Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes and other information included elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto and management's discussion and analysis of financial condition and results of operations for the year ended December 31, 2025. In addition to historical data, this discussion contains forward-looking statements about our business, ability to continue as a going concern, ability to successfully commercialize our WiSE CRT System, results of operations, cash flows, financial condition and prospects based on current expectations that involve risks, uncertainties, assumptions, and other important factors. Our actual results could differ materially from such forward-looking statements. Factors that could cause or contribute to those differences include, but are not limited to, those identified below and those discussed in Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K. Additionally, our historical results are not necessarily indicative of the results that may be expected for any period in the future. We use words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "potential," "seek," "should," "will," "would," and similar expressions to identify forward-looking statements.

Overview

EBR is a U.S. based medical device company that developed the WiSE CRT System ("WiSE"), an implantable cardiac pacing system able to provide stimulation to endocardial heart tissue for the correction of heart rhythm conditions without requiring the use of leads. That implantable device is part of a cardiac resynchronization therapy ("CRT"), offering endocardial heart tissue stimulation without the complications associated with traditional lead-based systems. Cardiac rhythm management ("CRM") systems use leads to conduct electricity from an implantable pulse generator ("IPG") to electrodes that deliver therapeutic electric pulses to heart tissue. While leads are a critical part of most CRM systems, they have long been recognized as a primary shortcoming of these systems and are a leading cause of device failure.

We initially developed WiSE for use in conjunction with another implanted pacemaker to provide CRT to patients who are unable to receive CRT from a traditional lead-based system or are at high risk of complications from an upgrade procedure. WiSE CRT technology is engineered to benefit patients who have not seen success with conventional CRT or face high complication risks. By eliminating lead requirements for left ventricular pacing, WiSE CRT introduces a novel approach to cardiac pacing, with the potential to transform CRT delivery.

On April 11, 2025, we received notification that the Center for Devices and Radiological Health ("CDRH") of the Food and Drug Administration ("FDA") had completed its review of our premarket approval application ("PMA") for WiSE and approved WiSE for commercial distribution in the U.S. for adult patients who are at least 22 years of age, are indicated for CRT, have an existing or are eligible for an implanted right ventricular pacing system, and are in one of the following two categories: 1) patients in whom previous coronary sinus ("CS") lead implantation was unsuccessful, or where an implanted lead has been turned off, referred to as "previously untreatable"; or 2) patients with previously implanted pacemakers or Implantable Cardioverter-Defibrillators ("ICDs") in whom standard CRT upgrade is not advisable due to known relative contraindications for CS lead or CRT device implantation, referred to as "high risk upgrades".

We have launched WiSE with the focus on driving adoption of WiSE at key, high-volume, hospitals or medical facilities within the U.S. to be followed by select, high-volume hospitals or medical facilities in markets outside the U.S. ("OUS") that we would target after evaluating regulatory and reimbursement considerations. The growth of our business depends on our ability to successfully commercialize WiSE and gain wide acceptance of WiSE by continuing to make physicians and other hospital staff aware of the benefits of WiSE to generate increased demand and frequency of use and thus increase sales to our hospital customers. Our ability to grow our business will also depend on our ability to expand our customer base in existing or new target markets. The rate at which we grow our sales force and the speed at which newly hired salespeople become effective can impact our revenue growth or our costs incurred in anticipation of such growth. We intend to make significant investments in our sales and marketing organization by increasing the number of sales representatives and expanding our marketing programs, in the U.S., to help facilitate further adoption among existing hospital accounts as well as broaden awareness of our products to new hospital accounts.

Financial overview

Our WiSE CRT System received approval from the FDA for commercial distribution in April 2025, and we began commercializing WiSE during the second quarter of 2025. During the three months ended September 30, 2026, we had 40 commercial implants at 24 hospitals in the US, and recognized net sales of $2.5 million. During the nine months ended September 30, 2026, we had 127 commercial implants at 41 hospitals in the US, and recognized net sales of $7.5 million. An additional 58 physicians were trained to implant the WiSE CRT System, and 43 additional purchase agreements were signed with target Limited Market Release ("LMR") sites during the nine months ended September 30, 2026. The commercial potential of and our ability to successfully commercialize WiSE is unproven and will require, among other things, effective sales, marketing, manufacturing, distribution, information systems and pricing strategies, as well as compliance with applicable laws and regulations.

Since inception, we have incurred significant net losses and expect to continue to incur net losses until we are able to generate sufficient revenue. Since our inception, our operations have been financed primarily by net proceeds from the sale of our CDIs, common stock, convertible preferred stock, and indebtedness. As of September 30, 2026, we had $93.2 million in cash, cash equivalents, and marketable securities and an accumulated deficit of $453.4 million. For a more comprehensive discussion see "Liquidity and Capital Resources" and "Future Funding Requirements" below.

In June 2026, the Company completed a fully underwritten institutional placement to institutional and sophisticated investors ("Institutional Placement"), comprising: (a) an institutional placement to institutional and sophisticated investors ("Tranche 1"); and (b) a conditional placement to BCP3 Pty Ltd, a related party of Dr. Chris Nave, a non-executive director of the Company, which was approved by stockholders at the Special Meeting of Stockholders held on August 18, 2026 ("Tranche 2"). Under the Tranche 1 Institutional Placement, we issued 77,352,890 CDIs, representing 7,735,289 shares of common stock, at a purchase price of A$0.38 per CDI (A$3.80 per share of common stock), for proceeds of $19.5 million, net of $1.2 million of related issuance costs.

In June 2026, we completed a 1-for-2 accelerated non-renounceable pro rata entitlement offer, with an institutional and retail component, at a purchase price of A$0.38 per CDI (A$3.80 per share of common stock). Under the institutional entitlement offering, we issued 110,582,160 CDIs, representing 11,058,216 shares of common stock, for proceeds of $28.0 million, net of $1.5 million of related issuance costs. Under the retail entitlement offering, we issued 114,699,930 CDIs, representing 11,469,993 shares of common stock, for proceeds of $28.3 million, net of $1.7 million of related issuance costs.

In August 2026, we completed Tranche 2 of the fully underwritten institutional placement, and issued 92,105,270 CDIs, representing 9,210,527 shares of common stock at a purchase price of A$0.38 per CDI (A$3.80 per share of common stock), for proceeds of $23.7 million, net of $1.4 million of related issuance costs.

Factors Affecting Our Business

There are a number of factors that have impacted, and we believe will continue to impact, our results of operations and growth. These factors include:

·

Regulatory approvals/clearances. Our business strategy depends on the successful FDA submission of our post-approval study ("PAS") and ongoing annual reporting of our WiSE CRT System to the FDA.

·

Clinical results. Publications of clinical results by us, our competitors and other third parties can have a significant influence on whether, and the degree to which, our products are used by physicians and the procedures and treatments those physicians choose to administer for a given condition.

·

Market acceptance. The growth of our business depends on our ability to successfully commercialize WiSE and gain wide acceptance of WiSE by continuing to make physicians and other hospital staff aware of the benefits of WiSE to generate increased demand and frequency of use and thus increase sales to our hospital customers. Our ability to grow our business will also depend on our ability to expand our customer base in existing or new target markets.

·

Sales force size and effectiveness. The rate at which we grow our sales force and the speed at which newly hired salespeople become effective can impact our revenue growth or our costs incurred in anticipation of such growth. We intend to make significant investments in our sales and marketing organization by increasing the number of U.S. sales representatives and expanding our international marketing programs to help facilitate further adoption among existing hospital accounts as well as broaden awareness of our products to new hospital accounts.

·

Competition. Our industry is intensely competitive and, in particular, we compete with a number of large, well-capitalized companies on multiple fronts. We must strive to be successful in light of our competitors' existing and future products and related pricing and their resources to successfully market to the physicians who use our products.

While these factors may present significant opportunities for us, they also pose significant risks and challenges that we must address.

Components of our Consolidated Results of Operations

Net Sales

We derive most of our revenue from sales of WiSE to the hospital facilities that implant our WiSE CRT System. We recognize revenue upon the transfer of goods or services to a customer at an amount that reflects the expected consideration to be received in exchange for those goods or services, net of rebates. Specifically, revenue from the sale of WiSE is recognized at an amount that reflects the expected consideration upon notice that our products have been used in a surgical procedure. We account for rebates as a reduction to revenue, calculated based on the terms agreed with the customer. Our revenue fluctuates primarily based on the volume of procedures performed. Our revenue is expected to continue to fluctuate in the future from quarter-to-quarter due to a variety of factors, including the success of our sales force in expanding adoption of WiSE in new hospitals and the number of physicians who are aware of and implant WiSE.

Nearly all our revenue results from sales in the United States, but we also have limited sales of replacement batteries for our WiSE CRT System to hospital facilities with patients who have been or are currently enrolled in our clinical study in the United Kingdom ("UK").

Cost of Goods Sold and Gross Margin

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

We calculate gross margin as gross profit divided by net sales. Our gross margin has been and will continue to be affected by a variety of factors, primarily by our manufacturing costs, pricing, and the use of inventory that was previously expensed during our clinical trial, although we have fully utilized inventory that was previously expensed and going forward will receive no additional benefit to gross margin. Over the long term our gross margin may increase to the extent our production volume increases as our fixed manufacturing costs would be spread over a larger number of units, thereby reducing our per-unit manufacturing costs. We expect our gross margin will fluctuate from period to period based upon the factors described above.

Operating Expenses

Research and Development Expenses

Research and development expenses primarily consist of personnel-related expenses, including salaries, bonuses, fringe benefits and other compensation-related costs, including stock-based compensation expense, for employees engaged in research and development functions. Research and development expenses also include costs of conducting our post-approval study, such as expenses associated with our clinical research organization, or CRO, who provided project management, outside service fees paid to third party consultants and contractors related to WiSE engineering, quality assurance and regulatory approval, as well as contract manufacturing of WiSE and allocated facility costs.

We expense research and development costs as incurred. Non-refundable advance payments that we make for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses and other long-term assets, which are expensed as the related goods are delivered or the services are performed, or when it is no longer expected that the goods will be delivered, or the services rendered.

We anticipate that our research and development expenses will increase significantly in the future as we:

·

hire and retain additional personnel, including research, clinical, development, manufacturing, quality control, quality assurance and regulatory personnel;

·

conduct our post-approval study;

·

continue to advance the research and development of our WiSE CRT system or other product candidates; and

·

develop and validate our commercial-scale current good manufacturing practice ("cGMP").

Selling, General and Administrative Expenses

Selling, general and administrative expenses primarily consist of personnel-related costs, including salaries, bonuses, fringe benefits and other compensation-related costs, including stock-based compensation expense, for our personnel and external contractors involved in our sales and marketing, executive, finance, legal and other administrative functions. Selling, general and administrative expenses also include costs incurred for outside services associated with such functions, including costs associated with obtaining and maintaining our patent portfolio and professional fees for accounting, auditing, tax, legal services, and other consulting expenses.

We anticipate that our selling, general and administrative expenses will increase significantly in the future as we:

·

hire and retain additional sales, general and administrative personnel to support the expected growth in our sales and marketing activities;

·

continue to expand our sales, marketing and administrative function to support the sales adoption of WiSE;

·

maintain, expand, and protect our intellectual property portfolio; and

·

incur increased expenses associated with operating as a U.S. publicly reporting company, including increased costs of accounting, audit, legal, regulatory, and tax-related services, and director and officer insurance premiums.

Interest expense

Interest expense primarily consists of cash and non-cash interest related to our notes payable. See "Loan and Security Agreements" section below for more details about our debt agreements.

Interest income

Interest income consists of interest income, including amortization of premiums and accretion of discounts, generated from our cash, cash equivalent, and marketable securities.

Gain/ (loss) on foreign currency

Gains and losses arising from the settlement and remeasurement of monetary assets and liabilities denominated in currencies other than a subsidiary's functional currency.

Critical Accounting Estimates

Our critical accounting estimates are more fully described in our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no significant changes to our critical accounting estimates since December 31, 2025.

Recent Accounting Pronouncements

See the sections titled "Recently adopted accounting pronouncements" and "Recently issued accounting pronouncements not yet adopted" in Note 3 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Non- GAAP Financial Measures

Adjusted earnings before interest, income taxes, depreciation and amortization ("Adjusted EBITDA"), a non-GAAP measure used by management to assess operating performance, is defined as net loss, excluding interest expense, net, depreciation and amortization, and stock-based compensation. Adjusted EBITDA is intended as a supplemental measure of our performance and provides useful information to management and investors regarding our operating results.

We present Adjusted EBITDA in this filing because we believe it assists investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our ongoing operating performance. Period-to-period comparison of Adjusted EBITDA helps our management identify additional trends in our company's financial results that may not be shown solely by period-to-period comparison of net loss. In addition, we believe that providing Adjusted EBITDA, together with a reconciliation of Adjusted EBITDA to net loss, helps investors make comparisons between our company and other companies that may have different capital structures, different capitalized asset values, different forms of employee compensation and different strategic nonrecurring projects. Adjusted EBITDA has its limitations as an analytical tool because of the excluded items, and you should not consider it in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. Some of these limitations include:

·

Adjusted EBITDA does not reflect interest expense and interest income because these items are not directly attributable to the performance of our business operations and may vary over time due to financing transactions that we have entered into or may enter into in the future.

·

Adjusted EBITDA does not reflect certain non-cash items, including depreciation and amortization, and stock-based compensation expense. We believe that excluding the effect of these expenses from Adjusted EBITDA assists management and investors in making period-to-period comparisons in our company's operating performance because the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations.

A reconciliation between net loss and adjusted EBITDA is presented below:

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
(in thousands)		2026				2025				2026				2025
Reconciliation of net loss to non-GAAP Adjusted EBITDA
Net loss		$	(16,644	)		$	(12,189	)		$	(51,171	)		$	(34,710	)
Interest expense, net			495				607				2,450				2,188
Depreciation and amortization			301				90				601				288
Stock-based compensation (a)			1,004				929				2,847				2,138
Adjusted EBITDA		$	(14,844	)		$	(10,563	)		$	(45,273	)		$	(30,096	)

(a)

Represents non-cash expense associated with our share-based payments.

Results of Operations

Comparison of the Three Months Ended September 30, 2026, to the Three Months Ended September 30, 2025

We recorded a net loss of $16.6 million in the three months ended September 30, 2026, an increase of $4.5 million, or 36.5%, from the three months ended September 30, 2025. The increased loss in 2026 was due to an increase in selling, general and administrative expenses, and research and development expenses, as discussed below. Other expense, net also increased in 2026 primarily due to a decrease in other income, as discussed below.

The following table summarizes our operating results for the three months ended September 30, 2026 and 2025:

		Three Months Ended September 30,								Change
(in thousands)		2026				2025				Amount				%
Net sales		$	2,487			$	512			$	1,975				385.7	%
Cost of goods sold			2,238				288				1,950				677.1	%
Gross profit			249				224				25				11.2	%
Operating expenses
Research and development			6,697				6,244				453				7.3	%
Selling, general and administrative			9,800				5,861				3,939				67.2	%
Total operating expenses			16,497				12,105				4,392				36.3	%
Other expense, net			(396	)			(308	)			(88	)			28.6	%
Loss before income tax			(16,644	)			(12,189	)			(4,455	)			36.5	%
Income tax expense			-				-				-				-
Net Loss		$	(16,644	)		$	(12,189	)		$	(4,455	)			36.5	%

We derive the majority of our revenue from sales to customers in the United States. International revenue is attributable to the battery replacements for clinical trial patients in the UK. Revenue by geography is based on the billing address of the customer.

The table below summarizes our revenue by geography:

		Three Months Ended September 30,								Change
(in thousands)		2026				2025				Amount				%
United States		$	2,477			$	509			$	1,968				386.6	%
International			10				3				7				233.3	%
Net sales		$	2,487			$	512			$	1,975				385.7	%

Net Sales, Cost of Goods Sold, Gross Profit, and Gross Margin:

		Three Months Ended September 30,								Change
(in thousands)		2026				2025				Amount				%
Net sales		$	2,487			$	512			$	1,975				385.7	%
Cost of goods sold			2,238				288				1,950				677.1	%
Gross profit		$	249			$	224			$	25				11.2	%
Gross margin			10.0	%			43.8	%

Net Sales and Cost of Goods Sold

Net sales and cost of goods sold was $2.5 million and $2.2 million, respectively, during the three months ended September 30, 2026, resulting from the Company completing commercial implants at twenty-four hospitals in the US. Net sales and cost of goods sold were significantly lower during the three months ended September 30, 2025, resulting from the then-recent FDA approval of our WiSE CRT System in April 2025. During the three months ended September 30, 2025, we had commercial implants at four hospitals in the US.

Gross Profit, and Gross Margin

Gross profit increased by $0.03 million, or 11.2% during the three months ended September 30, 2026, as compared to the three months ended September 30, 2025, resulting from an increase in sales volume and a higher average selling price. Our gross margin was positively affected by the use of inventory that was previously expensed during our clinical trial, although we have fully utilized inventory that was previously expensed and going forward will receive no additional benefit to gross margin. Gross margin was 10.0% for the three months ended September 30, 2026, compared to 43.8% for the three months ended September 30, 2025. Excluding the use of previously expensed inventory, we would have had a negative gross margin of 8.9% for the three months ended September 30, 2026, compared to a negative gross margin of 25.2% for the three months ended September 30, 2025. The improvement in gross margin, excluding the use of previously expensed inventory, is the result of a higher average selling price, and increased manufacturing efficiencies during the three months ended September 30, 2026, as compared to the three months ended September 30, 2025.

Operating Expenses

Research and Development

The following table presents our total research and development expenses by category:

		Three Months Ended September 30,								Change
(in thousands)		2026				2025				Amount				%
Research and development expenses
R&D personnel expense		$	4,302			$	4,981			$	(679	)			(13.6	%)
Clinical expenses			972				599				373				62.3	%
Quality assurance			226				103				123				119.4	%
Contract manufacturing, materials & components			425				484				(59	)			(12.2	%)
Facility allocation & depreciation			772				77				695				902.6	%
Total research and development expense		$	6,697			$	6,244			$	453				7.3	%

Research and development expenses increased by $0.5 million, or 7.3%, during the three months ended September 30, 2026, as compared to the three months ended September 30, 2025. Clinical expenses increased by $0.4 million as a result of higher expenses related to WiSE CRT post-approval study. Facility-related expenses and depreciation increased by $0.7 million as a result of our new laboratory in Santa Clara, CA. Quality assurance expenses increased by $0.1 million due to expenses incurred to support product development projects. These increases were offset by $0.7 million decrease in personnel-related expenses due to the reallocation of employees from research and development to selling and manufacturing activities, as a result of the shift in business focus towards commercialization during the three months ended September 30, 2026, as compared to the three months ended September 30, 2025.

Selling, General and Administrative Expenses

Selling, General and administrative expenses increased by $3.9 million, or 67.2%, during the three months ended September 30, 2026, as compared to the three months ended September 30, 2025. Personnel-related expenses including salaries, bonuses, stock-based compensation and certain fringe benefits increased by $2.4 million as a result of the expansion of our workforce to support increased adoption of our WiSE CRT System. Travel-related expenses increased by $0.8 million due to increased travel to support our sales and marketing efforts. Professional fees increased by $0.4 million, primarily resulting from higher legal fees. Corporate expenses increased by $0.2 million, primarily resulting from the higher expenses related to investor relations, insurance premiums, and computer software licenses. Facility related and other expenses increased by $0.1 million, primarily resulting from the higher expenses for our new corporate headquarters and manufacturing facility.

Other expense, net

Other expense, net increased by $0.1 million during the three months ended September 30, 2026, as compared to the three months ended September 30, 2025. This increase was primarily due to a $0.2 million decrease in other income from refundable tax incentives, which was partially offset by a $0.1 million decrease in interest expense.

Comparison of the Nine Months Ended September 30, 2026, to the Nine Months Ended September 30, 2025

We recorded a net loss of $51.2 million in the nine months ended September 30, 2026, an increase of $16.5 million, or 47.4%, from the nine months ended September 30, 2025. The increased loss in 2026 was due to an increase in selling, general and administrative expenses, and research and development expenses, as discussed below. Other expense, net also increased in 2026 primarily due to a decrease in interest income, as discussed below.

The following table summarizes our operating results for the nine months ended September 30, 2026 and 2025:

		Nine Months Ended September 30,								Change
(in thousands)		2026				2025				Amount				%
Net sales		$	7,486			$	682			$	6,804				997.7	%
Cost of goods sold			6,710				374				6,336				1,694.1	%
Gross profit			776				308				468				151.9	%
Operating expenses
Research and development			19,734				17,614				2,120				12.0	%
Selling, general and administrative			29,859				15,488				14,371				92.8	%
Total operating expenses			49,593				33,102				16,491				49.8	%
Other expense, net			(2,354	)			(1,916	)			(438	)			22.9	%
Loss before income tax			(51,171	)			(34,710	)			(16,461	)			47.4	%
Income tax expense			-				-				-				-
Net Loss		$	(51,171	)		$	(34,710	)		$	(16,461	)			47.4	%

We derive the majority of our revenue from sales to customers in the United States. International revenue is attributable to the battery replacements for clinical trial patients in the UK. Net sales by geography is based on the billing address of the customer.

The table below summarizes our revenue by geography:

		Nine Months Ended September 30,								Change
(in thousands)		2026				2025				Amount				%
United States		$	7,473			$	658			$	6,815				1,035.7	%
International			13				24				(11	)			(45.8	%)
Net sales		$	7,486			$	682			$	6,804				997.7	%

Net Sales, Cost of Goods Sold, Gross Profit, and Gross Margin:

		Nine Months Ended September 30,								Change
(in thousands)		2026				2025				Amount				%
Net sales		$	7,486			$	682			$	6,804				997.7	%
Cost of goods sold			6,710				374				6,336				1,694.1	%
Gross profit		$	776			$	308			$	468				151.9	%
Gross margin			10.4	%			45.2	%

Net Sales and Cost of Goods Sold

Net sales and cost of goods sold was $7.5 million and $6.7 million, respectively, during the nine months ended September 30, 2026, resulting from the Company completing commercial implants at forty-one hospitals in the US. Net sales and cost of goods sold were significantly lower during the nine months ended September 30, 2025, resulting from the then-recent FDA approval of our WiSE CRT System in April 2025. During the nine months ended September 30, 2025, we had commercial implants at seven hospitals in the US.

Gross Profit, and Gross Margin

Gross profit increased by $0.5 million, or 151.9% for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025, resulting from an increase in sales volume and a higher average selling price. Our gross margin was positively affected by the use of inventory that was previously expensed during our clinical trial, although we have fully utilized inventory that was previously expensed and going forward will receive no additional benefit to gross margin. Gross margin was 10.4% for the nine months ended September 30, 2026, compared to 45.2% for the nine months ended September 30, 2025. Excluding the use of previously expensed inventory, we would have had a negative gross margin of 16.9% for the nine months ended September 30, 2026, compared to a negative gross margin of 31.9% for the nine months ended September 30, 2025. The improvement in gross margin, excluding the use of previously expensed inventory, is the result of a higher average selling price, and increased manufacturing efficiencies during the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025.

Operating Expenses

Research and Development

The following table presents our total research and development expenses by category:

		Nine Months Ended September 30,								Change
(in thousands)		2026				2025				Amount				%
Research and development expenses
R&D personnel expense		$	12,971			$	13,829			$	(858	)			(6.2	%)
Clinical expenses			2,759				1,560				1,199				76.9	%
Quality assurance			634				273				361				132.2	%
Contract manufacturing, materials & components			1,908				1,744				164				9.4	%
Facility allocation & depreciation			1,462				208				1,254				602.9	%
Total research and development expense		$	19,734			$	17,614			$	2,120				12.0	%

Research and development expenses increased by $2.1 million, or 12.0%, during the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025. Clinical expenses increased by $1.2 million as a result of higher expenses related to WiSE CRT post-approval study. Facility-related expenses and depreciation increased by $1.2 million, as a result of our new laboratory in Santa Clara, CA. Quality assurance expenses increased by $0.4 million and contract manufacturing expenses increased by $0.2 million primarily due to higher expenses incurred to support product development projects. These increases were partially offset by a $0.9 million decrease in personnel-related expenses due to the reallocation of employees from research and development to selling and manufacturing activities, as a result of the shift in business focus towards commercialization during the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025.

Selling, General and Administrative Expenses

Selling, General and administrative expenses increased by $14.4 million, or 92.8%, during the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025. Personnel-related expenses including salaries, bonuses, stock-based compensation and certain fringe benefits increased by $7.9 million, as a result of the expansion of our workforce to support increased adoption of our WiSE CRT System. Travel-related expenses increased by $3.7 million due to increased travel to support our sales and marketing efforts. Professional fees increased by $1.2 million, primarily resulting from higher legal and consulting services fees. Corporate expenses increased by $0.7 million, primarily resulting from the higher expenses related to insurance premiums, investor relations, and computer software licenses. Facility related and other expenses increased by $0.9 million, primarily resulting from the higher expenses for our new corporate headquarters and manufacturing facility.

Other expense, net

Other expense, net increased by $0.4 million during the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025. This increase primarily resulted from a $0.5 million decrease in interest income earned on investments in marketable securities, including the accretion of discounts on marketable securities, and a $0.2 million decrease in other income from refundable tax incentives, which were partially offset by a $0.3 million decrease in interest expense.

Liquidity and Capital Resources

We manage our cash and capital structure to maximize shareholder return, maintain our financial condition, and maintain flexibility for future strategic initiatives. We continuously assess our working capital needs, debt and leverage levels, debt maturity schedule, capital expenditure requirements and future investments. As of September 30, 2026 and December 31, 2025, we had approximately $93.2 million and $54.2 million, respectively, in cash, cash equivalents, and marketable securities. Based on our cash, cash equivalents, and marketable securities as of September 30, 2026, and our expectation to generate operating losses, negative operating cash flows in the foreseeable future, and the repayment of notes payable, there exists substantial doubt regarding our ability to continue as a going concern for a period of at least twelve months from the date of this Form 10-Q.

Going concern consideration

The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities during the normal course of business. For the nine months ended September 30, 2026 and 2025, we incurred a net loss of $51.2 million and $34.7 million, respectively. During the nine months ended September 30, 2026 and 2025, we had negative cash flows from operations of $54.7 million and $38.2 million, respectively. As of September 30, 2026, we had working capital of $58.3 million and accumulated deficit of $453.4 million. Additionally, the Company has $41.8 million of debt obligations coming due within the next twelve months. These factors raise substantial doubt about our ability to continue as a going concern. Until we are able to generate consistent and sufficient revenue from sales of our WiSE CRT System, our ability to continue as a going concern is dependent on our ability to raise additional capital through the issuance of additional common stock or borrowings from financial institutions. Our ability to obtain additional financing is subject to several factors, including market and economic conditions, our performance, and investor sentiment with respect to our company and our industry, however no assurance can be given as to whether additional needed financing will be available on terms acceptable to the Company, or at all.

Loan and Security Agreements

On June 30, 2022, we entered into a loan and security agreement with Runway Growth Finance Corp. The debt is secured against substantially all of our assets, except for intellectual property, but includes all proceeds from the sale of intellectual property. The loan agreement provides three term loan tranches. We received the initial draw of $20.0 million in June 2022. We received positive interim analysis data, sufficient to proceed with the clinical trial and premarket approval submission to the U.S. Food and Drug Administration, which allowed us to draw the second tranche of $20.0 million in June 2023. The final tranche provided $10.0 million from the date of approval from the FDA for the WiSE CRT System and ended on June 30, 2024. We did not receive FDA approval by June 30, 2024, and therefore did not meet the draw requirements of the third and final tranche.

Interest on the term loan accrues on the principal amount outstanding at a floating per annum rate equal to the greater of the rate of interest noted in The Wall Street Journal Money Rates section, as the "Prime Rate" or 4.00% plus a margin of 4.9% and is payable monthly in arrears and shall be computed on the basis of a 360-day year for the actual number of days elapsed. We are required to make interest only payments from July 2022 to May 2027. The note payable has a maturity date of June 15, 2027, at which time any unpaid interest, outstanding principal balance, and a final payment of 4.5% of the original principal amount borrowed shall be due in full. If we repay the loan prior to maturity, we will be required to pay a prepayment fee of 0.5% of the outstanding principal balance. We are also required to pay a 3% success fee of the funded principal amount of the term loan at the time of a liquidity event, as defined in the loan and security agreement. The success fee is enforceable within 10 years from the execution date of the agreement.

As of September 30, 2026 and December 31, 2025, the outstanding principal balance was $41.8 million, which included the principal borrowings under tranche one and tranche two, as well as the final payment of 4.5% of the principal borrowings to date.

We are subject to customary financial and reporting covenants under the loan and security agreement. As of September 30, 2026 and December 31, 2025, we were in compliance with all debt covenants.

Future Funding Requirements

Despite recent FDA approval of WiSE CRT System, the outcome of any clinical activities and/or regulatory approval process is highly uncertain, we cannot reasonably estimate whether our future development activities may succeed; or whether we will be able to effectively commercialize WiSE CRT System in the U.S., if at all. We may never recoup our investment in any WiSE CRT System development which would adversely affect our financial condition and our business and business prospects. In addition, our plans and timing expectations could be further delayed or interrupted by the effects of macroeconomic or other global conditions, including those resulting from inflation, rising interest rates, prospects of a recession, bank failures and other disruptions to financial systems, civil or political unrest, military conflicts, pandemics or other health crises and supply chain and resource issues.

To date, we have not generated significant commercial product revenue. We will continue to require additional capital to successfully commercialize WiSE CRT System and fund operations for the foreseeable future. Our primary uses of cash are to fund our operations, which consist primarily of research and development expenses, manufacturing automation and scaleup, and selling, general and administrative expenses. We expect our expenses to continue to increase in connection with our ongoing activities as we continue to commercialize WiSE CRT System.

We may seek to raise capital through equity offerings or debt financings, collaboration agreements, or other arrangements with other companies, or through other sources of financing. Adequate additional funding may not be available to us on acceptable terms or at all. Our failure to raise capital as and when needed could have a negative impact on our consolidated financial condition and our ability to pursue our business strategies. We anticipate that we will need to raise substantial additional capital, the requirements of which will depend on many factors, including:

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the degree of success we experience in commercializing our WiSE CRT System;

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the cost, timing and results of our post-marketing trial and regulatory reviews;

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the cost of our research and development activities for new and modified products;

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the cost and timing of growing our sales, marketing and distribution capabilities;

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the terms and timing of any collaborative, licensing and other arrangements that we may establish, including any contract manufacturing arrangements;

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the timing, receipt and amount of sales from our WiSE CRT System;

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the emergence of competing or complementary technologies;

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the impact of global business, political and macroeconomic conditions, including inflation, rising interest rates, uncertainty with respect to the federal budget, instability in the global banking system, volatile market conditions, supply chain disruptions, cybersecurity events, and global events, including regional conflicts around the world;

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the cost of preparing, filing, prosecuting, maintaining, defending and enforcing any patent claims and other intellectual property rights; and

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the extent to which we acquire or invest in businesses, products or technologies, although we currently have no commitments or agreements relating to any of these types of transactions.

If we raise additional capital through debt financing, we may be subject to covenants that restrict our operations including limitations on our ability to incur liens or additional debt, pay dividends, make certain investments, and engage in certain merger, consolidation, or asset sale transactions. Any debt financing or additional equity that we raise may contain terms that are not favorable to us. If we raise funds through collaborations, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs, product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds when needed, we may be required to delay, reduce, or terminate some or all of our development programs and clinical trials or delay investments in our manufacturing scale-up and automation. In addition, our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and the recent disruptions to and volatility in the credit and financial markets. Furthermore, this Quarterly Report on Form 10-Q contains statements expressing substantial doubt about our ability to continue as a going concern. If we seek additional financing to fund our business activities in the future and there remains substantial doubt about our ability to continue as a going concern, investors or other financing sources may be unwilling to provide funding to us on commercially reasonable terms, if at all.

Contractual Obligations and Commitments

As of September 30, 2026, we had $0.2 million in operating lease obligations for our corporate headquarters and laboratory space located in Sunnyvale, California. Additionally, in January 2025, we entered into a new lease agreement for our new corporate headquarters, laboratory and manufacturing facility in Santa Clara, California, for which we had recorded $18.3 million in operating lease obligations as of September 30, 2026.

As of September 30, 2026, the outstanding principal balance under our loan and security agreement described above was $41.8 million, which included the principal borrowings under tranche one and tranche two, as well as the final payment of 4.5% of the principal borrowings to date.

In addition, we have agreements with suppliers and other parties to purchase inventory. Product inventory obligations consist primarily of purchase order commitments for raw materials and sub-assemblies used in the production of the WiSE CRT System. In certain instances, our purchase agreements allow us to cancel, reschedule, or adjust our purchase requirements based on our business needs prior to firm orders being placed. As of September 30, 2026, our obligations under such arrangements were approximately $14.0 million.

Working Capital

September 30, 2026, Compared to December 31, 2025

As of September 30, 2026, we had working capital of $58.3 million, comprised of current assets of $110.8 million and current liabilities of $52.5 million. Current assets, consisting of cash and cash equivalents, marketable securities, accounts and other receivables, inventory, prepaid expenses, and other current assets, increased by $37.7 million as of September 30, 2026, compared to December 31, 2025. The capital raises completed in 2026 contributed to the overall increase in cash, cash equivalents and marketable securities, resulting in a $32.2 million increase in working capital as of September 30, 2026. The capitalization of inventory resulted in a $5.1 million increase in working capital. A $0.4 million increase in accounts receivable was primarily due to a $2.1 million increase in amounts outstanding from customers and contract manufacturers, offset by a $1.7 million decrease accounts receivable from reimbursements for leasehold improvements. Additionally, a $1.2 million increase in other current assets, primarily due to an increase in deferred costs of goods sold, was offset by a $1.2 million decrease in prepaid expenses attributable to higher amortization of prepaid expenses in 2026.

Current liabilities, consisting primarily of accounts payable, accrued liabilities, lease obligations, interest payable, and current portion of notes payable increased by approximately $38.5 million as of September 30, 2026, compared to December 31, 2025. The increase primarily resulted from a $41.4 million increase in notes payable which was reclassified into current liability, as it becomes due within the next twelve months. This increase was partially offset by a $2.7 million decrease in accounts payable and accrued expenses, which were mainly due to the activity related to construction of leasehold improvements at the new corporate headquarters and purchases of raw materials, and a $0.2 million decrease in operating lease liabilities.

Cash Flows

September 30, 2026, Compared to September 30, 2025

The following table summarizes our cash flows for the nine months ended September 30, 2026 and 2025:

		Nine Months Ended September 30,
(in thousands)		2026				2025
Net cash used in operating activities		$	(54,698	)		$	(38,181	)
Net cash used in investing activities			(36,819	)			(281	)
Net cash provided by financing activities			99,704				46,772
Effect of exchange rate change on cash			4				18
Net change in cash and cash equivalents		$	8,191			$	8,328

Operating Activities

Net cash used in operating activities during the nine months ended September 30, 2026, was $54.7 million, compared to $38.2 million during the nine months ended September 30, 2025, representing an increase in use of $16.5 million. This increase is primarily attributed to an increase in net loss of $16.5 million and an increase in use of cash from changes in working capital of $1.2 million, which were partially offset by an increase in non-cash adjustments of $1.2 million.

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The increase in net loss of $16.5 million primarily resulted from an increase in selling, general and administrative expenses, and research and development expenses, as further described under "Results of Operations" above.

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Non-cash items primarily consisted of decrease in accretion of discount on marketable securities of $0.2 million driven by fluctuating interest rates and maturity terms, a $0.7 million increase in stock-based compensation due to new options issuance to new hires and existing employees, and a $0.3 million increase in depreciation expense due to an increase in property and equipment at our new corporate headquarters, laboratory and manufacturing facility in Santa Clara, CA.

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The decrease in changes from working capital activities primarily consisted of $3.1 million increase in cash used for accounts payable due to the timing of invoice payments, $1.4 million increase in cash used for deposits to vendors, and a $1.4 million increase in cash used for the operating lease liability. These increases in the use of cash were partially offset by of $1.9 million increase in cash provided from accounts and other receivables due to collections on reimbursable leasehold improvements and outstanding invoices from customers, a $1.4 million increase in cash provided from accrued expenses, a $0.9 million decrease in cash used for inventory purchases, and a $0.5 million increase in cash from prepaid expenses.

Investing Activities

Net cash used by investing activities during the nine months ended September 30, 2026, was $36.8 million, compared to $0.3 million during the nine months ended September 30, 2025, representing an increase in cash used of $36.5 million. The increase was attributable to a $32.3 million increase in the purchase of marketable securities, as well as a $4.0 million increase in purchases of property and equipment during the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2026. In addition, cash provided from the maturities and sales of marketable securities decreased by $0.2 million during the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025.

Financing Activities

Net cash provided by financing activities during the nine months ended September 30, 2026 was $99.7 million, compared to $46.8 million during the nine months ended September 30, 2025, representing an increase of $52.9 million. This increase was primarily attributed to the $53.3 million increase in proceeds from a capital raise, net of issuance cost, during the nine months ended September 30, 2026, which was partially offset by a $0.4 million decrease in proceeds from exercise of stock options during the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025.