SHOULDER INNOVATIONS, INC.

Previous wording

The following discussion should be read in conjunction with the unaudited condensed financial statements and accompanying notes, which appear elsewhere in this Quarterly Report. We urge you to carefully review and consider the various disclosures made by us in this Quarterly Report and in our other reports filed with the Securities and Exchange Commission (the “SEC”), including our audited financial statements for the year ended December 31, 2025 and related notes as disclosed in our 2025 Annual Report, which discusses our business and related risks in greater detail, as well as subsequent reports we may file with the SEC from time to time, for additional information. The section titled “Risk Factors” contained in Part I, Item 1A of the Company’s 2025 Annual Report and similar discussions in our other SEC filings, also describe some of the important risk factors that may affect our business, financial condition, results of operations and/or liquidity. You should carefully consider those risks, in addition to the other information in this Quarterly Report and in our other filings with the SEC, before deciding to purchase, hold or sell our common stock.

Current wording

The following discussion should be read in conjunction with the unaudited condensed financial statements and accompanying notes, which appear elsewhere in this Quarterly Report. We urge you to carefully review and consider the various disclosures made by us in this Quarterly Report and in our other reports filed with the Securities and Exchange Commission (the “SEC”), including our audited financial statements for the year ended December 31, 2025 and related notes as disclosed in our 2025 Annual Report, which discusses our business and related risks in greater detail, as well as subsequent reports we file with the SEC from time to time, for additional information. The section titled “Risk Factors” contained in Part I, Item 1A of the Company’s 2025 Annual Report and similar discussions in our other SEC filings, also describe some of the important risk factors that may affect our business, financial condition, results of operations and/or liquidity. You should carefully consider those risks, in addition to the other information in this Quarterly Report and in our other filings with the SEC, before deciding to purchase, hold or sell our common stock.

Previous wording

•Continued investments in product development, innovation and growth. We expect to continue to focus on long-term revenue growth through investments in our ecosystem and expansion of our operations. In research and development, we continually invest in improving our technologies, developing new products and further expanding our cleared indications. For example, we began using ProVoyance in 2021 and have developed a product line to include certain fracture indications and commercially launched the InSet 70 in September of 2025. In December 2025, the Company announced the development of a robotics platform to design a transformative shoulder-specific micro-robotic solution designed to further enhance shoulder surgical precision, workflow efficiency, and enable exciting, new clinical approaches in the aTSA and rTSA markets. The robotic solution, known as InSet Neo, is designed to be integrated with the Company’s ProVoyance platform to deliver a comprehensive technology solution. We are planning FDA submission for InSet Neo in the first half of 2027. We are also evaluating expansion into adjacent areas in shoulder surgical care, which may include sports medicine and shoulder trauma markets. In January 2026, we received FDA 510(k) clearance for products designed for patients with metal sensitivity and products that expand our I-Series humeral stem product line to include additional fracture indications. In April 2026, we announced the full commercial launch of the InSet™ I-135RFX Humeral Stem. We have filed a 510(k) with the FDA related to additive manufacturing of certain products, which will add additional supply chain capacity and cost reductions of up to 30% on certain products beginning in 2027. Beginning in the third quarter of 2026, the InSet Clutch guide system for anatomic and reverse glenoid procedures will be available to surgeons, and we also expect a limited user release for a new subscapularis sparing technique initiative. We expect the first surgical cases using our streamlined InSet anatomic glenoid implant, the InSet Go, in the fourth quarter of 2027 which will further reduce surgical steps. Additionally, we are targeting FDA submission in 2027 for a new concept for reverse procedures, branded InSet One. We anticipate we will continue to invest significantly in product development, including with respect to our supporting technologies, in order to further bolster our ecosystem. While research and development are time consuming and costly and therefore negatively impact our results of operations in the near term, we believe expanding into new areas, implementing product improvements and continuing to demonstrate the efficacy, safety and cost effectiveness of our products through clinical data and surgeon education are all critical to increasing the adoption of our implant systems and to the success of our business over the long term. Our clinical data collection efforts within the registry are ahead of our expectations. As we expand o…

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Current wording

•Continued investments in product development, innovation and growth. We expect to continue to focus on long-term revenue growth through investments in our ecosystem and expansion of our operations. In research and development, we continually invest in improving our technologies, developing new products and further expanding our cleared indications. For example, we began using ProVoyance in 2021 and have developed a product line to include certain fracture indications and commercially launched the InSet 70 in September of 2025. In December 2025, the Company announced the development of a robotics platform to design a transformative shoulder-specific micro-robotic solution designed to further enhance shoulder surgical precision, workflow efficiency, and enable exciting, new clinical approaches in the aTSA and rTSA markets. The robotic solution, known as InSet Neo, is designed to be integrated with the Company’s ProVoyance platform to deliver a comprehensive technology solution. We are planning FDA submission for InSet Neo in the first half of 2027. We are also evaluating expansion into adjacent areas in shoulder surgical care, which may include sports medicine and shoulder trauma markets. In January 2026, we received FDA 510(k) clearance for products designed for patients with metal sensitivity and products that expand our I-Series humeral stem product line to include additional fracture indications. In April 2026, we announced the full commercial launch of the InSet™ I-135RFX Humeral Stem. In September 2026, the Company received FDA 510(k) clearance for the N-22 Humeral Head, a titanium implant option for metal hypersensitivity, and the Company announced the product’s full commercial launch and a partnership with ALM Ortho Inc. to introduce a bespoke implant for the treatment of severe deformity and complex revision cases. In the third quarter of 2026, we commenced a limited user release for a new subscapularis sparing technique. We have filed a 510(k) with the FDA related to additive manufacturing of certain products, which will add additional supply chain capacity and cost reductions of up to 30% on certain products beginning in 2027. With a new version of ProVoyance now in place, we expect to commence a limited user release of the InSet Clutch guide system in the first quarter of 2027. We completed the first surgical cases using our streamlined InSet anatomic glenoid implant, the InSet Go, in October 2026, which is designed to further reduce surgical steps. Additionally, we are targeting FDA submission in 2027 for a new concept for reverse procedures, branded InSet One, a patient-matched, additively manufactured iteration of our InSet Reverse solution, purpose-built for our risk-based approach to preoperative planning. We anticipate we will continue to invest significantly in product development, including with respect to our supporting technologies, in order to further bolster our ecosystem. While research and development are time consuming a…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

We currently derive our net revenue from the sale of our aTSA and rTSA implant systems, which generally consist of our InSet Glenoid and humeral stem products. We sell our implants to hospitals, outpatient centers and ASCs in the United States through a dedicated commercial leadership team and a network of external independent distributors. Net revenue is recognized when the performance obligation to deliver these implant systems to our customers is satisfied and we transfer control of the implants to our customers, which is generally when we have received a purchase order and appropriate notification that the procedure has been used or implanted. Revenue is recognized in the amount of the consideration received net of any sales taxes that we expect to collect from customers. We also record shipping and handling costs as revenue. Our average sales price for our implant systems was $7,674 and $7,330 for the three months ended June 30, 2026 and 2025, respectively. Our average sales price for our implant systems was $7,662 and $7,179 for the six months ended June 30, 2026 and 2025, respectively. No single customer accounted for more than 10% of our net revenue during the three or six months ended June 30, 2026 and 2025, respectively. We expect our net revenue to increase for the foreseeable future as we expand our commercial organization, add new customers, expand our sales territories, introduce new products, as existing customers perform more procedures using our systems and as we generally expand awareness of our systems with new and existing customers. While industry trends have resulted in increased downward pricing pressure on medical services and products, we have not experienced a material impact on our net revenue to date; however, we cannot assure you that our net revenue will not be impacted in the future by these industry trends. Our net revenue may fluctuate from quarter to quarter due to a variety of factors, such as the size and success of our dedicated commercial leadership team, the number of hospitals and physicians who are aware of and use our systems and seasonality.

Current wording

We currently derive our net revenue from the sale of our aTSA and rTSA implant systems, which generally consist of our InSet Glenoid and humeral stem products. We sell our implants to hospitals, outpatient centers and ASCs in the United States through a dedicated commercial leadership team and a network of external independent distributors. Net revenue is recognized when the performance obligation to deliver these implant systems to our customers is satisfied and we transfer control of the implants to our customers, which is generally when we have received a purchase order and appropriate notification that the procedure has been used or implanted. Revenue is recognized in the amount of the consideration received net of any sales taxes that we expect to collect from customers. Shipping and handling costs charged to customers are included in revenue. Our average sales price for our implant systems was $7,616 and $7,465 for the three months ended September 30, 2026 and 2025, respectively. Our average sales price for our implant systems was $7,647 and $7,278 for the nine months ended September 30, 2026 and 2025, respectively. No single customer accounted for more than 10% of our net revenue during the three or nine months ended September 30, 2026 and 2025, respectively. We expect our net revenue to increase for the foreseeable future as we expand our commercial organization, add new customers, expand our sales territories, introduce new products, as existing customers perform more procedures using our systems and as we generally expand awareness of our systems with new and existing customers. While industry trends have resulted in increased downward pricing pressure on medical services and products, we have not experienced a material impact on our net revenue to date; however, we cannot assure you that our net revenue will not be impacted in the future by these industry trends. Our net revenue may fluctuate from quarter to quarter due to a variety of factors, such as the size and success of our dedicated commercial leadership team, the number of hospitals and physicians who are aware of and use our systems and seasonality.

Previous wording

Cost of goods sold consists primarily of the cost of components, packaging and sterilization, and obsolete inventory adjustments. Our systems are manufactured to our specifications primarily by third-party suppliers in the United States and are generally ordered on a purchase order basis. Cost of goods sold is recognized at the time the related revenue is recognized. Prior to use in surgery, the cost of our products is recorded as inventories, net of obsolescence reserve on our condensed balance sheets. Cost of goods sold does not include depreciation expense for instruments, which is included in selling, general and administrative expenses. Depreciation expense for instruments was $1,086 thousand and $623 thousand for the three months ended June 30, 2026 and 2025, respectively. See Note 7 to our unaudited condensed financial statements included elsewhere in this Quarterly Report for additional information. We expect cost of goods sold to increase as our net revenue increases and more of our implant systems are sold.

Current wording

Cost of goods sold consists primarily of the cost of components, packaging and sterilization, and obsolete inventory adjustments. Our systems are manufactured to our specifications primarily by third-party suppliers in the United States and are generally ordered on a purchase order basis. Cost of goods sold is recognized at the time the related revenue is recognized. Prior to use in surgery, the cost of our products is recorded as inventories, net of obsolescence reserve on our condensed balance sheets. Cost of goods sold does not include depreciation expense for instruments, which is included in selling, general and administrative expenses. Depreciation expense for instruments was $1,094 thousand and $744 thousand for the three months ended September 30, 2026 and 2025, respectively. See Note 7 to our unaudited condensed financial statements included elsewhere in this Quarterly Report for additional information. We expect cost of goods sold to increase as our net revenue increases and more of our implant systems are sold.

Previous wording

We expect our selling, general and administrative expenses to continue to increase for the foreseeable future as we continue to grow our business and increase our utilization of internal and external resources within our commercial organization. As we continue to invest in growth, we will be required to maintain significant levels of instrumentation, which we expect to increase our selling, general and administrative expenses. Furthermore, the royalty payments made pursuant to our License Agreement will increase as our net revenue increases. Additionally, we anticipate increased expenses related to audit, legal, regulatory and tax-related services associated with being a public company, compliance with exchange listing and SEC requirements, director and officer insurance premiums and investor relations costs. We also expect to see an increase in our stock-based compensation expense with the establishment of a new publicly-traded company equity plan and to the extent of grants in the form of restricted stock units or options.

Current wording

We expect our selling, general and administrative expenses to continue to increase for the foreseeable future as we continue to grow our business and increase our utilization of internal and external resources within our commercial organization. As we continue to invest in growth, we will be required to maintain significant levels of instrumentation, which we expect to increase our selling, general and administrative expenses. Furthermore, the royalty payments made pursuant to our License Agreement will increase as our net revenue increases. Additionally, we anticipate increased expenses related to audit, legal, regulatory and tax-related services associated with being a public company, compliance with exchange listing and SEC requirements, director and officer insurance premiums and investor relations costs. We also expect to see an increase in our stock-based compensation expense to the extent of grants in the form of restricted stock units or options.

Previous wording

Our other (income) expense consists of (i) interest (income) expense, net, (ii) change in fair value of Series E purchase option, (iii) loss on extinguishment of debt, and (iv) other (income) expense, net.

Current wording

Our other (income) expense consists of (i) interest (income) expense, net, (ii) change in fair value of Series E purchase option, (iii) change in fair value of convertible notes, net, (iv) loss on extinguishment of debt, and (v) other (income) expense, net.

Previous wording

Change in fair value of warrant liabilities consists of gains and losses resulting from the remeasurement of the fair value of our warrant liabilities at each balance sheet date. During the third quarter of 2025 and upon completion of the Company’s IPO, a final remeasurement of the fair value of the warrant liability was made and the warrants were reclassified to equity within the additional paid-in capital line item.

Current wording

Change in fair value of warrant liabilities consists of gains and losses resulting from the remeasurement of the fair value of our warrant liabilities at each balance sheet date. During the third quarter of 2025 and upon completion of the

Previous wording

Loss on extinguishment of debt consists of unamortized deferred financing fees, prepayment premium, and unrecognized end of term payment amount under the Trinity Loan Agreement.

Current wording

Loss on extinguishment of debt consists of unamortized deferred financing fees, prepayment premium, and an unrecognized end of term payment amount under the Trinity Loan Agreement.

Previous wording

Other expense, net consists primarily of adjustment in the fair market value of marketable securities and change in fair value of warrant liabilities.

Current wording

Other (income) expense, net consists primarily of adjustment in the fair market value of marketable securities and change in fair value of warrant liabilities.

Previous wording

(1)Includes stock-based compensation expense of $1,081 thousand and $190 thousand for the three months ended June 30, 2026 and 2025, respectively.

Current wording

(1)Includes stock-based compensation expense of $1,018 thousand and $298 thousand for the three months ended September 30, 2026 and 2025, respectively.

Previous wording

Net Revenue. Net revenue increased $6,162 thousand, or 56.0%, to $17,175 thousand for the three months ended June 30, 2026, compared to $11,013 thousand for the three months ended June 30, 2025. The increase in net revenue was due to an increase in the number of implant systems sold, as well as an increase in the number of customers.

Current wording

Net Revenue. Net revenue increased $4,435 thousand, or 37.7%, to $16,191 thousand for the three months ended September 30, 2026, compared to $11,756 thousand for the three months ended September 30, 2025. The increase in net revenue was due to an increase in the number of implant systems sold, as well as an increase in the number of customers.

Previous wording

Cost of Goods Sold and Gross Margin. Cost of goods sold increased $1,114 thousand, or 42.5%, to $3,734 thousand for the three months ended June 30, 2026, compared to $2,620 thousand for the three months ended June 30, 2025. This increase in cost of goods sold was primarily due to the increase in the number of our systems sold. Gross margin for the three months ended June 30, 2026 increased to 78.3%, compared to 76.2% for the three months ended June 30, 2025.

Current wording

Cost of Goods Sold and Gross Margin. Cost of goods sold increased $691 thousand, or 24.7%, to $3,486 thousand for the three months ended September 30, 2026, compared to $2,795 thousand for the three months ended September 30, 2025. This increase in cost of goods sold was primarily due to the increase in the number of our systems sold. Gross margin for the three months ended September 30, 2026 increased to 78.5%, compared to 76.2% for the three months ended September 30, 2025.

Previous wording

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased $14,943 thousand, or 64.0%, to $38,294 thousand for the six months ended June 30, 2026, compared to $23,351 thousand for the six months ended June 30, 2025. This increase in selling, general and administrative expenses was primarily due to a $6,312 thousand increase in personnel-related expenses as a result of increased headcount of our commercial organization, a $4,250 thousand increase in commissions and sales related costs due to higher sales of our systems, a $1,960 thousand increase in general corporate costs such as information technology, business development and insurance costs, a $1,491 thousand increase in stock-based compensation expense and a $930 thousand increase in depreciation primarily of surgical instruments.

Current wording

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased $2,060 thousand, or 13.7%, to $17,137 thousand for the three months ended September 30, 2026, compared to $15,077 thousand for the three months ended September 30, 2025. This increase in selling, general and administrative expenses was primarily due to a $2,604 thousand increase in personnel-related expenses as a result of increased headcount of our commercial organization, a $721 thousand increase in commissions and sales related costs due to higher sales of our systems, a $720 thousand increase in stock-based compensation expense, a $417 thousand increase in general corporate costs such as information technology, business development and insurance costs, and a $274 thousand increase in depreciation primarily of surgical instruments, partially offset by lower legal costs of $2,676 thousand primarily driven by lower litigation-related expenses.

Previous wording

Research and Development Expenses. Research and development expenses increased $1,985 thousand, or 141.2%, to $3,391 thousand for the three months ended June 30, 2026, compared to $1,406 thousand for three months ended June 30, 2025. The increase in research and development expenses was due to our investment in new product development efforts, including an increase in external consulting fees of $1,499 thousand primarily related to the robotic platform strategic partnership.

Current wording

Research and Development Expenses. Research and development expenses increased $1,640 thousand, or 107.5%, to $3,165 thousand for the three months ended September 30, 2026, compared to $1,525 thousand for three months ended September 30, 2025. The increase in research and development expenses was due to our investment in new product development efforts, including an increase in external consulting fees of $1,363 thousand primarily related to the robotic platform strategic partnership.

Previous wording

Interest (Income) Expense, Net. Interest expense, net decreased $889 thousand, or 411.6%, to interest income, net of $673 thousand for the three months ended June 30, 2026, compared to interest expense, net of $216 thousand for the three months ended June 30, 2025. This decrease in interest expense, net was due to higher interest earned on marketable securities.

Current wording

Interest (Income) Expense, Net. Interest income, net increased $652 thousand, or 835.9%, to interest income, net of $574 thousand for the three months ended September 30, 2026, compared to interest expense, net of $78 thousand for the three months ended September 30, 2025. This increase in interest expense, net was due to higher interest earned on marketable securities and lower interest expense related to long-term debt.

Previous wording

Other Expense, Net. Other expense, net decreased by $1,360 thousand, or 97.1%, to $40 thousand for the six months ended June 30, 2026, compared to other expense, net of $1,400 thousand for the six months ended June 30, 2025. This decrease in other expense, net was due to a decrease of $1,415 thousand related to changes in the fair value of our preferred stock warrant liability offset by an increase of $55 thousand in loss on marketable securities.

Current wording

Other (Income) Expense, Net. Other expense, net increased by $1,232 thousand, or 102.1%, to $25 thousand for the three months ended September 30, 2026, compared to other income, net of $1,207 thousand for the three months ended September 30, 2025. This increase in other expense, net was due to an increase of $1,159 thousand related to changes in the fair value of our preferred stock warrant liability and an increase of $73 thousand in loss on marketable securities.

Previous wording

(1)Includes stock-based compensation expense of $1,807 thousand and $317 thousand for the six months ended June 30, 2026 and 2025, respectively.

Current wording

(1)Includes stock-based compensation expense of $2,825 thousand and $615 thousand for the nine months ended September 30, 2026 and 2025, respectively.

Previous wording

Net Revenue. Net revenue increased $12,738 thousand, or 60.2%, to $33,883 thousand for the six months ended June 30, 2026, compared to $21,145 thousand for the six months ended June 30, 2025. The increase in net revenue was due to an increase in the number of implant systems sold, as well as an increase in the number of customers.

Current wording

Net Revenue. Net revenue increased $17,173 thousand, or 52.2%, to $50,074 thousand for the nine months ended September 30, 2026, compared to $32,901 thousand for the nine months ended September 30, 2025. The increase in net revenue was due to an increase in the number of implant systems sold, as well as an increase in the number of customers.

Previous wording

Cost of Goods Sold and Gross Margin. Cost of goods sold increased $2,495 thousand, or 50.3%, to $7,456 thousand for the six months ended June 30, 2026, compared to $4,961 thousand for the six months ended June 30, 2025. This increase in cost of goods sold was primarily due to the increase in the number of our systems sold. Gross margin for the six months ended June 30, 2026 increased to 78.0%, compared to 76.5% for the six months ended June 30, 2025.

Current wording

Cost of Goods Sold and Gross Margin. Cost of goods sold increased $3,186 thousand, or 41.1%, to $10,942 thousand for the nine months ended September 30, 2026, compared to $7,756 thousand for the nine months ended September 30, 2025. This increase in cost of goods sold was primarily due to the increase in the number of our systems sold. Gross margin for the nine months ended September 30, 2026 increased to 78.1%, compared to 76.4% for the nine months ended September 30, 2025.

Previous wording

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased $7,237 thousand, or 56.3%, to $20,086 thousand for the three months ended June 30, 2026, compared to $12,849 thousand for the three months ended June 30, 2025. This increase in selling, general and administrative expenses was primarily due to a $3,066 thousand increase in personnel-related expenses as a result of increased headcount of our commercial organization, a $2,079 thousand increase in commissions and sales related costs due to higher sales of our systems, a $891 thousand increase in stock-based compensation expense, a $736 thousand increase in general corporate costs such as information technology, business development and insurance costs including costs associated with becoming a public company and a $465 thousand increase in depreciation primarily of surgical instruments.

Current wording

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased $17,003 thousand, or 44.2%, to $55,431 thousand for the nine months ended September 30, 2026, compared to $38,428 thousand for the nine months ended September 30, 2025. This increase in selling, general and administrative expenses was primarily due to a $8,916 thousand increase in personnel-related expenses as a result of increased headcount of our commercial organization, a $4,971 thousand increase in commissions and sales related costs due to higher sales of our systems, business development and insurance costs, a $2,210 thousand increase in stock-based compensation expense, a $1,153 thousand increase in depreciation primarily of surgical instruments and a $3,004 thousand increase in general corporate costs such as information technology, partially offset by lower legal costs of $3,251 thousand primarily driven by lower litigation-related expenses.

Previous wording

Research and Development Expenses. Research and development expenses increased $4,156 thousand, or 139.0%, to $7,145 thousand for the six months ended June 30, 2026, compared to $2,989 thousand for the six months ended June 30, 2025. The increase in research and development expenses was due to our investment in new product development efforts, including an increase in external consulting fees of $3,778 thousand primarily related to the robotic platform strategic partnership.

Current wording

Research and Development Expenses. Research and development expenses increased $5,796 thousand, or 128.4%, to $10,310 thousand for the nine months ended September 30, 2026, compared to $4,514 thousand for the nine months ended September 30, 2025. The increase in research and development expenses was due to our investment in new product development efforts, including an increase in external consulting fees of $5,140 thousand primarily related to the robotic platform strategic partnership.

Previous wording

Interest (Income) Expense, Net. Interest expense, net decreased $1,692 thousand, or 290.2%, to interest income, net of $1,109 thousand for the six months ended June 30, 2026, compared to interest expense, net of $583 thousand for the six months ended June 30, 2025. This decrease in interest expense, net was due to higher interest earned on marketable securities.

Current wording

Interest (Income) Expense, Net. Interest income, net increased $2,344 thousand, or 354.6%, to interest income, net of $1,683 thousand for the nine months ended September 30, 2026, compared to interest expense, net of $661 thousand for the nine months ended September 30, 2025. This increase in interest income, net was due to higher interest earned on marketable securities and lower interest expense related to long-term debt.

Previous wording

Change in Fair Value of Series E Purchase Option. Change in fair value of Series E purchase option was $0 for the three months ended June 30, 2026, compared to $11,719 thousand for the three months ended June 30, 2025. The Series E purchase option was issued in connection with the Company’s Series E preferred stock financing entered into during the first quarter of 2025 and the increase resulted from recognition of the fair value change between issuance and the exercise of the Series E preferred stock purchase option in June 2025.

Current wording

Change in Fair Value of Series E Purchase Option. Change in fair value of Series E purchase option was $0 for the nine months ended September 30, 2026, compared to $11,719 thousand for the nine months ended September 30, 2025. The Series E purchase option was issued in connection with the Company’s Series E preferred stock financing entered into during the first quarter of 2025 and the increase resulted from recognition of the fair value change between issuance and the exercise of the Series E preferred stock purchase option in June 2025. There was no purchase option in 2026.

Previous wording

Loss on Extinguishment of Debt. Loss on extinguishment of debt was $589 thousand for the three months ended June 30, 2026 and resulted from repaying the Trinity Loan Agreement. There was no loss on extinguishment of debt in 2025.

Current wording

Loss on Extinguishment of Debt. Loss on extinguishment of debt was $589 thousand for the nine months ended September 30, 2026 and resulted from repaying the Trinity Loan Agreement. There was no loss on extinguishment of debt in 2025.

Previous wording

Other Expense, Net. Other expense, net decreased by $1,198 thousand, or 85.6%, to $201 thousand for the three months ended June 30, 2026, compared to other expense, net of $1,399 thousand for the three months ended June 30, 2025. This decrease in other expense, net was due to a decrease of $1,415 thousand related to changes in the fair value of our preferred stock warrant liability offset by an increase of $217 thousand in loss on marketable securities.

Current wording

Other Expense, Net. Other expense, net decreased by $128 thousand, or 66.3%, to $65 thousand for the nine months ended September 30, 2026, compared to other expense, net of $193 thousand for the nine months ended September 30, 2025. This decrease in other expense, net was due to a decrease of $256 thousand related to changes in the fair value of our preferred stock warrant liability, partially offset by an increase of $128 thousand in loss on marketable securities.

Previous wording

To date, our primary sources of capital have been from net revenue received from the sale of our implant systems, the sale of common stock in our IPO, proceeds from private placements of our convertible preferred stock and debt financing arrangements. On August 1, 2025, we completed our IPO, selling 5,000,000 shares of our common stock at $15.00 per share. Upon completion of our IPO, we received net proceeds of approximately $64,212 thousand, after deducting underwriting discounts and commissions and offering expenses. Since inception, we have raised a total of $114,600 thousand in net proceeds from private placements of our convertible preferred stock. As of June 30, 2026, we had cash, cash equivalents and marketable securities of $98,993 thousand and $15,000 thousand of principal outstanding under the Loan Agreement.

Current wording

To date, our primary sources of capital have been from net revenue received from the sale of our implant systems, the sale of common stock in our IPO, proceeds from private placements of our convertible preferred stock and debt financing arrangements. On August 1, 2025, we completed our IPO, selling 5,000,000 shares of our common stock at $15.00 per share. Upon completion of our IPO, we received net proceeds of approximately $64,212 thousand, after deducting underwriting discounts and commissions and offering expenses. Since inception, we have raised a total of $114,600 thousand in net proceeds from private placements of our convertible preferred stock. As of September 30, 2026, we had cash, cash equivalents and marketable securities of $92,334 thousand and $15,000 thousand of principal outstanding under the Loan Agreement.

Previous wording

We have generated losses from our operations since our inception as reflected in our accumulated deficit of $115,932 thousand as of June 30, 2026. Our losses primarily resulted from the costs incurred in the development, sales, and marketing of our systems and providing support for our operations. We expect to continue to incur losses for the foreseeable future and to expend significant amounts of cash for the foreseeable future as we continue to scale our business, increase selling, general and administrative expenses to support the expansion of our commercial organization and efforts, increase general and administrative expenses to support being a publicly-traded company and invest in research and development activities.

Current wording

We have generated losses from our operations since our inception as reflected in our accumulated deficit of $122,980 thousand as of September 30, 2026. Our losses primarily resulted from the costs incurred in the development, sales, and marketing of our systems and providing support for our operations. We expect to continue to incur losses for the foreseeable future and to expend significant amounts of cash for the foreseeable future as we continue to scale our business, increase selling, general and administrative expenses to support the expansion of our commercial organization and efforts, increase general and administrative expenses to support being a publicly-traded company and invest in research and development activities.

Previous wording

•the scope, rate of progress and costs of our current or future clinical and registries as well as costs associated with complying with regulatory requirements;

Current wording

•the scope, rate of progress and costs of our current or future clinical trials and registries as well as costs associated with complying with regulatory requirements;

Previous wording

For the six months ended June 30, 2026, net cash used in operating activities was $19,750 thousand, consisting primarily of a net loss of $18,532 thousand and net cash used by changes in our operating assets and liabilities of $6,311 thousand, partially offset by non-cash charges of $5,093 thousand. The non-cash charges primarily consisted of depreciation and amortization expense of $2,265 thousand, stock-based compensation expense of $1,807 thousand and loss on extinguishment of debt of $589 thousand. Net cash used by changes in our operating assets and liabilities primarily consisted of an increase of $2,857 thousand in trade accounts receivable, a decrease of $2,222 thousand in accounts payable, an increase of $1,329 thousand to inventory, and an increase of $811 thousand in prepaid expenses, partially offset by an increase of $908 thousand in other current liabilities.

Current wording

For the nine months ended September 30, 2026, net cash used in operating activities was $26,142 thousand, consisting primarily of a net loss of $25,580 thousand and net cash used by changes in our operating assets and liabilities of $7,951 thousand, partially offset by non-cash charges of $7,389 thousand. The non-cash charges primarily consisted of depreciation and amortization expense of $3,382 thousand, stock-based compensation expense of $2,825 thousand and loss on extinguishment of debt of $589 thousand. Net cash used by changes in our operating assets and liabilities primarily consisted of a decrease of $3,419 thousand in accounts payable, an increase of $2,789 thousand to inventory, an increase of $1,346 thousand in trade accounts receivable, and an increase of $1,072 thousand in prepaid expenses, partially offset by an increase of $675 thousand in other current assets and liabilities.

Previous wording

For the six months ended June 30, 2025, net cash used in operating activities was $11,274 thousand, consisting primarily of a net loss of $23,858 thousand and net cash used by changes in our operating assets and liabilities of $2,270 thousand, partially offset by non-cash charges of $14,854 thousand. The non-cash charges primarily consisted of changes in the fair value of our preferred stock warrant liability and Series E purchase option of $13,134 thousand, depreciation and amortization expense of $1,385 thousand and stock-based compensation expense of $317 thousand, partially offset by realized gain on marketable securities of $207 thousand. Net cash used by changes in operating assets and liabilities primarily consisted of an increase of $3,126 thousand in inventory and an increase in accounts receivable of $1,820 thousand, partially offset by an increase of $1,954 thousand in other current liabilities and an increase of $982 thousand in accounts payable.

Current wording

For the nine months ended September 30, 2025, net cash used in operating activities was $19,829 thousand, consisting primarily of a net loss of $32,587 thousand and net cash used by changes in our operating assets and liabilities of $4,230 thousand, partially offset by non-cash charges of $16,988 thousand. The non-cash charges primarily consisted of change in fair value of convertible notes, net of $2,216 thousand, changes in the fair value of our preferred stock warrant liability and Series E purchase option of $11,975 thousand, depreciation and amortization expense of $2,228 thousand and stock-based compensation expense of $615 thousand. Net cash used by changes in operating assets and liabilities primarily consisted of an increase of $5,403 thousand in inventory, an increase in accounts receivable of $2,060 thousand and an increase of $1,279 thousand in prepaid expenses, partially offset by an increase of $2,723 thousand in other current assets and liabilities and an increase of $1,789 thousand in accounts payable.

Previous wording

For the six months ended June 30, 2026, net cash provided by investing activities was $17,322 thousand, consisting primarily of proceeds of $40,384 thousand from sales of our marketable securities, partially offset by purchases of $18,170 thousand in marketable securities and $4,892 thousand in fixed assets purchases.

Current wording

For the nine months ended September 30, 2026, net cash provided by investing activities was $35,455 thousand, consisting primarily of proceeds of $59,103 thousand from sales of our marketable securities, partially offset by purchases of $18,170 thousand in marketable securities and $5,478 thousand in fixed assets purchases.

Previous wording

For the six months ended June 30, 2025, net cash used in investing activities was $5,879 thousand, consisting primarily of purchases of $20,477 thousand in marketable securities and $2,311 thousand in fixed assets purchases, partially offset by cash proceeds of $16,909 thousand from sales of our marketable securities.

Current wording

For the nine months ended September 30, 2025, net cash used in investing activities was $78,315 thousand, consisting primarily of purchases of $95,582 thousand in marketable securities and $5,126 thousand in fixed assets purchases, partially offset by cash proceeds of $22,393 thousand from sales of our marketable securities.

Previous wording

For the six months ended June 30, 2026, net cash provided by financing activities was $17 thousand, resulting from proceeds of $15,000 thousand from debt issuance and proceeds of $524 thousand from exercise of common stock options, partially offset by payments of $15,000 thousand of payments of long-term debt and $507 thousand of payments of debt issuance and extinguishment costs.

Current wording

For the nine months ended September 30, 2026, net cash provided by financing activities was $232 thousand, resulting from proceeds of $15,000 thousand from debt issuance and proceeds of $739 thousand from exercise of common stock options, partially offset by payments of $15,000 thousand of payments of long-term debt and $507 thousand of payments of debt issuance and extinguishment costs.

Previous wording

For the six months ended June 30, 2025, net cash provided by financing activities was $38,084 thousand, consisting of proceeds of $39,553 thousand from the issuance and sale of shares of our Series E convertible preferred stock, proceeds of $362 thousand from the exercise of warrants for our Series Seed preferred stock and proceeds of $151 thousand from the exercise of common stock options, partially offset by $1,982 thousand of payments of deferred IPO costs.

Current wording

For the nine months ended September 30, 2025, net cash provided by financing activities was $146,955 thousand, consisting of proceeds of $66,441 thousand from the issuance of common stock, net of commissions and issuance costs from the Company’s IPO, proceeds of $39,863 thousand from the issuance of convertible notes net of issuance costs, proceeds of $39,508 thousand from the issuance and sale of shares of our Series E convertible preferred stock, proceeds of $688 thousand from the exercise of common stock options and proceeds of $455 thousand from the exercise of warrants for our Series Seed and Series B preferred stock.

Previous wording

We have entered into an operating lease for office space in Michigan. The lease has a five-year term, which commenced in July 2021 and is renewable for one additional five-year term upon expiration, and was renewed in April 2026. We have also entered into an operating lease for warehouse space in California. The lease has a three-year term, which commenced in March 2025 and is renewable for one additional one-year term upon expiration. In April 2026, we entered into a new lease, which includes the construction of a new commercial building in Michigan that is expected to be substantially completed around the fourth quarter of 2027, which we intend to use as our corporate headquarters. As of June 30, 2026, the operating lease obligations under these operating leases were $71 thousand.

Current wording

We have entered into an operating lease for office space in Michigan. The lease has a five-year term, which commenced in July 2021 and is renewable for one additional five-year term upon expiration, and was renewed in April 2026. We have also entered into an operating lease for warehouse space in California. The lease has a three-year term, which commenced in March 2025 and is renewable for one additional one-year term upon expiration. In April 2026, we entered into a new lease, which includes the construction of a new commercial building in Michigan that is expected to be substantially completed around the fourth quarter of 2027, which we intend to use as our corporate headquarters. As of September 30, 2026, the operating lease obligations under these operating leases were $61 thousand.

Previous wording

On October 22, 2020, we entered into a software license agreement with Genesis Software Innovations, LLC (“Genesis Software”), which was amended and restated on January 1, 2023, and subsequently amended and restated on June 10, 2025 (as amended and restated, the “License Agreement”), pursuant to which we are required to pay Genesis Software certain payments, including royalty payments, until such time we have paid Genesis Software an aggregate of $7,000 thousand under the License Agreement. As of June 30, 2026, we have paid an aggregate of $7,000 thousand of the total $7,000 thousand, including royalties of $666 thousand and $398 thousand in the three months ended June 30, 2026 and 2025, respectively.

Current wording

On October 22, 2020, we entered into a software license agreement with Genesis Software Innovations, LLC (“Genesis Software”), which was amended and restated on January 1, 2023, and subsequently amended and restated on June 10, 2025 (as amended and restated, the “License Agreement”), pursuant to which we are required to pay Genesis Software certain payments, including royalty payments, until such time we have paid Genesis Software an aggregate of $7,000 thousand under the License Agreement. As of September 30, 2026, we have paid an aggregate of $7,000 thousand of the total $7,000 thousand, including royalties of $415 thousand and $433 thousand in the three months ended September 30, 2026 and 2025, respectively.