Annual Report for Fiscal Year Ending 12-31, 2025 (Form 10-K)

The following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of many factors. The consolidated results of operations for the years ended December 31, 2025and 2024are not necessarily indicative of the results that may be expected for any future period. The following discussion should be read in conjunction with the consolidated financial statements and the notes thereto included in Part IV, Item 15of this Form 10-K and in conjunction with the "Risk Factors" included in Part I, Item 1A of this Form 10-K.

Business Overview

Vivani Medical, Inc. ("Vivani," the "Company," "we," "us," "our" or similar terms) is a clinical stage biopharmaceutical company which develops miniature, ultra long-acting subdermal drug implant candidates utilizing its proprietary NanoPortal™ technology, which is designed to enable reversible, ultra long-acting, near constant-rate delivery of a broad range of medicines to treat chronic diseases. Vivani uses this platform technology to develop, and potentially commercialize, drug implant candidates, alone or in collaboration with pharmaceutical company partners, to address leading causes of poor clinical outcomes in the treatment of chronic diseases, including medication non-adherence, drug tolerability and administration challenges faced by certain patients.

According to the U.S. Centers for Disease Control and Prevention, adherence is defined as the extent to which an individual's behavior, including taking medications, corresponds to recommendations from a health care provider. An alarmingly high proportion of patients, approximately 50%, do not, or cannot, take their medicine as prescribed in the real world, a statistic that applies to both daily oral as well as weekly injectable medicines. For example, a recent study has shown that 64% of patients taking Wegovy® (semaglutide injection) discontinue treatment within the first year, a number that increases to 76% by the second year. Unfortunately, GLP-1 discontinuation may result in failure to achieve target outcomes and a quick reversal of the health benefits in the majority of patients.

At Vivani, we are developing a portfolio of miniature, ultra long-acting subdermal drug implant candidates based on our NanoPortal technology that, unlike most oral and injectable medicines, are designed with the goal of guaranteeing medication adherence by delivering therapeutic drug levels for up to six months or longer. Our NanoPortal implant technology has the potential to enable patients to maintain continuous and therapeutic drug exposure levels with convenient once or twice yearly administration and the ability to stop receiving therapy at any time, if necessary, by removing the implant.In addition, we aim to minimize fluctuations in patients' drug levels which may improve the tolerability of medicines, including GLP-1 receptor agonists which produce side effects that are associated with fluctuating drug levels in the blood.

Our emerging portfolio of miniature, ultra long-acting drug implant candidates have the potential to revolutionize the treatment of chronic diseases by directly addressing poor medication adherence and improving drug tolerability in patients, both of which may translate into better health outcomes for patients in the real-world setting. Vivani's lead program, NPM-139, is a miniature, six-month, GLP-1 (semaglutide) implant currently in development for chronic weight management in obese and overweight patients. NPM-139 achieved encouraging preclinical data in rats showing approximately 20% weight loss, as compared to a control group receiving sham implants, which was maintained for a full year after a single administration. We are also developing NPM-133, a miniature, six-month, GLP-1(semaglutide) implant for the treatment of type-2 diabetes. Preliminary feasibility data support the additional potential benefit of once yearly dosing for both semaglutide implant programs, NPM-139 and NPM-133. In addition, we are also developing NPM-115(exenatide implant) for the treatment of chronic weight management, and OKV-119, a GLP-1-based implant in development for chronic weight management and related conditions in companion cats and dogs. OKV-119 is being developed in collaboration with animal health partner Okava Pharmaceuticals, Inc. ("Okava").

Vivani resulted from the business combination of Second Sight Medical Products, Inc. ("Second Sight") and Nano Precision Medical, Inc. ("NPM"). On August 30, 2022, Second Sight and NPM completed their merger pursuant to which NPM became a wholly owned subsidiary of Second Sight and the combined company of NPM and Second Sight was renamed Vivani Medical, Inc. Vivani's main priority is the further development of its miniature, ultra long-acting drug implant candidate programs. In parallel, Vivani's management team remains committed to identifying and exploring strategic options that will enable further development of its pioneering neurostimulation systems from legacy company Second Sight which are aimed at helping patients recover critical body functions. As noted below, we subsequently contributed our Second Sight assets and certain liabilities to Cortigent, Inc. ("Cortigent"), our wholly owned subsidiary, to advance our pioneering neurostimulation technology.

Preclinical and NanoPortal™ Platform Development

In February 2024, Vivani announced positive preclinical weight loss data with its exenatide implant, NPM-115, that was comparable to semaglutide, the active ingredient in Ozempic® and Wegovy®, and a strategic shift to prioritize the Company's obesity portfolio. In a study of high-fat diet-induced obese mice, the exenatide implant generated weight loss of approximately 20% compared to a sham implant control after a 28-day treatment duration, comparable to the extent of weight loss observed in mice treated with semaglutide injections in the same study.

In February 2024, the Company also disclosed that semaglutide, the active ingredient in Ozempic®, Wegovy® and Rybelsus®, is the active pharmaceutical ingredient in NPM-139, another miniature, ultra long-acting subdermal GLP-1 implant in development for chronic weight management, further prioritizing our obesity treatment portfolio. NPM-139 has the added potential benefit of once-yearly administration.

On May 28, 2024, Vivani announced the publication of positive weight loss data supporting the potential veterinary use of OKV-119, the Company's miniature, ultra long-acting GLP-1 implant under development with partner Okava for the treatment of pre-diabetes, diabetes and obesity in companion felines. The device is intended to be conveniently inserted under the skin during routine veterinary visits and is being designed to deliver six months of GLP-1 therapy with a single administration.

On September 4, 2024, Vivani announced positive preclinical liver fat results with its miniature, ultra long-acting GLP-1 (exenatide) implant, NPM-115, under development for chronic weight management in obese and overweight individuals. The implant produced sham-implant adjusted liver fat reduction of 82% at Week 12in an obese mouse model from a single administration with expected twice-yearly dosing. These liver fat data are consistent with published results from similar investigations with semaglutide.

On August 5, 2025, Vivani announced positive weight loss data from an ongoing preclinical study of NPM-139, an ultra long-acting subdermal GLP-1 (semaglutide) implant in development for chronic weight management, in rats, which showed approximately 20% sham-controlled weight loss, maintained for longer than 6months after administration of a single implant. The Company also announced the successful completion of LIBERATE-1, the first-in-human application of Vivani's NanoPortalTM implant technology, which showed a positive safety and tolerability profile, along with encouraging performance data. Based on the promising preclinical feasibility of the semaglutide implant and the successful completion of LIBERATE-1, Vivani announced its intention to focus our resources and prioritize efforts to accelerate NPM-139into clinical-stage development.

Clinical Development

On July 14, 2023, we filed an Investigational New Drug Application ("IND") for NPM-119 (exenatide implant) with the U.S. Food and Drug Administration (the "FDA") to support the initiation of a first-in-human study of our GLP-1 implant in patients with type 2 diabetes. On August 18, 2023, FDA provided written notification that the study was on full clinical hold, primarily due to insufficient Chemistry, Manufacturing, and Controls ("CMC") information to assess the risk to human subjects.

On June 13, 2024, Vivani announced that the FDA cleared the IND and lifted the clinical hold for NPM-119, the Company's miniature, six-month GLP-1 implant proposed for development for the treatment of patients with type 2 diabetes.

On July 11, 2024, the Company provided an update of the clinical development plans for NPM-115, the clinical program associated with the miniature, ultra long-acting GLP-1 (high-dose exenatide) implant for chronic weight management in obese and overweight individuals. The Company redesigned the first-in-human study, LIBERATE-1™, initially intended to explore the safety, tolerability and pharmacokinetics of NPM-119, its low-dose exenatide implant in patients with type 2 diabetes, to instead evaluate NPM-115, its high dose exenatide implant in obese and overweight individuals.

On September 26, 2024, the Company reported receiving regulatory approval to initiate its first-in-human clinical trial with NPM-115, a miniature, ultra long-acting GLP-1 (exenatide) implant in obese and overweight individuals in Australia. This clinical trial, known as LIBERATE-1, investigated the safety, tolerability and full pharmacokinetic profile of our exenatide implant. The trial also represented the first clinical application of the Company's proprietary NanoPortal drug implant technology. LIBERATE-1 was redesigned to enroll participants who were titrated on weekly semaglutide injections for 8 weeks (0.25 mg/week for 4 weeks followed by 0.5 mg/week for 4 weeks) before being randomized to receive a single administration of Vivani's exenatide implant (n=8), weekly exenatide injections (n=8), or weekly 1 mg semaglutide injections (n=8) for a 9-week treatment duration. The trial was initiated at the end of 2024 and top-line data was released in August 2025.

On December 19, 2024, Vivani announced that screening and enrollment of LIBERATE-1, the first-in-human clinical trial with a GLP-1 implant in obese and overweight patients, was initiated at two study centers in Australia. The primary objective of the study was to investigate the safety, tolerability and full pharmacokinetic profile of an exenatide implant in obese or overweight individuals.

On March 13, 2025, the Company announced the successful administration of its first GLP-1 (exenatide) implant in the LIBERATE-1 clinical trial. This milestone marked a critical step toward potentially addressing one of healthcare's most pressing challenges: medication adherence in metabolic diseases including chronic weight management and type 2 diabetes. The Company also announced full enrollment in the LIBERATE-1 study, which was achieved in just four weeks after enrollment of the first subject, signaling early potential interest for this six-month, subdermal GLP-1 implant.

On August 5, 2025, Vivani announced plans to support the rapid advancement of NPM-139, a novel semaglutide implant, based on promising results from the LIBERATE-1 clinical study and additional positive data from a preclinical study with a semaglutide implant. LIBERATE-1, the first-in-human application of Vivani's proprietary NanoPortal implant technology, demonstrated a positive safety and tolerability profile and encouraging performance data, thus meeting the study's primary objectives. This study provided information on the GLP-1 exposure levels obtained with an exenatide configuration, thereby paving the road for future clinical development of the technology, not only for exenatide implants (NPM-115 and OKV-119), but also for semaglutide implants (NPM-139 and NPM-133) and other applications of NanoPortal technology that the Company may pursue in the future. Vivani also announced new NPM-139 (semaglutide implant) preclinical feasibility data that demonstrated approximately 20% sham-controlled weight loss with a single implant, which had been maintained for more than six months at the time of the announcement. These semaglutide data also support the potential for a semaglutide implant with annual dosing. Based on the LIBERATE-1 data supporting the clinical application of the NanoPortal platform technology, and the preclinical weight loss data with a semaglutide implant configuration, Vivani announced plans to prioritize advancement of NPM-139, with clinical development expected to begin in 2026.

On September 4, 2025, Vivani announced plans to initiate a Phase 1 clinical study for the NPM-139 semaglutide implant program in the first half of 2026, pending regulatory clearance, along with high-level details of the anticipated study design. The Company also announced parallel preparations to initiate a Phase 2 clinical study of NPM-139 pending enabling results from the Phase 1 study and regulatory feedback. The Company currently expects the Phase 1 study to initiate in mid-2026.

Cortigent, Inc.

In December 2022, we contributed our neurostimulation assets and certain liabilities from legacy company Second Sight to Cortigent, our wholly owned subsidiary, to advance our pioneering neurostimulation technology. Cortigent had 5,000,000 shares of common stock outstanding, all owned by Vivani. On March 21, 2023, Vivani announced a proposed initial public offering ("IPO") to be registered on a Form S-1registration statement for Cortigent to fund its operations separately from Vivani's.

On August 25, 2023, the Company and Cortigent entered into an Amendment No. 1 (the "Amendment") to the Transition Funding, Support and Services Agreement dated March 19, 2023 (the "TFSSA"). Pursuant to the TFSSA, Vivani agreed to advance funds and provide or cause to be provided to Cortigent the services and funding intended to cover salaries and related costs, rent and other overhead in order to permit Cortigent to operate in substantially the same manner as Second Sight prior to the formation of Cortigent. Efforts to support a successful IPO of Cortigent were paused in March 2025 and efforts were focused at that time on a potential spin-off transaction with the filing of a Form 10 registration statement. On March 12, 2025, the Company announced the proposed spin-off of Cortigent into a fully independent, publicly traded company, subject to the satisfaction of certain conditions, including, among others, final approval of Vivani's board of directors, receipt of a favorable opinion that the transaction will qualify for non-recognition of gain or loss as a result of receipt of Cortigent shares for U.S. Federal Income Tax purposes, and SEC and Nasdaq approval. The TFSSA terminated effective December 31, 2024. Vivani continues to pursue a path forward to unlock stockholder value associated with this asset. If Cortigent is spun off through a Form 10registration statement, the loan payable from Cortigent to Vivani will be forgiven. A Form 10registration statement was filed with the U.S. Securities and Exchange Commission ("SEC") on May 29, 2025.

On September 17, 2025, Vivani announced that its board of directors had set a record date for the approved spin-off of Cortigent. Vivani's stockholders holding common stock as of that record date would receive common stock in Cortigent. This record date was withdrawn on October 3, 2025, due to delays arising from the shutdown of the U.S. federal government. Thereafter, Cortigent filed amendments to its registration statement on Form S-1on December 2, 2025 and January 9, 2026. If Cortigent successfully completes an IPO, it will repay to Vivani $1.5million of transition funding from the proceeds of that offering and issue a five-year promissory note requiring repayment of $2million at fivepercent per year upon maturity of the promissory note.

Currently, both a spin-off to be registered on a Form 10and an IPO to be registered on a Form S-1registration statement are approaches being considered to transition Cortigent to becoming a separate reporting company that may provide an opportunity for Vivani's stockholders to potentially realize value in Cortigent's assets. In the IPO scenario, Vivani would retain an ownership stake in Cortigent. In the Form 10spin-off scenario, shares of Cortigent's common stock would be distributed to the holders of Vivani's common stock. The strategic goal of either transaction is to create two focused companies dedicated to driving current and future value in their respective therapeutic areas of expertise.

Okava Pharmaceuticals, Inc.

On April 12, 2025, Vivani entered into an amendment to its License and Supply Agreement with Okava which expanded Vivani's ongoing collaboration to include dogs in the development of OKV-119, a long-acting GLP-1 therapy for weight management, type 2 diabetes, and other cardiometabolic conditions. The amendment added $5M in regulatory milestone payments related to the development of products for the treatment of obesity in dogs.

Liquidity and Capital Resources

Capital Funding

On March 1, 2024, the Company entered into a securities purchase agreement with an institutional investor to purchase 3,947,368shares of common stock, par value $0.0001per share, and warrants to purchase up to an aggregate of 3,947,368shares of common stock, at a purchase price of $3.80per share and accompanying warrant, in a registered direct offering. The warrants have an exercise price of $3.80per share, are exercisable immediately upon issuance, and will expire threeyears following the date of issuance. Simultaneously, the Company also entered into a placement agency agreement with Maxim Group LLC, which acted as the sole placement agent for the Offering. The gross proceeds of $15.0million from the Offering, before paying the placement agent fees and other offering costs, were received on March 5, 2024. In connection with the Securities Purchase Agreement, the Company paid issuance costs of $1.3million, resulting in net proceeds of $13.7million.

On April 22, 2024, the Company entered into an Open Market Sale Agreement^SM (the "Sales Agreement") with Jefferies LLC ("Jefferies"), under which the Company may offer and sell, from time to time at its sole discretion, shares of the common stock, having an aggregate offering price of up to $75.0 million through Jefferies as its sales agent. Also on April 22, 2024, the Company filed a Registration Statement on Form S-3, which was declared effective on May 3, 2024, including a sales agreement prospectus relating to the offering of up to $75.0 million shares of its common stock in accordance with the Sales Agreement. For additional information, refer to Note 7. Equity Securities of the Notes to Consolidated Financial Statements in this Annual Report on Form 10-K.

2024Private Sale Transaction

On November 8, 2024, the Company entered into a private sale transaction with one of its independent directors whereby the Company sold an aggregate of 3,968,253 shares of the Company's common stock to the director at a price of $1.26 per share, which was the lower of the closing price of the Company's common stock on Nasdaq or the 5-day average closing price of the Company's common stock on Nasdaq, each immediately prior to the closing date, subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the common stock that occur after the date of the private sale transaction. The gross proceeds from this private sale transaction were $5.0million.

2025Private Sale Transactions

During 2025, the Company entered into multiple share purchase agreements with an entity affiliated with oneof its independent directors and one share purchase agreement with oneof its investors (collectively, the "2025Private Sales Transactions") pursuant to which the Company agreed to sell shares of its common stock in multiple tranche closings at prices equal to the closing price of the Company's common stock on Nasdaq on the respective agreement dates, subject to customary adjustments for reverse and forward stock splits, stock dividends, stock combinations, and similar transactions.

On March 26, 2025, the Company entered into a share purchase agreement with an entity affiliated with oneof its independent directors to sell an aggregate of 7,366,071shares of common stock in fivetranche closings at a price of $1.12per share, representing the closing price of the Company's common stock on Nasdaq on that date. Gross proceeds from this transaction are expected to be approximately $8.25million.

On May 12, 2025, the Company entered into an additional share purchase agreement with an entity affiliated with oneof its independent directors to sell an aggregate of 2,912,621shares of common stock in twotranche closings at a price of $1.03per share, representing the closing price of the Company's common stock on Nasdaq on that date. Gross proceeds from this transaction are expected to be approximately $3.0million.

On August 11, 2025, the Company entered into a share purchase agreement with an entity affiliated with oneof its independent directors, and with another investor, to sell an aggregate of 7,936,507shares of common stock in twelvetranche closings at a price of $1.26per share, representing the closing price of the Company's common stock on Nasdaq on that date. Gross proceeds from this transaction are expected to be approximately $10.0million.

During the twelve months ended December 31, 2025, the Company issued 7,480,158shares of common stock pursuant to the 2025Private Sales Transactions, generating gross proceeds of $8.6million. The remaining shares issuable under these agreements are expected to be issued in 2026upon completion of the applicable tranche closings, with expected gross proceeds of approximately $12.6million.

2025Private Placement and Registered Direct Offering

On October 26, 2025, the Company entered into a share purchase agreement with an entity affiliated with oneof its independent directors for the issuance and sale of an aggregate 3,703,703shares of the Company's common stock at a purchase price of $1.62per share, which represented the last reported sale price of the Company's common stock on October 24, 2025 (the "2025Private Placement"). The 2025Private Placement resulted in gross proceeds of $6.0million. No warrants, discounts, placement agent fees, or investment banking fees were incurred in connection with the transaction. The shares were issued pursuant to an exemption from registration under Rule 506of Regulation D of the Securities Act of 1933, as amended, in reliance, in part, on representations made by the purchaser.

Concurrent with the 2025Private Placement, the Company also entered into a placement agency agreement, dated October 26, 2025 (the "Placement Agency Agreement") with ThinkEquity LLC (the "Agent") relating to the sale by the Company of 6,000,000shares of the Company's common stock in a registered direct offering (the "2025Registered Direct Offering"). The gross proceeds from the 2025Registered Direct Offering were approximately $9.7million, before placement agent fees and other estimated offering expenses. In connection with the Placement Agency Agreement, the Company agreed to pay the Agent a cash fee of 7.0% of the gross proceeds from the sale of the shares. The Company also agreed to reimburse the Agent for legal fees and other reimbursable expenses up to $125,000. Net proceeds, after giving effect to Agent fees and expenses, and after giving effect to other financing costs associated with the transaction, were $8.7million.

2026 Private Placement and 2026Registered Direct Offering

On January 25, 2026, the Company entered into a share purchase agreement with an entity affiliated with one of its independent directors for the purchase of an aggregate of 1,351,351 shares of common stock of the Company at a purchase price of $1.48 per share, the last reported sale price of the common stock on January 23, 2026. This private placement of common stock resulted in gross proceeds of approximately $2.0 million to the Company. Concurrent with the private placement, the Company also entered into a Placement Agency Agreement with ThinkEquity, LLC relating to the sale by the Company of 1,689,200 shares of the Company's common stock in a registered direct offering, also at a purchase price of $1.48 per share. The gross proceeds from the Registered Offering were approximately $2.5 million, before placement agent fees and other estimated offering expenses.

Non-Capital Funding

From time to time, we receive grants that help fund specific development programs. Any amounts received pursuant to grants are offset against the related operating expenses as the costs are incurred. Commencing in January 2018, we were awarded a grant from the National Institutes of Health (the "NIH") to fund the "Early Feasibility Clinical Trial of a Visual Cortical Prosthesis". The final year of the grant ended in March 2024, however the NIH issued us a no-cost extension allowing us to utilize the unfunded amount through March 2025. During the twelve months ended December 31, 2025 and 2024total grants offsetting against operating expenses were $35,000and $0.2 million, respectively.

Liquidity

We have experienced recurring operating losses and negative operating cash flows since inception and we expect to continue to incur operating losses and negative operating cash flows for the foreseeable future. To date, we have financed our working capital requirements through the recurring sale of our equity securities. Our financial statements have been presented on the basis that our business is a going concern and contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

We estimate that currently available cash will provide sufficient funds to enable the Company to meet its planned obligations into mid-2027. Our ability to continue as a going concern is dependent on our ability to raise additional capital, however, there can be no assurances that we will be able to do so.

Our operating plan may change as a result of many factors currently unknown to us, and we will need to seek additional funds through public or private equity offerings or debt financings, grants, collaborations, strategic partnerships or other sources. However, we may be unable to raise additional capital or enter into such other arrangements when needed on favorable terms or at all. If we are unable to obtain funding on a timely basis, we may be required to significantly curtail, delay or discontinue one or more of our research or development programs, or we may be unable to expand or maintain our operations, maintain our current organization and employee base or otherwise capitalize on our business opportunities, as desired, which could materially and adversely affect our business, financial condition and results of operations.

We are subject to the risks and uncertainties associated with a business with no revenue that is developing a novel pharmaceutical product candidates and medical device candidates, including limitations on our operating capital resources and uncertain demand for our products. We expect our operating expenses to increase significantly as we continue our business operations, particularly as we prepare to initiate additional clinical trials and conduct our other research and development activities. Conducting clinical trials is a time-consuming, expensive and uncertain process that takes many years to complete, and we may never generate the necessary data or results required to obtain marketing approval. We do not expect revenues until we are successful in completing the development and obtaining marketing approval for our products. We expect expenses to increase in connection with our ongoing activities, particularly as we initiate clinical trials, initiate new research and development projects and seek marketing approval for any product candidates that we successfully develop. If we are required to conduct additional nonclinical or clinical activities, or IND-enabling activities, our overall expenditures would increase. In addition, if we obtain marketing approval, we expect to incur significant additional expenses related to sales, marketing, distribution and other commercial infrastructure to commercialize such product. In addition, our product candidates, if approved, may not achieve commercial success. We incur significant costs associated with operating as a public company in a regulated industry.

Until such time, if ever, we can generate product revenues, we anticipate that we will seek to fund our operations through public or private equity or debt financings, grants, collaborations, strategic partnerships or other sources. However, we may be unable to raise additional capital or enter into such other arrangements when needed on favorable terms or at all. To the extent that we raise additional capital through the sale of equity, convertible debt or other equity-linked securities, the ownership interests of some or all of our common stockholders will be diluted, the holders of new equity securities may have priority rights over our existing stockholders and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our existing common stockholders. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If adequate funds are not available, we may be required to curtail operations significantly or to obtain funds by entering into agreements on unattractive terms. If, for example, we raise funds through additional collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates, or to grant licenses on terms that may not be favorable to us. Our inability to raise capital could have a material adverse effect on our business, financial condition and results of operations.

Recently Issued Accounting Pronouncements Not Yet Adopted as of December 31, 2025

In November 2024, the Financial Accounting Standards Board ("FASB") issuedAccounting Standards Update ("ASU") No. 2024-03 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ("ASU 2024-03"), which will improve the disclosures about a public business entity's expenses and requires detailed disclosures about specified categories of expenses (including employee compensation, depreciation, and amortization) included in certain expense captions such as cost of sales, selling, general and administrative, and research and development on the face of the income statement. ASU 2024-03is effective for the Company or fiscal years beginning on January 1, 2027, and for interim periods within fiscal years beginning on January 1, 2028. Early adoption is permitted. The guidance may be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of ASU 2024-03or (2) retrospectively to all prior periods presented in the financial statements. The Company does not expect the adoption of this guidance to have a material effect on its consolidated financial statements and continues to evaluate disclosure presentation alternatives.

In December 2025, the FASB issued ASU No. 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities. This ASU provides authoritative guidance for the recognition, measurement and presentation of government grants received by a business entity. This ASU is effective for annual reporting periods beginning after December 15, 2028 and interim periods within those annual periods. The guidance can be applied on a modified prospective, modified retrospective, or retrospective approach; early adoption is permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements and related disclosures.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270) - Narrow-Scope Improvements. This ASU clarifies interim disclosure requirements; it does not attempt to expand or reduce disclosures. ASU 2025-11also includes a disclosure principle to help entities determine which events since the end of the last annual reporting period are material for disclosure. This ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. The guidance can be applied on a prospective basis, or a retrospective basis for all or any prior periods, and early adoption is permitted. The Company is currently evaluating the impact of this ASU; however, it is not anticipated to have a material impact on its consolidated financial statements

Recently Adopted Accounting Standards

Critical Accounting Policies and Estimates

The following discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in conformity with accounting principles generally accepted in the United States of America. Certain accounting policies and estimates are particularly important to the understanding of our financial position and results of operations and require the application of significant judgment by our management or can be materially affected by changes from period to period in economic factors or conditions that are outside of our control. As a result, they are subject to an inherent degree of uncertainty. In applying these policies, our management uses their judgment to determine the appropriate assumptions to be used in the determination of certain estimates. Those estimates are based on our historical operations, our future business plans and projected financial results, the terms of existing contracts, our observance of trends in the industry, information provided by our customers and information available from other outside sources, as appropriate. See Note 2of notes to our consolidated financial statements for a more complete description of our significant accounting policies.

Stock-Based Compensation. Pursuant to Financial Accounting Standards Board ASC 718, Share-Based Payment ("ASC 718"), we record stock-based compensation expense for all stock-based awards. Under ASC 718, we estimate the fair value of stock options granted using option pricing models. The fair value for awards that are expected to vest is then amortized on a straight-line basis over the requisite service period of the award, which is generally the option vesting term. The Company accounts for forfeitures as they occur.

For stock options or restricted stock units with market vesting conditions, the awards were valued using the Monte-Carlo Simulation model.

Results of Operations

Operating Expenses. We recognize our operating expenses as incurred in twogeneral operational categories: research and development and general and administrative. Our operating expenses also include a non-cash component related to the amortization of stock-based compensation for research and development and general and administrative personnel. From time-to-time we have received grants from institutions or agencies, such as the National Institutes of Health, to help fund some of the cost of our development efforts. We have recorded these grants as reductions to operating expenses.

Comparison of the Years Ended December 31, 2025and 2024

Research and development expense. Research and development expense during the year ended December 31, 2025was $18.1million, compared to $15.7million during the year ended December 31, 2024. The increaseof $2.4million, or 15%, was primarily attributable to the increase in both the clinical trial related expense and development expense from our Biopharm Division.

General and administrative expense. General and administrative expense during the year ended December 31, 2025was $9.4million, compared to $8.9million during the year ended December 31, 2024. The increaseof $0.5million, or 6%, was primarily attributable to the increase in the professional services from our Neurostimulation Division and our Biopharm Division.

Other income, net. Other income, net during the year ended December 31, 2025was $0.9million, compared to $1.2million during the year ended December 31, 2024. The decreaseof $0.3million was primarily attributable to lower interest income being earned on deposits from our Biopharm Division and the write off of the accumulated other comprehensive income related to foreign currency translation balance of our Neurostimulation Division's Switzerland subsidiary effectively closed in 2025, partially offset by an increase R&D rebates earned.

Net loss. The net loss during the year ended December 31, 2025was $26.6million, compared to $23.5million during the year ended December 31, 2024. The increasein net loss of $3.1 million was primarily attributable to the increase in the clinical trial related expense and development expense from our Biopharm Division, the increase in professional services and the decrease in other income from our Neurostimulation Division and our Biopharm Division.

Cash Flows from Operating Activities

During 2025, we used $24.3million of cash in operating activities, consisting primarily of a net loss of $26.6 million, partially offset by $0.2 million from a net change in operating assets and liabilities, and non-cash items totaling $2.1million for stock-based compensation, lease expense, and depreciation of property and equipment.

During 2024, we used $20.8million of cash in operating activities, consisting primarily of a net loss of $23.5 million, partially offset by $0.4million from a net change in operating assets and liabilities, and non-cash items totaling $0.2 million for stock-based compensation, lease expense, depreciation of property and equipment, fixed assets write-off.

Cash Flows from Investing Activities

Net cash used in investing activities during 2025and 2024was $1.2million and $0.6million, respectively, for the purchase of equipment.

Cash Flows from Financing Activities

In 2025, financing activities provided $23.3million of cash primarily attributable to $8.7million from a registered direct offering with a placement agent and $14.5million from other securities purchase agreements with oneof our independent directors and another investor.

In 2024, financing activities provided $19.1million of cash primarily attributable to $13.7million from a securities purchase agreement with an institutional investor and $5.0million from another securities purchase agreement with oneof our independent directors.

Off-Balance Sheet Arrangements

At December 31, 2025, we did not have any transactions, obligations or relationships that could be considered off-balance sheet arrangements.