Item 9A. Controls and Procedures
Item 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures. Our principal executive officer and principal financial officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Form 10-K, have concluded that, based on such evaluation, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
Management’s Annual Report on Internal Control over Financial Reporting . The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended, as a process designed by, or under the supervision of, the company’s principal executive and principal financial officers and effected by the company’s board of directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financial reporting includes those policies and procedures that:
● pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
● provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and
● provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
The Company’s management assessed the effectiveness of the company’s internal control over financial reporting as of December 31, 2025. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. Based on our assessment, management believes that, as of December 31, 2025, the Company’s internal control over financial reporting was effective based on those criteria.
Remediation of Previously Reported Material Weakness
As previously disclosed in Item 9A of our Annual Report on Form 10-K for the year ended December 31, 2024, management identified a material weakness in our internal control over financial reporting related to our process for reviewing contract terms and arrangements with customers under ASC 606, Revenue from contracts with customers . This material weakness resulted in audit adjustments to revenue, trade and other receivables and prepaid expenses, deposits and other assets, which were recorded prior to the issuance of the financial statements as of and for the year ended December 31, 2024.
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During 2025, management implemented a remediation plan to address this material weakness. Our remediation efforts included the following:
● Expanded the finance team to include more Chartered Professional Accountants with technical expertise and experience in evaluating more complex areas of US GAAP.
● Engaged third-party consultants to assist with assessing the accounting for more complex revenue contracts.
Management has completed its testing of the design and operating effectiveness of these newly implemented and enhanced controls. Based on this testing, we have concluded that these controls are operating effectively and that the previously identified material weakness did not result in any misstatements or adjustments in the Company’s audited financial statements during the year ended December 31, 2025 and has been remediated as of December 31, 2025.
Changes in Internal Control Over Financial Reporting. Other than the remediation of the material weakness described above, there were no changes in our internal control over financial reporting, identified in connection with the evaluation of such internal control that occurred during our most recently completed fiscal year and fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting .
Attestation Report of the Registered Public Accounting Firm. We are a smaller reporting company, and therefore our independent registered public accounting firm has not issued a report on the effectiveness of internal control over financial reporting.
Item 9B. OTHER INFORMATION
Rule 10b5-1 Trading Plans
During the fiscal quarter ended December 31, 2025, none of our directors or executive officers adopted , modified or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement” as defined in Item 408(c) of Regulation S-K.
Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
None.
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PART III
Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Executive Officers and Directors
The following table provides information regarding our executive officers and directors, including their ages as of March 5, 2026:
Name
Age
Position
Arun Menawat
71
Chief Executive Officer and Director, Chair of the Board (Principle Executive Officer)
Rashed Dewan
58
Chief Financial Officer (Principal Financial and Accounting Officer)
Mathieu Burtnyk
44
President
Tom Tamberrino
46
Chief Commercial Officer
Brian Ellacott (2)
68
Director, Lead Independent Director
Cynthia Lavoie (1)
58
Director
Murielle Lortie (1) (3)
56
Director
Arthur Rosenthal (1) (2)(4)
79
Director
Kris Shah (2)
64
Director
Notes:
(1) Member of the Audit Committee.
(2) Member of the Human Resources and Corporate Governance Committee.
(3) Chair of the Audit Committee.
(4) Chair of the Human Resources and Corporate Governance Committee.
Executive Officers
Arun Menawat – Chief Executive Officer and Director – Dr. Menawat has served as the Chief Executive Officer of Profound since 2016. He has an accomplished history of executive leadership success in the healthcare industry. Prior to joining Profound in August 2016, he served as the Chairman, President and CEO of Novadaq Technologies Inc., a TSX and Nasdaq listed company that marketed medical imaging and therapeutic devices for use in the operating room, from 2003 to 2016. Previously, he was President and Chief Operating Officer and Director of another publicly listed medical imaging software company, Cedara Software. His educational background includes a Bachelor of Science in Biology, University of District of Columbia, Washington, D.C., and a Ph.D. in Chemical Engineering, from the University of Maryland, College Park, MD, including graduate research in Biomedical Engineering from the National Institute of Health, Bethesda, MD. He also earned an Executive M.B.A. from the J.L. Kellogg School of Management, Northwestern University, Evanston, IL.
Rashed Dewan – Chief Financial Officer – Mr. Rashed Dewan has served as Chief Financial Officer of Profound since March 2022. He previously served as Chief Accounting Officer of Profound from May 2021 to March 2022, and as VP Finance of Profound from July 2015 to May 2021. He has over 20 years of finance and accounting experience in public and private companies, with expertise in the medical device sector. Mr. Dewan has extensive experience with systems design and implementation and a strong track record of success in accounting, finance, sales and operations management. Mr. Dewan is a Certified Public Accountant and has a Bachelor of Science Degree with a concentration in Accounting from the University of Southern California.
Mathieu Burtnyk – President - Dr. Mathieu Burtnyk has over 20 years of experience creating and developing imaging technologies and therapeutic ultrasound solutions, from benchtop to bedside, with a focus on prostate disease. He started his career in academia, obtaining his PhD in Medical Biophysics at the University of Toronto and Sunnybrook Health Sciences Center. He is the inventor of the patented closed-loop temperature feedback control algorithm used by the TULSA-PRO today in clinic. Dr. Burtnyk joined Profound in 2011, leading the scientific design and execution of pre-clinical through Phase I and TACT Pivotal clinical studies. Dr. Burtnyk has served as President of Profound since November 2024. He previously served as Chief Operating Officer of Profound from March 2024 to November 2024, as SVP Product Leader for TULSA-PRO of Profound from February 2021 to February 2024, and as VP of Clinical Affairs of Profound from July 2019 to February 2021. Dr. Burtnyk received his Ph.D. in Medical Biophysics from the University of Toronto.
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Tom Tamberrino – Chief Commercial Officer - Mr. Tom Tamberrino has served as Chief Commercial Officer of Profound since October 2024. He is a seasoned leader with a distinguished career in sales and marketing leadership, business development, and executive management, with much of his success rooted in the U.S. healthcare industry. He brings a wealth of experience, including a history of entrepreneurial ventures and significant contributions to the medical technology sector. Prior to joining Profound Medical, Mr. Tamberrino served as Managing Partner of AKB LLC from February 2018 to October 2024. Earlier in his career, Mr. Tamberrino held progressive sales management positions at LifeCell Corporation, eventually serving as Area Director. During his time at LifeCell Corporation, he led a 50-person sales team across the Northeastern U.S. and Canada, marketing regenerative tissue matrices. He previously served as Vice President of Sales and Marketing at Novadaq Technologies Inc. for several years. Mr. Tamberrino holds a Bachelor of Science degree in Marketing with a Minor in Psychology from Georgetown University and a Master of Business Administration from Emory University.
Non-Employee Directors
Brian Ellacott – Director – Mr. Ellacott is an experienced global medical device executive. Mr. Ellacott has served as Chief Executive Officer of Belmont Instrument since December 2017. Belmont Instrument is a Boston based private equity owned medical device company with a leading global position in fluid warming and infusion systems. Prior to Belmont Instrument, Mr. Ellacott was the President and CEO of Laborie. Laborie is a Urology and Gastroenterology medical device company based in Toronto with manufacturing facilities in Toronto, Montreal, Enschede, NL, Attikon, Switzerland and Portsmouth, New Hampshire. Mr. Ellacott joined private equity owned Laborie as President and CEO in July 2013 and in four years completed 14 global acquisitions tripling Laborie’s revenue and increasing EBITDA eight-fold. The company was ranked as one of the fastest growing and most profitable medical device companies in the world. Prior to joining Laborie, Mr. Ellacott served as Executive Vice President and General Manager of Invacare’s (NYSE: IVC) $1 billion North and South American homecare and rehabilitation business. Mr. Ellacott has also held executive positions with Baxter International and American Hospital Supply, with assignments in Canada, Australia and the United States. Mr. Ellacott serves on the board of Belmont Instrument and is the past Chairman of the board of the Canadian Assistive Devices Association. Mr. Ellacott holds a Bachelor of Business Administration Degree from Wilfrid Laurier University, Waterloo, Ontario, Canada and is a dual United States and Canadian citizen.
Cynthia Lavoie – Director – Dr. Lavoie has served as President and Managing Director of AllosteRx Capital Management (“AllosteRx”) since August 2018. She also serves as President and Chief Investment Officer of CCRM Enterprises since August 2020. Prior to co-founding AllosteRx, Cynthia was a General Partner with TVM Life Science Management Inc. (“TVM”), a global venture capital group with main offices in Munich and Montreal. She was recruited to TVM from VG (VenGrowth) Partners Inc., where she was a Partner and co-headed its life sciences fund. Cynthia is currently chair of the board of directors at Fibrocor Therapeutics, a fibrosis company in Toronto and Board Director of Apiary Therapeutics, a cell therapy start-up based in Toronto. A seasoned healthcare investment professional with 20 years of experience in venture capital, Dr. Lavoie’s expertise includes creating companies de novo and leading investments into businesses developing therapeutics, devices, and diagnostic tools. Cynthia has taken active roles on boards of companies located in Canada and the US from start-up to revenue-generating stages. These include Acer Therapeutics (acquired by NASDAQ: ZVRA), Cytochroma (acquired by OPKO Health), VisualSonics (acquired by SonoSite, now FujiFilm SonoSite), and Trillium Therapeutics (NASDAQ: TRIL) (acquired by Pfizer). Before joining the investment community, Dr. Lavoie served in a variety of academic and scientific leadership positions for 10 years, working with research institutes and life science companies. Cynthia earned her MBA with first class honors from Rotman School of Management at the University of Toronto and earned her Ph.D in Molecular Biology with Dean’s honors from McGill University.
Murielle Lortie – Director – Ms. Lortie has an accomplished history of financial leadership success within the global life science industry. She currently serves as Chief Financial Officer of Claridge Inc since September 2021. Prior to joining Claridge Inc., Ms. Lortie was Chief Financial Officer Liminal BioSciences Inc. (“Liminal”), a Nasdaq-listed, clinical-stage biopharmaceutical company from September 2018 to September 2021. Prior to joining Liminal, Ms. Lortie was Vice President & Chief Financial Officer and Advisor to the CEO, Global Strategy, Mergers & Acquisitions at Pharmascience Inc. Previously, she has held senior positions in finance at Bristol Myers Squibb, including Vice-President of Finance for Bristol Myers Squibb Canada Co. and Global Director of Finance supporting BMS Headquarters. Ms. Lortie is a Chartered Professional Accountant and member of the Ordre des comptables professionnels agrées du Québec. She holds a Graduate Diploma in Accountancy from Concordia University and a Bachelor of Business Administration Bishop’s University. She has extensive corporate governance experience, previously serving on the Boards of Bellus Health Inc. and Pharmascience Barbados Ltd. & Pharmascience International Ltd. Ms. Lortie is currently the Chair of the Board at Bishops University.
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Arthur L. Rosenthal – Director – Dr. Rosenthal has served as director of Profound since June 2018. Dr. Rosenthal formerly served as director and Chair of Compensation Committee for LivaNova PLC, a UK global medical technology company. Prior, Dr. Rosenthal served on the Cyberonics board of directors as a non-executive director and Chair of the Compensation Committee from January 2007 to October 2015. Since June 2010, Dr. Rosenthal has served as Professor of Practice in the Biomedical Engineering Department at Boston University. Since December 2011, Dr. Rosenthal has also served as CEO of gEyeCue, Ltd., which he co-founded, a development stage medical device company working on a guided biopsy for lower and upper gastrointestinal cancer screening. From June 2011 until July 2012, Dr. Rosenthal served as executive vice chairman of Cappella Medical Devices Ltd. (now ArraVasc Ltd.), a development-stage company focused on novel device solutions for coronary artery disease. From June 2009 until June 2011, Dr. Rosenthal served as President and CEO of Cappella, Inc. Dr. Rosenthal served as chairman, from January 2002, and CEO, commencing in January 2005, of Labcoat, Ltd. until its acquisition by Boston Scientific Corporation in December 2008. From January 1994 to May 2000, Dr. Rosenthal was a Senior Vice President, Corporate Officer, and Chief Development Officer of Boston Scientific, and from May 2000 until his retirement in January 2005, he was a Senior Vice President, Chief Scientific Officer, and Executive Committee Member of Boston Scientific. From 2000 until 2010, Dr. Rosenthal served as a non-executive director, and from 2006 through 2009, as chairman of the Remuneration Committee, of Renovo, Ltd., a U.K. based pharmaceutical company that became publicly traded in 2006. In July 2009, Dr. Rosenthal joined the board of Interface Biologics, Inc., a Toronto-based development stage company focused on drug delivery devices, as a non-executive director. In April 2011, Dr. Rosenthal was elected Chairman at Interface Biologics, Inc. From April 2013 to May 2015, Dr. Rosenthal served as non-executive director and Member of the Compensation Committee of Arch Technologies, Inc. and is currently a member of Arch’s Clinical Advisory Board. In 2015, Dr. Rosenthal was appointed to the Industrial Advisory Committee, CURAM (National University in Galway, Ireland). Since 2003, Dr. Rosenthal has been a Fellow of the American Institute of Medical and Biological Engineering.
Kris Shah – Director – Kris Shah is the president of Baylis Medical Technologies, Inc. (“Baylis”), a leader in the development and commercialization of innovative medical devices in the fields of radiology and neurosurgery. Headquartered in Canada, Baylis also provides contract manufacturing services to some of the world’s leading medical device companies. Kris joined Baylis in 1989 as a co-founder and served as president from 2015 until it was acquired by Boston Scientific in 2022. Baylis is a leading developer, manufacturer, and distributor of specialized medical devices for interventional cardiology. Baylis had previously divested its interventional pain management business to Kimberly Clark Corporation (now Avanos Medical, Inc.) in 2009, and its bone tumor ablation business (OsteoCool) to Medtronic plc in 2016. Kris also co-founded the consulting business OME Group in 1991, which was sold to Ernst and Young in 2011. Kris is an active board member for AdvaMed Accel and Intellijoint Surgical. In the past he has served on the boards of Venture Lab, MEDEC, and the Business Advisory Committee of HTX and Conavi Medical Inc. His list of accomplishments includes numerous patents, the Ernst and Young Entrepreneur Award for Healthcare in Quebec (2011) and the University of Waterloo Alumni Achievement Award (2014). Kris has a B.Sc. in Electrical Engineering from the University of Waterloo.
Board Mandate
The Board has responsibility for the stewardship of the Company. The Board has adopted a written mandate for the Board (the “ Mandate ”) to confirm and enhance the Board’s ongoing duty and responsibility for stewardship of the Company, a copy of which is available on the Company’s website at www.profoundmedical.com. The Board is ultimately responsible for supervising the management of the business and affairs of the Company and, in doing so, is required to act in the best interests of the Company. The Board generally discharges its responsibilities either directly or through the Audit Committee and the Human Resources and Corporate Governance Committee. Specific responsibilities of the Board set out in the Mandate include:
(a) Appointing Management – including approval of the Chief Executive Officer, the compensation of the executive officers and the oversight of succession planning programs;
(b) Board Organization – including responding to recommendations received from the Human Resources and Corporate Governance Committee, but the Board retains the responsibility for managing its own affairs;
(c) Strategic Planning – including the review and approval of the Company’s business, financial and strategic plans on at least an annual basis;
(d) Monitoring of Financial Performance and Other Financial Reporting Matters – including the review of the Company’s ongoing financial performance and results of operations and review and approval of the Company’s audited and interim consolidated financial statements and management’s discussion and analysis of financial conditions and results of operations;
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(e) Risk Management – including the identification of the Company’s principal business risks and the implementation of appropriate systems to effectively monitor and manage such risks;
(f) Policies and Procedures – including the approval and monitoring of all policies and procedures including those related to corporate governance, ethics and confidentiality;
(g) Communication and Reporting – including the oversight of the timely and accurate disclosure of financial reports and other material corporate developments; and
(h) Other Responsibilities – including those related to position descriptions, orientation and continuing education, nomination of directors and Board evaluations and matters in respect of any disposition, material commitment or venture, or significant expenditure in either monetary or business terms.
Role of Board in Risk Oversight
One of the key functions of the Board is to oversee the Company’s risk management process. The Board is responsible for identifying the Company’s principal business risks and the implementation of appropriate systems to effectively monitor and manage such risks. The Audit Committee has the responsibility to review and discuss our major financial risk exposures and the policy steps management will take to monitor and control such exposures. The Audit Committee also monitors compliance with legal and regulatory requirements.
Board Composition
Our Board presently has six members. As a foreign private issuer, under the listing requirements and rules of Nasdaq, we are not required to have independent directors on our board of directors, except that our audit committee is required to consist fully of independent directors. However, our board of directors has determined that Brian Ellacott, Cynthia Lavoie, Murielle Lortie, Arthur Rosenthal and Kris Shah are all “independent” as such term is defined by National Instrument 58-101 – Disclosure of Corporate Governance Practices and Nasdaq rules. Arun Menawat is a non-independent director as he is our Chief Executive Officer. Each of the independent directors has no direct or indirect material relationship with the Company, including any business or other relationship, which could reasonably be expected to interfere with the director’s ability to act with a view to the best interests of the Company or which could reasonably be expected to interfere with the exercise of the director’s independent judgment.
If the Chairman is not independent, the independent directors may select one of their members to be appointed lead independent director of the Board (“Lead Independent Director”) for such term as the independent directors may determine. The Lead Independent Director is responsible for chairing meetings of the independent directors and seeking to ensure that the Board is able to carry out its role.
Dr. Arun Menawat acts as Chairman of the Board. Since Dr. Menawat is not independent, Brian Ellacott has been appointed Lead Independent Director of the Board.
Meetings of Independent Directors
The entire complement of independent directors on the Board and each of the committees meet regularly without management present. The Chairman of the Board conducts these sessions at Board meetings and the Chair of each committee conducts them at committee meetings. During the last financial year ended December 31, 2025, there were eight such meetings of the independent directors.
Chairman of the Board
Dr. Arun Menawat is the Chief Executive Officer of the Company and as a result does not meet the Board’s independence standards. The primary functions of the Chairman are to facilitate the operations and deliberations of the Board and the satisfaction of the Board’s responsibilities under its Mandate. The Chairman’s key responsibilities include duties relating to providing overall leadership to the Board, chairing board and Shareholder meetings, acting as a liaison between management, the members of the Board and the Chairs of the various committees of the Board, and communicating with Shareholders and regulators. The responsibilities of the Chairman are reviewed by the Human Resources and Corporate Governance Committee and considered by the Board for approval each year.
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Director Term Limits and Other Mechanics of Board Renewal
The Board has not established any term limits for directors, as the Board takes the view that term limits are an arbitrary mechanism for removing directors which can result in valuable, experienced directors being forced to leave the Board solely because of length of service. The Board’s priorities continue to be ensuring the appropriate skill sets are present amongst the Board to optimize the benefit to the Company. The Board conducts annual evaluations of the individual directors, the committees of the Board and the Chairman of the Board, which are overseen by the Human Resources and Corporate Governance Committee, to ensure these objectives are met. See “Board Assessments”.
Board Meetings
The Board holds a minimum of one regular quarterly meeting and a corporate strategy session each year, as well as additional meetings as required. An in-camera session of the directors is held at each regularly scheduled Board and committee meeting, as deemed necessary, so that the independent members of the Board have an opportunity to meet without the presence of management members of the Board.
Meeting Attendance
During our fiscal year ended December 31, 2025, there were seven (7) meetings of our Board of Directors, four (4) meetings of our Audit Committee and four (4) meetings of the Human Resources and Corporate Governance Committee. No director attended fewer than 75% of the total number of meetings of our board of directors and of the committees of our board of directors on which he or she served. Our board of directors has adopted a policy under which each member of our board of directors is strongly encouraged but not required to attend each annual meeting of our stockholders.
Orientation and Continuing Education
Pursuant to the Mandate, it is the responsibility of the Board to provide an orientation program for new directors and ongoing educational opportunities for all directors. New directors are expected to participate in an initial information session on the Company in the presence of its senior executive officers to learn about, among other things, the business of the Company, its financial situation and its strategic planning. All directors will receive a record of public information about the Company, as well as other relevant corporate and business information including corporate governance practices of the Company, the structure of the Board and its standing committees, its corporate organization, the charters of the Board and its standing committees, the Code (as defined herein) and other relevant corporate policies.
Continuing education opportunities are directed at enabling individual directors to maintain or enhance their skills and abilities as directors, as well as ensuring that their knowledge and understanding of the Company’s affairs remains current. Directors are kept informed as to matters which may impact the Company’s operations through regular reports and presentations at Board and committee meetings.
Code of Business Conduct and Ethics
The Company has adopted a written Code of Business Conduct and Ethics (the “Code”) for directors, officers and employees and is available on our website at www.profoundmedical.com. Information contained on, or that can be accessed through, our website does not constitute a part of this report and is not incorporated by reference herein. The objective of the Code is to provide guidelines for maintaining the integrity, reputation, honesty, objectivity and impartiality of the Company and its subsidiaries. The Code addresses compliance with laws, conflicts of interest, corporate opportunity, confidentiality, fair dealing with customers, suppliers, competitors, officers and employees, protection and proper use of company assets and accounting complaints. The Board has the ultimate responsibility for the stewardship of the Code and is responsible for considering any request for waivers from the Code. Any waiver of the Code’s provisions is subject to the disclosure and other provisions of applicable securities laws and the applicable rules of any and all securities exchanges on which the securities of the Company are listed and posted for trading. A copy of the Code is available on the Company’s website at www.profoundmedical.com. If we make any amendment to the Code or grant any waivers, including any implicit waiver, from a provision of the Code, we will disclose the nature of such amendment or waiver on our website to the extent required by the rules and regulations of the SEC. Disclosure regarding any amendments to, or waivers from, provisions of the Code that apply to our directors, principal executive officer or principal financial officer will be included in a Current Report on Form 8-K within four business days following the date of the amendment or waiver, unless website posting or the issuance of a press release of such amendments or waivers is then permitted by the rules of The Nasdaq Stock Market.
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The Board monitors compliance with the Code and reviews it on at least an annual basis to determine whether updates are appropriate. Where a director or officer has any interest in or a perceived conflict involving a contract or business relationship with the Company, that director or officer is excluded from all discussions and deliberations regarding the contract or relationship and such director abstains from voting in respect thereof. Directors and executive officers have disclosed to the Company all directorships held by such member and the existence and nature of any interests that could result in a conflict situation with the Company.
The Board has also adopted a whistleblower policy (the “Whistleblower Policy”) relating to the reporting of inappropriate activity to encourage and promote a culture of ethical business conduct. The Whistleblower Policy is intended to encourage and facilitate the reporting of questionable accounting, internal accounting controls or auditing matters.
Nomination of Directors
The Human Resources and Corporate Governance Committee has the responsibility for reviewing the composition of the Board by taking into account, among other things, its size and the particular competencies and skills of its members. The Human Resources and Corporate Governance Committee, in consultation with the Chairman of the Board and Chief Executive Officer, will then identify potential Board nominees and recommend such nominees for election as directors based on the competencies and skills each new member possesses in the context of the needs of the Company. The Board as a whole is then responsible for nominating new directors. The Human Resources and Corporate Governance Committee is composed entirely of independent directors.
The Board seeks nominees that have the following characteristics: (i) a track record in general business management; (ii) special expertise in an area of strategic interest to the Company; (iii) the ability to devote time; and (iv) support for the Company’s mission and strategic objectives.
While the Company has not adopted a written policy relating to the identification and nomination of women directors, it recognizes that diversity is an economic driver of competitiveness for companies and it strives to promote an environment and culture conducive to the appointment of well qualified persons so that there is appropriate diversity to maximize the achievement of corporate goals. Gender of a potential candidate is one component in the overall list of factors the Human Resources and Corporate Governance Committee considers when selecting candidates for executive officer and senior manager appointments, and membership on the Board and its committees. The Human Resources and Corporate Governance Committee is of the opinion that if gender was the overriding factor governing the selection of Board nominees, it could unduly restrict the Board’s ability to select the most appropriate nominees and candidates. The Company has not adopted targets regarding women on the Board or women in executive officer and senior management positions as it does not believe that such targets are necessary at this time given the size of the Board and that the director nomination process recognizes the benefits of diversity. There are currently two women on the Board.
Director and Executive Compensation
The Human Resources and Corporate Governance Committee oversees the remuneration policies and practices of the Company. The principal responsibilities of the Human Resources and Corporate Governance Committee include: (i) considering the Company’s overall remuneration strategy and, where information is available, verifying the appropriateness of existing remuneration levels using external sources for comparison; (ii) comparing the nature and amount of the Company’s directors’ and executive officers’ compensation to performance against goals set for the year while considering relevant comparative information, independent expert advice and the financial position of the Company, and (iii) making recommendations to the Board in respect of director and executive officer remuneration matters, with the overall objective of ensuring maximum shareholder benefit from the retention of high quality board and executive team members.
Board Assessments
The Board is responsible for ensuring that there is a process in place for annually evaluating the effectiveness and contribution of the Chief Executive Officer, the Board, the committees of the Board, the Chairman of the Board and the individual directors based on their applicable terms of reference or position description.
The objective of the assessments is to ensure the continued effectiveness of the Board in the execution of its responsibilities and to contribute to a process of continuing improvement. In addition to any other matters the Board deems relevant, the assessments may consider in the case of the Board or a committee, the applicable terms of reference, the applicable position descriptions, as well as the competencies and skills each individual director is expected to bring to the Board.
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The Human Resources and Corporate Governance Committee annually reviews and makes recommendations to the Board on the method and content of such evaluations and oversees the evaluation process.
Board Committees
The Board has two standing committees, the Audit Committee and the Human Resources and Corporate Governance Committee. Below is a description of the committees. The Board has adopted a written charter for each of the committees below that is available to shareholders on our website at https://ir.profoundmedical.com/governance.
Audit Committee
The Audit Committee oversees the accounting and financial reporting practices and procedures of the Company’s financial statements. The principal responsibilities of the Audit Committee include: (i) the integrity of the consolidated financial statements of the Company; (ii) the Company’s compliance with legal and regulatory requirements; (iii) the public accountants’ qualifications and independence; and (iv) the performance of the Company’s internal audit function and public accountants. The Audit Committee shall oversee the preparation of and review the report required by the rules of any and all securities regulatory bodies to which the Company is subject to be included in the Company’s annual proxy statement.
Composition of the Audit Committee
The following are the current members of the Audit Committee:
Name
Independence
Financial Literacy
Cynthia Lavoie
Independent
Financially Literate
Murielle Lortie
Independent
Financially Literate
Arthur Rosenthal
Independent
Financially Literate
The relevant education and experience of each member of the Audit Committee, is provided above, under the heading “ Election of Directors ”. All of the Audit Committee members are “independent” as required by the TSX and as defined in the listing standards of The Nasdaq Stock Market LLC and under Rule 10A-3 under the Exchange Act and each member is financially literate in that each has the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the Company’s financial statements. The Company’s board of directors has determined that each of Cynthia Lavoie, Murielle Lortie and Arthur Rosenthal, members of its Audit Committee, is an “audit committee financial expert” as defined by applicable SEC rules.
Audit Committee Oversight
At no time since the commencement of the Company’s most recently completed financial period was a recommendation of the Audit Committee to nominate or compensate an external auditor not adopted by the Board.
Human Resources and Corporate Governance Committee
The Human Resources and Corporate Governance Committee is comprised of Brian Ellacott, Kris Shah and Arthur Rosenthal. All three members are independent directors.
The key responsibilities of the Human Resources and Corporate Governance Committee include:
(a) Annually review and approve corporate goals and objectives relevant to compensation of executive officers for whom compensation is required to be individually reported under applicable securities laws, evaluate the NEOs’ performance in light of those goals and objectives, and set the NEOs’ respective compensation levels based on this evaluation.
(b) Annually review the Chief Executive Officer’s evaluation of the performance of the other officers of the Company and such other senior management and key employees of the Company or any subsidiary of the Company as may be identified to the Committee by the Board (collectively, the “ Designated Executives ”) and review the Chief Executive Officer’s recommendations with respect to the amount of compensation to be paid to the Designated Executives.
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(c) Annually review, assess the competitiveness and appropriateness of and approve the compensation package of each of the Designated Executives.
(d) Review and approve any employment contracts or arrangements with each of the Designated Executives, including any retiring allowance arrangements or any similar arrangements to take effect in the event of a termination of employment.
(e) Review and recommend to the Board compensation policies and processes and in particular, the compensation policies and processes for the Designated Executives.
(f) In determining the long-term incentive component of the Chief Executive Officer’s compensation and each Designated Executive’s compensation, consider the Company’s performance and relative shareholder return, the value of similar incentive awards to executives at comparable companies, and the awards given to Company executives in past years.
(g) Make recommendations to the Board with respect to incentive compensation and equity-based plans, and review and make recommendations with respect to the performance or operating goals for participants in such plans.
(h) Have the sole authority to retain and terminate any compensation consultant to be used to assist in the evaluation of director, Chief Executive Officer or senior executive compensation and have sole authority to approve the consultant’s fees and other retention terms.
(i) Adopt, administer, approve and ratify awards under incentive compensation and stock plans, including amendments to the awards made under any such plans, and review and monitor awards under such plans.
(j) Review and report to the Board on the appropriateness of the succession planning of the Company, including appointing, training and monitoring senior management.
(k) Review the significant human resources policies, plans and programs of the Company to ensure they are supportive of the Company’s near and long-term strategies.
(l) Undertake on behalf of, and in an advisory capacity to, the Board such other initiatives as may be necessary or desirable to assist the Board in discharging its responsibility to ensure that appropriate human resources development, performance evaluation, compensation and management development programs are in place and operating effectively.
Position Descriptions
The Board has developed written position descriptions which identify the responsibilities of the Chairman of the Board and the Chief Executive Officer. The Board has not developed written position descriptions for the Chair of each committee of the Board. The Board believes that the charters of the Audit Committee and the Human Resources and Corporate Governance Committee adequately delineate the roles of the Chairs of such committees. Each of the Audit Committee and the Human Resources and Corporate Governance Committee are responsible for reviewing their respective charters on a regular basis and to recommend to the Board any changes as considered appropriate from time to time.
Corporate Governance
We qualify as a “Foreign Private Issuer,” as defined in Rule 3b-4 under the Exchange Act. As a result, in accordance with Nasdaq listing requirements, we may rely on home country governance requirements and certain exemptions thereunder rather than complying with Nasdaq corporate governance standards.
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Although we have voluntarily chosen to file registration statements, periodic reports and current reports on U.S. domestic issuer forms, we will maintain our status as a foreign private issuer. While we voluntarily follow most Nasdaq corporate governance rules, we may choose to take advantage of limited exemptions from the following:
● U.S. federal proxy rules pursuant to Section 14 of the Exchange Act and Regulations 14A and 14C thereunder;
● Regulation FD;
● Section 16 rules, except as applicable to Foreign Private Issuers;
● the requirement that our board have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and
● the requirement to have independent director oversight of director nominations.
We intend to follow Canadian corporate governance practices in lieu of Nasdaq corporate governance requirements as follows:
We intend to adopt and approve material changes to equity incentive plans in accordance with Toronto Stock Exchange (“TSX”) listing rules, which do not impose a requirement of shareholder approval for such actions. In addition, we intend to follow the TSX listing rules in respect of private placements instead of Nasdaq requirements to obtain shareholder approval for certain dilutive events (such as issuances that will result in a change of control, certain transactions other than a public offering involving issuances of a 20% or greater interest in us and certain acquisitions of the stock or assets of another company) and the minimum quorum requirement for a shareholders meeting. Under Nasdaq listing rules, the required minimum quorum for a shareholders meeting is 33 1/3% of the outstanding common shares, and our minimum quorum requirement is only 10% of the total number of voting rights attaching to all outstanding common shares.
Although we may rely on certain home country corporate governance practices, we must comply with Nasdaq’s Notification of Noncompliance requirement (Nasdaq Rule 5625) and the Voting Rights requirement (Nasdaq Rule 5640). Further, we must have an audit committee that satisfies Nasdaq Rule 5605(c)(3), which addresses audit committee responsibilities and authority and requires that the audit committee consist of members who meet the independence requirements of Nasdaq Rule 5605(c)(2)(A)(ii).
We intend to take all actions necessary for us to maintain compliance as a foreign private issuer under the applicable corporate governance requirements of the Sarbanes-Oxley Act, the rules adopted by the SEC and Nasdaq listing rules. Accordingly, our shareholders will not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance requirements of Nasdaq.
Insider Trading Policy
We have adopted the Profound Medical Corp. Corporate Disclosure, Confidentiality and Trading in Securities by Directors, Officers, Employees and Consultants Policy (the “Insider Trading Policy”) governing the purchase, sale and/or other dispositions of our securities by our directors, officers, employees and other covered persons. The Insider Trading Policy prohibits, among other things, insider trading and certain speculative transactions in our securities (including short sales, transacting in call or put options and other hedging transactions in our securities) and establishes a regular black-out period schedule during which directors, executive officers, employees and other covered persons may not trade in the Company’s securities, as well as certain pre-clearance procedures that directors and certain officers, employees and other covered persons must observe prior to effecting any transaction in our securities. We believe the Insider Trading Policy is reasonably designed to promote compliance with applicable insider trading laws, rules and regulations, as well as the exchange listing standards applicable to us. Although we have not adopted an insider trading policy governing our purchase, sale, and/or other disposition of our securities, as part of the oversight of risk, the Board, or one or more of its committees, approves any transaction, plan or arrangement by or with the Company with respect to our securities on a case-by-case basis, and as part of their procedures to review and approve any such transaction, plan or arrangement, the Board or committee consults with legal counsel to ensure compliance with applicable insider trading laws, rules and regulations, and listing standards. The foregoing description of our Insider Trading Policy is qualified in its entirety by reference to the full text of the Insider Trading Policy, filed as Exhibit 19.1 to this Annual Report on Form 10-K.
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Shareholder Communications to our Board of Directors
Generally, shareholders who have questions or concerns should contact our Investor Relations team at 647-476-1350. However, any stockholders who wish to address questions regarding our business directly with our Board of Directors, or any individual director, should direct his or her questions in writing to the Chairman of our Board of Directors at 2400 Skymark Ave. Unit #6, Mississauga, Ontario, L4W5K5, Canada. Communications will be distributed to our board of directors, or to any individual director or directors as appropriate, depending on the facts and circumstances outlined in the communications. Items that are unrelated to the duties and responsibilities of our board of directors may be excluded.
Item 11. EXECUTIVE COMPENSATION
As a foreign private issuer in the United States, we are deemed to comply with this Item if we provide information required by Items 6.B, and 6.E.2 of Form 20-F, with more detailed information provided if otherwise made publicly available or required to be disclosed in Canada. We have provided information required by Items 6.B and 6.E.2 of Form 20-F below. As a foreign private issuer in the United States, we are not required to disclose executive compensation according to the requirements of Regulation S-K that apply to U.S. domestic issuers, and we are not otherwise required to adhere to the U.S. requirements relative to certain other proxy disclosures and requirements. Our executive compensation disclosure complies with Canadian requirements, which are, in many respects, substantially similar to U.S. rules.
Compensation Philosophy and Objectives of Compensation Programs
The executive compensation program adopted by Profound and applied to its executive officers is designed to:
(a) attract and retain qualified and experienced executives who have international business and operations experience and will contribute to the success of Profound;
(b) ensure that the compensation of the executive officers provides a competitive base compensation package, with additional compensation to reward success and create a strong link between corporate performance and compensation; and
(c) motivate executive officers to enhance long term shareholder value, with current compensation being weighted toward at-risk long-term incentives in the form of Options and restricted share units (“ RSUs ”) so as to foster alignment with the interests of the Shareholders.
The goals of the compensation program are to attract and retain the most qualified people with relevant experience, to motivate and reward such individuals on a short term and long-term basis, and to create alignment between corporate performance and compensation. The Human Resources and Corporate Governance Committee and the Board intend that the total cash components of compensation (base salary plus annual cash bonus) target the median of a benchmark group in comparable industries with similar market capitalization (the “ Compensation Peer Group ”).
Aggregate compensation (including annual cash bonus and equity-based compensation) payable to each NEO (as defined below) is based on the achievement of certain performance goals. Performance goals are established annually and designed to align with the Company’s strategic objectives. As described in greater detail below, performance goals affect equity-based compensation grants and annual cash bonuses.
Profound does not believe that its compensation programs encourage excessive or inappropriate risk taking as: (i) employees receive both fixed and variable compensation, and the fixed (salary) portion provides a steady income regardless of Common Share value which allows employees to focus on the business; (ii) the Share Option Plan encourages a long term perspective due to the vesting provisions of the options (see “ Share Option Plan ” below); and (iii) annual bonus is earned only if short-term objectives of the Company are achieved. Profound believes that the compensation program is appropriately structured and balanced to motivate its executives and reward the achievement of annual performance goals, as well as the achievement of long term growth in shareholder value. NEOs and directors are not permitted to purchase financial instruments, including, for greater certainty, prepaid variable forward contracts, equity swaps, collars, or units of exchange funds, that are designed to hedge or offset a decrease in market value of equity securities granted as compensation or held, directly or indirectly, by the NEO or director.
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Aligning Management and Shareholders
The Company’s compensation program seeks to align management interests with Shareholder interests through both short-term and long-term incentives linking compensation to performance. The short-term incentive is an annual cash bonus which is linked to individual performance and the Company’s performance. Further, long-term incentives of Option grants comprise a significant portion of overall compensation for the Company’s NEOs (as defined herein). The Human Resources and Corporate Governance Committee believes this is appropriate because it creates a direct correlation between variations in the Company’s share price (which is based in part on the Company’s financial performance) and the compensation of its NEOs, thereby aligning the interests of the Company’s executives and Shareholders.
Clawback Policy
The Company has adopted a clawback policy which applies to cash bonus awards made, and RSUs granted, to the NEOs and any other individuals as determined by the Board from time to time. Under the clawback policy, a clawback may be triggered if an NEO is indicted for or convicted of an act involving gross negligence, fraud, theft, dishonesty or willful misconduct. Among other remedial actions, the enforcement of the clawback policy may involve forfeiture or cancellation of unpaid cash bonus awards or unvested RSUs and recoupment of the value of such awards. The Human Resources and Corporate Governance Committee will continue to keep this policy under review as part of its regular risk review.
Base Salary
Base salary is intended to reflect an executive officer’s position within the corporate structure, his or her years of experience and level of responsibility, and salary norms in the sector and the general marketplace. As such, decisions with respect to base salary levels for executive officers are not based on objective identifiable performance measures but for the most part are determined by reference to competitive market information for similar roles and levels of responsibility, as well as more subjective performance factors such as leadership, commitment, accountability, industry experience and contribution. The Company’s view is that a competitive base salary is a necessary element for retaining qualified executive officers, as it creates a meaningful incentive for individuals to remain at Profound and not be unreasonably susceptible to recruiting efforts by the Company’s competitors.
In determining the base salary of the Named Executive Officers (as defined herein), the Board considered: (i) recruiting and retaining executives critical to the success of Profound and the enhancement of shareholder value; (ii) providing fair and competitive compensation; (iii) balancing the interests of management and Shareholders; and (iv) rewarding performance, both on an individual basis and with respect to operations in general.
Long-term Incentives
Long-term incentives, in the form of Options, are intended to align the interests of Profound’s directors and its executive officers with those of the Shareholders, to provide a long-term incentive that rewards these individuals for their contribution to the creation of shareholder value and to reduce the cash compensation Profound would otherwise have to pay. The Share Option Plan is administered by the Board. In establishing the number of Options to be granted to any particular executive officer, reference was made to the number of Options granted to officers of other companies involved in similar businesses. The Board also considers previous grants of Options and the overall number of Options that are outstanding relative to the number of outstanding Common Shares in determining whether to make any new grants of Options and the size and terms of any such grants, as well as the performance of the executive officer as demonstrated through his or her level of effort, time, responsibility, ability, experience, level of commitment and performance goals in determining the level of incentive share option compensation.
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Bonus Awards
The Board will consider whether it is appropriate and in the best interests of the Company to award a discretionary cash bonus to executive officers for the most recently completed financial year and if so, in what amount. A cash bonus may be awarded to reward performance that has led to increased value for Shareholders through property acquisitions or divestitures, the formation of new strategic or joint venture relationships and/or capital raising efforts.
Quantitative performance objectives include the achievement of the Company’s revenue target, departmental and individual goals, which may be quantitative or qualitative in nature. These have been established for each individual executive officer by the Board with alignment of such corporate/individual goals with the CEO and include objectives such as research and product development, company productivity, revenue growth and long-term strategic guidance of the Company. These corporate, departmental and individual goals form the basis for the review of the executive officers and the determination of cash bonuses at the end of each year with the Board. These awards are reviewed yearly to ensure that corporate performance metrics and individual goals are consistent from year to year.
Bonus award payments are based on the following assessment of:
(a) whether or not the executive officers have successfully met or exceeded the established corporate, departmental and individual performance metrics and goals;
(b) the executive officers’ decisions and actions and whether or not they are aligned with the Company’s long-term growth strategy and have created value for Shareholders;
(c) whether any near-term goals and objectives were not met because the executive officers made decisions in the best long-term interests of the Company or due to factors outside of the executive officers’ control; and/or
(d) additional initiatives undertaken by the executive officers, which were not contemplated in the initial objectives.
The following targets, as a percentage of base salary, were approved for each NEO for the fiscal year ending December 31, 2025:
Position
Target
CEO
80
%
Other NEOs
20 - 50
%
Benefits Plans
The Named Executive Officers are entitled to life insurance, health and dental benefits.
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Performance Graph
The following graph illustrates the cumulative return to Shareholders of a $100 investment in Common Shares from December 31, 2020 to December 31, 2025, as compared to the cumulative total return on the Standard & Poor’s/TSX Index and Standard & Poor’s/Nasdaq Composite Index for the same period, assuming the reinvestment of cash distributions and/or dividends.
December 31,
December 31,
December 31,
December 31,
December 31,
December 31,
2020
2021
2022
2023
2024
2025
$
$
$
$
$
$
Profound Medical
100.00
54.45
55.29
42.38
35.93
41.12
S&P/TSX Composite Index
100.00
121.74
111.20
120.22
141.85
181.91
Nasdaq Composite Index
100.00
121.39
81.21
116.47
149.84
180.34
The trend shown in the above graph does not necessarily correspond to the Company’s trend of compensation for the NEOs (as defined herein) for the period disclosed above. The Company considers a number of factors in connection with its determination of appropriate levels of compensation including, but not limited to, the demand for and supply of skilled professionals with experience in the medical device industry, individual performance, the Company’s performance (which is not necessarily tied exclusively to the trading price of the Common Shares on the TSX and Nasdaq) and other factors discussed herein.
Named Executive Officers
The following individuals are considered the “ Named Executive Officers ” or “ NEOs ” for the purposes of the disclosure:
(a) each individual who, during any part of the most recently completed financial year, served as the Company’s Chief Executive Officer or CEO, including an individual performing functions similar to a CEO;
(b) each individual who, during any part of the most recently completed financial year, served as the Company’s Chief Financial Officer or CFO, including an individual performing functions similar to a CFO;
(c) each of the three most highly compensated executive officers of the Company, including its subsidiaries, or the three highly compensated officers acting in a similar capacity, other than the CEO and CFO, at the end of the most recently completed financial year whose total compensation was more than C$150,000 for the fiscal year ended December 31, 2025; and
(d) each individual who would be a Named Executive Officer under paragraph (c) but for the fact the individual was not an executive officer of the Company and was not acting in a similar capacity as of December 31, 2025.
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Summary Compensation Table
The following table sets forth information concerning the total compensation for the three most recently completed financial years paid to the Named Executive Officers as of the most recently completed financial year. Dr. Menawat is the only officer of the Company that also serves as a director of the Company.
Non-Equity Incentive
Plan Compensation
($)
Share-
Option-
Annual
Long Term
Based
Based
Incentive
Incentive
Pension
All Other
Total
Salary
Awards
Awards
Plan
Plan
Value
Compensation (1)
Compensation
Name and Principal Position
Year
($)
($)
($)
($)
($)
($)
($)
($)
Arun Menawat
2025
558,593
2,357,362
(2)
—
440,000
—
—
—
3,355,955
Chief Executive Officer and Director
2024
514,439
595,395
(3)
1,185,443
(5)
167,737
—
—
—
1,948,575
2023
370,244
454,079
(4)
—
65,625
—
—
—
889,948
Rashed Dewan (6)
2025
316,200
392,894
(2)
—
156,072
—
—
—
865,166
Chief Financial Officer
2024
252,003
267,923
(3)
740,902
(5)
47,963
—
—
—
1,308,791
2023
195,173
454,079
(4)
—
20,004
—
—
—
669,256
Mathieu Burtnyk (6)
2025
323,764
589,340
(2)
—
156,072
—
—
—
1,069,176
President
2024
252,003
178,615
(3)
938,475
(5)
47,963
—
—
—
1,417,056
2023
195,173
181,631
(4)
—
20,004
—
—
—
396,808
Tom Tamberrino (7)
2025
307,200
392,894
(2)
—
75,000
—
—
—
775,094
Chief Commercial Officer
2024
66,456
—
987,869
(5)
—
—
—
—
1,054,325
2023
—
—
—
—
—
—
—
—
Notes:
(1) Nil indicates that perquisites and other personal benefits did not exceed C$50,000 or 10% of the total salary of the NEO for the financial year.
(2) The value shown is the product of the number of RSUs granted multiplied by the Common Share TSX closing price on the grant date of C$10.77.
(3) The value shown is the product of the number of RSUs granted multiplied by the Common Share TSX closing price on the grant date of C$10.77.
(4) The value shown is the product of the number of RSUs granted multiplied by the Common Share TSX closing price on the grant date of C$10.77.
(5) Option based awards granted utilize the Black-Scholes option pricing model to determine the fair value. The input factors to determine the fair value were volatility 70%, exercise price C$11.14, interest rate 3.17% and expected life of 6 years. This methodology was chosen to be consistent with the accounting fair value used by the Company in its financial statements and since the Black-Scholes option pricing model is a commonly used methodology for valuing options which provides an objective and reasonable estimate of fair value.
(6) Amounts paid in Canadian dollars and converted to United States dollars for reporting purposes. On December 31, 2025, the exchange rate for Canadian dollars expressed in United States dollars (as reported by the Bank of Canada) was C$1.00 = US$0.7296.
(7) Mr. Tamberrino joined the Company on October 14, 2024.
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Outstanding Option-Based and Share-Based Awards
The following table sets forth information with respect to the unexercised Options granted under the Share Option Plan and RSUs granted under the Company’s long-term incentive plan (the “ LTIP ”) to the NEOs that were outstanding as of December 31, 2025.
Option-Based Awards
Share-Based Awards
Number of
Value of
Market
Market
Common
Unexercised
Number
Value of
Value of
Shares
Option
In-the-
of RSUs
RSUs that
Vested RSUs
Underlying
Exercise
Option
Money
that have
have not
not paid out
Unexercised
Price
Expiration
Options
not
Vested
or Distributed
Name and Principal Position
Options
(C$)
Date
($) (5)
Vested
($) (6)
($)
Arun Menawat (1)
93,406
14.60
Aug 22, 2026
—
Chief Executive Officer and Director
1,650
13.50
Sep 15, 2026
—
8,345
11.00
Nov 24, 2026
—
35,439
11.00
Dec 21, 2026
—
330,000
2,593,098
—
167,392
9.20
May 16, 2029
191,743
98,573
17.44
May 20, 2030
—
49,287
22.08
May 21, 2031
—
240,000
11.14
Nov 18, 2034
—
Rashed Dewan (2)
5,000
13.50
July 19, 2026
—
Chief Financial Officer
7,500
11.00
Nov 24, 2026
—
4,500
8.50
Nov 16, 2027
7,453
2,500
9.20
May 16, 2029
2,864
73,334
576,249
—
27,667
17.44
May 20, 2030
—
51,533
22.08
May 21, 2031
—
150,000
11.14
Nov 18, 2034
—
Mathieu Burtnyk (3)
2,500
8.50
Nov 16, 2027
4,140
President
42,000
9.20
May 16, 2029
48,110
18,333
17.44
May 20, 2030
—
88,334
694,117
—
30,867
22.08
May 21, 2031
—
190,000
11.14
Nov 18, 2034
—
Tom Tamberrino (4)
200,000
11.14
Nov 18, 2034
—
50,000
392,894
—
Chief Commercial Officer
Notes:
(1) Dr. Menawat holds 694,092 Options, with 514,092 of these Options vested and exercisable and the remaining balance vesting over a three year period from their respective grant dates.
(2) Mr. Dewan holds 248,700 Options, with 136,200 of these Options vested and exercisable and the remaining balance vesting over a three year period from their respective grant dates.
(3) Dr. Burtnyk holds 283,700 Options, with 141,200 of these Options vested and exercisable and the remaining balance vesting over a three year period from their respective grant dates.
(4) Mr. Tamberrino holds 200,000 Options, with 50,000 of these Options vested and exercisable and the remaining balance vesting over a three year period from their respective grant dates.
(5) The value shown is the product of the number of Common Shares underlying the Option multiplied by the difference between the Common Share TSX closing price on December 31, 2025 of C$10.77 and the exercise price.
(6) The value shown is the product of the number of outstanding RSUs multiplied by the Common Share TSX closing price on December 31, 2025 of C$10.77.
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Incentive Plan Awards — Value Vested or Earned During the Year Ended December 31, 2025
The following table sets forth information with respect to the value of Options vested during the year ended December 31, 2025 as well as the cash bonuses granted to the NEOs during the year ended December 31, 2025.
Non-Equity Incentive
Option-Based Awards
Share-Based Awards
Plan Compensation
Value Vested During
Value Vested During
Value earned during the
Year
Year
year
Name and Principal Position
($) (1)
($) (2)
($)
Arun Menawat
Chief Executive Officer and Director
—
182,674
440,000
Rashed Dewan
Chief Financial Officer
—
147,310
156,072
Mathieu Burtnyk
President
—
106,233
156,072
Tom Tamberrino
Chief Commercial Officer
—
—
75,000
Notes:
(1) The value shown is the product of the number of Common Shares underlying the Options that vested during the year multiplied by the difference between the Common Share TSX closing price on the day the Options vested and the exercise price of the Options that vested.
(2) The value shown is the product of the number of Common Shares underlying the RSUs that vested during the year multiplied by the Common Share TSX closing price on the day the RSUs vested.
Termination and Change of Control Benefits
Each of Dr. Menawat, Mr. Dewan, Dr. Burtnyk and Mr. Tamberrino are a party to an executive employment agreement (the “Executive Employment Agreements”) with the Company. The Executive Employment Agreements have an indefinite term and contain standard confidentiality and non-solicitation provisions. Profound has agreed pursuant to the Executive Employment Agreements that each of Dr. Menawat, Mr. Dewan, Dr. Burtnyk and Mr. Tamberrino will receive base salaries determined by the Board and may receive discretionary bonuses, grants of Options, grants of RSUs, reimbursement of expenses, benefits and certain perquisites as set forth in the Executive Employment Agreements, with the amounts paid in 2025 with respect to such matters set forth in the Summary Compensation Table.
The following table sets forth information with respect to the estimated aggregate dollar amount to which each current NEO would have been entitled if the event resulting in termination of employment occurred on December 31, 2025.
Value of
Bonus and
Value of
Cash
other
Option
Name
Triggering Event
Payment
Benefits
Awards
Total Payout
Arun Menawat
Termination with cause/resignation
—
(1)
—
—
(2)
—
Termination without cause/Termination with a change of control
$
550,000
(4)
$
440,000
—
(2)
$
990,000
Rashed Dewan
Termination with cause/resignation
—
(1)
—
—
(2)
—
Termination without cause/Termination with a change of control
$
310,000
(5)
$
224,039
(3)
—
(2)
$
534,039
Mathieu Burtnyk
Termination with cause/resignation
—
(1)
—
—
(2)
—
Termination without cause/Termination with a change of control
$
162,500
(6)
$
224,039
(3)
—
(2)
$
386,539
Tom Tamberrino
Termination with cause/resignation
—
(1)
—
—
(2)
—
Termination without cause/Termination with a change of control
$
150,000
(7)
$
75,000
(3)
—
(2)
$
225,000
Notes:
(1) In the event of a termination for just cause or resignation, the Company shall have no further obligation to Dr. Menawat, Mr. Dewan, Dr. Burtnyk or Mr. Tamberrino, as applicable, other than the payment of unpaid base salary, any bonus declared but not yet paid, plus all outstanding vacation pay and expense reimbursement.
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(2) The value shown is the product of the number of Common Shares underlying the vested Options multiplied by the difference between the Common Share TSX closing price on December 31, 2025 of C$10.77 and the exercise price.
(3) The value shown is a sum of the semi annual cost of benefits and the average cash bonus paid in respect of the years ended December 31, 2025, 2024 and 2023.
(4) If Dr. Menawat’s employment is terminated without cause, he is entitled to twelve months of pay of base salary in lieu of notice and an amount equal to the then current target annual bonus prorated based on the number of days elapsed in the calendar year until the date of termination as a percentage of the total number of days in such calendar year.
(5) If Mr. Dewan’s employment is terminated without cause, he is entitled to the greater of: (i) twelve months’ notice; or (ii) the minimum notice (or pay in lieu) and minimum severance, if any, to which he would be entitled under employments standards legislation.
(6) If Dr. Burtnyk’s employment is terminated without cause, he is entitled to six months’ notice and minimum severance, if any, to which he would be entitled under employments standards legislation.
(7) If Mr. Tamberrino’s employment is terminated without cause, he is entitled to the greater of: (i) six months’ notice; or (ii) the minimum notice (or pay in lieu) and minimum severance, if any, to which he would be entitled under employments standards legislation.
Director Compensation
The directors of the Company, other than the current CEO, were paid an annual fee of $50,000 for their services in respect of the financial year-ended December 31, 2025. The Chair of the Audit Committee is entitled to an additional annual fee of $15,000 and the Chair of the Human Resources and Corporate Governance Committee is entitled to an additional annual fee of $10,000. Audit Committee members are entitled to an additional annual fee of $7,500 and Human Resources and Corporate Governance Committee members are entitled to an additional annual fee of $5,000. Directors of the Company are also eligible to receive Options and/or deferred share units (“ DSUs ”) as an initial grant when joining the Board and on an annual basis. Except as set out below, directors are not eligible to receive other compensation.
Summary Compensation Table
The following table sets forth information concerning compensation paid to the non-executive directors for the year ended December 31, 2025.
Option-based
Share-based
All Other
Fees Earned
awards
awards
Compensation
Total
Name
($)
($)
($) (1)
($)
($)
Brian Ellacott
58,750
—
74,902
—
133,652
Cynthia Lavoie
55,000
—
74,902
—
129,902
Murielle Lortie
56,000
—
74,902
—
130,902
Arthur Rosenthal
62,500
—
74,902
—
137,402
Kris Shah
53,750
—
74,902
—
128,652
Notes:
(1) The directors were granted 12,097 DSUs each. The value shown is the product of the number of DSUs issued multiplied by the Common Share TSX closing price on the grant date, June 24, 2025, of C$8.49.
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Outstanding Option-Based and Share-Based Awards
The following table sets forth information with respect to the unexercised Options granted under the Share Option Plan and DSUs granted under the LTIP to the non-executive directors that were outstanding as of December 31, 2025.
Option-Based Awards
Share-Based Awards
Market
or payout
Market or
Number of
Value of
value of
payout value
Common
Unexercised
Number
DSUs
of vested
Shares
Option
In-the-
of DSUs
that have
DSUs not
Underlying
Exercise
Option
Money
that have
not
paid out or
Unexercised
Price
Expiration
Options
not
vested
distributed
Name
Options
(C$)
Date
($) (5)
Vested
($)
($) (6)
Brian Ellacott (1)
3,300
10.20
June 15, 2028
1,372
10,000
11.23
Nov 18, 2029
—
10,000
17.44
May 20, 2030
—
17,098
134,354
78,579
10,000
22.08
May 21, 2031
—
Cynthia Lavoie (2)
10,000
28.16
March 3, 2031
—
10,000
22.08
May 21, 2031
—
17,098
134,354
78,579
Murielle Lortie (3)
10,000
23.02
Dec 15, 2030
—
10,000
22.08
May 21, 2031
—
17,098
134,354
78,579
Arthur Rosenthal (4)
3,300
10.20
June 15, 2028
1,372
10,000
11.23
Nov 18, 2029
—
17,098
134,354
10,000
17.44
May 20, 2030
—
78,579
10,000
22.08
May 21, 2031
—
Kris Shah
—
—
—
—
17,098
134,354
78,579
Notes:
(1) Mr. Ellacott holds 33,300 Options, with 33,300 of these Options vested and exercisable.
(2) Dr. Lavoie holds 20,000 Options, with 20,000 of these Options vested and exercisable.
(3) Ms. Lortie holds 20,000 Options, with 20,000 of these Options vested and exercisable.
(4) Dr. Rosenthal holds 33,300 Options, with 33,300 of these Options vested and exercisable.
(5) The value shown is the product of the number of Common Shares underlying the Option multiplied by the difference between the Common Share TSX closing price on December 31, 2025 of C$10.77 and the exercise price.
(6) The value shown is the product of the number of outstanding DSUs multiplied by the Common Share TSX closing price on December 31, 2025 of C$10.77.
Incentive Plan Awards — Value Vested or Earned During the Year Ended December 31, 2025
The following table sets forth information with respect to the value of Options vested during the year ended December 31, 2025 as well as the cash bonuses granted to non-executive directors during the year ended December 31, 2025.
Option-Based Awards
Share-Based Awards
Non-Equity Incentive Plan
Value Vested During
Value Vested During the
Compensation Value
Year
Year
earned during the year
Name
($) (1)
($) (2)
($)
Brian Ellacott
—
17,277
—
Cynthia Lavoie
—
17,277
—
Murielle Lortie
—
17,277
—
Arthur Rosenthal
—
17,277
—
Kris Shah
—
17,277
—
Notes:
(1) The value shown is the product of the number of Common Shares underlying the Options that vested during the year multiplied by the difference between the Common Share TSX closing price on the day the Options vested and the exercise price of the Options that vested.
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(2) The value shown is the product of the number of Common Shares underlying the DSUs that vested during the year multiplied by the Common Share TSX closing price on the day the DSUs vested .
Share Option Plan
The Company’s amended and restated share option plan (the “ Share Option Plan ”) is administered by the Board which may, from time to time, delegate to a committee of the Board, all or any of the powers conferred to the Board under the Share Option Plan. The Share Option Plan was originally adopted by the Board on June 4, 2015, and then amended and restated on December 8, 2016 and again on July 13, 2018.
The amendments made on July 13, 2018 were as follows: (i) inclusion of the Insider Participation Limits (as defined herein); (ii) removal of TSX Venture Exchange (“ TSXV ”) required participation limits since the Company was no longer listed on the TSXV; (iii) clarification to the share reserve since the Company was listed on the TSX and pursuant to the Share Option Plan, the reserve changed from a fixed number to a fixed percentage as described below; (iv) inclusion of an additional amendment to the list of amendments that require Shareholder approval (being removing or exceeding the Insider Participation Limits); and (v) other amendments of a housekeeping nature.
The Share Option Plan provides that the Board may from time to time, in its discretion, grant to directors, officers, employees, consultants and any other person or entity engaged to provide ongoing services to the Company non-transferable Options, provided that the maximum number of Common Shares reserved for issuance under the Share Option Plan is equal to 13% of the issued and outstanding shares in the capital of the Company at the time of any Option grant. If any Option is exercised, cancelled, expired, surrendered or otherwise terminated for any reason, the number of Common Shares in respect of which the Option is exercised, cancelled, expired, surrendered or otherwise terminated, as the case may be, will again be available for purchase pursuant to Options granted under the plan. As of December 31, 2025, 2,142,522 Options have been granted under the Share Option Plan, which represents 5.9% of the issued and outstanding Common Shares of the Company as of December 31, 2025. As of December 31, 2025, 2,575,651 Options are available for grant under the Share Option Plan, which represents 7.1% of the issued and outstanding shares in the capital of the Company as of December 31, 2025.
The aggregate number of Common Shares that may be (i) issued to insiders of the Company within any one-year period, or (ii) issuable to insiders of the Company at any time, in each case, under the Share Option Plan alone or when combined with all other security-based compensation arrangements of the Company, cannot exceed 10% of the outstanding Common Shares (the “ Insider Participation Limits ”).
The Board shall determine the exercise price of the Options, provided that, it cannot be less than the Market Price of the Common Shares on the date of grant. For the purposes of the Share Option Plan, “ Market Price ” means the volume-weighted average price of the Common Shares on the stock exchange where the majority of trading volume and value of the Common Shares occurs, for the five trading days immediately preceding the relevant date on which the Market Price is to be determined.
The expiry date for an Option shall not be later than the 10th anniversary of the date an Option is granted, subject to the expiry date falling with a corporate blackout period or within 5 business days following the expiry of such a blackout period, in which case the expiry date will be extended to the 10th business day following the expiry of the blackout period.
Unless otherwise specified by the Board, each Option generally vests and becomes exercisable as to 1/4 on the first anniversary of the date of grant and as to 1/36 on the first day of each calendar month thereafter. The Board has the discretion to permit accelerated vesting of Options.
The Company does not provide any financial assistance to optionees to facilitate the purchase of Common Shares issued pursuant to the exercise of Options under the Share Option Plan. Options granted under the Share Option Plan are not transferable or assignable (except to an optionee’s estate) and no Options may be exercised by anyone other than the optionee or his or her legal representative during the lifetime of the optionee.
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The Share Option Plan contains the following provisions regarding the exercise and cancellation of Options following a change in the employment status of an optionee. In the event of:
(a) an optionee’s retirement, the optionee will continue to participate in the plan and each Option that has vested or that vests within 12 months following the retirement date continues to be exercisable until the earlier of the Option’s expiry date and the date that is 12 months from the retirement date, and any Options that have not been exercised by such time will immediately expire and be cancelled;
(b) an optionee’s death or disability, each vested Option is exercisable until the earlier of the Option’s expiry date and 6 months following the date of death or disability, as applicable, and any Options that have not been exercised by such time will immediately expire and be cancelled;
(c) a termination without cause for an employee optionee, or the termination by the Company or an affiliate of a consulting agreement or arrangement (other than for breach) or the death or disability of a consultant, each vested Option is exercisable until the earlier of the Option’s expiry date and 90 days following the date of termination, death or disability, as applicable, and any Options that have not been exercised by such time will immediately expire and be cancelled;
(d) a termination for cause or resignation of an employee optionee, or the termination by the Company or an affiliate of a consulting agreement or arrangement (for breach) or the voluntary termination by the consultant, all Options (whether vested or unvested) terminate on the date of termination or resignation, as applicable; and
(e) a director (who is not an employee or consultant) ceases to hold office, each vested Option is exercisable until the earlier of the Option’s expiry date and 60 days following the cessation date, and any Options that have not been exercised by such time will immediately expire and be cancelled.
The Board may from time to time, without notice and without Shareholder approval, amend, modify, change, suspend or terminate the Share Option Plan or any Options granted thereunder as it, in its discretion determines appropriate, provided, however, that no such amendment, modification, change, suspension or termination of the Share Option Plan or any Option granted thereunder may materially impair any rights of an optionee or materially increase any obligations of an optionee under the plan without the consent of the optionee, unless the Board determines such adjustment is required or desirable in order to comply with any applicable securities laws or stock exchange requirements. Amendments that can be made by the Board without Shareholder approval include, but are not limited to, housekeeping amendments, amendments to comply with applicable law or stock exchange rules, amendments necessary for Options to qualify for favorable treatment under applicable tax laws, amendments to the vesting provisions of the Share Option Plan or any Option, amendments to include or modify a cashless exercise feature, amendments to the termination or early termination provisions of the Share Option Plan or any Option, and amendments necessary to suspend or terminate the Share Option Plan. Shareholder approval is required for the following amendments to be made to the Share Option Plan:
(a) increase to the number of Common Shares reserved for issuance under the Share Option Plan, except pursuant to the provisions in the plan that permit the Board to make equitable adjustments in the event of transactions affecting the Company or its capital;
(b) reduce the exercise price of an Option, except pursuant to the provisions in the plan that permit the Board to make equitable adjustments in the event of transactions affecting the Company or its capital;
(c) extend the term of an Option beyond the original expiry date, except where an expiry date would have fallen within a blackout period or within 5 business days following the expiry of such a blackout period;
(d) permit an Option to be exercisable beyond 10 years from its date of grant, except where an expiry date would have fallen within a blackout period;
(e) permit Options to be transferred other than for normal estate settlement purposes;
(f) remove or exceeds the Insider Participation Limits;
(g) permit awards, other than the Options, to be granted under the Share Option Plan; or
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(h) delete or reduce the range of amendments which require Shareholder approval.
As required by section 613 of the TSX Company Manual, the Company’s annual burn rate, which represents the number of Options granted under the Share Option Plan divided by the weighted average number of Common Shares outstanding as at the end of a fiscal year, was 6.9% in 2023, 5.4% in 2024 and 7.1% in 2025.
Description of the Company’s LTIP
On May 20, 2020, the Shareholders approved the adoption of the LTIP. The LTIP is an incentive-based equity compensation plan that provides for the grant of RSUs and DSUs.
The RSUs may be granted to any director, officer, employee or consultant of the Company or any of its affiliates and any such person’s personal holding company, as designated by the Board in a resolution (the “ RSU Participants ”) upon the terms and conditions set forth in a grant agreement. The DSUs may be granted to any director of the Company who has been designated by the Company for participation in the LTIP and who has agreed to participate in the LTIP (the “ DSU Participants ”, together with the RSU Participants, the “ Participants ”), upon the terms and conditions set forth in a grant agreement. Subject to Board approval, once each fiscal year, a DSU Participant may elect to be paid up to 100% of this or her annual board retainer in the form of DSUs, with the remaining balance (if any) being paid in cash.
The LTIP was amended and restated by the Board on April 3, 2023, with respect to the revisions to the LTIP’s amendment provision intended to more closely track the TSX amendment provision requirements and governance best practices (as further described below). Other than the revisions to the amendment provision, none of the amendments made to the LTIP required Shareholder approval. The amendments made to the LTIP that did not require Shareholder approval include decreasing the maximum number of Common Shares issuable pursuant to the LTIP from 13% of the outstanding Common Shares to 4.9% of the outstanding Common Shares, provided that, the maximum number of Common 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 including new non-employee director participation limits, including a new default vesting schedule for DSUs, permitting DSU Participants holding vested DSUs to elect settlement timing (subject to certain restrictions), providing the Company with the ability to elect whether vested DSUs are settled in Common Shares or cash, including a clawback provision, and other amendments of an administrative or “housekeeping” nature. These amendments do not require Shareholder approval because of the LTIP’s amendment provision that allows these amendments to be made without Shareholder approval.
The LTIP is intended to advance the interests of the Company by: (i) providing Participants with additional incentives; (ii) rewarding the performance of the Participants through the issuance of the Units; (iii) increasing the proprietary interest of the Participants in the success of the Company; (iv) encouraging the Participants to remain with the Company or its affiliates; and (v) attracting new directors, employees, officers and consultants to the Company or its affiliates.
The LTIP will be administered by the Board and the Human Resources and Corporate Governance Committee. The Board is responsible for, among other things, granting the RSUs to the RSU Participants, granting the DSUs to the DSU Participants, determining the terms of such grants, and interpreting the LTIP and all agreements entered into thereunder. Pursuant to the LTIP, the number of RSUs (including fractional RSUs) granted at any particular time will be calculated by dividing (i) the dollar amount of such grant by (ii) the market value of a Common Share on the applicable grant date, which is equal to the volume weighted average trading price of all Common Shares traded on the TSX (or other exchange where the Common Shares are listed) for the five (5) trading days immediately preceding such date (the “ Market Value ”). The number of DSUs (including fractional DSUs) granted at any particular time will be calculated by dividing (i) the dollar amount of such grant by (ii) the Market Value of a Common Share on the applicable grant date.
The RSUs will vest 1/3 on each of the first, second and third anniversary dates of the original grant, provided that the RSU Participant is continuously employed by or in service with the Company, or any of its affiliates, until the respective vesting date. The Board would have the option to add any performance-based vesting criteria at its discretion. After the RSUs have vested, a Canadian RSU Participant may deliver a settlement notice to the Company in respect of any or all vested RSUs it desires to settle. U.S. RSU Participants must settle any vested RSUs within 70 days after such RSUs vested unless otherwise specified in the grant agreement. The Company may elect to settle the vested RSUs in cash, in Common Shares issued from treasury, or a combination thereof. Since the form of settlement (i.e. cash and/or Common Shares) is at the option of the Company, all RSUs must settle no later than December 31 in the third calendar year following the year in which the services giving rise to the RSUs were rendered.
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DSUs granted prior to April 3, 2023 and any DSUs that a director elects to receive in lieu of annual cash board retainers will vest on the DSU termination date, which is the date on which the DSU Participant ceases to be a director and, if applicable, an employee of the Company for any reason. DSUs granted on or after April 3, 2023 will vest 1/3 on each of the first, second and third anniversary dates of the original grant, provided that the DSU Participant is continuously in service with the Company, or any of its affiliates, until the respective vesting date.
After the DSUs have vested and following a DSU Participant ceasing to hold all positions with the Company, a Participant may elect when to settle the Participant’s vested DSUs (subject to certain restrictions) and the Company will elect to settle such DSUs in such DSU Participant’s notional account for cash, Common Shares issued from treasury, or a combination thereof. U.S. DSU Participant’s shall settle any vested DSUs within 70 days on the date from such DSU Participant incurs a “separation from service” within the meaning of Section 409A of U.S. Internal Revenue Code of 1986.
The maximum number of Common Shares which may be reserved for issuance under the LTIP cannot exceed 4.9% of the issued and outstanding Common Shares from time to time on a non-diluted basis (representing an aggregate of 1,778,388 Common Shares as at December 31, 2025), provided that the Board may make appropriate adjustments in the Common Shares issuable or amounts payable to preclude a dilution or enlargement of the benefits under the LTIP as a result of a consolidation, share split or similar change in the capital structure of the Company, subject to any required approval by any stock exchange or regulatory authority. As at December 31, 2025, an aggregate of 994,825 Units, representing approximately 2.7% of the issued and outstanding Common Shares, are outstanding under the LTIP. As at December 31, 2025, an aggregate of 783,563 Units, representing approximately 2.2% of the issued and outstanding Common Shares, are available for grant under the LTIP.
Certain other restrictions on grants apply, including that: (i) the number of Common Shares issuable to insiders (as a group), at any time, under the LTIP and any other security-based compensation arrangements, including the Share Option Plan, shall not exceed 10% of the Company’s issued and outstanding Common Shares; (ii) the number of Common Shares issued to insiders (as a group), within a one-year period, under the LTIP and any other security-based compensation arrangements cannot exceed 10% of the Company’s issued and outstanding Common Shares; and (iii) the Company is prohibited from granting to any individual non-employee director of the Company more than $150,000 worth of awards under any security-based compensation arrangement of the Company (with no more than $100,000 attributable to stock options) annually based on the grant date fair value of the Units, other than in respect of awards granted to non-employee directors in lieu of cash fees on a value for value basis.
Under the LTIP, the Company will not provide financial assistance to Participants in connection with the settlement of Units by Participants. Except as the Board may otherwise determine, if a RSU Participant ceases to be a RSU Participant for any reason, including, without limitation, as a result of his or her resignation, voluntary or involuntary termination (including with or without cause), retirement, disability, or death, any unvested RSUs held by such RSU Participant shall expire. Each DSU Participant is entitled to terminate his or her participation in the LTIP by filing a termination notice with the designated officer of the Company. Thereafter, any portion of such DSU Participant’s annual board retainer payable and all subsequent annual board retainers shall be paid in cash.
In no event may the rights or interests of a Participant under the LTIP be assigned, encumbered, pledged, transferred or alienated in any way, except to the extent that certain rights may pass to a beneficiary or legal representative upon death of a Participant, by will or by the laws of succession and distribution.
Any Unit which is subject to recovery, cancellation, forfeiture, revocation or recoupment under applicable laws, stock exchange listing requirements or policies adopted by the Company, including the Company’s clawback policy, will be subject to such deductions, cancellations, forfeitures, revocations, recoupments and clawbacks as may be required pursuant to such laws, stock exchange listing requirements or policies.
In the event of a change of control, merger, amalgamation, arrangement, business combination or other transaction pursuant to which the Common Shares of the Company are converted into, or exchanged for, other property, whether in the form of securities of another entity, cash or otherwise, any surviving or acquiring company must, (i) assume any Unit outstanding under the LTIP on substantially the same economic terms and conditions as the LTIP; or (ii) substitute or replace restricted share units and deferred share units, as applicable for those RSUs and DSUs outstanding under the LTIP on substantially the same economic terms and conditions. In the event any surviving or acquiring company neglects or refuses (as determined by the Board, acting reasonably) to assume any Units or to substitute or replace similar restricted share units and deferred share units, as applicable, for those outstanding RSUs and DSUs in connection with a such an event, then with respect to any Units held by Participants, the vesting of such Units will automatically accelerate and be fully vested. Additionally, the Board may, in its discretion: (a) terminate, conditionally or otherwise and on such terms as it sees fit, the RSUs not settled following successful completion of such event; and (b) accelerate, conditionally or otherwise and on such terms as it sees fit, the vesting of Units or otherwise modify the terms of the Units to assist the Participants to obtain the advantage of holding Common Shares during the event.
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In the event of a potential change of control following a take-over bid, the Board may, in its discretion, conditionally or otherwise and on such terms as it sees fit, accelerate the vesting of all of a Participant’s unvested Units to a date prior to the expiry date of such take-over bid or offer, such that all of a Participant’s Units will immediately vest at such time. In such event, all RSUs so vested may be settled conditionally or otherwise, from such date until their respective expiry date so as to permit the Participant to tender the Common Shares received upon such settlement pursuant to the take-over bid or offer.
The Board may make certain amendments to the LTIP or to any Unit outstanding thereunder without seeking shareholder approval, including, but not limited to, housekeeping amendments, amendments to comply with applicable law or stock exchange rules, amendments necessary for Units to qualify for favorable treatment under applicable tax laws, amendments to the vesting provisions of the LTIP or any Unit, amendments to the termination or early termination provisions of the LTIP or any Unit, and amendments necessary to suspend or terminate the LTIP. Only the following types of amendments will not be able to be made without obtaining shareholder approval:
● increasing the number of Common Shares reserved for issuance under the LTIP (other than as a result of a share split or similar change in the capital structure of the Company);
● permitting awards to be transferred or assigned other than for normal estate settlement purposes;
● permitting the introduction or reintroduction of non-employee directors as participants on a discretionary basis or increasing limits previously imposed on non-employee director participation;
● removing or exceeding the participation limits on insiders;
● amendments which delete or reduce the range of amendments which require approval by the Shareholders; and
● amendments required to be approved by shareholders under applicable laws or the rules, regulations and policies of any stock exchange on which the Common Shares are listed.
As required by section 613 of the TSX Company Manual, the Company’s annual burn rate, which represents the number of Units granted under the LTIP divided by the weighted average number of Common Shares outstanding as at the end of a fiscal year, was 2.7% in 2023, 1.7% in 2024 and 3.3% in 2025.
Policies and Practices Related to the Grant of Certain Equity Awards
Our equity awards, including stock options, are granted in connection with regularly scheduled meetings of the Human Resources and Corporate Governance Committee and the Board which are scheduled in March, August and November after the release of our quarterly financial results for the prior quarter. Our trading black-out period normally lifts after two trading days following such release of information. The Human Resources and Corporate Governance Committee may also grant equity awards to individuals upon hire or promotion to executive officer positions, which awards are granted on a quarterly basis. These equity awards are not granted during any trading black-out periods. The Human Resources and Corporate Governance Committee does not grant equity awards in anticipation of the release of material non-public information . Similarly, we do not time the release of material non-public information based on equity award grant dates.
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Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth certain information with respect to the beneficial ownership of our common shares as of March 5, 2026 for:
● each person or group of affiliated persons known by us to be the beneficial owner of more than five percent of our capital stock;
● each of our directors;
● each of our named executive officers; and
● all of our current directors and executive officers as a group.
Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Under those rules, beneficial ownership includes any shares as to which the individual or entity has sole or shared voting power or investment power. Except as noted by footnote, and subject to community property laws where applicable, we believe, based on the information provided to us, that the persons and entities named in the table below have sole voting and investment power with respect to all common shares shown as beneficially owned by them.
The percentage of beneficial ownership in the table below is based on 36,293,640 common shares outstanding as of March 5, 2026. Options to purchase common shares that are exercisable within 60 days of March 5, 2026 are deemed to be beneficially owned by the persons holding these options for the purpose of computing percentage ownership of that person, but are not treated as outstanding for the purpose of computing any other person’s ownership percentage.
Unless otherwise indicated, we believe that each person named in the table below has sole voting and investment power with respect to all common shares beneficially owned by them. Unless otherwise indicated, the business address of each of the following entities or individuals is c/o Profound Medical Corp., 2400 Skymark Avenue, Unit 6, Mississauga, Ontario, Canada, L4W5K5.
Shares Beneficially
Percentage of Shares
Name of Beneficial Owner
Owned
Beneficially Owned
Greater than 5% Stockholders:
Neil Gagnon (Gagnon Securities LLC) (1)
3,346,743
11.2
%
Named Executive Officers and Directors:
Arun Menawat (2)
1,139,356
3.1
%
Rashed Dewan (3)
214,526
0.6
%
Mathieu Burtnyk (4)
184,749
0.5
%
Tom Tamberrino (5)
75,333
0.2
%
Brian Ellacott (6)
103,202
0.3
%
Cynthia Lavoie (7)
28,202
0.1
%
Murielle Lortie (8)
25,352
0.1
%
Arthur Rosenthal (9)
77,941
0.2
%
Kris Shah (10)
2,202
0.0
%
All current executive officers and directors as a group (9 persons)
1,850,863
5.1
%
Notes:
(1) Based on the Schedule 13G/A filed by Gagnon Securities LLC on January 23, 2025. Consists of shares held by Gagnon Securities LLC, Gagnon Advisors, LLC and Neil Gagnon. Mr. Gagnon is the managing member and principal owner of Gagnon Securities LLC and may be deemed to share voting power with respect to 1,771,667 shares and dispositive power with respect to 1,920,060 shares held in customer accounts of Gagnon Securities LLC. Gagnon Securities LLC and Mr. Gagnon expressly disclaim beneficial ownership of all securities held in the accounts. Mr. Gagnon is the Chief Executive Officer of Gagnon Advisors, LLC. Mr. Gagnon and Gagnon Advisors, in its role as investment manager to Gagnon Investment Associates, LLC (“GIA”), a private investment fund, may be deemed to share voting and dispositive power with respect to the 896,671 shares held by GIA. Gagnon Advisors and Mr.
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Gagnon expressly disclaim beneficial ownership of all securities held by GIA. The business address of each of these entities or individuals 1370 Ave. of Americas, 26th Floor, New York, NY 10019.
(2) Consists of (i) 625,264 common shares held by Dr. Menawat, (ii) options to purchase 514,092 common shares issuable upon the exercise of options to purchase common shares exercisable within 60 days of March 5, 2026 held by Dr. Menawat.
(3) Consists of (i) 78,326 common shares held by Mr. Dewan, (ii) options to purchase 136,200 common shares issuable upon the exercise of options to purchase common shares exercisable within 60 days of March 5, 2026 held by Mr. Dewan.
(4) Consists of (i) 43,549 common shares held by Dr. Burtnyk, (ii) options to purchase 141,200 common shares issuable upon the exercise of options to purchase common shares exercisable within 60 days of March 5, 2026 held by Dr. Burtnyk.
(5) Consists of (i) 25,333 common shares held by Mr. Tamberrino, (ii) options to purchase 50,000 common shares issuable upon the exercise of options to purchase common shares exercisable within 60 days of March 5, 2026 held by Mr. Tamberrino.
(6) Consists of (i) 70,202 common shares held by Mr. Ellacott, (ii) options to purchase 33,300 common shares issuable upon the exercise of options to purchase common shares exercisable within 60 days of March 5, 2026 held by Mr. Ellacott.
(7) Consists of (i) 8,202 common shares held by Dr. Lavoie, (ii) options to purchase 20,000 common shares issuable upon the exercise of options to purchase common shares exercisable within 60 days of March 5, 2026 held by Dr. Lavoie.
(8) Consists of (i) 5,352 common shares held by Ms. Lortie, (ii) options to purchase 20,000 common shares issuable upon the exercise of options to purchase common shares exercisable within 60 days of March 5, 2026 held by Ms. Lortie.
(9) Consists of (i) 44,941 common shares held by Dr. Rosenthal, (ii) options to purchase 33,300 common shares issuable upon the exercise of options to purchase common shares exercisable within 60 days of March 5, 2026 held by Dr. Rosenthal.
(10) Consists of 2,202 common shares held by Mr. Shah.
Securities Authorized for Issuance under Equity Incentive Plans
Equity Compensation Plan Information
The following table provides certain aggregate information with respect to all of the Company’s equity compensation plans in effect as of December 31, 2025.
Number of securities to
Weighted-average
Number of securities
be issued upon exercise
exercise price of
remaining available for
of outstanding options
outstanding options
future issuance under
Plan Category
and rights
and rights
equity compensation plans
Equity compensation plans approved by securityholders
3,137,347
(1)
C$
13.53 per Common Share
(2)
1,580,826
(3)
Equity compensation plans not approved by securityholders
—
—
—
Total
3,137,347
C$
13.53 per Common Share
1,580,826
(4)
Notes:
(1) Consists of options to purchase 2,142,522 Common Shares outstanding under the Share Option Plan, and 994,825 Common Shares subject to RSUs and DSUs outstanding under the LTIP as of December 31, 2025.
(2) Reflects the weighted-average exercise price of options to purchase Common Shares outstanding as of December 31, 2025.
(3) Consists of 1,103,048 Common Shares reserved under the Share Option Plan, and 477,778 Common Shares reserved under the LTIP as of December 31, 2025.
(4) The aggregate maximum number of Common Shares that may be issued under the LTIP may not exceed 4.9% of the issued and outstanding Common Shares from time to time on a non-diluted basis. The aggregate maximum number of Common Shares that may be issued under the Share Option Plan, together with all other security-based compensation arrangements of the Company, is limited to 13% of the issued and outstanding Common Shares.
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Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Under existing SEC rules, some transactions, commonly referred to as “related party transactions,” are required to be disclosed to shareholders, including any transactions in which we have been a participant, in which the amount involved exceeds the lesser of (i) $120,000 or (ii) 1% of the average of our total assets as of December 31, 2024 and 2025, and in which any of our directors, executive officers or holders of more than 5% of our capital stock, or an affiliate or immediate family member thereof, had or will have a direct or indirect material interest.
We are not aware of any related party transactions or series of similar transactions to which we have been or will be a party since January 1, 2024, other than compensation arrangements, which are described where required under the “Compensation of Named Executive Officers” and “Director Compensation” sections above.
Policies and Procedures for Related Party Transactions
We have adopted a written policy that requires all transactions between us and any director, executive officer, holder of 5% or more of any class of our capital stock or any member of the immediate family of, or entities affiliated with, any of them, or any other related persons, as defined in Item 404 of Regulation S-K, or their affiliates, in which the amount involved is equal to or greater than $120,000, be approved in advance by the Audit Committee. Any request for such a transaction must first be presented to the Audit Committee for review, consideration and approval. In approving or rejecting any such proposal, the Audit Committee is to consider the relevant facts and circumstances available and deemed relevant to the Audit Committee, including, but not limited to, the extent of the related party’s interest in the transaction, and whether the transaction is on terms no less favorable to us than terms we could have generally obtained from an unaffiliated third party under the same or similar circumstances.
Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table presents fees for professional audit services rendered by PricewaterhouseCoopers LLP (PwC) for the audit of our annual financial statements for the years ended December 31, 2025 and December 31, 2024, and fees billed for other services rendered by PwC during those periods:
Audit Related
Financial Year Ending
Audit Fees (1)
Fees
Tax Fees (2)
All Other Fees
December 31, 2025
$
678,000
$
—
$
110,000
$
—
December 31, 2024
$
386,000
$
—
$
69,000
$
—
Notes:
(1) Audit fees includes annual audit, quarterly reviews and work performed in relation to offerings.
(2) Tax fees includes fees related to annual tax returns and scientific research credit return along with tax and transfer pricing advice.
Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Public Accountant
Consistent with SEC policies regarding auditor independence, the audit committee has responsibility for appointing, setting compensation and overseeing the work of our independent registered public accounting firm. In recognition of this responsibility, the audit committee has established a policy to pre-approve all audit and permissible non-audit services provided by our independent registered public accounting firm.
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Prior to engagement of an independent registered public accounting firm for the next year’s audit, management will submit an aggregate of services expected to be rendered during that year for each of four categories of services to the audit committee for approval.
1. Audit services include audit work performed in the preparation of financial statements, as well as work that generally only an independent registered public accounting firm can reasonably be expected to provide, including comfort letters, statutory audits, and attest services and consultation regarding current financial accounting and/or reporting standards.
2. Audit-Related services are for assurance and related services that are traditionally performed by an independent registered public accounting firm, including due diligence related to mergers and acquisitions, employee benefit plan audits, and special procedures required to meet certain regulatory requirements.
3. Tax services include all services performed by an independent registered public accounting firm’s tax personnel except those services specifically related to the audit of the financial statements, and include fees in the areas of tax compliance, tax planning, and tax advice.
4. Other Fees are those associated with services not captured in the other categories. We generally do not request such services from our independent registered public accounting firm but these fees may include permitted advisory services and license fees associated with an accounting research tool.
Prior to engagement, the audit committee pre-approves these services by category of service. The fees are budgeted and the audit committee requires our independent registered public accounting firm and management to report actual fees versus the budget periodically throughout the year by category of service. During the year, circumstances may arise when it may become necessary to engage our independent registered public accounting firm for additional services not contemplated in the original pre-approval. In those instances, the audit committee requires specific pre-approval before engaging our independent registered public accounting firm.
The audit committee may delegate pre-approval authority to one or more of its members. The member to whom such authority is delegated must report, for informational purposes only, any pre-approval decisions to the audit committee at its next scheduled meeting.
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PART IV
Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
Item 15(a).
The following documents are filed as part of this annual report on Form 10-K:
Item 15(a)(1) and (2)
See “Index to Consolidated Financial Statements and Financial Statement Schedules” at Item 8 to this Annual Report on Form 10-K. Other financial statement schedules have not been included because they are not applicable or the information is included in the financial statements or notes thereto.
Item 15(a)(3)
Exhibits
The following is a list of exhibits filed as part of this Annual Report on Form 10-K.
Exhibit Number
Exhibit Description
Filed with this Report
Incorporated by Reference herein from Form or Schedule
Filing Date
SEC File/Reg. Number
3.1
Articles of Incorporation
Form S-8 (Exhibit 4.1)
11/7/2019
333-234574
3.2
Articles of Amendment
Form S-8 (Exhibit 4.2)
11/7/2019
333-234574
3.3
Articles of Amalgamation
Form S-8 (Exhibit 4.3)
11/7/2019
333-234574
3.4
Bylaws
Form S-8 (Exhibit 4.4)
11/7/2019
333-234574
4.1
Description of Securities
X
4.2
Specimen Share Certificate
Form 10-K (Exhibit 4.2)
3/7/2025
001-39032
10.1*
Employment Agreement, dated January 1, 2020, as amended, by and between the Company and Arun Menawat
Form 10-K (Exhibit 10.1)
3/7/2025
001-39032
10.2*
Employment Agreement, dated October 14, 2024, by and between the Company and Tom Tamberrino
Form 10-K (Exhibit 10.2)
3/7/2025
001-39032
10.3*
Amended and Restated Employment Agreement, dated August 23, 2019, as amended, by and between the Company and Rashed Dewan
Form 10-K (Exhibit 10.3)
3/7/2025
001-39032
10.4*
Amended and Restated Employment Agreement, dated August 20, 2019, as amended, by and between the Company and Mathieu Burtnyk
Form 10-K (Exhibit 10.4)
3/7/2025
001-39032
10.5*
Profound Medical Corp. Long Term Incentive Plan
X
10.6*
Profound Medical Amended and Restated Share Option Plan
Form S-8 (Exhibit 99.1)
11/7/2019
333-234574
10.7
Amended and Restated Technology License Agreement, dated May 16, 2011, by and between the Company and Sunnybrook Health Sciences Centre
Form 10-K (Exhibit 10.7)
3/7/2025
001-39032
10.8
Siemens Agreement dated January 23, 2019. between the Company and Siemens Healthcare GmbH
Form 10-K (Exhibit 10.8)
3/7/2025
001-39032
10.9
Amended and Restated Credit Agreement, dated March 3, 2025, between the Company and Canadian Imperial Bank of Commerce
Form 10-K (Exhibit 10.9)
3/7/2025
001-39032
10.10
Form of Securities Purchase Agreement, dated as of December 19, 2025, by and between Profound Medical Corp. and the purchaser parties thereto
Form 8-K (Exhibit 10.1)
12/19/2025
001-39032
10.11
Form of Subscription Agreement, dated December 30, 2025
Form 8-K (Exhibit 10.1)
12/30/2025
001-39032
19
Profound Medical Corp. Corporate Disclosure, Confidentiality and Trading in Securities by Directors, Officers, Employees and Consultants Policy
Form 10-K (Exhibit 19)
3/7/2025
001-39032
21
Subsidiaries of the Company
Form 10-K (Exhibit 21)
3/7/2025
001-39032
23.1
Consent of Independent Registered Public Accountant
X
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31.1
Certification of the Company’s Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
31.2
Certification of the Company’s Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
32†
Certification of the Company’s Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
X
97*
Profound Medical Corp.’s Clawback Policy
Form 40-F (Exhibit 97.0)
3/7/2024
001-39032
101.INS
Inline XBRL Instance Document
X
101.SCH
Inline XBRL Taxonomy Extension Schema Document
X
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
X
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document
X
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
X
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
X
104
Cover Page Interactive Data File (formatted as iXBRL and contained in Exhibit 101).
X
*
Management contract or compensatory plan or arrangement.
†
The certifications attached as Exhibit 32 that accompany this Annual Report on Form 10-K are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of such Form 10-K), irrespective of any general incorporation language contained in such filing.
Item 16. FORM 10-K SUMMARY
Not applicable.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized .
PROFOUND MEDICAL CORP.
Date:
March 5, 2026
By:
/s/ Arun Menawat
Arun Menawat
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signatures
Title
Date
By:
/s/ Arun Menawat
Chief Executive Officer and Director
March 5, 2026
Arun Menawats
(principal executive officer)
By:
/s/ Rashed Dewan
Chief Financial Officer
March 5, 2026
Rashed Dewan
(principal financial officer and principal accounting officer)
By:
/s/ Brian Ellacott
Director
March 5, 2026
Brian Ellacott
By:
/s/ Cynthia Lavoie
Director
March 5, 2026
Cynthia Lavoie
By:
/s/ Murielle Lortie
Director
March 5, 2026
Murielle Lortie
By:
/s/ Arthur Rosenthal
Director
March 5, 2026
Arthur Rosenthal
By:
/s/ Kris Shah
Director
March 5, 2026
Kris Shah
109