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, included in our Registration Statement on Form 10-12G, filed with the Securities and Exchange Commission (the "SEC") on March 18, 2026, as amended by Amendment No. 1 filed on April 24, 2026, and Amendment No. 2 filed on May 15, 2026, and effective as of May 18, 2026 (the "Registration Statement"). In addition to historical data, this discussion contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to our business, financial condition, results of operations, cash flows, and projections based on current expectations that involve risks, uncertainties, assumptions, and other important factors. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in Part II, Item 1A, "Risk Factors," of this Quarterly Report on Form 10-Q and in Item 1A, "Risk Factors," of our Registration Statement. 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 "will," "may," "expect," "intend," "seek," "would," "should," "could," "continue," "plan," "estimate," "anticipate," "believe," and similar expressions to identify forward-looking statements, but the absence of these words does not mean that a statement is not forward looking.

Overview

Imricor is a U.S.-based medical device company that is leading the new field of real-time iMR cardiac ablations - that is, cardiac ablations guided by real-time MR, rather than by conventional x-ray fluoroscopy. Our principal focus is the design, manufacturing, sale, and distribution of MR-compatible products for cardiac catheter ablation procedures.

The Vision-MR Ablation Catheter is our prime product offering, specifically designed to work under real-time MR guidance, with the intent of enabling higher success rates along with a faster and safer treatment compared to conventional procedures using x-ray guided catheters. The Vision-MR Ablation Catheter has been approved in the European Union ("EU"), Qatar, and the Kingdom of Saudi Arabia ("KSA") with an indication for treating Type I atrial flutter. We also have approval for the sale of our capital product, the Advantage-MR EP Recorder/Stimulator System, in the EU, Qatar, and KSA. We have approval for the sale of our capital product, the NorthStar Mapping System, in the EU, KSA, and the U.S.

We are continuing enrollment in our Vision-MR Ablation of Atrial Flutter ("VISABL-AFL") clinical trial to support U.S. market entry of the Vision-MR Ablation Catheter and RF-5000 ablation generator system. In parallel with the clinical trial, we have secured market clearance from the FDA for the Vision-MR Diagnostic Catheter and NorthStar Mapping System. We are pursuing approvals for our other products, including the Advantage-MR EP Recorder/Stimulator System and the Vision-MR Dispersive Electrode, while the VISABL-AFL clinical trial is ongoing.

We sell our capital and consumable products to hospitals and clinics for use in iMR labs, in which ablation procedures using the Vision-MR Ablation Catheter can be performed. We collaborate with GE Healthcare, Philips, and Siemens, the three leading global MR vendors who provide MR systems for iMR labs, to target certain sites and support the design and construction of iMR labs for those sites.

Financial Overview

Imricor is in the early commercialization phase and is not yet profitable as we continue to invest in clinical validation, regulatory approvals, and commercial infrastructure to support adoption of iMR procedures. As a result, for the nine months ended September 30, 2026, the Company incurred a net loss of $28,048 thousand on revenues of $212 thousand. Operating expenses, primarily in research and development, sales and marketing, and general and administrative functions, reflect planned investments in pursuing U.S. regulatory approval, expanding our clinical support and sales teams, and building iMR lab infrastructure in our target markets.

As of September 30, 2026, the Company had cash and cash equivalents of $62,100 thousand, compared to cash and cash equivalents of $19,502 thousand and marketable securities of $21,278 thousand as of December 31, 2025. We have funded our operations to date primarily through the sale of our common stock and CDIs and through indebtedness. We expect to continue to incur operating losses for the foreseeable future as we execute our commercialization and clinical strategies. We anticipate that achieving profitability will require significant growth in iMR procedure volume and geographic expansion, and the Company may require additional financing to support these objectives.

Key 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:

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Regulatory approvals/clearances. The sale of our products requires regulatory approval in each relevant jurisdiction. We are not assured of receiving future regulatory clearances for our existing products outside of the European Union or approvals for expanding indications or additional products currently in our product pipeline.

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Market adoption. Our ability to generate revenue is dependent on hospitals and clinics with ablation centers in markets where we obtain the required regulatory approval establishing an iMR lab and adopting our MR-compatible technology for cardiac catheter ablation procedures. While we work collaboratively with leading MR vendors to drive lab adoption, there can be no guarantee on the outcome.

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Competition. We expect to generate the vast majority of our future revenue from the sale of our products used for MR-guided cardiac ablation procedures. The medical device industry is competitive, subject to rapid change, and significantly affected by new product introductions. There are a number of other products and devices on the market which are not traditionally MR-compatible, but which are commonly used to perform conventional cardiac catheter ablation procedures. To this end, we will compete with larger companies who manufacture and sell ablation and diagnostic electrophysiology products. 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.

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Sales and marketing resources. We currently have limited sales and marketing resources and will need to, among other things, expand our sales team. We will sell all our products to hospitals and clinics either directly or through distributors and will therefore need to commit increased resources to sales and marketing to execute our current growth strategy. The rate at which we grow our sales force and the speed at which newly hired salespeople or distributors become effective can impact our revenue growth or our costs incurred in anticipation of such growth.

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

Recent Developments

On May 7, 2026, we completed a placement in which we issued 32,432,433 CDIs. We raised $41,586 thousand in net proceeds after deducting issuance costs. Proceeds from this placement will support our growth strategy and may be used for purposes including launching the NorthStar Mapping System in the U.S., advancing regulatory approvals, completing clinical trials, research and development activities, and associated offer costs.

On July 6, 2026, a total of 5,051,539 CDI options were exercised by holders of previously issued CDI options. We received total proceeds of $2,114 thousand, net of expenses. In connection with the exercise, the fair value of the option liabilities of $4,265 thousand as of the settlement date was reclassified to additional paid-in capital.

Components of our Consolidated Results of Operations

Revenues

We generate revenue from product sales and service revenue. Revenue is recognized when control of the product or service transfers to the customer. For product sales that contain a single performance obligation, revenue is recognized at a point in time when title to the goods and risk of loss transfers to the customer, which typically occurs upon shipment. For product sales that contain multiple performance obligations, such as equipment sales that include installation services, we allocate the transaction price to each performance obligation based on the estimated or observable standalone selling price and recognize revenue for each performance obligation when (or as) control is transferred to the customer and the performance obligation is satisfied. Service revenue is recognized over time as services are provided. Sales tax and value added taxes in foreign jurisdictions that are collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from net sales. Product sales include shipping and handling fees charged to customers. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of goods sold.

Product Revenue

Our product revenue is derived from sales of our cardiac ablation systems, associated consumables, and third-party equipment to hospitals, clinics, and other providers. Our primary products include the Vision-MR Ablation Catheter and Vision-MR Diagnostic Catheter, which are used in iMR-guided cardiac ablation procedures. Customers select our products based on clinical efficacy, ease of use, pricing, and third-party reimbursement availability. We currently derive revenue from both domestic and international markets, particularly the U.S. and the European Union, where we maintain a direct sales organization. In other international markets, including the Middle East, we distribute our products through exclusive distributors. We evaluate sales returns and allowances for variable consideration on a monthly basis and allowance for credit losses at each reporting period. We have historically not considered provisions for these items necessary.

Service Revenue

Our service revenue is derived from service agreements for maintenance on our Advantage-MR EP Recorder/Stimulator System and third-party equipment products provided to hospitals, clinics, and other providers. Service revenue is recognized over the contract period on a straight-line basis as customers benefit from the services throughout the service contract period.

Costs and Expenses

Cost of Goods Sold

Cost of goods sold represents costs directly related to production and distribution of our products, including raw materials and components, manufacturing labor, quality assurance testing, product sterilization and packaging, shipping and handling costs, and manufacturing overhead. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of goods sold. Manufacturing overhead costs include the cost of material procurement, inventory control, and equipment and operations supervision. Cost of goods sold also includes depreciation expense for product tooling, production equipment, and equipment placed at customer sites as part of commercial sales agreements. Costs associated with any inventory write-downs resulting from quarterly physical inventory counts and product obsolescence are also included within cost of goods sold. Fluctuations in our cost of goods sold correspond with the fluctuations in these costs as well as sales volume.

Sales and Marketing

Sales and marketing expenses consist primarily of sales and marketing personnel, field sales travel, trade show expenses, physician training and education programs, and consultant fees related to market development and commercialization strategy. We anticipate that our sales and marketing expenses will increase as we expand our direct sales force in the U.S. and EU, establish and support international distribution partnerships, and increase marketing investments to drive adoption of our MR-guided ablation systems.

Research and Development Expenses

Research and development expenses include salaries for our research and development, regulatory, quality, and clinical personnel, clinical trial expenses, regulatory submissions, manufacturing process improvements, product development costs, enhancements to our currently commercialized products, and additional investments in our product development pipeline. We expense research and development expenses as incurred. We track external costs on a development program basis for our key programs, including VISABL-AFL and Vision-MR Ablation of Ventricular Tachycardia ("VISABL-VT"). However, we do not track internal costs, including personnel related costs, equipment costs, facility costs, and supplies, on a development program basis because these costs are deployed across multiple programs and are monitored in total rather than by individual program. We generally expect that research and development expenses will increase as we conduct our VISABL-AFL and VISABL-VT clinical trials, pursue additional regulatory approvals in the U.S. and international markets, advance next-generation product development, and optimize our manufacturing processes.

General and Administrative Expenses

General and administrative expenses consist primarily of salaries for our executive, finance, accounting, and human resources personnel; share-based compensation; professional fees for accounting, audit, legal, and tax services; public company compliance costs; directors and officers liability insurance; and facility costs. We anticipate general and administrative expenses will increase as we hire additional personnel to support growth in our commercial and research and development teams, comply with SEC reporting requirements, and enhance our internal systems and controls infrastructure.

Other Income (Expense)

Other income (expense) consists primarily of changes in fair value of our financial instruments, including convertible notes (related party), option liabilities, and warrant liabilities that are remeasured to fair value at each reporting period, as well as interest income from our investments in cash, cash equivalents, and marketable securities. Additionally, other income and expense may include foreign currency exchange gains and losses resulting from remeasurements on our cash holdings, receivables, leases, and liabilities denominated in foreign currencies such as Euros and Australian dollars, government grant income related to our research and development activities, and interest expense on financing agreements.

Results of Operations

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

		Three Months Ended September 30,								Change
(in thousands)		2026				2025				Amount						%
				​				​				​				​
Revenues		$	188			$	35			$	153				437	%
				​				​				​				​
Costs and Expenses:				​				​				​				​
Cost of goods sold			616				702				(86	)			(12	)%
Sales and marketing			1,500				1,101				399				36	%
Research and development			4,257				2,578				1,679				65	%
General and administrative			1,989				1,423				566				40	%
Total Costs and Expenses			8,362				5,804				2,558				44	%
				​				​				​				​
Loss from Operations			(8,174	)			(5,769	)			(2,405	)			42	%
				​				​				​				​
Total Other Income (Expense)			5,264				2,275				2,989				131	%
				​				​				​				​
Net Loss		$	(2,910	)		$	(3,494	)		$	584				(17	)%

Revenues

Our revenue is derived from product revenue and service revenue. We earned revenue of $188 thousand for the three months ended September 30, 2026, as compared to revenue of $35 thousand for the three months ended September 30, 2025, an increase of $153 thousand. The increase in revenue compared to the prior period was primarily due to our first U.S. sale of our NorthStar Mapping System in September 2026.

Cost of Goods Sold

Cost of goods sold during the three months ended September 30, 2026, were $616 thousand, compared to $702 thousand during the three months ended September 30, 2025, representing a decrease of $86 thousand. The decrease in cost of goods sold was primarily due to a $287 thousand favorable change in inventory absorption resulting from higher production levels, including production of clinical trial materials and equipment, relative to sales during the three months ended September 30, 2026, compared to the corresponding period in 2025. Additionally, inventory reserve expense decreased $102 thousand during the three months ended September 30, 2026, compared to the corresponding period in 2025. These decreases were partially offset by higher personnel-related costs compared to the prior period. Personnel-related costs, including salaries, bonuses, benefits, and other employee expenses, increased $290 thousand following the expansion of our manufacturing team which resulted in a higher number of employees during the three months ended September 30, 2026, compared to the corresponding period in 2025.

Sales and Marketing

Sales and marketing expenses during the three months ended September 30, 2026, were $1,500 thousand, compared to $1,101 thousand during the three months ended September 30, 2025, representing an increase of $399 thousand. This increase was primarily attributed to higher personnel-related costs of $254 thousand, including salaries, bonuses, benefits, and other employee expenses, reflecting the expansion of our sales and marketing teams which resulted in a higher number of sales and marketing employees during the three months ended September 30, 2026, compared to the corresponding period in 2025. Additionally, event-related sales and marketing expenses increased $60 thousand, driven by increased spending for trade shows and conventions.

Research and Development

Research and development expenses during the three months ended September 30, 2026, were $4,257 thousand, compared to $2,578 thousand during the three months ended September 30, 2025, representing an increase of $1,679 thousand. This increase was primarily attributed to higher personnel-related costs during the three months ended September 30, 2026, compared to the corresponding period in 2025, which increased $1,316 thousand, of which $395 thousand relates to an increase in stock-based compensation expense, driven primarily by the achievement of performance-based vesting conditions for equity awards previously granted to research and development employees. The remaining increase in personnel-related costs, including salaries, bonuses, benefits, and other employee expenses, was driven by a higher number of research and development employees during the three months ended September 30, 2026, compared to the corresponding period in 2025, to support multiple concurrent development programs and regulatory initiatives. Additionally, professional services, including consulting expenses, increased $260 thousand during the three months ended September 30, 2026, compared to the corresponding period in 2025, primarily to support these development programs, regulatory initiatives, and clinical trial activities. External clinical expenses increased $148 thousand, reflecting expanded clinical trial activities, driven by an increase of $150 thousand in external costs associated with the VISABL-VT trial, primarily due to costs associated with inventory designated for use in the VISABL-VT trial during the three months ended September 30, 2026, compared to the corresponding period in 2025.

General and Administrative

General and administrative expenses during the three months ended September 30, 2026, were $1,989 thousand, compared to $1,423 thousand during the three months ended September 30, 2025, representing an increase of $566 thousand. This increase was primarily attributed to higher personnel-related costs, which increased $559 thousand during the three months ended September 30, 2026, compared to the corresponding period in 2025, of which $436 thousand relates to an increase in stock-based compensation expense, driven primarily by the achievement of performance-based vesting conditions for equity awards previously granted to general and administrative employees. The remaining increase in personnel-related costs, including salaries, bonuses, benefits, and other employee expenses, was driven by a higher number of general and administrative employees during the three months ended September 30, 2026, compared to the corresponding period in 2025, to support the additional reporting obligations associated with the SEC registration and growth in personnel in preparation for anticipated U.S. commercialization following expected FDA approval.

Other Income (Expense)

Total other income (expense) during the three months ended September 30, 2026, was income of $5,264 thousand, compared to income of $2,275 thousand during the three months ended September 30, 2025, representing an increase in income of $2,989 thousand. This increase was primarily attributed to favorable changes in non-cash expenses from changes in fair value of convertible notes (related party), option liabilities, and warrant liabilities, which together increased from income of $1,803 thousand for the three months ended September 30, 2025, to income of $4,436 thousand for the three months ended September 30, 2026, representing a favorable change of $2,633 thousand. A favorable change in foreign currency exchange gain, primarily related to foreign currency remeasurement on our cash held in Australian dollars, further contributed $211 thousand to the increase in income during the three months ended September 30, 2026, compared to the corresponding period in 2025.

Net loss

As a result of the above factors, our net loss was $2,910 thousand for the three months ended September 30, 2026, as compared to a net loss of $3,494 thousand for the three months ended September 30, 2025. We expect to continue incurring net losses until such time as we obtain additional regulatory approvals for our MR-compatible cardiac catheter ablation products, expand our commercialization, and generate sufficient revenue to offset our costs and expenses.

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

		Nine Months Ended September 30,								Change
(in thousands)		2026				2025				Amount						%
				​				​				​				​
Revenues		$	212			$	232			$	(20	)			(9	)%
				​				​				​				​
Costs and Expenses:				​				​				​				​
Cost of goods sold			2,010				1,514				496				33	%
Sales and marketing			4,319				3,305				1,014				31	%
Research and development			11,993				8,341				3,652				44	%
General and administrative			5,799				3,953				1,846				47	%
Total Costs and Expenses			24,121				17,113				7,008				41	%
				​				​				​				​
Loss from Operations			(23,909	)			(16,881	)			(7,028	)			42	%
				​				​				​				​
Total Other Income (Expense)			(4,139	)			246				(4,385	)			(1,783	)%
				​				​				​				​
Net Loss		$	(28,048	)		$	(16,635	)		$	(11,413	)			69	%

Revenues

Our revenue is derived from product revenue and service revenue. We earned revenue of $212 thousand for the nine months ended September 30, 2026, as compared to revenue of $232 thousand for the nine months ended September 30, 2025, a decrease of $20 thousand. The decrease in revenue compared to the prior period was primarily due to a decrease in product revenue, resulting from lower sales volumes of consumable devices of $97 thousand and a customer return of consumable devices totaling $76 thousand during the nine months ended September 30, 2026. The decrease in consumable product revenue was primarily offset by the increase in equipment revenue of $157 thousand, due primarily to our first U.S. sale of our NorthStar Mapping System in September 2026. Service revenue remained relatively constant compared to the prior period, due to ongoing maintenance and support services provided to existing customers throughout the year.

The decrease in consumable sales volumes was primarily attributable to certain customer sites in Europe exclusively enrolling patients in our VISABL-AFL clinical trial. Consumable devices used in clinical trial procedures are not recognized as product revenue. During the nine months ended September 30, 2025, these customer sites performed commercial procedures, resulting in recognized product revenue, before they began enrolling patients in our VISABL-AFL clinical trial. We currently expect that, following completion of enrollment in our VISABL-AFL clinical trial, these customer sites in the European Union will transition back to commercial use of our consumable devices, and based on our assessment, this trend is reasonably likely to have a favorable impact on future product revenue. The customer return of consumable devices reflects a one-time concession, and management does not expect customer returns to become a recurring or significant component of revenue adjustments.

Cost of Goods Sold

Cost of goods sold during the nine months ended September 30, 2026, were $2,010 thousand, compared to $1,514 thousand during the nine months ended September 30, 2025, representing an increase of $496 thousand. The increase in cost of goods sold was primarily due to higher personnel-related costs compared to the prior period. Personnel-related costs, including salaries, bonuses, benefits, and other employee expenses, increased $937 thousand following the expansion of our manufacturing and quality assurance teams which resulted in a higher number of employees during the nine months ended September 30, 2026, compared to the corresponding period in 2025. This increase was partially offset by a $548 thousand favorable change in inventory absorption resulting from higher production levels, including production of clinical trial materials and equipment, relative to sales during the nine months ended September 30, 2026, compared to the corresponding period in 2025.

Sales and Marketing

Sales and marketing expenses during the nine months ended September 30, 2026, were $4,319 thousand, compared to $3,305 thousand during the nine months ended September 30, 2025, representing an increase of $1,014 thousand. This increase was primarily attributed to higher event-related sales and marketing expenses of $424 thousand, driven by increased spending for trade shows, conventions and related marketing materials during the nine months ended September 30, 2026, compared to the corresponding period in 2025. Additionally, personnel-related costs, including salaries, bonuses, benefits, and other employee expenses, increased $341 thousand, reflecting the expansion of our sales and marketing teams which resulted in a higher number of sales and marketing employees during the nine months ended September 30, 2026, compared to the corresponding period in 2025. There were also higher travel expenses for field sales activities. Travel expenses, including airfare and lodging costs associated with field demonstrations and customer engagement, increased $192 thousand during the nine months ended September 30, 2026, compared to the corresponding period in 2025.

Research and Development

Research and development expenses during the nine months ended September 30, 2026, were $11,993 thousand, compared to $8,341 thousand during the nine months ended September 30, 2025, representing an increase of $3,652 thousand. This increase was primarily attributed to higher personnel-related costs during the nine months ended September 30, 2026, compared to the corresponding period in 2025, which increased $3,011 thousand, of which $696 thousand relates to an increase in stock-based compensation expense, driven primarily by the achievement of performance-based vesting conditions for equity awards previously granted to research and development employees. The remaining increase in personnel-related costs, including salaries, bonuses, benefits, and other employee expenses, was driven by a higher number of research and development employees during the nine months ended September 30, 2026, compared to the corresponding period in 2025, to support multiple concurrent development programs and regulatory initiatives. Additionally, external clinical expenses increased $646 thousand during the nine months ended September 30, 2026, compared to the corresponding period in 2025, reflecting expanded clinical trial activities, driven by an increase of $475 thousand in external costs associated with the VISABL-AFL trial, as new hospitals join the clinical trial. Professional services, including consulting expenses, increased $540 thousand, primarily to support these development programs, regulatory initiatives, and clinical trial activities. These increases were partially offset by a decrease in prototype and testing expenses of $563 thousand during the nine months ended September 30, 2026, compared to the corresponding period in 2025.

General and Administrative

General and administrative expenses during the nine months ended September 30, 2026, were $5,799 thousand, compared to $3,953 thousand during the nine months ended September 30, 2025, representing an increase of $1,846 thousand. This increase was primarily attributed to higher personnel-related costs, which increased $1,198 thousand during the nine months ended September 30, 2026, compared to the corresponding period in 2025, of which $821 thousand relates to an increase in stock-based compensation expense, driven primarily by the achievement of performance-based vesting conditions for equity awards previously granted to general and administrative employees. The remaining increase in personnel-related costs, including salaries, bonuses, benefits, and other employee expenses, was driven by a higher number of general and administrative employees during the nine months ended September 30, 2026, compared to the corresponding period in 2025, to support the additional reporting obligations associated with the SEC registration and growth in personnel in preparation for anticipated U.S. commercialization following expected FDA approval. Additionally, professional services, including audit and legal expenses, increased $583 thousand during the nine months ended September 30, 2026, compared to the corresponding period in 2025, primarily due to additional audit and compliance requirements associated with SEC registration and reporting obligations.

Other Income (Expense)

Total other income (expense) during the nine months ended September 30, 2026, was an expense of $4,139 thousand, compared to income of $246 thousand during the nine months ended September 30, 2025, representing an increase in expense of $4,385 thousand. This increase was primarily attributed to higher non-cash expenses from changes in fair value of convertible notes (related party), option liabilities, and warrant liabilities, which together increased from expense of $2,513 thousand for the nine months ended September 30, 2025, to expense of $5,350 thousand for the nine months ended September 30, 2026, representing an unfavorable change of $2,838 thousand. An unfavorable change in foreign currency exchange gain, primarily related to foreign currency remeasurement on our cash held in Australian dollars, further contributed $1,230 thousand to the increase in expense during the nine months ended September 30, 2026, compared to the corresponding period in 2025.

Net loss

As a result of the above factors, our net loss was $28,048 thousand for the nine months ended September 30, 2026, as compared to a net loss of $16,635 thousand for the nine months ended September 30, 2025. We expect to continue incurring net losses until such time as we obtain additional regulatory approvals for our MR-compatible cardiac catheter ablation products, expand our commercialization, and generate sufficient revenue to offset our costs and expenses.

Liquidity and Capital Resources

We believe that, considering our cash and cash equivalents as of September 30, 2026, we maintain adequate liquidity to allow us to meet our financial obligations as they become due for the next 12 months from the date these unaudited condensed consolidated financial statements are available to be issued. Our principal short-term cash requirements consist of funding operating expenses, including commercialization activities, research and development activities, clinical trials, and working capital needs. We continuously assess our working capital needs, financing obligations, commitments, and future investment requirements. As of September 30, 2026, we had cash and cash equivalents of $62,100 thousand. As of December 31, 2025, we had cash and cash equivalents of $19,502 thousand and marketable securities of $21,278 thousand.

A portion of our cash and cash equivalents is denominated in foreign currencies. As of September 30, 2026, and December 31, 2025, cash and cash equivalents denominated in foreign currencies totaled $20,019 thousand and $11,967 thousand, respectively, representing 32% and 29% of our total cash, cash equivalents, and marketable securities for those periods, and were held primarily in Australian dollars. These foreign currency denominated balances are remeasured into U.S. dollars at period-end exchange rates.

For the nine months ended September 30, 2026 and 2025, foreign currency exchange gain of $25 thousand and $1,255 thousand, respectively, primarily reflected remeasurement effects on our Australian dollar-denominated cash, with the gain during the nine months ended September 30, 2025, largely driven by favorable changes in the Australian dollar exchange rate from December 31, 2024 to September 30, 2025. Consistent with the foreign currency exchange gain of $25 thousand, the effect of foreign currency exchange rate changes on cash and cash equivalents reported in our unaudited condensed consolidated statements of cash flows was $39 thousand for the nine months ended September 30, 2026, which consists of $687 thousand of realized gains and $(648) thousand of unrealized losses for the nine months ended September 30, 2026.

Long-term cash requirements are expected to primarily relate to continued investments in commercialization activities, research and development activities, clinical trials, and other working capital needs. Our future capital requirements will depend on several factors, including the pace of commercialization activities, our ability to generate revenue from product sales, and costs associated with ongoing research and development, clinical trials, and regulatory submissions. In the long term, we expect to fund these activities through a combination of existing cash resources, cash generated from future operations, and, if necessary, issuances of equity or debt financings.

We may require additional capital to fund our future business activities and execute our growth strategy. To the extent additional funds are necessary, we may seek additional funds through the issuance of equity securities, debt financing, or other strategic transactions. If we raise additional funds by issuing equity securities, the interests held in the Company by stockholders and CDI holders may be diluted. Debt financing, if available, would result in increased fixed payment obligations and may involve covenants restricting our ability to incur additional debt, limitations on our ability to acquire, sell, or license intellectual property rights, and other operating restrictions that could adversely impact our ability to conduct our business. We cannot guarantee the future availability of funds or that the funds will be available on terms that are favorable to us. If we are unable to obtain or maintain sufficient financial resources, our business, financial condition, and results of operations will be materially and adversely affected, including potentially requiring us to delay, limit, reduce, or terminate certain research and development activities or commercialization efforts.

Working Capital

As of September 30, 2026, we had working capital of $33,663 thousand, comprised of current assets of $65,652 thousand and current liabilities of $31,989 thousand. As of December 31, 2025, we had working capital of $25,546 thousand, comprised of current assets of $42,917 thousand and current liabilities of $17,371 thousand.

At both September 30, 2026 and December 31, 2025, current liabilities included the current portions of our convertible notes (related party) measured at fair value. As of September 30, 2026, the convertible notes (related party) had a fair-value carrying amount of $29,107 thousand, compared with outstanding contractual principal and accrued interest of $7,075 thousand, consisting of $3,333 thousand for the first tranche and $3,742 thousand for the second tranche. The first and second tranches are scheduled to mature on December 23, 2026 and March 28, 2027, respectively, unless earlier maturity is triggered by a change-in-control event. Unless converted at the holder's election, outstanding principal and accrued interest are payable in cash at maturity. The amounts outstanding at September 30, 2026, exclude additional interest accruing through maturity. We have sufficient cash and cash equivalents to repay the contractual principal and accrued interest on the convertible notes (related party) at their scheduled maturity dates if the holder does not elect to convert the notes. We also have sufficient authorized and unissued shares of common stock available to satisfy conversion of the notes if elected by the holder. See Note 7 - Convertible Notes with Warrants (related party) to our unaudited condensed consolidated financial statements for the nine months ended September 30, 2026, included elsewhere in this Quarterly Report on Form 10-Q, for further details.

Current assets increased by $22,735 thousand as of September 30, 2026, compared to December 31, 2025, primarily driven by an increase in cash and cash equivalents of $42,598 thousand, which was partially offset by a decrease in marketable securities of $21,278 thousand. Current liabilities increased by $14,618 thousand as of September 30, 2026, compared to December 31, 2025, primarily due to an increase in the current portion of convertible notes (related party) of $17,362 thousand. The increase in the current portion of convertible notes (related party) reflects both the $4,093 thousand increase in the fair value of these notes during the period and the reclassification of the second tranche, with a fair value of $13,269 thousand as of December 31, 2025, from noncurrent to current as of September 30, 2026. The increase in current liabilities was partially offset by the elimination of option liabilities of $3,158 thousand resulting from the exercise of all outstanding CDI options in July 2026. Accordingly, no option liabilities remained outstanding as of September 30, 2026.

Cash Flows

The following table summarizes our cash flows for the nine months ended September 30:

		Nine Months Ended September 30,								Change
(in thousands)		2026				2025				Amount						%
Net cash used in operating activities		$	(21,365	)		$	(13,939	)		$	(7,426	)			53	%
Net cash provided by (used in) investing activities			20,173				(7,705	)			27,878				(362	)%
Net cash provided by financing activities			43,751				42,990				761				2	%
Net change in cash			42,559				21,346				21,213				99	%
Beginning cash balance			19,502				15,708				3,794				24	%
Effect of exchange rate changes on cash			39				1,285				(1,246	)			(97	)%
Ending cash balance		$	62,100			$	38,339			$	23,761				62	%

Operating Activities

Net cash used in operating activities during the nine months ended September 30, 2026, was $21,365 thousand, compared to net cash used in operating activities of $13,939 thousand during the nine months ended September 30, 2025, representing an increase in cash used of $7,426 thousand. This increase was primarily attributed to an increase in net loss of $11,413 thousand period over period, partially offset by changes in non-cash items that impacted net loss but did not result in corresponding cash outflows. Non-cash items included the change in stock-based compensation expense, fair value of convertible notes, foreign currency exchange gain, and change in fair value of option liabilities. The period-over-period increases in these items were $1,816 thousand, $1,716 thousand, $1,230 thousand, and $1,091 thousand, respectively. Unfavorable changes in working capital, including higher cash outflows related to inventories of $1,348 thousand, further contributed to the increase in net cash used in operating activities.

Investing Activities

Net cash provided by investing activities during the nine months ended September 30, 2026, was $20,173 thousand, compared to net cash used in investing activities of $7,705 thousand during the nine months ended September 30, 2025, representing an increase in cash provided of $27,878 thousand. This increase was primarily attributed to net cash inflows from maturities of marketable securities, net of purchases, of $21,278 thousand during the nine months ended September 30, 2026, compared to net cash outflows from purchases of marketable securities of $7,406 thousand during the nine months ended September 30, 2025.

Financing Activities

Net cash provided by financing activities during the nine months ended September 30, 2026, was $43,751 thousand, compared to net cash provided by financing activities of $42,990 thousand during the nine months ended September 30, 2025, representing an increase in cash provided of $761 thousand. During the nine months ended September 30, 2026, financing cash flows primarily consisted of net proceeds of $41,586 thousand from an equity raise completed in May 2026 and net proceeds of $2,114 thousand from exercises of CDI options in July 2026. During the corresponding period in 2025, financing cash flows primarily consisted of net proceeds of $42,828 thousand from an equity raise completed in March 2025. For additional information, see Note 9 - Stockholders' Equity in the unaudited condensed consolidated financial statements for the nine months ended September 30, 2026 and 2025, included elsewhere in this Quarterly Report on Form 10-Q.

Contractual Obligations and Commitments

There have been no material changes in our contractual obligations and commitments from those disclosed in Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations," of our Registration Statement, other than routine changes in the ordinary course of business. For additional information, see Note 5 - Leases and Note 6 - Commitments and Contingencies in the unaudited condensed consolidated financial statements for the nine months ended September 30, 2026 and 2025, included elsewhere in this Quarterly Report on Form 10-Q.

Securities Purchase Agreement

There have been no material changes to the terms, principal amounts, related warrants, or conversion features of our unsecured, unquoted convertible promissory notes issued under the Securities Purchase Agreement from those described in Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations," of our Registration Statement. For additional information, see Note 7 - Convertible Notes with Warrants (related party) in the unaudited condensed consolidated financial statements for the nine months ended September 30, 2026 and 2025, included elsewhere in this Quarterly Report on Form 10-Q.

Capital Commitments

On July 6, 2023, we entered into a Capital Commitment Agreement with GEM Global Yield LLC SCS ("GGY") under which GGY agreed to provide us with up to $30 million Australian dollars through a Security Subscription Facility (the "Facility") over a 3-year term. We controlled the timing of drawdowns under the Facility and there was no minimum drawdown obligation. The Facility expired in accordance with its terms on July 6, 2026 and is no longer available as a source of liquidity. The expiration of the Facility did not have a material impact on our liquidity or capital resources.

Recent Financings

On May 7, 2026, we completed a placement in which we issued 32,432,433 CDIs. We raised $41,586 thousand in net proceeds after deducting issuance costs. Proceeds from this placement will support our growth strategy and may be used for purposes including launching the NorthStar Mapping System in the U.S., advancing regulatory approvals, completing clinical trials, research and development activities, and associated offer costs.

On July 6, 2026, a total of 5,051,539 CDI options were exercised by holders of previously issued CDI options. We received total proceeds of $2,114 thousand, net of expenses. In connection with the exercise, the fair value of the option liabilities of $4,265 thousand as of the settlement date was reclassified to additional paid-in capital.

Off-Balance Sheet Arrangements

As of September 30, 2026 and December 31, 2025, we did not have any off-balance sheet arrangements, except as discussed in Note 6 - Commitments and Contingencies to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Critical Accounting Estimates

Our critical accounting estimates are more fully described in Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations," of our Registration Statement. There have been no significant changes to our critical accounting estimates since the date of the Registration Statement.

Recent Accounting Pronouncements

See the section titled "Summary of Significant Accounting Policies-Recent Accounting Pronouncements" in Note 1 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.