What changed in this filing

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Item 1. Financial Statements

2025-08-07 compared with 2025-05-08 · 202 added, 133 removed, 407 unchanged (45% of the section changed)

4 unchanged sentences

(In thousands, except share data)

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Current Assets:

16 unchanged sentences

Warrant liability 12,018 8,107

Current portion of lease liabilities 262 301

Current portion of operating lease liabilities 82 126

Current portion of finance lease liabilities 115 175

Current portion of contract liabilities 221 193

1 unchanged sentence

Non-current Liabilities:

Lease liabilities, less current portion, net of incentives 568 191

Operating lease liabilities, less current portion, net of incentives 974 125

Finance lease liabilities, less current portion 11 66

Contract liabilities, less current portion 301 300

5 unchanged sentences

6,175 shares Series A, 293 shares Series B, 90 shares Series C and 8 shares Series D designated, respectively;

no shares issued and outstanding at March 31, 2025 and December 31, 2024

no shares issued and outstanding at June 30, 2025 and December 31, 2024

Common stock, par value $ 0.001 , 2,500,000,000 shares authorized;

8,548,473 and 8,543,686 issued and outstanding at March 31, 2025 and December 31, 2024, respectively *

8,568,005 and 8,543,686 issued and outstanding at June 30, 2025 and December 31, 2024, respectively *

Additional paid-in capital 241,248 238,685

7 unchanged sentences

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands, except share data)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Revenue $ 10,164 $ 7,162 $ 19,506 $ 12,948

7 unchanged sentences

Total Operating Expenses 6,081 3,248 12,479 8,500

Operating Income (Loss) 986 ( 1,050 )

Operating Income 1,877 1,992 2,863 942

Other Income (Expense):

1 unchanged sentence

Interest expense, related party - ( 387 ) — ( 710 )

Loss on extinguishment of debt - ( 105 )

Gain on extinguishment of debt - 5,310 — 5,205

Change in fair value of derivative liabilities 990 3,717 ( 3,911 ) 1,216

Other expense ( 27 ) ( 685 ) ( 28 ) ( 787 )

Total Other Expense ( 6,662 ) ( 3,478 )

Net Loss $ ( 5,676 ) $ ( 4,528 )

Other Comprehensive Loss

89 10 181 2,800

Total Other Income (Expense) ( 822 ) 4,569 ( 7,484 ) 1,091

Net Income (Loss) $ 1,055 $ 6,561 $ ( 4,621 ) $ 2,033

Other Comprehensive Income (Loss)

Foreign currency translation adjustments - 10 - 121

Total Comprehensive Loss $ ( 5,676 ) $ ( 4,417 )

Loss per Share:

Basic and Diluted * $ ( 0.66 ) $ ( 1.46 )

Total Comprehensive Income (Loss) $ 1,055 $ 6,571 $ ( 4,621 ) $ 2,154

Earnings (Loss) per Share:

Basic * $ 0.12 $ 2.08 $ ( 0.54 ) $ 0.65

Diluted * $ 0.01 $ 1.77 $ ( 0.54 ) $ 0.55

Weighted average shares outstanding

Basic and Diluted * 8,547,675 3,099,335

Basic * 8,561,737 3,152,595 8,554,706 3,126,000

Diluted * 9,167,846 3,699,501 8,554,706 3,663,730

* Reflects a one-for-three hundred seventy-five (1:375) reverse stock split of the outstanding shares of the Company's common stock effected on October 18, 2024 .

4 unchanged sentences

(In thousands, except share data)

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Outstanding Par Value Additional Paid-

2 unchanged sentences

Comprehensive

Balances as of December 31, 2024 8,543,686 $ 9 $ 238,685 $ ( 251,421 ) $ 10 $ ( 12,717 )

Balances as of March 31, 2025 8,548,473 $ 9 $ 239,786 $ ( 257,097 ) $ 10 $ ( 17,292 )

Stock-based compensation - - 1,132 - - 1,132

Stock options exercised 17,008 - 253 - - 253

Shares granted in lieu of board of director fees 2,524 - 77 - - 77

Foreign currency translation adjustment - - - - - -

- - - 1,055 - 1,055

Balances as of June 30, 2025 8,568,005 $ 9 $ 241,248 $ ( 256,042 ) $ 10 $ ( 14,775 )

Three Months Ended June 30, 2024

Outstanding Par Value Additional Paid-

in Capital Accumulated

Deficit Accumulated

Comprehensive

Balances as of March 31, 2024 3,041,492 $ 3 $ 176,979 $ ( 224,577 ) $ - $ ( 47,595 )

Three Months Ended March 31, 2024

Shares issued for settlement of warrants 14,440 - 6 - - 6

Shares issued for settlement of debt 94,130 - 1,412 - - 1,412

Foreign currency translation adjustment - - - - 10 10

- - - 6,561 - 6,561

Balances as of June 30, 2024 3,150,062 $ 3 $ 178,397 $ ( 218,016 ) $ 10 $ ( 39,606 )

* Reflects a one-for-three hundred seventy-five (1:375) reverse stock split of the outstanding shares of the Company's common stock effected on October 18, 2024 .

The accompanying notes to condensed consolidated financial statements are an integral part of these financial statements.

SANUWAVE HEALTH, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(In thousands, except share data)

Six Months Ended June 30, 2025

Outstanding Par Value Additional Paid-

3 unchanged sentences

Balances as of December 31, 2024 8,543,686 $ 9 $ 238,685 $ ( 251,421 ) $ 10 $ ( 12,717 )

Foreign currency translation adjustment - - - - 111 111

Stock-based compensation 4,787 - 2,233 - - 2,233

Stock options exercised 17,008 - 253 - - 253

Shares granted in lieu of board of director fees 2,524 - 77 - - 77

Net loss - - - ( 4,621 ) - ( 4,621 )

Balances as of March 31, 2024 3,041,492 $ 3 $ 176,979 $ ( 224,577 ) $ - $ ( 47,595 )

Balances as of June 30, 2025 8,568,005 $ 9 $ 241,248 $ ( 256,042 ) $ 10 $ ( 14,775 )

Six Months Ended June 30, 2024

Outstanding Par Value Additional Paid-

in Capital Accumulated

Deficit Accumulated

Comprehensive

Income (Loss) Total

Balances as of December 31, 2023 3,041,492 $ 3 $ 176,979 $ ( 220,049 ) $ ( 111 ) $ ( 43,178 )

Shares issued for settlement of warrants 14,440 - 6 - - 6

Shares issued for settlement of debt 94,130 - 1,412 - - 1,412

Foreign currency translation adjustment - - - - 121 121

Net income - - - 2,033 - 2,033

Balances as of June 30, 2024 3,150,062 $ 3 $ 178,397 $ ( 218,016 ) $ 10 $ ( 39,606 )

* Reflects a one-for-three hundred seventy-five (1:375) reverse stock split of the outstanding shares of the Company's common stock effected on October 18, 2024 .

3 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands)

Cash Flows - Operating Activities:

Net loss $ ( 5,676 ) $ ( 4,528 )

Adjustments to reconcile net loss to net cash used by operating activities

Net income (loss) $ ( 4,621 ) $ 2,033

Adjustments to reconcile net income to net cash (used in) provided by operating activities

Stock-based compensation 2,106 -

Depreciation and amortization 388 393

Amortization of right to use leases 65 82

Amortization of right-of-use assets 185 87

Reserve for credit losses 131 99

Loss on extinguishment of debt - 105

Gain on extinguishment of debt - ( 5,205 )

Change in fair value of derivative liabilities 3,911 ( 1,216 )

1 unchanged sentence

Accrued interest and accrued interest, related party - 1,859

Proceeds from tenant improvement funds 429 -

Changes in operating assets and liabilities

10 unchanged sentences

Cash Flows - Financing Activities

Proceeds from exercises of stock options 253 -

Payment of note payable - ( 2,175 )

Proceeds from convertible notes payable - 1,300

Proceeds from promissory note payable, related party - 500

Proceeds from factoring, net - 831

Payments of principal on finance leases ( 149 ) ( 140 )

Net Cash Flows (Used in) Provided by Financing Activities ( 57 ) 42

Net Cash Flows Provided by Financing Activities 104 316

Effect of Exchange Rates on Cash - 121

7 unchanged sentences

Capitalize interest into senior secured debt 407 3,850

Shares granted in lieu of board of director fees 77 -

Stock options granted in lieu of cash bonus 117 -

Leased assets obtained in exchange for lease liabilities 430 -

Right-of-use assets obtained in exchange for lease liabilities 430 -

RSUs granted in exchange for services 10 -

Warrants issued in conjunction with convertible promissory notes - 3,633

Conversion of asset-backed secured promissory notes to convertible promissory notes - 4,584

Shares issued for settlement of debt - 1,412

Write off deferred merger costs - 1,226

The accompanying notes to condensed consolidated financial statements are an integral part of these financial statements.

2 unchanged sentences

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

June 30, 2025

Nature of the Business and Basis of Presentation

5 unchanged sentences

GAAP for comprehensive financial statements.

The financial information as of March 31, 2025, and for the three months ended March 31, 2025, and 2024 is unaudited;

however, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement have been included.

Operating results for the three months ended March 31, 2025, are not necessarily indicative of the results that may be expected for any other interim period or for the year ending December 31, 2025.

The financial information as of June 30, 2025, and for the three and six months ended June 30, 2025, and 2024 is unaudited;

however, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

Operating results for the three and six months ended June 30, 2025, are not necessarily indicative of the results that may be expected for any other interim period or for the year ending December 31, 2025.

The condensed consolidated balance sheet on December 31, 2024, has been derived from the audited consolidated financial statements at that date but does not include all the information and disclosures required by U.S.

GAAP for comprehensive financial statements.

These financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on March 20, 2025 (the “2024 Annual Report”).

These condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on March 20, 2025 (the “2024 Annual Report”).

Reverse Stock Split - All share numbers, including the number of shares underlying warrants, options and convertible debt, and per share amounts presented in these condensed consolidated financial statements, including these footnotes, reflect a one-for-three hundred seventy five (1:375) reverse stock split of the outstanding shares of the Company's common stock effected on October 18, 2024 (the "Reverse Stock Split").

The Company's authorized shares of common and preferred stock along with the par value did not change.

No fractional shares were issued as a result of the Reverse Stock Split.

The Company's authorized shares of common and preferred stock along with the par value did not change as a result of the Reverse Stock Split, and no fractional shares were issued as a result of the Reverse Stock Split.

Any fractional shares that would have resulted from the Reverse Stock Split were settled in cash.

The Reverse Stock Split affected all common stockholders uniformly and did not alter any stockholder's percentage interest in the Company's common stock, except to the extent that the Reverse Stock Split resulted in some stockholders experiencing an adjustment of a fractional share as described above.

The Reverse Stock Split affected all common stockholders uniformly and did not alter any stockholder's percentage interest in the Company's common stock, except to the extent that the Reverse Stock Split resulted in certain stockholders experiencing an adjustment of a fractional share as described above.

Reclassification - Certain accounts in the prior period condensed consolidated balance sheets and statement of cash flows have been reclassified to conform to the presentation of the current period condensed consolidated financial statements.

2 unchanged sentences

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

The Company has incurred recurring operating losses in prior years, has negative working capital, and its Senior Secured Note becomes due in September 2025, which raises substantial doubt as to its ability to continue as a going concern for a period of 12 months from the filing of this Form 10-Q.

During the three months ended March 31, 2025, and prior fiscal year ended December 31, 2024, the Company achieved operating income, reflecting a significant improvement in its financial performance.

This turnaround is attributable to several strategic initiatives, primarily revenue growth initiatives and a capital raise from a private placement in October 2024, which have positively impacted the Company's operations.

The Company has an accumulated deficit, has negative working capital, and its Senior Secured Note becomes due in September 2025, which raises substantial doubt as to its ability to continue as a going concern for a period of 12 months from the filing of this Form 10-Q.

During the three and six months ended June 30, 2025, and prior fiscal year ended December 31, 2024, the Company achieved operating income.

This is attributable to the implementation and execution of several strategic initiatives, primarily revenue growth initiatives and a capital raise from a private placement in October 2024, which have positively impacted the Company's operations.

Despite the positive operating income in the current year, the Company continues to monitor its financial position closely.

In addition to the operational improvements, the Company is addressing its financial obligations, including the significant portion of debt that is coming due in September 2025.

Management is actively engaged in discussions with lenders and

financial institutions to refinance this debt, which would extend the maturity of the debt and provide additional liquidity to support ongoing operations and strategic initiatives.

Management acknowledges that it must continue to execute its strategic initiatives effectively to ensure long-term financial stability.

In addition to the operational improvements, the Company is addressing its financial obligations, including the significant portion of debt that matures in September 2025.

Management is actively engaged in discussions with lenders and financial

institutions to refinance this debt, which could extend the maturity of the debt and provide additional liquidity to support ongoing operations and strategic initiatives.

Management acknowledges that it must continue to execute its strategic initiatives effectively to ensure long-term financial stability, and that failure to do so could have a material adverse effect on the Company.

The carrying amounts of assets and liabilities presented in the condensed consolidated financial statements do not necessarily purport to represent realizable or settlement values.

68 unchanged sentences

The roll-forward of the allowance for credit losses is as follows:

(in thousands) Three Months Ended March 31, 2025

(in thousands) Six Months Ended June 30, 2025 Six Months Ended June 30, 2024

Allowance for credit losses, December 31 $ 1,147 $ 1,237

Provision for credit losses 136 113

Allowance for credit losses, March 31, 2025 $ 1,180

Write-offs ( 5 ) ( 156 )

Allowance for credit losses, June 30 $ 1,278 $ 1,194

Inventory consisted of the following:

(in thousands) March 31, 2025 December 31, 2024

(in thousands) June 30, 2025 December 31, 2024

Finished goods $ 3,202 $ 386

4 unchanged sentences

The lease includes an option to renew for an additional 5 years at the Company's discretion.

Lease payments - Under the terms of the lease, the Company is obligated to make monthly lease payments starting September 1, 2025, with an annual escalation of 3.5 % starting on September 1, 2026.

Lease payments - Under the terms of the lease, the Company is obligated to make monthly lease payments starting September 1, 2025, with an annual escalation of 3.5 % starting on September 1, 2026 through August 30, 2030.

The total minimum lease payments over the initial lease term amount to approximately $ 1.4 million.

4 unchanged sentences

Under ASC 842, lease incentives are accounted for as a reduction of the right-of-use asset and recognized over the lease term.

As of March 31, 2025, the Company recorded a short-term lease liability debit balance of $ 0.5 million for the new office lease, reflecting future reimbursements from the lessor.

As of June 30, 2025, the Company recorded a short-term lease liability debit balance of $ 54 thousand for the new office lease, reflecting future reimbursements from the lessor.

This balance is classified net with long-term lease liabilities on the condensed consolidated balance sheet and will be amortized as a reduction to lease expense over the remaining lease term.

Estimated future reimbursement payments and timing used in recording the new office lease are as follows:

Date Reimbursement payment

(in thousands)

5/15/2025 $ 228

6/15/2025 228

7/15/2025 130

Lease expense - For the three months ended March 31, 2025, the Company recognized lease expense of $ 21 thousand related to this operating lease, which is included in general and administrative expenses in the condensed consolidated statements of comprehensive loss.

As of March 31, 2025, the maturities of the Company’s operating leases, which have initial or remaining lease terms more than one year, consist of the following:

Lease expense - For the three and six months ended June 30, 2025, the Company recognized lease expense of $ 37 thousand and $ 49 thousand, respectively, related to this operating lease, which is included in general and administrative expenses in the condensed consolidated statements of comprehensive income (loss).

As of June 30, 2025, the maturities of the Company’s operating leases, which have initial or remaining lease terms more than one year, consist of the following:

(in thousands) Operating

4 unchanged sentences

Present value of lease liabilities $ 1,056

The weighted-average useful life of operating leases at March 31, 2025, i s 4.3 years .

The weighted-average useful life of operating leases at June 30, 2025, i s 4.65 years .

The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

1 unchanged sentence

The following table summarizes outstanding senior secured debt:

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

(in thousands) Principal Debt Discount Carrying Value Principal Debt Discount Carrying Value

4 unchanged sentences

In February 2022 , the Company entered into a Second Amendment to Note and Warrant Purchase and Security Agreement (the “Second NWPSA”) for $ 3.0 million, for a total of $ 18.0 million outstanding.

Along with the issuance of the note, the Company also issued warrants to purchase 43,200 shares of common stock with an exercise price of $ 67.50 and 54,933 shares of common stock.

Along with the issuance of the note, the

Company also issued warrants to purchase 43,200 shares of common stock with an exercise price of $ 67.50 and 54,933 shares of common stock.

Interest is charged at the greater of the prime rate or 3 % plus 9 %, paid quarterly .

2 unchanged sentences

In June 2022, the Company entered into the Third Amendment to the Note and Warrant Purchase and Security Agreement (the “Third NWPSA”).

The Third NWPSA provides for (i) the extension of the agent’s and holder’s forbearance of exercising its remedies arising from Existing Defaults (as defined in the NWPSA) to the earlier of (x) the occurrence of an Event of Default (as defined in the NWPSA) or (y) August 30, 2022, and (ii) the extension to file a registration statement with the Securities and Exchange Commission to register the resale of the Advisor Shares (as defined in the NWPSA) no later than August 30, 2022.

In June 2023 , the Company entered into a Fourth Amendment to the NWPSA, which provides the Company an extension of the holder forbearing from exercising the remedies arising from the existing defaults to the earlier of the occurrence of an event of default and December 31, 2024 .

The Third NWPSA provided for (i) the extension of the agent’s and holder’s forbearance of exercising its remedies arising from Existing Defaults (as defined in the NWPSA) to the earlier of (x) the occurrence of an Event of Default (as defined in the NWPSA) or (y) August 30, 2022, and (ii) the extension to file a registration statement with the Securities and Exchange Commission to register the resale of the Advisor Shares (as defined in the NWPSA) no later than August 30, 2022.

In June 2023 , the Company entered into a Fourth Amendment to the NWPSA, which provided the Company an extension of the holder forbearing from exercising the remedies arising from the existing defaults to the earlier of the occurrence of an event of default and December 31, 2024 .

The amendment also added a consent fee of 2 % of the original principal amount of the NWPSA, payable in cash at maturity, accounted for as additional debt issuance costs.

The amendment also defers interest that would otherwise have been due on June 30, 2023 , and September 30, 2023.

The interest will instead be compounded and added to the principal amount of the notes and bear interest at a rate of 20.25 % per annum.

The amendment also requires the Company to complete an equity financing that results in gross cash proceeds of at least $ 2.5 million by July 15, 2023.

The amendment also deferred interest that would otherwise have been due on June 30, 2023 , and September 30, 2023.

The interest was instead compounded and added to the principal amount of the notes and bear interest at a rate of 20.25 % per annum.

The amendment also required the Company to complete an equity financing that resulted in gross cash proceeds of at least $ 2.5 million by July 15, 2023.

This financing successfully closed on July 21, 2023.

In March 2024, the Company entered into a Consent, Limited Waiver and Fifth Amendment to Note and Warrant Purchase Agreement (the “Fifth Amendment”).

The Fifth Amendment provides (i) consent to enter into a License and Option Agreement and consummation of the License and Option Transaction (ii) a waiver of any event of default that may occur under the NWPSA, because of the License and Option Agreement or License and Option Transaction and (iii) amended the NWPSA to release certain patents from the collateral.

The Fifth Amendment also provides for a forbearance of exercising remedies in connection with certain existing events of default under the NWPSA until the earlier of (x) the occurrence of another event of default under the NWPSA and (y) April 30, 2024.

During the forbearance period, the outstanding obligations under the NWPSA continue to accrue interest at the default rate.

The Fifth Amendment provided (i) consent to enter into a License and Option Agreement and consummation of the License and Option Transaction (ii) provided a waiver of any event of default that may occur under the NWPSA, because of the License and Option Agreement or License and Option Transaction and (iii) amended the NWPSA to release certain patents from the collateral.

The Fifth Amendment also provided for a forbearance of exercising remedies in connection with certain existing events of default under the NWPSA until the earlier of (x) the occurrence of another event of default under the NWPSA and (y) April 30, 2024.

During the forbearance period, the outstanding obligations under the NWPSA continued to accrue interest at the default rate.

On July 15, 2024, the Company entered into the Sixth Amendment to Note and Warrant Purchase and Security Agreement (the “Sixth Amendment”), which was a modification of debt.

1 unchanged sentence

On and after April 1, 2024, for each fiscal quarter during which any interest is payable in cash, deferred interest and default interest shall be calculated based on the principal amount of the Senior Secured Note as of the beginning of the quarter and shall include any default interest accrued to date.

The Sixth Amendment also provides for a forbearance of exercising remedies in connection with certain existing events of default under the NWPSA until the earlier of (x) the occurrence of another event of default under the NWPSA or (y) December 31, 2024.

The Sixth Amendment also provided for a forbearance of exercising remedies in connection with certain existing events of default under the NWPSA until the earlier of (x) the occurrence of another event of default under the NWPSA or (y) December 31, 2024.

During the forbearance period, the outstanding obligations under the NWPSA accrued interest at the default rate.

On October 17, 2024, the Company entered into a Consent and Limited Waiver to Note and Warrant Purchase and Security Agreement (the “Consent and Limited Waiver”) with the noteholders party thereto (the “Holders”) and NH Expansion

Credit Fund Holdings LP, as agent (the “Agent”).

The Agent and the Holders agreed to continue to forbear upon exercising remedies in connection with certain existing events of default under the NWPSA until the earlier of (x) the occurrence of an event of default and (y) December 31, 2024.

The Consent and Limited Waiver also consents to the repayment in full of amounts owed to HealthTronics, Inc.

The Consent and Limited Waiver also consented to the repayment in full of amounts owed to HealthTronics, Inc.

(“HealthTronics”) pursuant to the Convertible Promissory Note, dated as of August 6, 2020, by and between the Company and HealthTronics, in the original principal amount of approximately $ 1.4 million;

gross proceeds from the sale of common stock of at least $ 9.0 million in a private placement (for further details on this private placement transaction, see Note 16 on the 2024 Annual Report) and the Reverse Stock Split if the Company has at least $ 5.0 million of liquidity following such transactions, which is required pursuant to the minimum liquidity covenant in the NWPSA.

gross proceeds from the sale of common stock of at least $ 9.0 million in a private placement (for further details on this private placement transaction, see Note 16 on the 2024 Annual Report) and the Reverse Stock Split if the Company had at least $ 5.0 million of liquidity following such transactions, which is required pursuant to the minimum liquidity covenant in the NWPSA.

The Agent and the Holders have also agreed that any existing event of default that exists due to the Company’s failure to meet the minimum liquidity covenant will be waived if the conditions set forth in the Consent and Limited Waiver, including at least $ 5.0 million of liquidity following such transactions, are met.

As a condition to the effectiveness of the Consent and Limited Waiver, the Agent exercised, on a cashless basis, all warrants issued by the Company to the Agent in exchange for the issuance of 146,302 shares of the Company’s common stock following the Reverse Stock Split.

As of March 31, 2025, the Company is in compliance with all covenants in the Senior Secured Note.

As of June 30, 2025, the Company is in compliance with all covenants in the Senior Secured Note.

The debt issuance costs, and debt discount related to the Senior Secured Note were capitalized as a reduction in the principal amount and are being amortized to interest expense over the life of the Senior Secured Note.

Three Months Ended

(In millions) March 31, 2025 March 31, 2024

Three Months Ended Six Months Ended

(In millions) June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

Amortization of debt issuance costs and debt discount, included in interest expense $ 0.6 $ 2.1 $ 1.1 $ 4.0

3 unchanged sentences

(in thousands)

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Registration penalties $ 1,583 $ 1,583

2 unchanged sentences

Other 628 614

$ 3,581 $ 4,678

Accrued expenses $ 3,289 $ 4,678

Fair Value Measurements

1 unchanged sentence

The following tables classify the Company’s liabilities measured at fair value on a recurring basis into the fair value hierarchy:

Fair value measured at March 31, 2025

Fair value measured at June 30, 2025

(in thousands)

Fair value at

March 31, 2025 Quoted prices in

June 30, 2025 Quoted prices in

active markets

12 unchanged sentences

Warrant liability $ 8,107 $ - $ - $ 8,107

There were no transfers among Levels 1, 2 or 3 during the three months ended March 31, 2025, and 2024.

There were no transfers among Levels 1, 2 or 3 during the three and six months ended June 30, 2025, and 2024.

Both observable and unobservable inputs were used to determine the fair value of positions that the Company has classified within the Level 3 category.

1 unchanged sentence

Warrant Liability

The Company's liability classified warrants as of March 31, 2025, and December 31, 2024, were valued using the Black Scholes valuation model.

The Company's liability classified warrants as of June 30, 2025, and December 31, 2024, were valued using the Black Scholes valuation model.

Significant Black Scholes valuation model inputs related to the Company’s warrants are listed below:

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Weighted average expected life in years 0.35 0.85

3 unchanged sentences

Expected dividend yield 0 % 0 %

A summary of the Level 3 warrant activity for the three months ended March 31, 2025, is as follows:

A summary of the Level 3 warrant activity for the three and six months ended June 30, 2025, is as follows:

(in thousands, except per share data) Warrants

1 unchanged sentence

per Share Warrant Liability

Balance at March 31, 2025 390 $ 33.35 $ 13,008

Change in fair value - ( 990 )

Balance at June 30, 2025 390 $ 30.82 $ 12,018

(in thousands, except per share data) Warrants

Outstanding Fair Value

per Share Warrant Liability

Balance at December 31, 2024 390 $ 20.79 $ 8,107

Change in fair value - 3,911

Balance at March 31, 2025 390 $ 33.35 $ 13,008

Balance at June 30, 2025 390 $ 30.82 $ 12,018

Promissory Notes Payable

Convertible Notes Payable and Convertible Notes Payable, Related Parties - In August 2022 , November 2022 , May 2023, December 2023, January 2024, and June 2024, the Company entered into Securities Purchase Agreements (the “Purchase Agreements”) for the sale in a private placement of (i) Future Advance Convertible Promissory Notes (the “Notes”) in an aggregate principal amount of $ 16.2 million in August 2022 , $ 4.0 million in November 2022 , $ 1.2 million in May 2023 , $ 1.9 million in December 2023, $ 4.6 million in January 2024 related to the conversion of the Asset-Backed Secured Promissory Notes, and $ 1.3 million in June 2024 (ii) Common Stock Purchase Warrants to purchase an additional 1.9 million shares of common stock with an exercise price of $ 25.13 per share and (iii) Common Stock Purchase Warrants to purchase an additional 1.9 million shares of common stock with an exercise price of $ 15.00 per share.

Interest expense for the three months ended March 31, 2025, and March 31, 2024, totaled $ 0 and $ 1.6 million, respectively.

Interest expense for the three and six months ended June 30, 2025 totaled $ 0 , and interest expense for the three and six months ended June 30, 2024, totaled $ 1.2 and $ 2.8 million, respectively.

Pursuant to the Notes, the Company promised to pay in cash and/or in shares of common stock, at a conversion price of $ 15.00 (the “Conversion Price”), the principal amount and interest at a rate of 15 % per annum on any outstanding principal.

The Conversion Price of the Notes was subject to adjustment, including if the Company issued or sold shares of common stock for a price per share less than the Conversion Price of the Notes or if the Company listed its shares of common stock on The Nasdaq Capital Market and the average volume weighted average price of such common stock for the five trading days preceding such listing was less than $ 15.00 per share;

provided, however, that the Conversion Price

was never less than $ 3.75 .

provided, however, that the Conversion Price was never less than $ 3.75 .

The Notes contained customary events of default and covenants, including limitations on incurrences of indebtedness and liens.

20 unchanged sentences

The following table presents revenue from contracts with customers:

Three Months Ended March 31, 2025 Three Months Ended March 31, 2024

Three Months Ended June 30, 2025 Three Months Ended June 30, 2024

United States International Total United States International Total

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Total Revenue $ 10,148 $ 16 $ 10,164 $ 7,116 $ 46 $ 7,162

Six Months Ended June 30, 2025 Six Months Ended June 30, 2024

United States International Total United States International Total

Consumables and parts revenue $ 12,764 $ 16 $ 12,780 $ 9,161 $ 97 $ 9,258

System revenue 6,643 - 6,643 3,413 71 3,484

License fees and other - 15 15 - 20 20

Product Revenue $ 19,407 $ 31 $ 19,438 $ 12,574 $ 188 $ 12,762

Rental Income 68 - 68 186 - 186

Total Revenue $ 19,475 $ 31 $ 19,506 $ 12,760 $ 188 $ 12,948

Stock-Based Compensation

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Performance-based stock options vest upon the achievement of pre-established financial or operational performance criteria, as determined by the Company’s Board of Directors or Compensation Committee.

These awards expire five years from the date of grant and are subject to forfeiture if the performance goals are not achieved within the specified performance period.

These awards generally expire five years from the date of grant and are subject to forfeiture if the performance goals are not achieved within the specified performance period.

Market-based stock options vest upon the attainment of certain market conditions, such as specified

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All awards under the 2024 Plan are subject to the terms and conditions of the 2024 Plan and the individual award agreements.

During the three months ended March 31, 2025, the Company granted performance- and market-based awards to two employees which provide for the vesting of up to 55,500 shares of common stock.

During the six months ended June 30, 2025, the Company granted performance- and market-based option awards to three employees which provide for the vesting of up to 65,500 shares of common stock.

Vesting is contingent upon the achievement of specified performance or market conditions, with 100 % of the related shares vesting upon satisfaction of each applicable condition.

The performance conditions include the achievement of (a) specific revenue recognized ( 12,750 shares), (b) specific adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) targets ( 12,750 shares), (c) listing on NASDAQ ( 10,000 shares), and (d) the refinancing or repayment of certain debt obligations ( 10,000 shares).

The performance conditions include the achievement of (a) specific revenue recognized ( 12,750 shares), (b) specific adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) targets ( 12,750 shares), (c) listing on NASDAQ ( 10,000 shares), (d) the refinancing or repayment of certain debt obligations ( 10,000 shares), and (e) various operations related milestones ( 10,000 shares).

The market condition relates to the attainment of a defined stock price target ( 10,000 shares).

As of March 31, 2025, the Company concluded that the performance conditions related to revenue, adjusted EBITDA, and debt repayment were not probable of achievement, and accordingly, no compensation expense was recognized for those awards.

The NASDAQ listing condition was achieved during the quarter, and the related compensation expense was recognized.

The market condition has not been met as of March 31, 2025, however, compensation expense for the market-based award is recognized on a straight-line basis over the requisite service period, regardless of whether the market condition is ultimately satisfied.

During the three months ended June 30, 2025, 5,500 shares subject to performance conditions ( 2,750 shares under criterion (a) and 2,750 shares under criterion (b)) were forfeited due to the termination of one of the employees.

As a result, the maximum number of shares eligible to vest under these awards was reduced to 60,000 shares as of June 30, 2025.

As of June 30, 2025, the Company concluded that the performance conditions related to revenue, adjusted EBITDA, debt repayment, and the various operations related milestones were not probable of achievement, and accordingly, no compensation expense was recognized for those awards.

The NASDAQ listing condition was achieved during the quarter ended March 31, 2025, and the related compensation expense was recognized in the quarter achieved.

The market condition has not been met as of June 30, 2025, however, compensation expense for the market-based award is recognized on a straight-line basis over the requisite service period, regardless of whether the market condition is ultimately satisfied.

If the condition is achieved prior to the end of the service period, any unrecognized expense will be recognized immediately.

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The Stock Incentive Plan gives broad powers to the board of directors of the Company to administer and interpret the form and conditions of each option.

The following table presents stock compensation expense recognized by the Company for the three months ended March 31, 2025 .

Total unrecognized compensation cost related to equity awards as of March 31, 2025 was $ 8.9 million and is expected to be recognized over the next 2.75 years .

The following table presents stock compensation expense recognized by the Company for the three and six months ended June 30, 2025 .

Total unrecognized compensation cost related to equity awards as of June 30, 2025 was $ 9.9 million and is expected to be recognized over a weighted average period of 2.48 years .

All stock compensation expense from the Stock Incentive Plan was recognized prior to 2024.

The first grants from the 2024 Plan were issued in the three months ended December 31, 2024 , thus there is no expense for the three and six months ended June 30, 2024 .

The Company recognizes compensation expense on a straight-line basis over the requisite service period, net of actual forfeitures.

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in thousands) 2025 2025

Cost of sales 9

Cost of revenues $ 9 $ 18

General and administrative 905 1,706

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Total expense $ 1,132 $ 2,116

The following table presents a summary of stock options award activity during the three months ended March 31, 2025:

The following table presents a summary of stock options award activity during the six months ended June 30, 2025:

Number of Options (in thousands) Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in thousands)

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Granted 342 28.75 6.8 1,411

Exercised ( 17 ) 14.89 0.0 306

Forfeited ( 153 ) 19.45 0.0 -

Outstanding, March 31, 2025 1,233 $ 17.37 9.1 $ 22,883

Exercisable, March 31, 2025 207 $ 21.82 7.5 $ 3,499

Outstanding, June 30, 2025 1,309 $ 17.53 8.6 $ 18,855

Exercisable, June 30, 2025 292 $ 19.95 8.1 $ 4,333

Valuation Information for Stock-Based Compensation

The fair value of each stock option award during the three months ended March 31, 2025 was based on the closing price of the Company's common stock on the date of the grant.

The fair value of each stock option award during the three and six months ended June 30, 2025 was based on the closing price of the Company's common stock on the date of the grant.

Expected volatility was based on 100% of the historical realized volatilities of peer companies.

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The Company's policy is to recognize forfeitures as they occur.

The weighted average assumptions used in the Black-Scholes option pricing model in valuing stock options granted in the three months ended March 31, 2025 are summarized in the table below:

Three Months Ended March 31,

The weighted average assumptions used in the Black-Scholes option pricing model in valuing stock options granted in the three and six months ended June 30, 2025 are summarized in the table below:

Three Months Ended June 30, Six Months Ended June 30,

Fair value at grant date $ 30.19 $ 29.00

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Dividend yield 0 % 0 %

Loss per Share

Basic net loss per share is calculated by dividing the net loss attributable to common stockholders by the weighted average number of shares outstanding for the three months ended March 31, 2025, and 2024.

The weighted average number of shares outstanding includes outstanding common stock and shares issuable for nominal consideration.

Accordingly, warrants issued with a $ 0.01 per share exercise price, are included in weighted average shares outstanding as follows:

Three Months Ended

Net Income (Loss) per Share

Basic net income (loss) per share is computed based on the weighted average number of shares outstanding during the applicable period, including nominally priced warrants.

Diluted net income (loss) per share is computed by dividing the net income (loss) attributable to common stockholders by the weighted average number of shares of common stock and dilutive common stock equivalents outstanding.

Diluted net income (loss) per share is calculated based on the weighted average of shares of common stock outstanding and the number of additional shares that would have been outstanding if the potentially dilutive securities had been issued.

The Company uses the treasury stock method to calculate the number of shares for the nominally priced warrants.

Three Months Ended June 30, Six Months Ended June 30,

(in thousands, except per share data)

2025 2024 2025 2024

Basic net income (loss) available to stockholders 1,055 6,561 ( 4,621 ) 2,033

Change in fair value of warrants ( 990 ) - - -

Diluted net income (loss) available to stockholders 65 6,561 ( 4,621 ) 2,033

Weighted average common shares outstanding - Basic 8,562 3,153 8,555 3,126

Dilutive effect of warrants 363 - - -

Dilutive effect of stock options 243 - - -

Dilutive effect of convertible promissory notes including interest - 547 - 538

Weighted average common shares outstanding - Diluted 9,168 3,700 8,555 3,664

Net income (loss) per share:

Basic $ 0.12 $ 2.08 $ ( 0.54 ) $ 0.65

Diluted $ 0.01 $ 1.77 $ ( 0.54 ) $ 0.55

Diluted net income (loss) per share is computed by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock and dilutive common stock equivalents outstanding that are nominally priced.

In June 2024, the Company did not have any dilutive common stock equivalents that were nominally priced.

The following securities were excluded from the calculation of diluted net loss per share during the six months ended June 30, 2025 because the result would have been anti-dilutive.

Six Months Ended June 30,

(in thousands) 2025 2024

March 31, 2025 March 31, 2024

Weighted average shares outstanding

Common shares 8,548 3,041

Common shares issuable assuming exercise of nominally priced warrants - 58

Weighted average shares outstanding 8,548 3,099

Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock and dilutive common stock equivalents outstanding.

To the extent that securities are “anti-dilutive,” they are excluded from the calculation of diluted net loss per share.

As a result of the net loss for each of the three months ended March 31, 2025, and March 31, 2024, all potentially dilutive shares in such periods were anti-dilutive and therefore excluded from the computation of diluted net loss per share.

Three Months Ended

(in thousands) March 31, 2025 March 31, 2024

Common stock options 102 42

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The Company currently purchases most of its product component materials from single suppliers and the loss of any of these suppliers could result in a disruption in the Company’s production.

The percentage of purchases from major vendors

of the Company that exceeded ten percent of total purchases for the three months ended March 31, 2025, and 2024 were as follows:

Three Months Ended

March 31, 2025 March 31, 2024

The percentage of purchases from major vendors of the Company that exceeded ten percent of total purchases for the three and six months ended June 30, 2025, and 2024 were as follows:

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Vendor A 19 % 32 % 22 % 20 %

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The Company granted the Licensee an exclusive license to the patents and an option to acquire the patents for an additional one-time payment in the mid single-digit millions of dollars for a period of 3 years following the effective date of the Agreement.

Upon acquisition of the patents, the Licensee will distribute any resulting proceeds to the Company, including but not limited to any royalties, license fees, settlement payments, or other proceeds generated from the licensing or assertion of the patents, in accordance with a revenue sharing agreement.

Upon acquisition of the patents, the Licensee will distribute any resulting proceeds to the Company, including but not limited to any royalties, license fees, settlement payments, or other

proceeds generated from the licensing or assertion of the patents, in accordance with a revenue sharing agreement.

If the Licensee does not exercise its option to acquire the Patents during a specified option period of 3 years from the effective date of the Agreement, the license terminates, a supplement license fee is owed, and all rights revert back to the Company.

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The accounting policies of the one reportable segment are the same as those described in the summary of significant accounting policies.

The Chief Operating Decision Maker ( “ CODM ” ) assesses performance for the reportable segment and decides how to allocate resources primarily based on gross profit that is also reported on the consolidated statements of comprehensive loss.

The measure of segment assets is reported on the condensed consolidated balance sheets as total consolidated assets.

The CODM uses gross profit to evaluate income generated from segment assets (return on assets) in deciding whether to reinvest profits or to apply them to other parts of the entity.

Net (loss) income is used to monitor budget versus actual results.

The CODM also uses net (loss) income in competitive analysis by benchmarking to competitors.

The measure of segment assets is reported on the condensed consolidated balance sheets as total assets.

The CODM uses gross profit to evaluate income (loss) generated from segment assets (return on assets) in deciding whether to reinvest profits or to apply them to other parts of the entity.

Net income (loss) is used to monitor budget versus actual results.

The CODM also uses net income (loss) in competitive analysis by benchmarking to competitors.

The competitive analysis along with the monitoring of budgeted versus actual results are used in assessing performance of the segment and in establishing management’s compensation.

Management has determined that Morgan Frank, CEO, is the CODM.

The following table sets forth our condensed consolidated statements of comprehensive loss used by the CODM:

Three Months Ended March 31,

The following table sets forth our condensed consolidated statements of comprehensive income (loss) used by the CODM:

Three Months Ended June 30, Six Months Ended June 30,

(in thousands) 2025 2024 2025 2024

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Total Operating Expenses 6,081 3,248 12,479 8,500

Total Other Expense ( 6,662 ) ( 3,478 )

Net Loss $ ( 5,676 ) $ ( 4,528 )

Total Other Income (Expense) ( 822 ) 4,569 ( 7,484 ) 1,091

Net Income (Loss) $ 1,055 $ 6,561 $ ( 4,621 ) $ 2,033

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

What changed 10-Q

Item 1. Financial Statements