warrants and issuance of the Inducement Warrants, respectively. As of June 30, 2025,3,572 shares (the “Abeyance Shares”) from the exercised Existing Warrants that were held in abeyance to be issued at the direction of the Holders due to the ownership limitations from the warrant agreements have been issued.

The Company filed a registration statement on Form S-3 and S-3/A covering the resale of the Inducement Warrants Shares issued or issuable upon the exercise of the Inducement Warrants, which was effective March 27, 2025.

On April 21, 2025, stockholder approval was obtained for the issuance of the Inducement Warrants at the Company’s annual meeting of stockholders.

At-The-Market Offering

On June 23, 2023, the Company entered into a Sales Agreement (the “Sales Agreement”) with Roth to create an at-the-market offering program (“ATM”) under which the Company may offer and sell shares with an aggregate offering price of up to $2.0 million. Roth is entitled to a fixed commission rate equal to up to 3% of the gross proceeds pursuant to the Sales Agreement. As of June 30, 2025,124 and 197 shares have been sold under the ATM generating net proceeds of $0.1 million and $1.3 million in 2025 and 2024, respectively. On July 7, 2025, the Company filed a prospectus supplement that amends and supplements the prior prospectus supplements related to the ATM to increase the maximum offering size to $25.0 million. On July 21, 2025, the Company sold 379,040 shares at a weighted-average price of $13.63 generating net proceeds after commissions of $5.0 million.

Warrants

August 2022 Warrants

In connection with the Company’s registered public offering that closed on August 9, 2022, the Company issued warrants to purchase an aggregate of 960 shares of common stock (“2022 Public Warrants”). The Company performed an analysis of the provisions of the 2022 Public Warrants and concluded that the 2022 Public Warrants did not meet the guidance for being classified as an equity instrument due to a potential price reset prompted by a change in an unrelated instrument’s conversion rate or, in the event of a fundamental transaction, settlement rights that differ from those of the underlying common stockholders.

Due to the exercise resets resulting from the Inducement Letters and May 2025 Reverse Stock Split, refer to Note 1, and related share adjustment, the fair value of the 2022 Warrants as of June 30, 2025 was determined using the Black-Scholes option pricing model and as of December 31, 2024 was determined using both a Monte Carlo simulation model, which uses multiple input variables to determine the probability of the occurrence of a price reset or a fundamental transaction and the Black-Scholes option pricing model. As a result of the Company’s reverse stock split on July 1, 2025, refer to Note 1, the exercise price on the Public Warrants was reset to $8.609 per share based on the volume-weighted average price for thefive trading days following the July 2025 Reverse Stock Split. The following table includes the share price and the inputs used to estimate the fair value of the warrants:

The fair value of the derivative liability associated with the 2022 Public Warrants as of June 30, 2025 and December 31, 2024 was $0 and $0.2 million, respectively. The change in the fair value of the derivative liability was recognized as a component of nonoperating income (expense) in the Company’s unaudited condensed consolidated statements of operations and comprehensive loss. The Company will continue to evaluate the 2022 Public Warrants qualitatively in future periods. Eighty 2022 Public Warrants were exercised andno 2022 Public Warrants were cancelled during the six months ended June 30, 2025. The remaining outstanding 2022 Public Warrants to purchase 724 shares of common stock are classified as a derivative liability as of June 30, 2025, were exercisable upon issuance and will expire five years following the date of issuance.

Equity-classified Warrants

The Company has outstanding equity-classified warrants to purchase 17,828 shares of common stock at a weighted average exercise price of $385.27, with expiration dates ranging from February 2026 to April 2030. During the six months ended June 30, 2025,22,323 equity-classified warrants, including 3,131 2025 Pre-funded Warrants,12,548 Placement Agent Warrants,16 Pre-funded Warrants and 6,628 Exiting Warrants, were exercised for 34,868 common shares as the result of the cashless exercise provision for the Pre-Funded Warrants and the zero cash provision for the Placement Agent Warrants. The 8,871 outstanding Placement Agent Warrants as of June 30, 2025 were exercised in full on July 1, 2025 for 17,742 shares of common stock.

7. STOCK-BASED COMPENSATION

The Company may issue stock-based compensation awards under the Helius Medical Technologies, Inc. 2022 Equity Incentive Plan (as amended, the “2022 Plan”) or the Helius Medical Technologies, Inc. 2021 Inducement Plan (as amended, the “Inducement Plan”), as described more fully in the 2024 10-K. On January 1, 2023, pursuant to the automatic increase provision of the 2022 Plan, the number of shares authorized for issuance increased from 352 to 426. On May 30, 2024, the Board adopted a First Amendment (the “Amendment”) to the 2022 Plan. On June 27, 2024, at the

annual meeting of stockholders, the stockholders of the Company approved the Amendment. Pursuant to the terms and conditions of the Amendment, the 2022 Plan was amended to increase the aggregate number of shares of common stock that may be issued under the 2022 Plan to 2,785 new shares with an automatic increase on January 1st of each year by an amount equal to 5% of the fully diluted shares (as defined in the 2022 Plan) as of the last day of the preceding calendar year. On July 2, 2024, the Company approved an amendment to the Inducement Plan pursuant to which, the Inducement Plan was amended to increase the aggregate number of shares of common stock that may be issued under the Inducement Plan to 200 new shares. As of January 1, 2025, the number of shares authorized for issuance increased from 2,785 to 3,605. On April 22, 2025, the Board adopted an amendment to the 2022 Plan to increase the aggregate number of shares of common stock that may be issued under the 2022 Plan to 20% of the fully diluted shares on the 10 th calendar date following the first closing of a registered offering of the Company’s common stock that occurs on or after May 15, 2025 (the “Equity Plan Amendment”). The Equity Plan Amendment was approved by stockholders at the special stockholders meeting held on May 23, 2025, and on June 16, 2025, following the 2025 Offering, the number of shares authorized for issuance increased from 3,605 to 142,286. On July 2, 2025, the Company granted 124,200 stock options out of the 2022 Plan to Directors and employees. As of July 2, 2025, the remaining shares available for grant were 14,485 under the 2022 Plan and 166 under the Inducement Plan.

During the three and six months ended June 30, 2025, the Company granted 847 stock options out of the 2022 Plan andno stock options out of the Inducement Plan at a weighted average exercise price of $546.90 per share. The options vest overone tothree years and expireten years after the grant date. No options were granted during the six months ended June 30, 2024.

The grant date fair values of the stock options were estimated using the Black-Scholes option pricing model using the following weighted average assumptions:

There wereno restricted stock units granted during the six months ended June 30, 2025.

As of June 30, 2025, there were an aggregate of 3,635 stock options outstanding with a weighted average exercise price of $3,794.66 per share andno unvested restricted stock units outstanding.

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

As of June 30, 2025, the total remaining unrecognized compensation expense related to nonvested stock options and restricted stock units was $0.8 million which will be amortized over the weighted-average remaining requisite service period of 0.8 years.

8. BASIC AND DILUTED LOSS PER SHARE

The table below presents the computation of basic and diluted loss per share (in thousands, except share and per share information):

The following outstanding securities, presented based on amounts outstanding as of the end of each period, were not included in the computation of diluted net loss per share for the periods indicated, as they would have been anti-dilutive due to the net loss in each period.

9. COMMITMENTS AND CONTINGENCIES

The Company is obligated under a license agreement with Advanced NeuroRehabilitation, LLC to pay a 4% royalty on net revenue collected from the sale of devices covered by the patent-pending technology. During the three and six months ended June 30, 2025 and 2024, the Company recorded royalty expense from the sale of devices of approximately$1 thousand and$3 thousand,$7 thousand and$12 thousand, respectively, in its unaudited condensed consolidated statements of operations and comprehensive loss.

10. SEGMENT AND GEOGRAPHIC INFORMATION

Segment Information

Operating segments are components of an enterprise for which separate financial information is available and are evaluated regularly by the Company’s chief operating decision maker (“CODM”) in deciding how to allocate resources and assessing performance. The Company’s CODM is its Chief Executive Officer. The Company’s Chief Executive Officer views the Company’s operations and manages its business inone operating segment, which is the business of development and commercialization of products related to PoNS® devices. The Company has a single reporting segment and the determination of the single segment is consistent with the information provided to the CODM. The CODM evaluates performance and allocates resources based on the Company’s consolidated financial results.

Geographic Information

The following table presents the Company’s revenue disaggregated by geographic area (in thousands):

Four customers accounted for 87% andsix customers accounted for 94% of net product sales for the three and six months ended June 30, 2025, respectively, andthree customers accounted for 97% andtwo customers accounted for 88% of net product sales for the three and six months ended June 30, 2024. Two customers accounted for 100% of accounts receivable, net as of June 30, 2025 and December 31, 2024.