What changed in this filing

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Item 1. Financial Statements

2026-05-12 compared with 2025-11-06 · 253 added, 373 removed, 242 unchanged (72% of the section changed)

4 unchanged sentences

(In thousands, except share data)

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Current Assets:

14 unchanged sentences

Current portion of secured term loan $ 5,585 $ 5,638

Senior secured debt - 25,305

Accounts payable 3,320 3,251

Accrued expenses 8,584 8,382

Warrant liability 5,921 8,107

Current portion of operating lease liabilities 300 157

Current portion of finance lease liabilities - 175

Current portion of contract liabilities 487 388

Accrued interest 23 24

Total Current Liabilities 18,304 17,847

3 unchanged sentences

Operating lease liabilities, less current portion 1,294 854

Finance lease liabilities, less current portion - 66

Contract liabilities, less current portion 676 701

1 unchanged sentence

Total Liabilities $ 35,259 $ 35,724

Commitments and Contingencies (Footnote 16)

STOCKHOLDERS’ DEFICIT

Commitments and Contingencies (Note 15)

STOCKHOLDERS’ EQUITY

Preferred Stock, par value $ 0.001 , 5,000,000 shares authorized;

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 September 30, 2025 and December 31, 2024

no shares issued and outstanding at March 31, 2026 and December 31, 2025

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

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

8,594,209 and 8,588,876 issued and outstanding at March 31, 2026 and December 31, 2025, respectively

Additional paid-in capital 245,943 244,285

1 unchanged sentence

Accumulated other comprehensive loss 10 10

Total Stockholders’ Deficit ( 2,931 ) ( 12,717 )

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

Total Stockholders’ Equity 1,838 1,619

Total Liabilities and Stockholders’ Equity $ 37,097 $ 37,343

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

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AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands, except share data)

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

2025 2024 2025 2024

Three Months Ended March 31,

(As Restated)

Revenue $ 9,619 $ 9,333

7 unchanged sentences

Total Operating Expenses 8,555 6,774

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

Other Income (Expense):

Operating (Loss) Income ( 1,124 ) 601

Other (Expense) Income:

Interest expense ( 546 ) ( 1,909 )

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

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

Change in fair value of derivative liabilities - ( 4,901 )

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

Other expense ( 60 ) ( 1 )

Other income (See Note 15)

5,170 6 5,351 2,806

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

Net Income (Loss) $ 10,325 $ ( 20,657 ) $ 5,704 $ ( 18,624 )

Other Comprehensive Income (Loss)

Foreign currency translation adjustment - - - 121

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

Earnings (Loss) per Share:

Basic $ 1.20 $ ( 6.49 ) $ 0.67 $ ( 5.92 )

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

Total Other Expense, net ( 315 ) ( 6,719 )

Net Loss $ ( 1,439 ) $ ( 6,118 )

Other Comprehensive Loss

Foreign currency translation adjustments - -

Total Comprehensive Loss $ ( 1,439 ) $ ( 6,118 )

Loss per Share:

Basic and Diluted $ ( 0.17 ) $ ( 0.72 )

Weighted average shares outstanding

Basic 8,571,111 3,185,495 8,560,174 3,146,000

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

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)

Three Months Ended September 30, 2025

Outstanding Par Value Additional Paid-

in Capital Accumulated

Deficit Accumulated

Comprehensive

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

- - - 10,325 - 10,325

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-

in Capital Accumulated

Deficit Accumulated

Comprehensive

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

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

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

Basic and Diluted 8,591,098 8,547,675

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

1 unchanged sentence

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(In thousands, except share data)

Nine Months Ended September 30, 2025

Three Months Ended March 31, 2026

Outstanding Par Value Additional Paid-

5 unchanged sentences

Stock options exercised 1,333 - 19 - - 19

Shares issued for services rendered 4,000 - 97 - - 97

Shares granted in lieu of board of director fees - - 103 - - 103

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

- - - ( 1,439 ) - ( 1,439 )

Balances as of March 31, 2026 8,594,209 $ 9 $ 245,943 $ ( 244,124 ) $ 10 $ 1,838

Three Months Ended March 31, 2025

Outstanding Par Value Additional Paid-

2 unchanged sentences

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

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

Balance as of December 31, 2024 (As Restated) 8,543,686 $ 9 $ 238,685 $ ( 254,499 ) $ 10 $ ( 15,795 )

Stock-based compensation 4,787 - 1,101 - - 1,101

Net loss (As Restated) - - - ( 6,118 ) - ( 6,118 )

Balances as of March 31, 2025 (As Restated) 8,548,473 $ 9 $ 239,786 $ ( 260,617 ) $ 10 $ ( 20,812 )

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

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands)

Cash Flows - Operating Activities:

Net income (loss) $ 5,704 $ ( 18,624 )

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

(As Restated)

Operating Activities

Net loss $ ( 1,439 ) $ ( 6,118 )

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

Stock-based compensation 1,611 975

Depreciation and amortization 294 209

Amortization of right-of-use assets 268 268

Allowance for credit losses 112 16

Loss on disposal and impairment of assets 210 -

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

Amortization of right-of-use leases 18 65

Provision for credit losses 40 33

Shares issued for services 97 -

Change in fair value of derivative liabilities - 4,901

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

Proceeds from tenant improvement funds 586 -

Amortization of debt issuance and debt discounts 57 530

Write-off of inventory 69 -

Loss on disposal of assets 6 -

Changes in operating assets and liabilities

4 unchanged sentences

Accrued expenses and contract liabilities 205 ( 332 )

Operating lease payments ( 79 ) ( 102 )

Net Cash Flows Provided by Operating Activities 557 1,714

Cash Flows - Investing Activities:

Operating leases ( 37 ) -

Net Cash Provided by (Used in) Operating Activities 397 ( 1,517 )

Investing Activities

Purchase of property and equipment

( 23 ) ( 162 )

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 ) -

Deposits on property and equipment ( 66 ) -

Investment in software development ( 69 ) -

Net Cash Used in Investing Activities ( 158 ) ( 162 )

Financing Activities

Proceeds from exercises of stock options 19 -

Payment of note payable ( 27,747 ) ( 2,175 )

Proceeds from convertible notes payable - 1,300

Proceeds from promissory note payable, related party - 500

Proceeds from factoring, net - 449

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

Net Change in Cash During Period ( 635 ) 1,462

Cash at Beginning of Period

Cash at End of Period

Repayment of principal secured term loan ( 1,438 ) -

Payments of principal on finance leases - ( 57 )

Net Cash Used in Financing Activities ( 1,419 ) ( 57 )

Effect of Exchange Rates on Cash and Cash Equivalents - -

Net Change in Cash and Cash Equivalents During Period ( 1,180 ) ( 1,736 )

Cash and Cash Equivalents at Beginning of Period

11,959 10,237

Cash and Cash Equivalents at End of Period

$ 10,779 $ 8,501

Supplemental Information:

1 unchanged sentence

Non-cash Investing and Financing Activities:

Capitalize interest into senior secured debt 549 3,850

Right-of-use assets obtained in exchange for lease liabilities $ 619 $ 430

Shares granted in lieu of board of director fees 103 -

Stock options granted in lieu of cash bonus 69 117

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 -

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

Shares issued in exchange for services 97 -

Purchases of property and equipment in accounts payable 16 -

Capitalize interest into senior secured debt - 202

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

September 30, 2025

March 31, 2026

Nature of the Business and Basis of Presentation

1 unchanged sentence

and subsidiaries (“Sanuwave” or the “Company”) is focused on the commercialization of its patented regenerative medicine utilizing noninvasive ultrasound or shockwaves to produce a biological response promoting the repair and regeneration of tissue, musculoskeletal, and vascular structures.

Sanuwave was founded in 2004 and is headquartered in Eden Prairie, Minnesota.

Basis of Presentation - The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

2 unchanged sentences

GAAP for comprehensive financial statements.

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 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.

All significant intercompany accounts and transactions have been eliminated.

Amounts reported in thousands within this Quarterly Report on Form 10-Q are computed based on the amounts in thousands, and therefore, the sum of the components may not equal the total amount reported in thousands due to rounding.

The financial information as of March 31, 2026, and for the three months ended March 31, 2026, and 2025 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, 2026, are not necessarily indicative of the results that may be expected for any other interim period or for the year ending December 31, 2026.

The condensed consolidated balance sheet on December 31, 2025, 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.

1 unchanged sentence

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, 2025, as filed with the SEC on March 26, 2026 (the “2025 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 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 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.

These reclassifications had no effect on the previously reported operating results.

Going Concern

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.

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.

Restatement of Previously Issued Financial Statements

In connection with the preparation of the Company’s consolidated financial statements for the year ended December 31, 2025, the Company engaged a specialist to conduct a sales and use tax nexus study.

Management concluded that the Company had a historical state sales and use tax liability related to prior periods.

The Company is required and subject to collect and remit sales and use tax in state and local jurisdictions where it has economic and physical nexus.

During the year ended December 31, 2025, the Company determined that a sales tax liability existed and estimated a liability for sales transactions processed in jurisdictions where it had not previously reported.

The liability includes an estimate for each state, to account for any penalties and interest that is due on the base tax amount owed.

The error resulted in an understatement of accrued expenses for state and local sales tax, including related interest and penalties, in the condensed consolidated financial statements as of and for the three months ended March 31, 2025.

As a result of correcting this liability, general and administrative expenses and interest expense were increased in the affected periods, resulting in a one-time, non-recurring increase in reported expenses for the three months ended March 31, 2025.

The Company is in the process of finalizing remediation of the underlying sales tax obligations.

In addition to the errors related to sales tax liabilities, the Company identified that revenue was overstated and current portion of contract liabilities and contract liabilities, less current portion were understated related to extended warranties for the three months ended March 31, 2025.

The errors related to the Company's accounting for extended warranty contracts sold at a discount in conjunction with its products.

When extended warranties were sold at a discounted price, the Company did not allocate the discount proportionally across all performance obligations in the contract in accordance with Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers .

Specifically, ASC 606 requires that a discount present in a contract be allocated proportionally across all performance obligations based on their relative standalone selling prices, unless specific criteria are met to allocate the discount entirely to one or more performance obligations.

The Company incorrectly absorbed the entire discount within the extended warranty performance obligation rather than allocating a proportionate share of the discount to the other performance

obligations in the contract.

This caused the transaction price allocated to the extended warranty to be understated and the transaction price allocated to the other performance obligations to be overstated, resulting in revenue being recognized on the other performance obligations in excess of the amounts that should have been allocated to them.

Consequently, revenue was overstated and contract liabilities associated with the extended warranty was understated for the three months ended March 31, 2025.

The restatement was previously disclosed in the 2025 Annual Report.

Restated 2025 Quarterly Financial Information (Unaudited) - Reconciliation Table

The following table presents the impact of the restatement on the Company’s previously issued Unaudited Condensed Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2025.

(in thousands, except per share data) For the three months ended March 31, 2025

Unaudited Condensed Consolidated Statement of Comprehensive Loss Notes As Previously Reported Adjustment As Restated

Revenue (i) $ 9,342 $ ( 9 ) $ 9,333

Gross Margin 7,384 ( 9 ) 7,375

General and administrative (ii) 4,467 376 4,843

Total Operating Expenses 6,398 376 6,774

Operating Income (Loss) 986 ( 385 ) 601

Interest expense (iii) ( 1,852 ) ( 57 ) ( 1,909 )

Total Other Expense ( 6,662 ) ( 57 ) ( 6,719 )

Net Loss ( 5,676 ) ( 442 ) ( 6,118 )

Total Comprehensive Loss ( 5,676 ) ( 442 ) ( 6,118 )

Net Loss per share:

basic and diluted $ ( 0.66 ) $ ( 0.05 ) $ ( 0.72 )

A description of the restatement adjustments in the condensed consolidated statements of comprehensive loss is as follows:

(i) The $ 9 thousand decrease in revenue for the three months ended March 31, 2025, is related to the adjustment to revenue associated with extended warranties.

(ii) The $ 0.4 million increase in general and administrative expenses for the three months ended March 31, 2025, is related to the adjustment for estimated state and local sales tax expense and for the related penalties on outstanding sales tax balances.

(iii) The $ 57 thousand increase in interest expense for the three months ended March 31, 2025, is related to the adjustment for estimated interest on outstanding state and local sales tax balances.

Income Tax Effects

The Company maintains a full valuation allowance against its net deferred tax assets.

Accordingly, the restatement adjustments resulted in no net income tax benefit or expense for any period presented, and the effective tax rate is unchanged.

Summary of Significant Accounting Policies

3 unchanged sentences

Actual amounts may differ from these estimates.

These condensed consolidated financial statements have, in management’s opinion, been properly prepared within reasonable limits of materiality and within the framework of the accounting policies summarized herein.

Significant estimates include the recording of allowances for credit losses, the net realizable value of inventory, fair value of goodwill and other intangible assets, the determination of the valuation allowances for deferred taxes, litigation contingencies, stock-based compensation, incremental borrowing rate, and the estimated fair value of financial instruments, including warrants.

Revenue Recognition - The core principle of Accounting Standards Codification (“ASC”) Topic 606 “Revenue from Contracts with Customers” (“ASC 606”) requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services.

The Company allocates the transaction price to all contractual performance obligations included in the contract.

If a contract has more than one performance obligation, we allocate the transaction price to each performance obligation based on standalone selling price, which depicts the amount of consideration we expect to be entitled in exchange for satisfying each performance obligation.

The Company recognizes revenue primarily from the following types of contracts:

System Sales, Consumables and Part Sales - System sales, consumables and part sales include devices and applicators (new and refurbished).

Performance obligations are satisfied at the point in time when the customer obtains control of the goods, which is generally at the point in time that the product is shipped.

Licensing Fees - Licensing transactions include distribution licenses and intellectual property licenses.

Licensing revenue is recognized as the Company satisfies its performance obligations, which may vary with the terms of the licensing agreement.

Other Revenue - Other revenue primarily includes warranties, repairs, and billed freight.

The Company allocates the device sales price to the product and the embedded warranty by reference to the stand alone extended warranty price.

Warranty revenue is recognized over the time that the Company satisfies its performance obligations, which is generally the warranty term.

Repairs (parts and labor) and billed freight revenue are recognized at the point in time that the service is performed, or the product is shipped, respectively.

Stock-based compensation - The Company accounts for stock-based compensation in accordance with ASC Topic 718, “Compensation—Stock Compensation”.

Stock-based compensation expense is recognized for all share-based payment awards based on the grant-date fair value.

The Company grants the following types of equity awards:

Time-based or service awards , which vest based on continued service over a specified period.

These awards are valued using the Black-Scholes option pricing model (for stock options) or the grant-date fair value of the underlying common stock (for restricted stock units).

Performance-based awards , which vest upon the achievement of pre-established internal performance targets.

These awards are valued using the Black-Scholes option pricing model.

Market-based awards , which vest upon the attainment of defined market conditions, such as stock price milestones.

These awards are valued using a Monte Carlo simulation model.

The Company recognizes stock-based compensation expense on a straight-line basis over the requisite service period for time-based awards, on a straight-line basis over the requisite service period for performance-based awards when it is probable that the associated performance condition will be satisfied, and on a straight-line basis over the requisite service period for market-based awards irrespective of likelihood that the associated market condition will be satisfied.

Forfeitures are recognized as they occur.

Compensation expense is included in the same functional expense categories as the related employee payroll costs.

These condensed consolidated financial

statements have, in management’s opinion, been properly prepared within reasonable limits of materiality and within the framework of the accounting policies summarized herein.

Significant estimates include the recording of allowances for credit losses, the net realizable value of inventory, fair value of goodwill and other intangible assets, the determination of the valuation allowances for deferred taxes, litigation contingencies, stock-based compensation, incremental borrowing rate, the estimated fair value of financial instruments, including warrants, and the accrual of state and local sales tax liabilities.

Software Development Costs

The Company accounts for internal-use software costs in accordance with ASC Topic 350-40, Intangibles—Goodwill and Other—Internal-Use Software , as amended by ASU No.

2025-06, which the Company early adopted prospectively effective January 1, 2026.

The Company capitalizes costs associated with software developed or obtained for internal use, including software licensed from third-party developers, when management has authorized and committed to funding the project and it is probable that the project will be completed and the software will be used for its intended purpose.

Costs that do not meet these criteria, including training costs, general and administrative costs, and post-implementation maintenance costs, are expensed as incurred.

Capitalized internal-use software costs are recorded as intangible assets at cost and amortized on a straight-line basis over the estimated useful life of the software, which the Company has estimated to be three to five years , beginning when the software is substantially complete and ready for its intended use.

The Company reviews capitalized software for impairment in accordance with its policy for long-lived assets.

As of March 31, 2026, the Company has capitalized $ 69 thousand in licensed software costs, which are not yet placed in service and accordingly no amortization has been recorded.

The Company accounts for leases in accordance with ASC Topic 842, Leases .

At the commencement date of a lease, the Company recognizes a right-of-use (“ROU”) asset and a lease liability for all leases with a term greater than 12 months.

Short-term leases (those with an original term of 12 months or less) are not recorded on the balance sheet;

lease expense for these is recognized on a straight-line basis over the lease term.

Short-term leases (those with an original term of 12 months or less) are not recorded on the balance sheets;

lease expense for these leases is recognized on a straight-line basis over the lease term.

Lease liabilities are measured at the present value of future lease payments using the Company’s incremental borrowing rate unless the implicit rate is readily determinable.

ROU assets are measured at the initial lease liability, adjusted for lease incentives, initial direct costs, and any prepaid or accrued lease payments.

Lease Incentives

Leases are classified as either operating or finance leases at the commencement date.

The Company does not have any finance leases as of March 31, 2026, and December 31, 2025.

Operating lease ROU assets and liabilities are presented separately on the condensed consolidated balance sheets.

Lease incentives received from lessors, such as rent-free periods or reimbursement for leasehold improvements, are recognized as a reduction to the ROU asset at lease commencement.

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Incentives that are paid directly to the Company or on its behalf are included in the measurement of the ROU asset and reduce the total lease cost recognized over the lease term.

The Company’s lease agreements do not contain variable lease payments;

all lease payments are fixed and included in the measurement of lease liabilities.

New accounting pronouncements

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In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement - Reporting Comprehensive Income (Topic 220):

Expense Disaggregation Disclosures to improve the disclosures about a public entity’s expenses and provide more detailed information about the types of expenses in commonly presented expense captions such as inventory purchases, employee compensation, depreciation and intangible asset amortization.

The disclosure requirements must be applied retrospectively to all prior periods presented in the financial statements.

Expense Disaggregation Disclosures to

improve the disclosures about a public entity’s expenses and provide more detailed information about the types of expenses in commonly presented expense captions such as inventory purchases, employee compensation, depreciation and intangible asset amortization.

The effective date for the standard is for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the effects adoption of this guidance will have on the consolidated financial statements.

The Company is currently evaluating the effects adoption of this standard will have on the financial statement disclosures.

Recently adopted accounting pronouncements

ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software

In September 2025, the FASB issued ASU No.

2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software.

This ASU increases the operability of the recognition guidance by removing all references to "project stages" and clarifying when an entity is required to start capitalizing software costs.

The Company early adopted this ASU prospectively beginning in fiscal year 2026.

ASU 2023-09, Improvements to Income Tax Disclosures

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

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

ASU 2023-09 aims to enhance the transparency and decision usefulness of income tax disclosures.

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).

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 .

The Company adopted ASU 2023-09 prospectively in the first quarter of 2025.

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

This ASU primarily requires disaggregated annual information about a company's effective tax rate reconciliation and income taxes paid.

The Company adopted this ASU prospectively beginning with 2025.

Prior period disclosures have not been restated to conform to the current year period presentation.

Allowance for Credit Losses

The Company maintains an allowance for credit losses to cover estimated losses on accounts receivable.

The allowance is based on the Company's assessment of various factors, including historical loss experience, the age of receivables, current economic conditions, and the creditworthiness of customers.

The allowance for credit losses is reviewed and adjusted as necessary at each reporting date.

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

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

The rollforward of the allowance for credit losses is as follows:

(in thousands) Three Months Ended March 31, 2026

Allowance for credit losses, December 31 $ 1,265

Provision for credit losses 40

Write-offs ( 41 ) ( 248 )

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

Allowance for credit losses, March 31 $ 1,305

Inventory consisted of the following:

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

(in thousands) March 31, 2026 December 31, 2025

Finished goods $ 5,988 $ 6,012

Parts and accessories 128 135

Inventory reserve ( 213 ) ( 213 )

Total Inventory $ 5,903 $ 5,934

Property and Equipment

Depreciation expense related to property and equipment for the three months ended March 31, 2026 and 2025 was $ 118 thousand and $ 69 thousand, respectively.

Operating lease commitments - On March 27, 2025, the Company entered into a new operating lease agreement for its new headquarters in Eden Prairie, Minnesota.

The lease term commenced on March 28, 2025, and extends for a period of 5.5 years, expiring on August 30, 2030.

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 through August 30, 2030.

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

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.

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:

The lease term commenced on March 28, 2025.

Lease Modification - Effective March 24, 2026, the Company modified its lease agreement for its headquarters.

The lease amendment expands the existing property and extends for a period of 5.1 years, expiring on April 30, 2031.

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

As a result of the modification, the Company remeasured the related right-of-use asset and lease liability.

The modification resulted in an increase of $ 0.6 million in both the ROU asset and lease liability as of March 24, 2026.

The lease continues to be classified as an operating lease under ASC 842, Leases.

The modified measurement of the right-of-use asset was $ 1.0 million.

The modified measurement of the lease liability was $ 1.6 million, which represents the present value of the lease payments over the lease term, discounted at the Company's incremental borrowing rate of 7.2 %.

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

This payment, totaling $ 0.3 million, is intended to offset certain costs associated with leasehold improvements and is estimated to be paid in June 2027.

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

Lease payments - Under the terms of the modified lease, the Company is obligated to make increased monthly lease payments starting May 1, 2026, with an annual escalation of 3.5 % starting on May 1, 2027.

The total minimum lease payments over the modified lease term amount to approximately $ 2.3 million.

Lease expense - For the three months ended March 31, 2026 and 2025, the Company recognized lease expense of $ 46 thousand and $ 21 thousand, respectively, 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, 2026, 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

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Present value of lease liabilities $ 1,594

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

The weighted-average useful life of operating leases at March 31, 2026, i s 5.1 years .

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

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

The following table summarizes outstanding debt at March 31, 2026 and December 31, 2025 :

March 31, 2026 December 31, 2025

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

Secured term loan

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$ 655 $ ( 58 ) $ 597 $ 655 $ ( 68 ) $ 587

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

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.

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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.

For the Revolver, such costs are presented as an asset.

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

Principal payments on the Term Loan commenced on December 31, 2025, and will be made in quarterly installments of $ 1.4 million 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.

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 “Prior Debt”).

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

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

On September 25, 2025, the Company recognized a $ 0.5 million loss on extinguishment of debt, which included 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.

As of March 31, 2026 , 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.

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(in thousands) Principal Payments

2027 (includes the revolver) 6,405

2027 (including the Revolver) 6,405

Total Principal Payments 20,780

Debt Issuance Costs ( 268 )

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

Interest expense $ 1.8 $ 2.1 $ 5.5 $ 6.1

Accrued Expenses

Less current maturities of the Term Loan ( 5,750 )

Long term debt, net of current maturities and debt issuance costs $ 14,762

Accounts Payable and Accrued Expenses

Accounts payable consisted of the following:

(in thousands) March 31, 2026 December 31, 2025

Trade Accounts Payable 3,304 3,219

Total Accounts Payable $ 3,320 $ 3,251

Accrued expenses consisted of the following:

(in thousands)

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Registration penalties $ 1,583 $ 1,583

State & Local Sales Tax 4,188 3,885

State & Local Sales Tax Penalties 607 571

State & Local Sales Tax Interest 554 464

Board of directors fees 172 172

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Other 519 487

Accrued expenses $ 3,586 $ 4,678

Fair Value Measurements

The Company uses various inputs to measure the outstanding warrants on a recurring basis to determine the fair value of the liabilities.

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 September 30, 2025

(in thousands)

Fair value at

September 30, 2025 Quoted prices in

active markets

Significant other

observable inputs

unobservable inputs

Warrant liability $ 5,921 $ - $ - $ 5,921

Fair value measured at December 31, 2024

(in thousands)

Fair value at

December 31, 2024 Quoted prices in

active markets

(Level 1) Significant other

observable inputs

unobservable inputs

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

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.

Unrealized gains and losses associated with liabilities within the Level 3 category include changes in fair value that were attributable to both observable and unobservable inputs.

Warrant Liability

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:

September 30, 2025 December 31, 2024

Weighted average expected life in years 0.23 0.85

Weighted average volatility 60 % 91 %

Value of underlying shares $ 37.48 $ 22.76

Weighted average risk free interest rate 3.96 % 4.10 %

Expected dividend yield 0 % 0 %

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

Outstanding Fair Value

per Share Warrant Liability

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

Outstanding Fair Value

per Share Warrant Liability

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

Expired ( 222 )

Change in fair value ( 2,186 )

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 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.

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 .

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

The Notes had a term of 12 months from the date of issue.

In May 2024, the Company utilized its election to convert the May Notes into shares of common stock upon the Notes' maturity.

The May Notes totaling $ 1.2 million in principal and $ 0.2 million interest were converted to 94,130 shares of common stock.

All remaining outstanding convertible notes payable and convertible notes payable related party converted on October 18, 2024 to 591,802 shares of common stock.

The outstanding principal and interest converted totaled $ 8.9 million.

The Company recognized a $ 0.3 million gain on conversion of the Notes.

Promissory note payable, related parties - In June 2024 the Company entered into a $ 0.5 million promissory note with a related party.

Interest was accrued at 12 % with an original maturity date of December 3, 2024.

The Note was paid in full with accrued interest in October 2024.

Acquisition Convertible promissory notes payable - In August 2020 , the Company entered into an asset purchase agreement with Celularity to acquire Celularity’s UltraMIST assets.

A portion of the aggregate consideration of $ 24 million paid for the assets included the issuance of a promissory note to Celularity in the principal amount of $ 4 million (the “Seller Note”).

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.

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

This Seller Note was settled in 2024 for a cash payment of $ 2.2 million.

Convertible promissory notes payable, related party - In August 2020 , the Company issued a convertible promissory note payable in the amount of $ 1.4 million.

The note matured on August 6, 2021, and was not repaid and thus was in default.

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

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.

Total Accrued Expenses $ 8,584 $ 8,382

The disaggregation of revenue is based on type.

The following table presents revenue from contracts with customers:

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

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

System revenue 4,391 3,661

License fees and other 5 10

Product Revenue $ 11,422 $ 9,291

Rental Income 29 69

Total Revenue $ 11,451 $ 9,360

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

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

(in thousands) Three Months Ended March 31, 2026 Three Months Ended March 31, 2025

(As Restated)

Consumables, parts, and accessories revenue $ 6,638 $ 6,028

System revenue 2,878 3,198

License fees and other 20 30

Product Revenue $ 30,860 $ 22,053

Rental Income 97 255

Extended warranty 60 38

License fees - 5

Total Revenue $ 9,619 $ 9,333

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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.

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

During the three months ended March 31, 2026, the Company granted performance-based awards to two employees which provide for the vesting of up to 8,500 shares of common stock.

Vesting is contingent upon the achievement of specified performance 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 ( 6,000 shares) and (b) specific operational milestones ( 2,500 shares).

During the fiscal year ended December 31, 2025 , the Company granted performance-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), (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).

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.

During 2025, certain awards were forfeited due to employee termination and missed milestone deadlines, certain performance and market conditions were achieved and the related compensation expense was recognized, and certain market-based awards expired unachieved.

As a result, options exercisable for 20,000 shares remain outstanding and unvested as of March 31, 2026 relating to performance-based option award, all of which are subject to revenue and adjusted EBITDA performance conditions.

Options exercisable for 10,000 shares remain outstanding and unvested as of March 31, 2026 relating to market conditions, which relates to the attainment of a defined stock price target.

As of March 31, 2026, the Company concluded that the performance conditions related to revenue, adjusted EBITDA, and operational milestones were not probable of achievement, and accordingly, no compensation expense was recognized for any performance-based awards.

On November 1, 2010, the Company approved the Amended and Restated 2006 Stock Incentive Plan of SANUWAVE Health, Inc.

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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 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 nine months ended September 30, 2024 .

The following table presents stock compensation expense recognized by the Company for the three months ended March 31, 2026 and 2025.

Total unrecognized compensation cost related to equity awards as of March 31, 2026 was $ 10.8 million and is expected to be recognized over the next 2.12 years .

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

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

Three Months Ended March 31,

(in thousands) 2026 2025

4 unchanged sentences

Total expense $ 1,472 $ 975

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

The following table presents a summary of stock option activity during the three months ended March 31, 2026:

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

3 unchanged sentences

Forfeited ( 37 ) 21.82 - -

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

Exercisable, September 30, 2025

402 $ 25.15 7.9 $ 7,454

Outstanding, March 31, 2026 1,502 $ 22.16 8.1 $ 2,389

Exercisable, March 31, 2026 625 $ 20.11 7.5 $ 1,247

Valuation Information for Stock-Based Compensation

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.

The fair value of each stock option award during the three months ended March 31, 2026 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.

4 unchanged sentences

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 nine months ended September 30, 2025 are summarized in the table below:

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

The weighted average assumptions used in the Black-Scholes option pricing model in valuing stock options granted in the three months ended March 31, 2026 and 2025 are summarized in the table below:

Three Months Ended March 31,

Fair value at grant date $ 27.71 $ 27.47

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Risk-free interest rate 4 % 4 %

Expected holding period, in years 5.48 5.13

Expected holding period, in years 4.95 years 5.45 years

Dividend yield 0 % 0 %

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 September 30, Nine Months Ended September 30,

(in thousands, except per share data)

2025 2024 2025 2024

Basic net income (loss) available to stockholders 10,325 ( 20,657 ) 5,704 ( 18,624 )

Change in fair value of warrants ( 6,097 ) - ( 2,186 ) -

Diluted net income (loss) available to stockholders 4,228 ( 20,657 ) 3,518 ( 18,624 )

Weighted average common shares outstanding - Basic 8,571 3,185 8,560 3,146

Dilutive effect of warrants 158 - 295 -

Dilutive effect of stock options 412 - 323 -

Dilutive effect of convertible promissory notes including interest - — - —

Weighted average common shares outstanding - Diluted 9,141 3,185 9,178 3,146

Net income (loss) per share:

Basic $ 1.20 $ ( 6.49 ) $ 0.67 $ ( 5.92 )

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

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,

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, 2026, and 2025.

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

(in thousands)

March 31, 2026 March 31, 2025

Common shares 8,591 8,548

Weighted average shares outstanding 8,591 8,548

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, 2026, and March 31, 2025, all potentially dilutive shares in such periods

were anti-dilutive and therefore excluded from the computation of diluted net loss per share.

Anti-dilutive equity securities consist of the following:

Three Months Ended

(in thousands) March 31, 2026 March 31, 2025

Common stock options 1,502 1,233

Common stock purchase warrants 2 390

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 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

Concentration of Limited Suppliers

The Company currently purchases most of its product component materials from single suppliers and all of its finished product is assembled by a single supplier.

The loss of any of these suppliers could result in a disruption in our production.

The percentages of purchases from major vendors of the Company that represented ten percent or more of total purchases were as follows:

Three Months Ended

March 31, 2026 March 31, 2025

Vendor A 20 % 25 %

Vendor B - % 13 %

Vendor C 17 % - %

License and Option Agreement

In March 2024, the Company entered into an exclusive license and option agreement (the "Patent License") with a third party licensee in connection with a portfolio of patents related to the field of intravascular shockwave applications.

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 a period of 3 years following the effective date of the Agreement.

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

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 Patent License.

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.

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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.

At the time of the Patent License and through the licensee's 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 consolidated statements of comprehensive income (loss) for the fiscal year ended December 31, 2025 .

The Company does not have any ongoing obligations associated with the Patent License.

4 unchanged sentences

In the ordinary course of business, the Company from time to time becomes involved in various legal proceedings involving a variety of matters.

The Company does not believe there are any pending legal proceedings that will have a material adverse effect on the Company’s business, consolidated financial position, results of operations, or cash flows.

The Company does not believe there are any pending legal proceedings that will have a

material adverse effect on the Company’s business, consolidated financial position, results of operations, or cash flows.

However, the outcome of such legal matters is inherently unpredictable and subject to significant uncertainties.

3 unchanged sentences

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.

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 Company's chief operating decision maker (“CODM”) assesses performance for the reportable segment and decides how to allocate resources primarily based on net loss that is also reported on the condensed consolidated statements of comprehensive loss.

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

Net loss is used to monitor budget versus actual results.

The CODM also uses net 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 income (loss) used by the CODM:

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

Management has determined that Morgan Frank, Chief Executive Officer, is the CODM.

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

Three Months Ended March 31,

(in thousands) 2026 2025

(As Restated)

Revenue $ 9,619 $ 9,333

6 unchanged sentences

Depreciation and amortization 246 192

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

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

Net Income (Loss) $ 10,325 $ ( 20,657 ) $ 5,704 $ ( 18,624 )

Operating (Loss) Income ( 1,124 ) 601

Total Other Expense, net ( 315 ) ( 6,719 )

Net Loss $ ( 1,439 ) $ ( 6,118 )

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