What changed in this filing

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Item 1. Financial Statements

2025-11-06 compared with 2025-08-07 · 165 added, 159 removed, 450 unchanged (42% of the section changed)

4 unchanged sentences

(In thousands, except share data)

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Current Assets:

9 unchanged sentences

Goodwill 7,260 7,260

Secured revolving credit facility debt issuance costs, net 79 -

Total Non-Current Assets 12,966 11,722

1 unchanged sentence

Current Liabilities:

Current portion of secured term loan $ 5,629 $ -

Senior secured debt - 25,305

7 unchanged sentences

Non-current Liabilities:

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

Secured term loan, net of current portion and debt issuance costs 17,079 -

Secured revolving credit facility

Operating lease liabilities, less current portion 897 125

Finance lease liabilities, less current portion - 66

6 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 June 30, 2025 and December 31, 2024

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

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

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

8,576,164 and 8,543,686 issued and outstanding at September 30, 2025 and December 31, 2024, respectively

Additional paid-in capital 242,767 238,685

3 unchanged sentences

Total Liabilities and Stockholders’ Deficit $ 35,599 $ 30,119

* 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.

3 unchanged sentences

(In thousands, except share data)

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

12 unchanged sentences

Interest expense, related party - ( 346 ) - ( 1,056 )

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

Gain (Loss) on extinguishment of debt ( 477 ) - ( 477 ) 5,205

Change in fair value of derivative liabilities 6,097 ( 18,849 ) 2,186 ( 17,633 )

Loss on impairment of assets ( 196 ) - ( 196 ) -

Other expense ( 14 ) ( 106 ) ( 42 ) ( 893 )

Other income (See Note 15)

5,170 6 5,351 2,806

2 unchanged sentences

Other Comprehensive Income (Loss)

Foreign currency translation adjustments - 10 - 121

Foreign currency translation adjustment - - - 121

Total Comprehensive Income (Loss) $ 10,325 $ ( 20,657 ) $ 5,704 $ ( 18,503 )

5 unchanged sentences

Diluted 9,140,668 3,185,495 9,178,144 3,146,000

* 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.

3 unchanged sentences

(In thousands, except share data)

Three Months Ended June 30, 2025

Three Months Ended September 30, 2025

Outstanding Par Value Additional Paid-

2 unchanged sentences

Comprehensive

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

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

Stock-based compensation - - 1,397 - - 1,397

Stock options exercised 8,159 - 122 - - 122

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

Foreign currency translation adjustment - - - - - -

- - - 10,325 - 10,325

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

Three Months Ended June 30, 2024

Balances as of September 30, 2025 8,576,164 $ 9 $ 242,767 $ ( 245,717 ) $ 10 $ ( 2,931 )

Three Months Ended September 30, 2024

Outstanding Par Value Additional Paid-

2 unchanged sentences

Comprehensive

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

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 .

- - - ( 20,657 ) - ( 20,657 )

Balances as of September 30, 2024 3,150,062 $ 3 $ 178,397 $ ( 238,673 ) $ 10 $ ( 60,263 )

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

3 unchanged sentences

(In thousands, except share data)

Six Months Ended June 30, 2025

Nine Months Ended September 30, 2025

Outstanding Par Value Additional Paid-

6 unchanged sentences

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

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

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

Six Months Ended June 30, 2024

Net income - - - 5,704 - 5,704

Balances as of September 30, 2025 8,576,164 $ 9 $ 242,767 $ ( 245,717 ) $ 10 $ ( 2,931 )

Nine Months Ended September 30, 2024

Outstanding Par Value Additional Paid-

7 unchanged sentences

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 .

Net loss - - - ( 18,624 ) - ( 18,624 )

Balances as of September 30, 2024 3,150,062 $ 3 $ 178,397 $ ( 238,673 ) $ 10 $ ( 60,263 )

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

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands)

5 unchanged sentences

Amortization of right-of-use assets 268 268

Reserve for credit losses 131 99

Gain on extinguishment of debt - ( 5,205 )

Allowance for credit losses 112 16

Loss on disposal and impairment of assets 210 -

Loss (Gain) on extinguishment of debt 477 ( 5,205 )

Change in fair value of derivative liabilities ( 2,186 ) 17,633

Amortization of debt issuance and debt discounts 1,062 3,274

Gain on sale of patents ( 5,000 ) -

Amortization of debt issuance costs and debt discounts 1,416 4,792

Gain on lease modification ( 7 ) -

Accrued interest and accrued interest, related party - 2,749

6 unchanged sentences

Accrued expenses and contract liabilities ( 294 ) 819

Net Cash Flows (Used in) Provided by Operating Activities ( 524 ) 432

Operating lease payments ( 79 ) ( 102 )

Net Cash Flows Provided by Operating Activities 557 1,714

Cash Flows - Investing Activities:

1 unchanged sentence

( 1,846 ) ( 254 )

Net Cash Flows Used in Investing Activities ( 1,321 ) ( 206 )

Proceeds from sale of patents

Net Cash Flows Provided by (Used in) Investing Activities 3,154 ( 254 )

Cash Flows - Financing Activities:

Proceeds from secured term loan 23,000 -

Proceeds from secured revolving credit facility 655 -

Payment of debt issuance costs ( 371 ) -

Proceeds from exercises of stock options 359 -

3 unchanged sentences

Proceeds from factoring, net - 449

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

Net Cash Flows Provided by Financing Activities 104 316

Payments of principal on finance lease and extinguishment of lease liability ( 242 ) ( 193 )

Net Cash Flows Used in Financing Activities ( 4,346 ) ( 119 )

Effect of Exchange Rates on Cash - 121

10 unchanged sentences

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

Lease liabilities reduced upon lease modification 99 -

RSUs granted in exchange for services 10 -

7 unchanged sentences

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

September 30, 2025

Nature of the Business and Basis of Presentation

5 unchanged sentences

GAAP for comprehensive financial statements.

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

The financial information as of September 30, 2025, and for the three and nine months ended September 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.

Operating results for the three and nine months ended September 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.

9 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 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 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.

The condensed consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty.

Our condensed consolidated financial statements do not include any adjustments relating to the recoverability of assets and classification of assets and liabilities that might be necessary should we be unable to continue as a going concern.

In prior periods, the Company experienced recurring net losses, accumulated deficits, negative working capital, and significant debt maturities, which raised substantial doubt about its ability to continue as a going concern.

During the third quarter of 2025, management executed a comprehensive debt refinancing with a new lender, which extended the maturity of the Company’s principal debt obligations from the secured term loan and provided the option for additional liquidity to support ongoing operations through a s ecured revolving credit facility .

In addition, the Company achieved positive operating income for the three and nine months ended September 30, 2025, and prior fiscal year ended December 31, 2024, reflecting the impact of strategic initiatives focused on revenue growth and operational efficiency.

As a result of these actions, management has evaluated the Company’s financial condition and cash flow requirements for the twelve months following the issuance of these condensed consolidated financial statements.

Based on the debt refinancing, the achievement of operating income, and cash inflow from forecasted operations for at least the next 12

months, management believes the Company has sufficient resources to meet its obligations as they become due and to continue its operations for the foreseeable future.

Accordingly, when considering all conditions and factors, management has concluded that the substantial doubt about the Company’s ability to continue as a going concern for at least twelve months from issuance of these condensed consolidated financial statements has been alleviated.

Management will continue to monitor the Company’s financial position, operating results, and compliance with debt covenants.

Summary of Significant Accounting Policies

52 unchanged sentences

ASU 2023-09 modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state, and foreign).

also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes.

ASU 2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 .

1 unchanged sentence

The adoption of ASU 2023-09 did not have a material impact on the Company’s financial position or results of operations.

Merger Agreement

On August 23, 2023, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with SEP Acquisition Corp., a Delaware corporation (“SEPA”), and SEP Acquisition Holdings Inc., a Nevada corporation and a wholly owned subsidiary of SEPA.

Pursuant to the terms of the Merger Agreement, a business combination between the Company and SEPA was to be effected.

On June 25, 2024, the Company delivered a notice to SEPA terminating the Merger Agreement.

Allowance for Credit Losses

3 unchanged sentences

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

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

(in thousands) Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024

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

1 unchanged sentence

Write-offs ( 41 ) ( 248 )

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

Allowance for credit losses, September 30 $ 1,259 $ 1,056

Inventory consisted of the following:

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

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

Finished goods $ 6,083 $ 386

7 unchanged sentences

Right-of-use asset and lease liability - In accordance with ASC 842, "Leases," the Company recognized a right-of-use asset and a corresponding lease liability on the condensed consolidated balance sheets as of March 28, 2025.

measurement of the right-of-use asset and lease liability was $ 0.4 million, which represents the present value of the lease payments over the lease term, discounted at the Company's incremental borrowing rate of 11.5 %.

Lease-incentive - As part of a new office lease agreement, the Company is entitled to receive reimbursement payments from the lessor as a lease incentive.

These payments, totaling $ 586 thousand, are intended to offset certain costs associated with leasehold improvements.

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 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.

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:

The initial measurement of the right-of-use asset and lease liability was $ 0.4 million, which represents the present value of the lease payments over the lease term, discounted at the Company's incremental borrowing rate of 11.5 %.

Lease incentive - As part of a new office lease agreement, the Company received reimbursement payments from the lessor as a lease incentive.

These payments, totaling $ 586 thousand, were intended to offset certain costs associated with leasehold improvements.

Lease expense - For the three and nine months ended September 30, 2025, the Company recognized lease expense of $ 37 thousand and $ 86 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 September 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

2025 $ ( 13 )

Thereafter 199

2 unchanged sentences

Present value of lease liabilities $ 1,088

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

The weighted-average useful life of operating leases at September 30, 2025, i s 4.75 years .

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

Senior Secured Debt

The following table summarizes outstanding senior secured debt:

June 30, 2025 December 31, 2024

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

Long Term Debt, Revolving Credit Facility and Senior Secured Debt

The following table summarizes outstanding debt at September 30, 2025 and December 31, 2024 :

September 30, 2025 December 31, 2024

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

Secured term loan

$ 23,000 $ ( 292 ) $ 22,708 $ - $ - $ -

Secured revolving credit facility

655 ( 79 ) 576 - - -

Senior secured debt $ - $ - $ - $ 26,898 $ ( 1,593 ) $ 25,305

Senior secured promissory note payable (“Senior Secured Note”) – In August 2020 , the Company entered into a Note and Warrant Purchase and Security Agreement (the “NWPSA”).

In accordance with the NWPSA, the Company issued a $ 15 million Senior Secured Promissory Note Payable (the “Senior Secured Note”) and a warrant exercisable for shares of the Company’s common stock in exchange for cash to support operations, repay outstanding debt and close on the acquisition of the UltraMIST assets from Celularity Inc.

(Celularity) among other transactions.

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.

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

The principal increases at a rate of 3 % of the outstanding principal balance (PIK interest) on each quarterly interest payment date.

The original maturity date of the Senior Secured Note is September 20, 2025, and it can be prepaid.

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 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 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 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.

The Sixth Amendment added, as of June 30, 2024, a consent fee of $ 0.7 million to the principal amount of the Senior Secured Note issued pursuant to the NWPSA.

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 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 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 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 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 Six Months Ended

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

Revolving Credit Facility and Senior Secured Debt - On September 25, 2025, the Company entered into a new credit agreement (the “JPM Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent, and a syndicate of lenders.

The JPM Credit Agreement provides for a $ 23.0 million secured term loan (the “Term Loan”) with term payments through September 25, 2029, and a $ 5.0 million secured revolving credit facility (the “Revolver”) maturing September 25, 2027.

Loans under the JPM Credit Agreement accrue interest at a rate per annum equal to, at the Company’s option, either a term rate based on the secured overnight financing rate (“SOFR”) plus a margin of 3.50 %, or the CB Floating Rate (“CBFR”) plus a margin of 2.50 %.

Interest is payable in arrears, either at the end of the applicable interest period for SOFR-based loans or quarterly for CBFR-based loans.

Debt issuance costs incurred in connection with obtaining new debt facilities are capitalized and amortized over the term of the related debt.

For the term loan, these costs are presented as a direct reduction of the carrying amount of the debt.

For the revolving credit facility, such costs are presented as an asset.

Amortization of debt issuance costs is included in interest expense in the condensed consolidated statements of comprehensive income (loss).

Principal payments on the term loan will commence on December 31, 2025, and will be made in quarterly installments of $ 1,437,500 on the last day of each fiscal quarter.

The Company may prepay outstanding loans at any time without premium or penalty, subject to customary breakage costs for SOFR-based borrowings.

As of September 30, 2025, t he undrawn amount available under the revolver was $ 4.3 million.

Retirement of Senior Secured Debt - Concurrently, on September 25, 2025, in connection with the funding of the term loan and the initial draw of $ 0.7 million under the revolver, the Company paid all amounts due under and terminated in full all commitments under the Note and Warrant Purchase and Security Agreement, dated August 6, 2020, with NH Expansion

Credit Fund Holdings LP and the related senior secured debt (collectively, the “Existing Debt”).

The payoff and termination of the Existing Debt resulted in the release of all associated liens and security interests.

The full repayment of the Existing Debt was accounted for as a debt extinguishment under ASC 470-50.

The Company recognized a $ 0.5 million loss on extinguishment of debt, which includes the write-off of unamortized debt issuance costs and debt discounts.

Debt Covenants and Restrictions - The JPM Credit Agreement contains customary covenants, including requirements to maintain certain financial ratios and restrictions on additional indebtedness, asset sales, and dividend payments.

As of September 30, 2025 , the Company was in compliance with all covenants under the JPM Credit Agreement.

Collateral and Security - The Company’s obligations under the JPM Credit Agreement are secured by a first-priority lien on substantially all of the Company’s tangible and intangible assets, including the Company’s equity interests in subsidiaries.

Maturity Analysis - Future principal payments on the term loan and revolver are due as follows:

(in thousands) Principal Payments

2027 (includes the revolver) 6,405

Total Principal Payments 23,655

Debt Issuance Costs ( 371 )

Less current maturities ( 5,750 )

Long term debt, net of current maturities $ 17,534

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

Three Months Ended Nine Months Ended

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

Amortization of debt issuance costs and debt discount, included in interest expense $ 0.5 $ 0.5 $ 1.6 $ 1.4

3 unchanged sentences

(in thousands)

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Registration penalties $ 1,583 $ 1,583

6 unchanged sentences

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 June 30, 2025

Fair value measured at September 30, 2025

(in thousands)

Fair value at

June 30, 2025 Quoted prices in

September 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 and six months ended June 30, 2025, and 2024.

There were no transfers among Levels 1, 2 or 3 during the three and nine months ended September 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 June 30, 2025, and December 31, 2024, were valued using the Black Scholes valuation model.

The Company's liability classified warrants as of September 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:

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Weighted average expected life in years 0.23 0.85

3 unchanged sentences

Expected dividend yield 0 % 0 %

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

A summary of the Level 3 warrant activity for the three and nine months ended September 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

Expired ( 222 )

Change in fair value ( 6,097 )

Balance at September 30, 2025 168 $ 35.24 $ 5,921

(in thousands, except per share data) Warrants

2 unchanged sentences

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

Expired ( 222 )

Change in fair value ( 2,186 )

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

Balance at September 30, 2025 168 $ 35.24 $ 5,921

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 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.

Interest expense for the three and nine months ended September 30, 2025 totaled $ 0 , and interest expense for the three and nine months ended September 30, 2024 , totaled $ 1.5 and $ 4.3 million, res pectively.

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.

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The Seller Note matured on August 6, 2021, and was not repaid.

The Company’s failure to pay the outstanding principal balance when due constituted an event of default under the terms of the Seller Note and, accordingly, it began accruing additional interest of 5.0 % in addition to the 12.0 % initial rate, as of the date of the default.

The Company’s failure to pay the outstanding principal balance when due constituted an event of default under the terms of the Seller Note and, accordingly,

it began accruing additional interest of 5.0 % in addition to the 12.0 % initial rate, as of the date of the default.

As of December 31, 2024 , the Seller Note had outstanding accrued interest of $ 0 .

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The convertible promissory note was settled in 2024 for a cash payment of $ 1.4 million, which resulted in a gain on the extinguishment of debt of $ 0.8 million and a reduction in accrued interest of $ 0.8 million.

The disaggregation of revenue is based on type and geographical region.

The disaggregation of revenue is based on type.

The following table presents revenue from contracts with customers:

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

United States International Total United States International Total

Three Months Ended September 30, 2025 Three Months Ended September 30, 2024

Consumables and parts revenue $ 7,026 $ 5,620

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Total Revenue $ 11,451 $ 9,360

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

United States International Total United States International Total

Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024

Consumables and parts revenue $ 19,806 $ 14,879

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The 2024 Plan authorizes the issuance of up to 1,376,556 shares of common stock.

On August 19, 2025, at our annual meeting of stockholders, an amendment to the 2024 Plan was ratified, authorizing an additional 500,000 shares of common stock authorized for issuance under the plan.

Stock options granted under the 2024 Plan include service-based, performance-based, and market-based awards.

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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

stock price targets, and also expire five years after the grant date.

Market-based stock options vest upon the attainment of certain market conditions, such as specified stock price targets, and also expire five years after the grant date.

The fair value of market-based awards is estimated using a Monte Carlo simulation model.

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

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.

During the nine months ended September 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.

1 unchanged sentence

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

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.

During the nine months ended September 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 September 30, 2025.

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

The debt refinancing condition and half of the various operations related milestones were achieved during the quarter ended September 30, 2025, and the related compensation expense was recognized in the quarter.

The NASDAQ listing condition was achieved during the quarter ended March 31, 2025, and the related compensation expense was recognized in the quarter ended September 30, 2025.

The market condition has not been met as of September 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 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 .

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

Total unrecognized compensation cost related to equity awards as of September 30, 2025 was $ 10.1 million and is expected to be recognized over a weighted average period of 2.36 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 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 nine months ended September 30, 2024 .

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

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

Three Months Ended September 30, Nine Months Ended September 30,

(in thousands) 2025 2025

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Total expense $ 1,397 $ 3,513

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

The following table presents a summary of stock options award activity during the nine months ended September 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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Forfeited ( 187 ) 19.66 0.0 -

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

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

Outstanding, September 30, 2025 1,351 $ 19.03 8.6 $ 24,099

Exercisable, September 30, 2025

402 $ 25.15 7.9 $ 7,454

Valuation Information for Stock-Based Compensation

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.

The fair value of each stock option award during the three and nine months ended September 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 and six months ended June 30, 2025 are summarized in the table below:

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

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

Three Months Ended September 30, Nine Months Ended September 30,

Fair value at grant date $ 37.34 $ 30.61

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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,

Three Months Ended September 30, Nine Months Ended September 30,

(in thousands, except per share data)

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Diluted $ 0.46 $ ( 6.49 ) $ 0.38 $ ( 5.92 )

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,

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 that are nominally priced.

In September 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 income per share during the nine months ended September 30, 2025 because the result would have been anti-dilutive.

Three Months Ended September 30, Nine Months Ended September 30,

(in thousands) 2025 2024 2025 2024

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Convertible notes payable, including interest

86 4,626 114 4,626

Concentration of Credit Risk and Limited Suppliers

Major customers are defined as customers whose accounts receivable or sales individually consist of more than 10% of trade receivables or total sales, respectively.

The percentage of accounts receivable from major customers of the Company for the periods indicated were as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Customer A N/A 15 % N/A N/A

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 and six months ended June 30, 2025, and 2024 were as follows:

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

The percentage of purchases from major vendors

of the Company that exceeded ten percent of total purchases for the three and nine months ended September 30, 2025, and 2024 were as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

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The Company received a one-time payment of $ 2.5 million related to this Patent License, which was recorded in other income during the three months ended March 31, 2024.

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.

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.

The Company granted the Licensee an exclusive license to the patents and an option to acquire the patents 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.

On July 23, 2025, the Licensee exercised the acquisition option.

In connection with such exercise, the Licensee and the Company executed a patent purchase agreement, and the Licensee made a $ 5.0 million cash payment to Sanuwave, Inc.

on August 21, 2025.

At the time of the Patent License and through the Licensees exercise of the acquisition option, the Company did not have any amounts capitalized related to the underlying portfolio of patents, nor was any write-down of assets recorded upon executing the Patent License or acquisition option.

Accordingly, the Company recognized a $ 5.0 million gain on sale of patents within Other Income (Expense) on the condensed consolidated statements of comprehensive income (loss) for the three and nine months ended September 30, 2025.

The Company does not have any ongoing obligations associated with the patent license.

Additional proceeds may be provided to the Company under certain conditions of the agreement with the Licensee.

Contingent Consideration - The Company considers such royalties, license fees, settlement payments, or other proceeds as variable or contingent consideration.

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The Company operates in one reportable segment engaged in the design and sale of medical devices.

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 condensed consolidated statements of comprehensive income (loss).

The accounting policies of the 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 margin that is also reported on the condensed consolidated statements of comprehensive income (loss).

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

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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,

Three Months Ended September 30, Nine Months Ended September 30,

(in thousands) 2025 2024 2025 2024

7 unchanged sentences

Depreciation and amortization 222 206 588 568

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

Operating Income 1,467 1,953 4,330 2,895

Total Other Income (Expense) 8,858 ( 22,610 ) 1,374 ( 21,519 )

1 unchanged sentence

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