What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-03-05 compared with 2025-03-07 · 103 added, 141 removed, 628 unchanged (28% of the section changed)

33 unchanged sentences

Recurring non-capital revenue consists of revenues from the sale of one-time-use devices and services associated with extended warranties.

Capital equipment revenue consists of revenues from the sale of capital equipment including installation and training amounts.

Capital equipment revenue consists of revenues from the sale of capital equipment including installation and training amounts, which includes sales to distributors.

The amount of revenue to be recognized is based on the transaction price the Company expects to receive in exchange for its goods and services.

4 unchanged sentences

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included, among others, evaluating the recognition of revenue on a sample basis by (i) evaluating the customer contract terms;

These procedures included, among others, evaluating the recognition of revenue on a sample basis by (i) evaluating contract terms;

(ii) identifying and assessing performance obligations;

6 unchanged sentences

Profound Medical Corp.

Consolidated Balance Sheet

Consolidated Balance Sheets

As at December 31, 2025 and 2024

5 unchanged sentences

Total current assets

Trade and other receivables, net (note 3)

Property and equipment, net (note 5)

8 unchanged sentences

Lease liabilities (note 9)

Income tax payable

Total current liabilities

Deferred tax liabilities, net (note 13)

Deferred revenue

14 unchanged sentences

Consolidated Statements of Operations and Comprehensive Loss

For the year ended December 31, 2024 and 2023

For the years ended December 31, 2025 and 2024

In USD (000s)

13 unchanged sentences

Net loss before income taxes

Income tax (recovery) expense (note 13)

Deferred tax expense (note 13)

Income tax expense (note 13)

Deferred tax (recovery) expense (note 13)

Total income tax (recovery) expense

10 unchanged sentences

Consolidated Statements of Shareholders’ Equity

For the year ended December 31, 2024 and 2023

For the years ended December 31, 2025 and 2024

In USD (000s)

4 unchanged sentences

Cumulative translation adjustment – net of tax of $ nil

Shares issued in private placement and public offerings (note 10)

Exercise of share options (note 11)

Exercise of warrants (note 8)

Vesting of RSUs (note 11)

Vesting of DSUs (note 11)

Change in terms of DSUs (note 11)

Share-based compensation (note 11)

11 unchanged sentences

Consolidated Statements of Cash Flows

For the year ended December 31, 2024 and 2023

For the years ended December 31, 2025 and 2024

In USD (000s)

18 unchanged sentences

Net cash used in operating activities

Cash flows from investing activities

Purchase of property and equipment (note 5)

Purchase of intangible assets (note 6)

Net cash used in investing activities

Cash flows from financing activities

3 unchanged sentences

Proceeds from the exercise of stock options (note 11)

Proceeds from the exercise of warrants (note 8)

Net cash provided by financing activities

Net increase (decrease) in cash and cash equivalents

Net increase in cash and cash equivalents

Effect of exchange rate changes on cash

18 unchanged sentences

The preparation of the Company’s consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period.

Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, assumptions related to the valuation of inventory, the determination of the amortized cost of trade and other receivables, determination of expected credit loss, and the valuation of stock options and warrants.

Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, assumptions related to the determination of expected credit loss, and the valuation of stock options.

The Company based its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances.

3 unchanged sentences

Certain of the Company’s revenue is generated from sales to distributors.

Where these sales have payment terms based on installation, the Company exercises judgement in determining when to recognize revenue.

Once revenue is recognized, the Company records a contract asset until such time as the right to payment is not just subject to the passage of time, typically related to installation of the product.

When the Company transacts with a distributor, its contractual arrangement is with the distributor and not with the end customer.

Whether the Company transacts business with and receives the order from a distributor or directly from an end customer, its revenue recognition policy and resulting pattern of revenue recognition for the order are generally the same.

The Company exercises judgement in determining when to recognize revenue.

Consolidation

37 unchanged sentences

The Company currently does not have any level 3 financial instruments.

The Company considers its cash, trade and other receivables, net, prepaid expenses and deposits, accounts payable, accrued expenses and other liabilities and long-term debt to be financial instruments.

Profound Medical Corp.

2 unchanged sentences

In USD (000s)

Concentrations of credit risk

13 unchanged sentences

Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

Cost is determined using the first-in, first-out method for finished goods and weighted average cost for raw materials.

Cost is determined using the first-in, first-out method for finished goods and a weighted average basis using a standard cost methodology that approximates the actual cost.

The Company evaluates the carrying value of inventory on a regular basis, taking into account factors such as historical and anticipated future sales compared with quantities on hand, the price the Company expects to obtain for products in their respective markets compared with historical cost, obsolescence due to development of technology.

18 unchanged sentences

Exclusive licence agreement

Distribution rights

Impairment of long-lived assets

13 unchanged sentences

The difference between the carrying amount of a financial liability that has been extinguished and the consideration paid is recognized in the consolidated statements of operations and comprehensive loss, within other (income) expense, net.

The Company issued warrants to certain of its debt holder and equity investors and accounts for warrant instruments as either equity-classified or liability-classified instruments based on an assessment of the specific terms of the warrants and applicable authoritative guidance in ASC 480 Distinguishing Liabilities from Equity (ASC 480) and ASC 815, Derivatives and Hedging (ASC 815).

The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own stock and whether the holders of the warrants could

Profound Medical Corp.

Notes to Consolidated Financial Statements

December 31, 2024 and 2023

In USD (000s)

potentially require net cash settlement in a circumstance outside of the Company’s control, among other conditions for equity classification.

Leases where the Company is the Lessee

3 unchanged sentences

The lease term includes any renewal options and termination options that the Company is reasonably certain to exercise.

Profound Medical Corp.

Notes to Consolidated Financial Statements

December 31, 2025 and 2024

In USD (000s)

Lease liabilities and the corresponding right-of-use assets are recorded based on the present values of lease payments over the terms.

17 unchanged sentences

Revenue is derived primarily from the sale of the TULSA-PRO and Sonalleve systems and one - time use devices.

All products generally contain a one-year warranty.

All products generally include a one-year warranty.

The Company recognizes revenue when the customer obtains control of promised goods or services and in an amount that reflects the consideration to which the Company expects to be entitled to receive in exchange for those goods or services.

1 unchanged sentence

(i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract and (v) recognize revenue when (or as) the entity satisfies a performance obligation.

Profound Medical Corp.

Notes to Consolidated Financial Statements

December 31, 2024 and 2023

In USD (000s)

The amount of revenue to be recognized is based on the transaction price the Company expects to receive in exchange for its goods and services.

5 unchanged sentences

Capital equipment

Capital equipment revenue consists of the sale of capital equipment including installation and training amounts.

Capital equipment revenue consists of the sale of capital equipment including installation and training amounts, which includes sales to distributors.

Revenue is recognized when the Company transfers control to the customer, which is generally at the time of shipment.

The Company’s customer arrangements generally do not provide a right of return.

Profound Medical Corp.

Notes to Consolidated Financial Statements

December 31, 2025 and 2024

In USD (000s)

Contract Assets

3 unchanged sentences

The Company markets and sells its products primarily through its direct sales force, which sells its products to end customers.

A portion of the Company’s revenue is generated by sales to distributors primarily in Europe and Asia.

A portion of the Company’s revenue is generated by sales to distributors.

In markets where the Company does not maintain a direct presence, the Company engages distribution partners.

When the Company transacts with a distributor, its contractual arrangement is with the distributor and not with the end customer.

7 unchanged sentences

Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies.

Profound Medical Corp.

Notes to Consolidated Financial Statements

December 31, 2024 and 2023

In USD (000s)

The Company accounts for uncertainty in income taxes recognized in the consolidated financial statements by applying a two-step process to determine the amount of tax benefit to be recognized.

9 unchanged sentences

Compensation expense is recognized over the tranche’s vesting period using the graded vesting method by increasing additional paid-in capital based on the number of awards expected to vest.

Profound Medical Corp.

Notes to Consolidated Financial Statements

December 31, 2025 and 2024

In USD (000s)

The Company has a long-term incentive plan (LTIP) with a requisite service period of 3 years .

3 unchanged sentences

Vested RSUs and DSUs are settled either in Profound common shares or in cash or a combination thereof at the discretion of the Company.

As of December 31, 2024, the Company authorized for issuance under the share-based compensation a total of 3,089,175 share option, 716,000 RSUs and 100,000 DSUs.

As of December 31, 2025, the Company is authorized to issue under the share-based compensation arrangements a total of 2,939,785 share options and 1,778,388 units in the form of RSUs or DSUs .

Share-based compensation is recognized in the consolidated statements of operations and comprehensive loss in the same manner as the award recipients’ other compensation costs.

8 unchanged sentences

During the course of a clinical trial, the Company may adjust the rate of clinical expense recognized if actual results differ from management’s estimates.

Profound Medical Corp.

Notes to Consolidated Financial Statements

December 31, 2024 and 2023

In USD (000s)

Advertising and marketing costs

9 unchanged sentences

Accumulated other comprehensive (income) loss is recorded as a component of shareholders’ equity.

Contingencies

The Company records a liability in the consolidated financial statements on an undiscounted basis for loss contingencies related to legal actions when a loss is known or considered probable and the amount may be reasonably estimated.

If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is accrued.

If a loss is reasonably possible but not known or probable, and may be reasonably estimated, the estimated loss or range of loss is disclosed.

Recently adopted accounting pronouncements

In September 2022, the Financial Accounting Standards Board (FASB) issued ASU 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50), which requires that a buyer in a supplier finance program disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude.

The Company adopted this guidance on January 1, 2024.

The adoption of this standard did not have an impact on the Company’s consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting:

Improvements to Reportable Segment Disclosures.

This ASU modified the disclosure and presentation requirements primarily through enhanced disclosures of significant segment expenses and clarified that single reportable segment entities must apply ASC 280 in its entirety.

This guidance is effective for the Company for the year beginning January 1, 2024, with early adoption permitted.

The amendments should be applied retrospectively to all prior periods presented in the financial statement.

The Company adopted ASU 2023-07 on January 1, 2024 and the adoption did not have a material effect on the Company’s consolidated financial statements.

Profound Medical Corp.

2 unchanged sentences

In USD (000s)

In December 2023, the FASB issued ASU 2023-09, Income Taxes (ASC 740):

Improvements to Income Tax Disclosures, which includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction.

The amendments are effective for all public entities for fiscal years beginning after December 15, 2024, and early adoption is permitted.

The Company elected to early adopt ASU 2023-09 on January 1, 2024 retrospectively and the adoption has an effect on the Company’s disclosures on income taxes (note 13).

Contingencies

If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is accrued.

If a loss is reasonably possible but not known or probable, and may be reasonably estimated, the estimated loss or range of loss is disclosed.

Recently issued accounting pronouncements

5 unchanged sentences

The Company is currently evaluating the impact of this guidance.

In November 2024, the FASB issued ASU 2024 - 03 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures.

The amendment in this update requires public business entities to disclose in the footnotes the following information about income statement expenses at each interim and annual reporting period.

Within a tabular disclosure for each relevant income statement expense caption (a) specified natural expenses (b) expense reimbursements (c) amounts for certain other disclosure requirements in GAAP (d) other items remaining after disaggregation into the required categories and the total amount of selling expenses and, in annual reporting periods, the entity’s definition of selling expenses.

The effective date for the amendment will be for annual periods beginning after December 15, 2026 and interim reporting periods within annual reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The Company is currently evaluating the impact of this guidance.

The Company does not believe there are any other recently issued, but not yet effective, accounting standards that would have a significant impact on the Company’s financial position or results of operations.

5 unchanged sentences

Allowance for expected credit losses

Less amortized cost adjustment

Trade receivables, net

2 unchanged sentences

Total trade and other receivables, net

Current portion

Long-term portion

During the year ended December 31, 2025, $ nil (2024 – $ 2,147 ) of trade receivables were written off.

The activity in the allowance for expected credit losses for trade receivables was as follows:

Balance, beginning of year

Provision for allowance for expected credit losses

Balance, end of year

Profound Medical Corp.

2 unchanged sentences

In USD (000s)

The activity in the allowance for expected credit losses for trade receivables was as follows:

Balance, beginning of year

Provision for allowance for expected credit losses

Balance, end of year

The allowance for expected credit losses as at December 31, 2025 and 2024 for trade receivables is as follows:

9 unchanged sentences

During the year ended December 31, 2025, $ 4,364 (2024 - $ 3,178 ) of inventory was recognized in cost of sales.

The Company recognized $ 43 inventory write - downs in cost of sales during the year ended December 31, 2024 (2023 – $ 3 ).

The Company recognized $ nil inventory write - downs in cost of sales during the year ended December 31, 2025 (2024 – $ 43 ).

Property and equipment, net

5 unchanged sentences

Depreciation expense for the year ended December 31, 2025 was $ 373 (2024 - $ 707 ).

During the year ended December 31, 2024, the Company sold $ 532 (2023 - $ nil ) of equipment under operating lease to various customers.

During the year ended December 31, 2025, the Company sold $ 681 (2024 - $ 532 ) of equipment under operating lease to various customers.

Profound Medical Corp.

5 unchanged sentences

Exclusive licence agreement

Distribution rights

The Company has a licence agreement (the licence) with Sunnybrook Health Sciences Centre (Sunnybrook), pursuant to which Sunnybrook licenses to the Company certain intellectual property and exclusively licenced-in rights that enable the Company to use Sunnybrook’s technology for MRI-guided trans-urethral ultrasound therapy.

9 unchanged sentences

Accrued expenses and other current liabilities

Long-term debt

On November 3, 2022, the Company signed a credit agreement with CIBC (the “ Original CIBC Credit Agreement ”) to provide a secured loan for total gross proceeds of C$ 10,000 maturing on November 3, 2027 with an interest rate based on CIBC prime plus 2 % (CIBC Loan).

The Company was required to make interest only payments until October 31, 2023 and monthly repayments of C$ 208 plus accrued interest commenced on October 31, 2023.

All obligations of the Company under the credit agreement with CIBC are guaranteed by current and future subsidiaries of the Company and include security of first priority interests in the assets of the Company and its subsidiaries.

Initially, the Company had financial covenants in relation to the CIBC Loan where unrestricted cash is at all times greater than EBITDA for the most recent six-month period, reported on

Profound Medical Corp.

2 unchanged sentences

In USD (000s)

a monthly basis and that revenue for any fiscal quarter must be 15 % greater than revenue for the same fiscal quarter in the prior fiscal year, reported on a quarterly basis.

The term loan matures in November 2027.

On September 26, 2023, an amendment to the CIBC Loan resulted in a change to the financial covenants.

The amended covenants are that unrestricted cash must at all times be greater of:

(i) to the extent EBITDA is negative for such period, EBITDA for the most recent nine-month period and (ii) $ 7,500 , reported on a monthly basis;

and that recurring revenue for any fiscal quarter must be 15 % greater than recurring revenue for the same fiscal quarter in the prior fiscal year, reported on a quarterly basis.

On May 3, 2024, a second amendment to the CIBC Loan resulted in another change to the financial covenants.

The amended covenants are that the recurring revenue covenant shall not be tested for any fiscal quarter in the 2024 fiscal year so long as unrestricted cash is no less than 2.5 multiplied by the principal amount of outstanding CIBC Loan at all times.

Long-term debt

On March 3, 2025, the Company entered into an amended and restated credit agreement with CIBC (the “ CIBC Credit Agreement ”), which amended the terms of the CIBC Loan and the existing long-term debt provided under the Original CIBC Credit Agreement was repaid with proceeds from a new revolving line of credit provided by CIBC to Profound.

This was accounted for as a modification of debt whereby a new effective interest rate was established based on the carrying value of the debt and the revised cash flows.

The line of credit bears interest at the Wall Street Journal Prime Rate subject to a floor of 6.25 %.

The CIBC Credit Agreement contains financial covenants whereby unrestricted cash is at all times greater than EBITDA for the most recent nine-month period, reported on a monthly basis and that revenue for the 12 month period must be 15 % greater than revenue for the same time period in the prior fiscal year, reported on a quarterly basis.

The obligations are secured by, inter alia, a general security agreement over the assets and the assets of the Company’s subsidiaries.

The revolving line of credit matures on March 3, 2027 and provides an option to the Company to increase the amount of the revolving commitment by $ 5,000 within 18 months from March 3, 2025, subject to achieving a minimum trailing 12 month revenue exceeding $ 15,000 .

The exercise of the option would result in the size of the revolving commitment increasing from $ 10,000 to a maximum of $ 15,000 .

Additionally, the CIBC Credit Agreement provides that Profound may request a one-time increase in the principal amount of the revolving line of credit up to a maximum amount of $ 10,000 , which is subject to the approval of CIBC in its sole discretion.

On September 30, 2025, an amendment to the CIBC Agreement resulted in a change to one of the financial covenants.

The amended covenant is that unrestricted cash must at all times be greater of:

(i) to the extent that EBITDA is a negative number or loss for the most recent six-month period, the amount of such loss, or (ii) $ 10,000 , reported on a monthly basis.

The Company is in compliance with these financial covenants as at December 31, 2025.

Future compliance with the financial covenants included in the CIBC Credit Agreement is dependent upon achieving certain revenue, EBITDA, and anticipated unrestricted cash levels.

Balance - Beginning of year

Interest and accretion expense

Interest expense

Interest paid

Foreign exchange

2 unchanged sentences

Long-term portion

Principal payments required on long-term debt outstanding at December 31, 2024 are $ 1,737 in 2025, $ 1,738 in 2026, and $ 1,186 in 2027.

In connection with the CIBC term loan agreements, the Company had issued warrants to CIBC on July 30, 2018 and November 3, 2022, with each warrant entitling the holder to acquire one common share at a price of C$ 9.70 and C$ 5.29 per common share, respectively, with a cashless exercise feature (collectively, CIBC Warrants).

These warrants were determined to be equity classified and the fair value of the warrants on issuance date was recognized in additional paid-in capital.

On June 14, 2023, all of the outstanding CIBC Warrants were exercised resulting in the issuance of common shares of the Company, resulting in a reclassification from additional paid-in capital to share capital.

There were no CIBC Warrants outstanding as of December 31, 2024 and 2023.

Leases where the Company is the Lessee

1 unchanged sentence

Its operating leases have fixed payment structures expiring in 2026.

Subsequent to year end, the Company signed an extension that commences October 1, 2026, with fixed payment structures expiring in 2033.

Lease liabilities and corresponding right-of-use assets were recognized based on the present value of future lease payments.

30 unchanged sentences

On December 10, 2024, the Company closed a public offering, resulting in the issuance of 5,366,705 common shares at a price of $ 7.50 , for gross proceeds of $ 40,250 ( $ 36,132 , net of transaction costs).

On December 22, 2025, the Company closed a public offering, resulting in the issuance of 5,142,870 common shares at a price of $ 7.00 , for gross proceeds of $ 36,000 ($ 34,379 , net of transaction costs).

Profound Medical Corp.

2 unchanged sentences

In USD (000s)

On December 30, 2025, the Company closed a private placement, resulting in the issuance of 921,428 common shares at a price of $ 7.00 , for gross proceeds of $ 6,450 ($ 6,422 , net of transaction costs).

Except as otherwise required by law, the holders of common shares possess all voting power for the election of the Company’s directors and all other matters requiring shareholder action.

4 unchanged sentences

In the event of the Company’s voluntary or involuntary liquidation, dissolution, distribution of assets or winding-up, the holders of the common stock will be entitled to receive an equal amount per share of all of the Company’s assets of whatever kind available for distribution to shareholders, after the rights of the creditors have been satisfied.

A summary of warrants outstanding is shown below for the year ended December 31, 2023.

There are no warrants outstanding at December 31, 2024:

Balance - January 1, 2023

Balance - December 31, 2023

Share-based payments

34 unchanged sentences

The total remaining unrecognized compensation expense related to non-vested share options for the year ended December 31, 2025 was $ 2,588 , which will be amortized over the weighted-average period of 1.8 years.

Long-term incentive plan

Effective May 17, 2023, the Company adopted the amended long term incentive plan (the LTIP).

The LTIP is an incentive-based equity compensation plan that provides for the grant of restricted share units (the RSUs) and deferred share units (the

Profound Medical Corp.

2 unchanged sentences

In USD (000s)

DSUs, together with the RSUs, the Units).

Long-term incentive plan

Effective May 17, 2023, the Company adopted the amended long term incentive plan (the LTIP).

The LTIP is an incentive-based equity compensation plan that provides for the grant of restricted share units (the RSUs) and deferred share units (the DSUs, together with the RSUs, the Units).

The maximum number of units which may be reserved for issuance under this LTIP in respect of grants of RSUs and DSUs shall not exceed 4.9 % of the issued and outstanding common shares on a non-diluted basis, provided that, the maximum number of shares which may be reserved for issuance pursuant to all of the Company’s security-based compensation arrangements shall not in the aggregate exceed 13 % of the issued and outstanding common shares on a non-diluted basis.

10 unchanged sentences

The total remaining unrecognized compensation expense related to non-vested RSUs for the year ended December 31, 2025 was $ 4,666 , which will be amortized over the weighted-average period of 1.6 years.

Effective May 17, 2023, the Company adopted the approval of revision to the amended LTIP.

Previously, vested DSUs were settled either in common shares or in cash or a combination thereof at the discretion of the holder and were classified as a cash-settled liability.

Under the amended LTIP, vested DSUs are settled either in common shares or in cash or a combination thereof at the discretion of the Company.

The change in terms resulted in the DSUs being classified as equity settled and the effect of this change was recognized in 2023 resulting in a reclassification between accrued expenses and other current liabilities and additional paid-in capital of $ 203 .

Profound Medical Corp.

Notes to Consolidated Financial Statements

December 31, 2024 and 2023

In USD (000s)

A summary of the DSUs changes during the year are set forth below:

5 unchanged sentences

The total remaining unrecognized compensation expense related to non-vested DSUs for the year ended December 31, 2025 was $ 471 , which will be amortized over the weighted-average period of 1.6 years.

Profound Medical Corp.

Notes to Consolidated Financial Statements

December 31, 2025 and 2024

In USD (000s)

Share-based compensation expense

6 unchanged sentences

Share-based compensation

The following table provides information about disaggregated revenue by products and services:

For the year ended December 31, 2024

Contracts with

Recurring - non-capital

Capital equipment

Profound Medical Corp.

Notes to Consolidated Financial Statements

December 31, 2024 and 2023

In USD (000s)

For the year ended December 31, 2023

Contracts with

Recurring - non-capital

Capital equipment

The following table provides information about disaggregated revenue:

Timing of transfer of control

Point in time revenue

Service revenue recognized over time

Taxes on earnings reflect the annual effective rates, including charges for interest and penalties.

1 unchanged sentence

The components of loss before income taxes for 2025 and 2024 consist of:

Domestic - Canada

The components of (provision for) benefit from income taxes for 2025 and 2024 consist of:

2 unchanged sentences

Total income tax (recovery) expense

During the year ended December 31, 2024, the Company has early adopted ASU 2023-09 to enhance the income taxes disclosures regarding income taxes paid and the rate reconciliation disclosure.

The income taxes paid by the Company are as follows:

United States

Profound Medical Corp.

2 unchanged sentences

In USD (000s)

The income taxes paid by the Company are as follows:

United States

The (provision for) benefit from income taxes differs from the expected amount calculated by applying the Company’s Canadian federal statutory rate to loss before income taxes for 2025 and 2024 as follows:

2 unchanged sentences

Canadian federal statutory rate of 15 % (2024 - 15 % )

Provincial tax / state tax

Ontario Provincial tax

Foreign tax effects

5 unchanged sentences

Non-taxable or non-deductible items

True-up and other adjustments

Other adjustments

Effective tax rate

The components of deferred tax assets and liabilities are summarized as follows:

9 unchanged sentences

Net deferred tax assets

Deferred tax liabilities:

Excess of accounting value of property, plant and equipment over tax value

Total deferred tax liabilities

Deferred income taxes reflect future tax effects of temporary differences between the tax and financial reporting basis of the Company’s assets and liabilities measured using enacted tax laws and statutory tax rates applicable to the periods when the temporary differences will affect taxable income.

8 unchanged sentences

The Company has approximately $ 3,838 of Canadian federal and provincial tax credits that are available to be applied against Canadian federal and provincial taxes otherwise payable in future years and that expire in varying amounts from 2028 to 2045.

Profound Medical Corp.

Notes to Consolidated Financial Statements

December 31, 2025 and 2024

In USD (000s)

Loss per share

3 unchanged sentences

Basic and diluted loss per share

The computation of diluted loss per share is equal to the basic loss per share due to the anti-dilutive effect of the share options, RSUs, DSUs and warrants.

The computation of diluted loss per share is equal to the basic loss per share due to the anti-dilutive effect of the share options, RSUs and DSUs.

Of the 2,142,522 (2024 – 2,291,152 ) share options, 859,335 (2024 – 324,621 ) RSUs, and 135,490 (2024 – 91,670 ) DSUs not included in the calculation of diluted loss per share for the year ended December 31, 2025, 1,409,262 (2024 – 1,326,573 ) were exercisable.

6 unchanged sentences

As of December 31, 2025 and 2024, no material amounts were accrued for the Company’s obligations under these indemnification provisions.

Profound Medical Corp.

Notes to Consolidated Financial Statements

December 31, 2024 and 2023

In USD (000s)

Segment reporting

6 unchanged sentences

Capital equipment

Profound Medical Corp.

Notes to Consolidated Financial Statements

December 31, 2025 and 2024

In USD (000s)

For the year ended December 31, 2024

14 unchanged sentences

Depreciation of property and equipment

Profound Medical Corp.

Notes to Consolidated Financial Statements

December 31, 2024 and 2023

In USD (000s)

Subsequent events

On February 1, 2025, the President of the United States issued three executive orders directing the United States to impose new tariffs on imports originating from Canada, Mexico and China.

These orders call for additional 25 % duty on imports into the United States of Canadian-origin and Mexican-origin products and 10 % duty on Chinese origin products, except for Canadian energy resources that are subject to an additional 10 % duty.

The Company is assessing the direct and indirect impacts to its business of such tariffs, retaliatory tariffs or other trade protectionist measures implemented as this situation develops, and such impacts could be material.

The line of credit bears interest at the Wall Street Journal Prime Rate subject to a floor of 6.25 %.

The CIBC Credit Agreement contains certain financial covenants, and the obligations thereunder are secured by, inter alia , a general security agreement over the assets of the Company and its subsidiaries.

The revolving line of credit matures on March 3, 2027 and provides an option to increase the amount of the revolving commitment by $ 5,000 within 18 months from March 3, 2025, subject to achieving a minimum trailing 12 month revenue exceeding $ 15,000 .

The exercise of the option would result in the size of the revolving commitment increasing from $ 10,000 to a maximum of $ 15,000 .

Additionally, the CIBC Credit Agreement provides that the Company may request a one-time increase in the principal amount of the revolving line of credit up to a maximum amount of $ 10,000 , which is subject to the approval of CIBC in its sole discretion.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data