What changed in this filing

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Item 1. Financial Statements

2025-05-14 compared with 2024-11-14 · 565 added, 575 removed, 449 unchanged (72% of the section changed)

3 unchanged sentences

(in thousands, except per share data)

September 30, 2024

March 31, 2025

December 31, 2024

1 unchanged sentence

Cash and cash equivalents

Accounts receivable

$ 450 $ 2,873

Accounts receivable, net

Prepaid expenses and other current assets

3 unchanged sentences

Intangible assets, net

23,763 24,274

Other non-current assets

$ 24,800 $ 27,770

LIABILITIES AND STOCKHOLDERS' EQUITY

3 unchanged sentences

Notes payable

Interest payable to related parties

Current portion of royalties payable

Current portion of notes payable due to related parties

Current portion of interest payable due to related parties

Current portion of royalties payable due to related parties

Current portion of operating lease liabilities

Total current liabilities

Royalties payable

Royalties payable due to related parties

Deferred tax liability

Notes payable due to related parties

Interest payable due to related parties

Operating lease liabilities

Total liabilities

16,884 16,013

Commitments and contingencies (see Note 16)

2 unchanged sentences

Series A Convertible Preferred Stock, $ 0.0001 par value, 7,203 shares designated;

0 and 4,578 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively

0 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively

Series X Convertible Preferred Stock, $ 0.0001 par value, 15,404 shares designated;

12,656 shares issued and outstanding as of September 30, 2024 and December 31, 2023

12,656 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively

Common stock, $ 0.0001 par value, 60,000,000 shares authorized;

3,452,652 and 702,662 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively

9,268,632 and 8,004,633 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively

Additional paid-in capital

304,313 304,109

Accumulated deficit

( 296,397 ) ( 292,352 )

Total stockholders' equity

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$ 24,800 $ 27,770

See accompanying notes to unaudited condensed consolidated financial statements.

2 unchanged sentences

(in thousands, except per share data)

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

For the Three Months Ended March 31,

Cost of revenues

Operating expenses

Loss on impairment of goodwill

Selling, general and administrative

Research and development

Acquired in-process research and development

Total operating expenses

Operating loss

Other income (expense), net

Other expense, net

Interest income

1 unchanged sentence

Other expense, net

Change in fair value of royalties payable

Total other income (expense), net

Deemed dividend - warrant inducement offer

Net loss attributable to common stockholders

Net loss per share attributable to common stockholders, basic and diluted

Change in fair value of royalties payable due to related parties

Total other expense, net

Loss from operations before income taxes

Income tax benefit

Net loss per share, basic and diluted

Weighted-average common shares used in computing net loss per share, basic and diluted

5 unchanged sentences

Series X Convertible Preferred Stock

Additional Paid-In

Total Stockholders'

Stockholders'

Balance at December 31, 2024

$ ( 275,709 )

Stock-based compensation

Conversion of Series A Convertible Preferred Stock

Issuance of common stock for vested restricted stock awards

Issuance of common stock for asset acquisition (see Note 14)

Issuance of common stock upon release of Prepaid Series Warrants (see Note 11)

Balance at March 31, 2025

Stock-based compensation

Balance at June 30, 2024

$ ( 282,604 )

Issuance of common stock and other equity-classified contracts from September 2024 Public Offering, net of issuance costs

Issuance of common stock upon exercise of Pre-Funded Warrants (see Note 13)

Conversion of Series A Convertible Preferred Stock

Stock-based compensation

Balance at September 30, 2024

$ ( 286,724 )

Series A Convertible Preferred Stock

Series X Convertible Preferred Stock

Additional Paid-In

Total Stockholders'

Stockholders'

Balance at December 31, 2023

$ ( 205,137 )

Common stock issued upon the exercise of options

Restricted stock awards cancelled

Stock-based compensation

Issuance of Series X Convertible Preferred Stock in merger

Conversion of Series X Convertible Preferred Stock

Issuance of Series A Convertible Preferred Stock in connection with private placement, net

Warrants exercised (see Note 13)

Balance at March 31, 2023

Common stock issued upon the exercise of options

Adjustment of fair value of Series X Convertible Preferred Stock in merger

Adjustment of fair value of stock-based compensation related to merger

Balance at June 30, 2023

Stock-based compensation

Conversion of Series A Convertible Preferred Stock

Balance at September 30, 2023

$ ( 275,040 )

Balance at March 31, 2024

See accompanying notes to unaudited condensed consolidated financial statements.

2 unchanged sentences

(in thousands)

For the Nine Months Ended September 30,

For the Three Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES:

Adjustments to reconcile net loss to net cash used in operating activities:

Loss on impairment of goodwill

Depreciation and amortization

Stock-based compensation

Change in fair value of royalties payable

Change in fair value of royalties payable due to related parties

Deferred income tax benefit

Acquired in-process research and development

Changes in operating assets and liabilities:

Accounts receivable

Prepaid expenses and other assets

Prepaid expenses and other current assets

Operating lease right-of-use assets and lease liabilities

Current portion of royalties payable

Current portion of royalties payable due to related parties

Accounts payable

Accrued expenses

Interest payable to related parties

Interest payable due to related parties

Net cash used in operating activities

1 unchanged sentence

Purchases of property and equipment

Cash acquired as part of business combination

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from issuance of common stock and warrants

Proceeds from issuance of common stock and other equity-classified contracts from the September 2024 Public Offering, net of issuance costs

Proceeds from notes payable due to related parties

Payment on note payable

Proceeds from note payable

Proceeds from exercise of warrants

Payments of costs related to the warrant repricing

Payments of convertible promissory notes and accrued interest

Proceeds from the private placement of securities

Payments of offering costs related to the private placement of securities

Net cash provided by financing activities

Payment on notes payable

Net cash used in financing activities

NET CHANGE IN CASH AND CASH EQUIVALENTS

2 unchanged sentences

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Cash payments for interest

SUPPLEMENTAL DISCLOSURE OF NONCASH FINANCING AND INVESTING ACTIVITIES

Non-cash consideration for Catheter acquisition

Cash paid for interest

SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING AND INVESTING ACTIVITIES

Fair value of common stock issued in connection with the asset acquisition

Consideration for asset acquisition included in accrued expenses

Property and equipment included in accrued expenses

Property and equipment reclassified from inventories

Conversion of Series A Convertible Preferred Stock for common stock

See accompanying notes to unaudited condensed consolidated financial statements.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

(in thousands, except per share data)

Organization and Nature of Operations

5 unchanged sentences

Under the terms of the Merger Agreement, Old Catheter became a wholly owned subsidiary of Catheter, together referred to as the Company, in a stock-for-stock merger transaction (the "Merger").

Prior to the Merger, Catheter developed an advanced excimer laser-based platform for use in the treatment of vascular immune-mediated inflammatory diseases designed to be used as a tool in the treatment of Peripheral Artery Disease, which commonly occurs in the legs.

After the Merger, and looking forward, this legacy Destruction of Arteriosclerotic Blockages by laser Radiation Ablation laser and single-use catheter (together referred to as "DABRA") and related assets were no longer used.

The Company ceased operations and marketing with respect to DABRA, and Catheter’s legacy lines of business were discontinued.

Instead, the Company shifted the focus of its operations to Old Catheter’s product lines.

Accordingly, the Company’s current activities primarily relate to Old Catheter’s historical business, which comprises the design, manufacture and sale of new and innovative medical technologies focused in the field of cardiac electrophysiology (“EP”).

The Company’s current activities primarily relate to Old Catheter’s historical business, which comprises the design, manufacture and sale of new and innovative medical technologies in the field of cardiac electrophysiology (“EP”).

On February 17, 2025, Catheter formed a new subsidiary, Cardionomix, Inc.

("Cardionomix"), in order to pursue the potential strategic acquisition of certain assets previously held by Cardionomic, Inc.

("Cardionomic"), a third party entity that has ceased operations.

Catheter owns 82 % of the subsidiary’s issued and outstanding common stock.

The Company’s Chief Executive Officer and Chairman of the Board and certain of his affiliates own 12% .

The remaining 6 % is held by certain business associates of the Company’s Chief Executive Officer.

As of March 31, 2025, operations had yet to be started in Cardionomix.

The asset acquisition closed on May 5, 2025, and discussions to obtain funding have begun.

One of the Company’s two primary products is the VIVO System, which is an acronym for View into Ventricular Onset (“VIVO” or “VIVO System”).

5 unchanged sentences

Clinical studies for LockeT began during the year ended December 31, 2023.

These studies are planned to show the product’s effectiveness and benefits, including faster wound closure, earlier ambulation, potentially leading to early hospital discharge, and cost benefits.

These studies are planned to show the product’s effectiveness and benefits, including faster wound closure and earlier ambulation, potentially leading to early hospital discharge and cost benefits.

This information is intended to provide crucial data for marketing.

The Company recorded its first commercial sale of LockeT to distributors in May 2024.

The Company’s product portfolio also includes the Amigo® Remote Catheter System (the "AMIGO" or "AMIGO System"), a robotic arm that serves as a catheter control device.

2 unchanged sentences

Reverse Stock Split

On July 3, 2024, at the annual meeting of stockholders of the Company, the stockholders approved an amendment to the Amended and Restated Certificate of Incorporation of the Company (the “Amendment”), which included a decrease in the authorized common stock and authorization for the Board, in its discretion, to effect a reverse stock split within specified parameters.

The Amendment was effective July 15, 2024, reducing the authorized common stock to 30 million shares and effecting a reverse stock split in which each ten ( 10 ) shares of the Company’s common stock, par value $ 0.0001 per share, issued and outstanding immediately prior to the effective time, automatically combined into one (1) validly issued, fully paid and non-assessable share of the Company’s common stock, par value $ 0.0001 per share.

July 3, 2024, at the annual meeting of stockholders of the Company, the stockholders approved an amendment to the Amended and Restated Certificate of Incorporation of the Company (the “Amendment”), which included a decrease in the authorized common stock and authorization for the Board, in its discretion, to effect a reverse stock split within specified parameters.

The Amendment was effective

July 15, 2024, reducing the authorized common stock to

30 million shares and effecting a reverse stock split in which each

10 ) shares of the Company’s common stock, par value

$ 0.0001 per share, issued and outstanding immediately prior to the effective time, automatically combined into

1 ) validly issued, fully paid and non-assessable share of the Company’s common stock, par value

$ 0.0001 per share.

No fractional shares were issued as a result of the reverse stock split.

4 unchanged sentences

Going Concern

The unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities in the normal course of business, and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or amounts and classification of liabilities that may result from the outcome of this uncertainty.

The Company has incurred recurring net losses from operations and negative cash flows from operating activities since inception.

As of September 30, 2024, the Company had cash and cash equivalents of approximately $ 1.3 million.

For the nine months ended September 30, 2024, the Company used $ 6.4 million in cash for operating activities.

As of September 30, 2024, the Company had an accumulated deficit of approximately $ 287 million.

Management expects operating losses and negative cash flows to continue for the foreseeable future as the Company invests in its commercial capabilities.

These negative cash flows and additional costs associated with the Merger paid during the year ended December 31, 2023, have substantially depleted the Company’s cash.

Following the Merger with Old Catheter, Management further reduced costs while assuming the operating costs of Old Catheter.

For the three months ended March 31, 2025, the Company incurred $ 4.0 million in net loss and used $ 2.3 million in cash for operating activities.

As of March 31, 2025 , the Company had an accumulated deficit of $ 296.4 million and cash and cash equivalents of $ 0.5 million.

Management expects operating losses and negative cash flows to continue for the foreseeable future as the Company invests in its commercial capabilities and expands its product portfolio through strategic asset acquisitions.

On January 14, 2025, the Company acquired 100 % of the membership interests of Perikard, LLC, which was accounted for as an asset acquisition primarily consisting of a single patent for pericardial access technology.

The Company issued 275,000 shares of its common stock valued at $ 113 thousand as consideration and may be obligated to make future royalty payments equal to 10 % of net sales of the pericardial access kit for five years following the closing date (see Note 14, Asset Acquisition).

In addition, on April 22, 2025, the Company entered into an asset purchase agreement with the assignor of Cardionomic, Inc.

(“Cardionomic”), wherein it purchased Cardionomic’s late-stage treatment in development for acute decompensated heart failure, consisting of patents and trademarks related to Cardiac Pulmonary Nerve Simulation (CNPS) System (see Note 18, Subsequent Events).

The Company issued 1,000,000 restricted shares of its common stock valued at $ 310 thousand and a promissory note for $ 1.5 million.

The promissory note has an interest rate of 4 % per annum with no principal nor interest payable until the maturity date, which is three years after the date of issuance.

The purchased assets have not been cleared for commercial use and require further research and regulatory approval before commercialization.

In addition, on May 12, 2025, the Company entered into a Securities Purchase Agreement for a private placement with three institutional investors.

Pursuant to the Securities Purchase Agreement, the Company sold an aggregate of (i) 1,500 PIPE Units and (ii) 1,500 additional shares of a new series of the Company's preferred stock, designated Series B Convertible Preferred Stock, par value $ 0.0001 per share.

Each PIPE Unit consists of:

(i) one share of Series B Convertible Preferred Stock and (ii) Series L Warrants to purchase approximately 2,858 shares of Common Stock at an exercise price of $ 0.50 per share.

The aggregate stated value of the 3,000 shares of Series B Convertible Preferred Stock issued was $ 3.0 million.

As consideration for the PIPE Units and Series B Convertible Preferred Stock, the Company collected $ 1.5 million in cash and secured Convertible Promissory Notes of QHSLab, Inc.

previously held by one of the investors, before deducting placement agent fees and offering expenses of $ 0.2 million.

(See Note 18, Subsequent Events) The Company expects to continue to incur additional expenses as it undertakes the required research, development, and commercialization activities for the purchased assets.

These negative cash flows have substantially depleted the Company’s cash.

Management will continue to monitor its operating costs and seek to reduce its current liabilities.

Such actions may impair its ability to proceed with certain strategic activities.

From May to July 2024, the Company issued five short-term promissory notes with related parties totaling $ 1.5 million with an 8 % interest rate and a maturity date of August 30, 2024 (the “Related Party Notes”).

On August 23, 2024, the Company amended the Related Party Notes to extend the maturity date to January 31, 2026.

As part of the amendment, all interest accrued as of the amendment date was repaid to the noteholders and the contractual interest rate increased to 12% per annum as of the amendment date.

See Note 9, Notes Payable for additional information.

On August 30, 2024, the Company entered into an Underwriting Agreement (the “Underwriting Agreement”) with Ladenburg Thalmann & Co.

as representative (the “Representative”) of the underwriters named in the Underwriter Agreement (the “Underwriters”).

The Company collected gross proceeds of approximately $ 3.6 million before deducting underwriting discounts, commissions, and offering expenses payable by the Company of $ 1.0 million.

See Note 13, Equity Offerings for additional information.

On October 24, 2024, the Company entered into Warrant Inducement Offer Letters (the “2024 Inducement Offer”) with certain holders of the Company’s existing warrants.

Following the closing of the 2024 Inducement Offer, such warrant holders immediately exercised up to an aggregate of (i) 33,160.8 Series E Warrants, (ii) 499,909.34 Series F Warrants, (iii) 499,909.34 Series G Warrants, (iv) 1,990,000 Series H Warrants, and (v) 2,325,000 Series I Warrants (collectively the “Existing Warrants”) to purchase up to approximately 5.3 million shares of the Company’s Common Stock at a reduced exercise price of $0.70 per share.

In consideration for the immediate exercise of the Existing Warrants for cash, the Company agreed to issue unregistered new Series K Common Stock Purchase Warrants (“Series K Warrants”) to purchase up to 10.7 million shares of common stock.

The Company expects to receive aggregate gross proceeds of approximately $3.7 million in cash from the exercise of these warrants pursuant to the 2024 Inducement Offer, prior to deducting placement agent fees and offering expense of $0.4 million.

As of the date of the 2024 Inducement Offer, 578,900 Series H and 1,078,900 Series I warrants remained unexercised.

As additional consideration, the Company issued placement agent warrants to purchase up to 320,879 shares of common stock on the same terms as the Series K warrants, except the exercise price is $1.085 per share and have a termination date of October 28, 2029 .

Management estimates that based on the Company’s liquidity resources, there is substantial doubt about the Company’s ability to continue as a going concern within 12 months from the date of issuance of the unaudited condensed consolidated financial statements.

1 unchanged sentence

Management’s ability to continue as a going concern is dependent upon its ability to raise additional funding.

Management plans to raise additional capital through public or private equity or debt financings to fulfill its operating and capital requirements for at least 12 months from the date of the issuance of the unaudited condensed consolidated financial statements.

Management plans to raise additional capital through public or private equity or debt financing to fulfill its operating and capital requirements for at least 12 months from the date of the issuance of the unaudited condensed consolidated financial statements.

However, the Company may not be able to secure such financing in a timely manner or on favorable terms, if at all.

2 unchanged sentences

Principles of Consolidation

The unaudited condensed consolidated financial statements of the Company include the accounts of the Company and Old Catheter.

The unaudited condensed consolidated financial statements of the Company include the accounts of the Company, Old Catheter, and Cardionomix.

All intercompany transactions have been eliminated in consolidation.

1 unchanged sentence

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

GAAP") applicable to interim financial statements.

The Financial Accounting Standards Board (“FASB”) establishes these principles to ensure financial condition, results of operations, and cash flows are consistently reported.

4 unchanged sentences

The operating results presented herein are not necessarily an indication of the results that may be expected for the year.

The unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited Consolidated Financial Statements included in its Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the Securities and Exchange Commission (“SEC”) on April 1, 2024.

The unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited Consolidated Financial Statements included in its Annual Report on Form 10 -K for the year ended December 31, 2024, as filed with the Securities and Exchange Commission (“SEC”) on March 31, 2025.

Use of Estimates

The preparation of the unaudited condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods.

Actual results may differ materially from those estimates.

The Company’s unaudited condensed consolidated financial statements are based upon a number of estimates including, but not limited to, the accounting for the Old Catheter business combination (see Note 3, Business Combination), allowance for credit losses, evaluation of impairment of long-lived assets and goodwill, valuation of long-lived assets and their associated estimated useful lives, reserves for warranty costs, fair value of royalties payable, evaluation of probable loss contingencies, fair value of preferred stock and warrants issued, and the fair value of equity awards granted.

Actual results could differ from those estimates.

The Company’s unaudited condensed consolidated financial statements are based upon a number of estimates including, but not limited to, the allowance for credit losses, evaluation of impairment of long-lived assets, valuation of long-lived assets and their associated estimated useful lives, reserves for warranty costs, fair value of royalties payable due to related parties, the fair value of contingent consideration recorded in connection with a business combination or an asset acquisition, evaluation of probable loss contingencies, fair value of warrants issued, and fair value of equity awards granted.

Concentrations of Credit Risk

The Company's financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable.

Cash equivalents represent short-term, highly liquid investments with maturities of 90 days or less at the date of purchase.

The Company generally maintains balances in various operating accounts at financial institutions that management believes to be of high credit quality, in amounts that may exceed federally insured limits.

The Company generally maintains cash and cash equivalent balances in various operating accounts at financial institutions with high quality credit in amounts in excess of federally insured limits of $250,000.

As of March 31, 2025 , the Company had deposits in financial institutions in excess of federally insured limits of $ 0.2 million .

The Company has not experienced any losses related to its cash and cash equivalents and does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

1 unchanged sentence

The Company extends credit to customers in the normal course of business.

Concentrations of credit risk with respect to accounts receivable exist to the full extent of amounts presented in the condensed consolidated financial statements.

Concentrations of credit risk with respect to accounts receivable exist to the full extent of amounts presented in the unaudited condensed consolidated balance sheets.

The Company does not require collateral from its customers to secure accounts receivable.

The Company had three and five customers that represented 90 % and 86 % of the Company's consolidated revenue for the three and nine months ended September 30, 2024, respectively;

and three and four customers that represented 71 % and 73 % of the Company's consolidated revenue for the three and nine months ended September 30, 2023, respectively.

The Company had 3 customers that represented 70 % and 90 % of the Company's condensed consolidated revenues for the three months ended March 31, 2025 and 2024 , respectively.

The Company had 3 and 2 vendors that accounted for 60 % and 40 % of accounts payable included in the condensed consolidated balance sheets as of March 31, 2025 and 2024 , respectively.

Reclassifications

Certain prior year financial statement amounts have been reclassified for consistency with the current year presentation.

Certain prior period financial statement amounts have been reclassified for consistency with the current period presentation.

These reclassifications had no effect on our previously reported results of operations or accumulated deficit.

In the current period, the Company separately discloses interest income and interest expense in the condensed consolidated statement of operations.

For comparative purposes, amounts in the prior periods have been reclassified to conform to current period presentations.

Segment Reporting

The Company’s Board of Directors and executive management team represents the entity’s chief operating decision makers.

To date, the Company’s executive management team has viewed the Company’s operations as one segment that includes the marketing, sales, and development of medical technologies in the field of cardiac electrophysiology.

As a result, the financial information disclosed materially represents all of the financial information related to the Company’s sole operating segment.

The Company operates in one reportable segment, which includes all activities related to the marketing, sales, and development of medical technologies in the cardiac electrophysiology field.

While the commercial efforts that coordinate the marketing, sales, and distribution of these products are organized by geographic region and product, all of these activities are supported by a single corporate team and distribution channels.

The determination of a single reportable segment is consistent with the condensed consolidated financial information available and regularly reviewed by the Company’s chief operating decision maker (“CODM”).

The CODM is the Company’s chief executive officer, who reviews and evaluates condensed consolidated net loss reported on the condensed consolidated statements of operations for purposes of assessing performance, making operating decisions, allocating resources and planning and forecasting for future periods.

As the Company’s operations are managed at the consolidated level, there are no differences between the measurement of the reportable segments’ profit or losses and the Company’s condensed consolidated statements of operations.

Segment asset measures are not used as a basis for the CODM to evaluate the performance of or to allocate resources to the segment.

The following table summarizes segment revenues and significant segment expenses included in the measure of segment profit or loss (consolidated net loss) reviewed by the CODM (in thousands):

For the Three Months Ended

Cost of revenues

Acquired in-process research and development expense

Depreciation and amortization expense

Stock-based compensation expense

Salaries and benefits expense

Professional fees

Research and development expense

Interest income

( 18 ) ( 33 )

Interest expense

Change in fair value of royalties payable due to related parties

Income tax benefit

Other segment items (1)

Segment net loss

( 4,045 ) ( 2,675 )

Reconciliation of net loss

Adjustments and reconciling items

Consolidated net loss

$ ( 4,045 ) $ ( 2,675 )

( 1 ) Other segment items include consulting fees of $ 91 thousand, investor relations and SEC fees of $ 257 thousand, insurance fees of $ 82 thousand, and other selling, general, and administrative expenses of $ 392 thousand for the three months ended March 31, 2025 .

Other segment items include other expenses, net of $ 3 thousand, consulting fees of $ 150 thousand, investor relations and SEC fees of $ 136 thousand, insurance fees of $ 134 thousand, and other selling, general, and administrative expenses of $ 375 thousand for the three months ended March 31, 2024 .

Other selling, general, and administrative expenses primarily consist of travel expenses, computer and information technology expenses, and rent expenses.

Cash and Cash Equivalents

Cash equivalents primarily represent funds invested in readily available checking and money market accounts.

The Company maintains deposits in financial institutions in excess of federally insured limits of $250,000, in the amount of $987 thousand at September 30, 2024.

The Company considers all highly liquid investments purchased with an original maturity date of ninety days or less at the date of purchase to be cash equivalents.

Cash and cash equivalents primarily represent funds invested in readily available checking and money market accounts.

Fair Value Measurements

4 unchanged sentences

Level 3 - Unobservable inputs that are supported by little or no market data, which require the Company to develop its own assumptions.

Cash equivalents, prepaid expenses, trade accounts receivable, accounts payable, and accrued expenses are reported on the condensed consolidated balance sheets at carrying value which approximates fair value due to the short-term maturities of these instruments.

The following table details the fair value measurements within the fair value hierarchy of the Company’s financial instruments:

Fair value at September 30, 2024

Cash equivalents, prepaid expenses, accounts receivable, accounts payable, and accrued expenses are reported on the condensed consolidated balance sheets at carrying value which approximates fair value due to the short-term maturities of these instruments.

The carrying value of our notes payable and notes payable due to related parties approximates the instruments' fair value due to the short-term maturities of these debt instruments.

The following table details the fair value measurements within the fair value hierarchy of the Company’s financial instruments (in thousands):

March 31, 2025

Cash Equivalents

$ 420 $ 420 $ — $ —

Money market funds

Royalties payable

$ 433 $ 433 $ — $ —

Royalties payable due to related parties

$ 10,376 $ — $ — $ 10,376

Total liabilities

Fair value at December 31, 2023

$ 10,376 $ — $ — $ 10,376

December 31, 2024

Cash Equivalents

$ 2,803 $ 2,803 $ — $ —

Money market funds

Royalties payable

$ 2,815 $ 2,815 $ — $ —

Royalties payable due to related parties

$ 9,213 $ — $ — $ 9,213

Total liabilities

The royalties payable have significant unobservable inputs that are not supported by any market data.

As such, the Company developed its own assumptions and identified the inputs as Level 3.

The revenue adjusted discount rate (“RADR”) was calculated using a weighted average cost of capital (“WACC”) approach for the measurement of the Level 3 liability.

The RADR considers the WACC from the Company’s impairment analysis and adjusts certain inputs to represent the risk profile of the revenue.

Under the cost of equity section, the risk-free rate has changed to be commensurate with the royalties payable term.

Additionally, the Beta and Company Specific Risk Premium have been adjusted to Revenue Beta and Revenue Specific Risk Premium, respectively.

This adjustment was calculated by multiplying the respective metric by the quotient of equity volatility over revenue volatility.

The remaining inputs from the Impairment WACC have remained unchanged.

The following table summarizes the significant unobservable inputs used in the fair value measurement of Level 3 instruments as of September 30, 2024 and December 31, 2023:

September 30, 2024

$ 9,213 $ — $ — $ 9,213

The fair value measurement of royalties payable due to related parties includes unobservable inputs that are not supported by any market data.

Royalties payable due to related parties equals the present value of estimated future royalty payments.

The Company applies an internally developed, revenue adjusted discount rate (“RADR”) to discount back the forecasted royalty payments.

The RADR is based on the Company’s weighted average cost of capital (“WACC”) adjusted for the product revenue’s risk profile.

The risk-free rate used to determine the cost of equity for the RADR is adjusted to be commensurate with the term of the royalty agreements.

Furthermore, the Beta and Risk Premium used to determine the cost of equity are also adjusted to reflect the product revenue's volatility.

All other inputs for the RADR and the Company’s WACC are the same.

The following tables summarize the significant unobservable inputs used in the fair value measurement of Level 3 instruments:

March 31, 2025

Valuation Technique

Unobservable Input

Royalties Payable

Royalties payable due to related parties

Discounted future cash flows

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Unobservable Input

Royalties Payable

Royalties payable due to related parties

Discounted future cash flows

Revenue adjusted discount rate

Increases or decreases in the fair value of the royalties payable can result from updates to assumptions, such as changes in discount rates, project cash flows, among other assumptions.

Increases or decreases in the fair value of royalties payable due to related parties can result from updates to assumptions, such as changes in discount rates, projected cash flows, among other assumptions.

Judgment is used in determining these assumptions as of the initial valuation date and at each subsequent reporting period.

Changes or updates to assumptions could have a material impact on the reported fair value, the change in fair value, and the results of operations in any given period.

The table below summarizes the change in fair value of royalties payable due to related parties for the three months ended March 31, 2025 and 2024 (in thousands):

Beginning Balance at January 1,

$ 9,213 $ 6,974

Change in fair value of royalties payable due to related parties

Ending Balance at March 31,

$ 10,376 $ 7,060

Accounts Receivable and Allowances for Credit Losses

Under the Current Expected Credit Loss ("CECL") impairment model, the Company develops and documents its allowance for credit losses on its trade receivables based on three portfolio segments:

Accounts receivable consists of trade receivables recorded at invoiced amounts.

Accounts receivable is presented net of any discounts and allowance for credit losses, is unsecured and does not bear interest.

Accounts receivable is evaluated for collectability based on historical credit loss experience, adjusted for asset-specific risk characteristics, current economic conditions, and reasonable forecasts, including the probability of future collection and estimated loss rates based on aging schedules.

Accounts receivable is assessed for collectability based on three portfolio segments:

Hospitals - United States, Hospitals - Europe, and Distributors.

The determination of portfolio segments is based primarily on the customers’ industry and geographical location.

Trade accounts receivable are recorded at invoiced amounts, net of allowance for credit losses, if applicable, and are unsecured and do not bear interest.

The allowance for credit losses is based on the probability of future collection under the CECL impairment model in which the Company determines its estimated loss rates based on an aging schedule.

The Company also considers reasonable and supportable current information in determining its estimated loss rates, such as external forecasts, macroeconomic trends or other factors, including customers’ credit risk and historical loss experience.

The adequacy of the allowance is evaluated on a regular basis.

Trade account balances are written off after all means of collection are exhausted and the balance is deemed uncollectible.

Subsequent recoveries are credited to the allowance for credit losses, if any.

Changes in the allowance are recorded as adjustments to bad debt expense in the period incurred.

The allowance for credit losses within trade accounts receivable was not material as of September 30, 2024 and December 31, 2023.

The determination of portfolio segments is based on the customers’ industry and geographical location.

Changes in the estimated collectability of accounts receivable are recorded in the condensed consolidated statements of operations in the period in which the estimate is revised.

Accounts receivable are written off as uncollectible after all means of collection are exhausted.

Any subsequent recoveries are credited to the allowance for credit losses.

As of March 31, 2025 and December 31, 2024 , the allowance for credit losses related to accounts receivable was immaterial.

Inventories are stated at the lower of cost (determined by the first -in, first -out method) or net realizable value.

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Property and Equipment

Property and equipment are recorded at cost and depreciated on a straight-line basis over their estimated useful lives as follows:

Property and equipment are recorded at cost, less accumulated depreciation.

Property and equipment are depreciated on a straight-line basis over their estimated useful lives as follows:

Machinery and equipment

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VIVO DEMO/Clinical Systems

Leasehold improvements are depreciated over the shorter of the useful life of the leasehold improvement or the term of the underlying property’s lease.

The Company periodically reviews the residual values and estimated useful lives of each class of its property and equipment for ongoing reasonableness, considering long-term views on its intended use of each class of property and equipment and the planned level of improvements to maintain and enhance assets within those classes.

When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the account balances and any resulting gain or loss is recognized in income for the period.

The cost of repairs and maintenance is expensed as incurred, whereas significant betterments are capitalized.

The Company periodically reviews the residual values and estimated useful lives of each class of its property and equipment for ongoing reasonableness, considering the long-term views of their intended use and the level of planned improvements to maintain and enhance those assets.

When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from their respective account balances and any resulting gain or loss is recognized in the Company’s condensed consolidated statements of operations.

The cost of repairs and maintenance is expensed as incurred, whereas significant renewals and betterments are capitalized.

Impairment of Long-lived Assets

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If events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable and the expected undiscounted future cash flows attributable to the asset are less than the carrying amount of the asset, an impairment loss equal to the excess of the assets carrying value over its fair value is recorded in the Company’s consolidated statements of operations at that date.

The Company concluded there was no impairment as of September 30, 2024.

In accordance with ASC 350, Intangibles – Goodwill and Other , goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the fair value of net assets acquired.

Goodwill, which represents the excess of purchase price of Old Catheter over the fair value of net assets acquired, is carried at cost.

Goodwill is not amortized;

rather, it is subject to a periodic assessment for impairment by applying a fair value-based test.

The Company reviews goodwill for possible impairment annually during the fourth quarter, or whenever events or circumstances indicate that the carrying amount may not be recoverable.

To determine whether goodwill is impaired, annually or more frequently if needed, the Company performs a multi-step impairment test.

The Company first has the option to assess qualitative factors to determine if it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value.

The Company may also elect to skip the qualitative testing and proceed directly to the quantitative testing.

When performing quantitative testing, the Company first estimates the fair values of its reporting units using a combination of an income and market approach.

To determine fair values, the Company is required to make assumptions about a wide variety of internal and external factors.

Significant assumptions used in the impairment analysis include financial projections of free cash flow (including significant assumptions about operations, including the rate of future revenue growth, capital requirements, and income taxes), long-term growth rates for determining terminal value and discount rates.

Comparative market multiples are used to corroborate the results of the discounted cash flow test.

These assumptions require significant judgment.

Pursuant to ASU 2017-04, Simplifying the Test for Goodwill Impairment , the single step is to determine the estimated fair value of the reporting unit and compare it to the carrying value of the reporting unit, including goodwill.

To the extent the carrying amount of goodwill exceeds the implied goodwill, the difference is the amount of the goodwill impairment.

The majority of the inputs used in the discounted cash flow model are unobservable and thus are considered to be Level 3 inputs.

The inputs for the market capitalization calculation are considered Level 1 inputs.

There were impairment charges of $ 60.9 million recognized during the nine months ended September 30, 2023 (see Note 3, Business Combination and Note 7, Goodwill for additional details).

As of December 31, 2023, goodwill was fully impaired.

Royalties Payable

The Company is obligated to pay royalties under various royalty agreements executed by Old Catheter.

On January 9, 2023, prior to the consummation of the Merger, Old Catheter entered in an agreement with its Convertible Promissory Noteholders (“Noteholders”), which substantially consisted of amounts due to David A.

Jenkins, previously Old Catheter's Chairman of the Board of Directors, and, currently, the Company’s Executive Chairman of the Board of Directors and Chief Executive Officer, to forgive all accrued interest and future interest expense in exchange for a future royalty right.

The Company will pay to the Noteholders a royalty equal to 11.82% of net sales of LockeT, commencing on the first commercial sale through December 31, 2035 (see Note 10, Royalties Payable).

The Company recognizes a current liability for royalty fees incurred and payable to the Noteholders based on actual sales of LockeT devices.

The liability is recorded as current portion of royalties payable in the condensed consolidated balance sheet.

The Company further recognizes a liability for future, estimated royalty payments to the Noteholders at fair value, which is recorded as royalties payable in the condensed consolidated balance sheet (the “Royalties Payable”).

The fair value of the Royalties Payable is an estimate that is based on the projected sales of LockeT through the end of 2035.

The projected sales are then multiplied by the royalty rate of 11.82 % and discounted back to their present value using the RADR.

At each reporting date, the fair value of the Royalty Payable is re-measured in connection with any changes to Management’s projections as a change in estimate.

Product Warranty

The Company offers product warranties against defects in material and workmanship when properly the products are used for their intended purpose and properly maintained.

Warranty expenses are included in cost of revenues in the accompanying unaudited condensed consolidated statements of operations.

Changes in estimates to previously established warranty accruals result from current period updates to assumptions regarding repair and product recall costs and are included in current period warranty expense.

As of September 30, 2024 and December 31, 2023, there was no accrued warranty balance.

As a result of the sustained decline of the Company's stock, the Company assessed its long-lived assets for impairment.

To evaluate whether the carrying amount of the long-lived asset group is recoverable, the Company determined the estimated future cash flows of the group for a period consistent with that of the primary assets of the group.

The sum of the undiscounted cash flows was then compared to the carrying amount of the long-lived assets as of March 31, 2025 .

The Company concluded there was no impairment as of March 31, 2025 and December 31, 2024 .

Royalties Payable Due to Related Parties

The Company is obligated to pay royalties related to the sales of LockeT and AMIGO System under various royalty agreements executed by Old Catheter.

The Company recognizes a liability for royalty fees incurred and payable based on actual sales of products under current portion of royalties payable due to related parties in the condensed consolidated balance sheets.

The Company recognizes a liability for future, estimated royalty payments at fair value under the royalties payable due to related parties in the condensed consolidated balance sheets.

The royalties payable due to related parties is remeasured at each reporting period.

Changes in fair value of royalties payable due to related parties are recorded on the condensed consolidated statements of operations in the period in which they occur.

See Note 8, Royalties Payable for additional information.

Asset acquisitions and In-process Research and Development

The Company accounts for acquisitions of assets or a group of assets that do not meet the definition of a business as asset acquisitions based on the cost to acquire the asset or group of assets, which includes certain transaction costs.

In an asset acquisition, the cost to acquire is allocated to the identifiable assets acquired and liabilities assumed based on their relative fair values as of the acquisition date.

No goodwill is recorded in an asset acquisition.

Assets that are acquired in an asset acquisition for use in research and development activities that have an alternative future use are capitalized as in-process research and development (“IPR&D”) in the condensed consolidated balance sheets.

Acquired IPR&D that has no alternative future use as of the acquisition date is recognized as research and development expense in the condensed consolidated statements of operations as of the acquisition date.

Contingent consideration in asset acquisitions that is not accounted for as a derivative is measured and recognized when payment becomes probable and reasonably estimable.

Subsequent changes in the accrued amount of contingent consideration are measured and recognized at the end of each reporting period and upon settlement as an adjustment to the cost basis of the acquired asset or group of assets, or, if related to IPR&D with no alternative future use, recognized as expense.

Contingent consideration that is in the form of a sales or usage-based royalty payment is recognized as an expense as incurred.

Distinguishing Liabilities from Equity

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Freestanding financial instruments that are redeemable for cash or other assets at a fixed or determinable date, at the option of the holder, or upon the occurrence of an event are classified in temporary equity in accordance with ASC 480.

Otherwise, the freestanding financial instruments is classified in permanent equity.

Otherwise, the freestanding financial instruments are classified in permanent equity.

Revenue Recognition

In accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), the Company accounts for a contract with a customer when there is a legally enforceable contract, the rights of the parties are identified, the contract has commercial substance, and collectability of the contract consideration is probable.

In accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606” ), the Company accounts for contracts with customers when there is a legally enforceable contract, the rights of the parties are identified, the contract has commercial substance, and collectability of the contract consideration is probable.

Revenue is measured as the amount of consideration expected to be received in exchange for transferring promised goods or services.

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If there are multiple performance obligations in the customer contract, the Company allocates the transaction price in the contract to each performance obligation based on the relative standalone selling price.

The Company does not adjust revenue for the effects of a significant financing component for contracts if the period between the transfer of control and corresponding payment is expected to be one year or less.

Revenue is recognized when performance obligations in the customer contract are satisfied.

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Identify the performance obligations in the contract

Determine the transaction price in the contract

Determine the transaction price

Allocate the transaction price to the performance obligations in the contract

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Software upgrade services may be offered for initial contract terms of one to multiple years.

Customers have the option to renew terms for software upgrades services at the end of each term.

Customers have the option to renew software upgrades services at the end of each term.

The software upgrade services represent the Company's second performance obligation, which is recognized evenly over time over the contract term.

The Company invoices the customer after physical possession and control of the VIVO System is transferred to the customer and recognizes revenue upon delivery.

The timing of payment for the corresponding invoices is dependent upon the credit terms identified in each contract.

The Company invoices customers who pay for software upgrades in advance in conjunction with the invoice for the delivery of the VIVO System, and subsequent renewals of software upgrades are invoiced at the inception of the term.

Revenue for these stand-ready services is recognized evenly over the term of the upgrade period, consistently with similar stand-ready services under ASC 606.

Similar to the delivery of the VIVO System, the timing of payment for the corresponding invoices is dependent upon the credit terms identified in each contract.

Revenue is recognized at the point in time that the product is delivered to the customer.

The Company invoices the customer for the VIVO System and related software upgrades after physical possession and control of the VIVO System has been transferred to the customer.

Subsequent renewals for software upgrades are invoiced at inception of the renewed term.

The timing of payment for the corresponding invoices depends on the credit terms identified in each customer contract.

There were no software upgrade services revenues during the three months ended March 31, 2025 and 2024 .

LockeT was launched by the Company in February 2023 and is a suture retention device indicated for wound healing by distributing suture tension over a larger area in the patient in conjunction with a figure of eight suture closure.

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The Company recognizes revenue when it transfers control of the LockeT device to the customer, which happens when the Company delivers the product to the customer.

For both LockeT and VIVO System, the Company has elected the practical expedient to expense costs incurred to obtain a contract, rather than recognizing these costs as an asset at the time of occurrence.

The Company has elected as a practical expedient to expense as incurred any costs incurred to obtain a contract as the related amortization period would be one year or less.

Disaggregation of Revenue

The following table summarizes disaggregated product sales by geographic area (in thousands):

For the Three Months Ended September 30,

For the Nine Months Ended

September 30,

For the Three Months Ended March 31,

Product Sales

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Advertising costs are expensed as incurred and included in selling, general and administrative expenses.

Advertising costs were $ 31 thousand and $ 127 thousand during the three and nine months ended September 30, 2024, respectively.

Advertising costs were $ 309 thousand and $ 914 thousand during the three and nine months ended September 30, 2023, respectively.

Advertising costs were $ 83 t housand and $ 49 thousand during the three months ended March 31, 2025 and 2024 , respectively.

The Company expenses patent costs, including related legal costs, as incurred and records such costs as selling, general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations.

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Stock-based Compensation

The Company records stock-based compensation expense associated with stock options, restricted stock awards (“RSAs”) and restricted stock units (“RSUs”) issued to employees, members of the Company’s board of directors and consultants in accordance with the guidance under ASC Topic 718 , Compensation – Stock Compensation (“ASC 718”).

The Company evaluates whether an award should be classified and accounted for as a liability award or equity award for all stock-based compensation awards granted.

Stock-based compensation expense for stock options is measured at the grant date based on the estimated fair value of the award using the Black-Scholes option pricing valuation model (“Black-Scholes model”), which incorporates various assumptions, including expected term, volatility and risk-free interest rate.

Stock-based compensation expense for stock options is recognized on a straight-line basis over the requisite service period of the award, which is generally the vesting period of the respective award.

Share-based compensation for an award with a performance condition is recognized when the achievement of such performance condition is determined to be probable.

The Company recognizes stock-based compensation expense associated with stock options, restricted stock awards (“RSAs”) and restricted stock units (“RSUs”) issued to employees, members of the Company’s board of directors and consultants in accordance with ASC Topic 718, Compensation – Stock Compensation (“ASC 718” ).

The Company evaluates whether stock-based awards should be classified and accounted for as liability or equity awards on the date of grant.

Furthermore, the Company measures all stock-based awards granted based on their fair value on the date of grant.

Stock options are measured at fair value using the Black-Scholes option pricing valuation model (the “Black-Scholes model”), which incorporates various assumptions, including expected term, volatility and risk-free interest rate.

Stock-based compensation expense for all stock-based awards is recognized over the requisite service period, which is generally the vesting period of the respective stock award.

Stock-based compensation expense for stock-based awards with a performance condition is recognized when the achievement of such performance condition is determined to be probable.

If the outcome of such performance condition is not probable or is not met, no stock-based compensation expense is recognized, and any previously recognized compensation expense is reversed.

Forfeitures are recognized as a reduction of stock-based compensation expense as they occur.

As a result of the Merger, all unvested Old Catheter stock options were subject to accelerated vesting and became fully vested as of the closing date of the business combination.

The Company recognized the fair value of the replacement options as included in consideration transferred to the extent they do not exceed the fair value of the equivalent Old Catheter options.

Any incremental fair value was recognized in compensation expense in the post-combination period, with this recognized as a Day 1 expense due to the Old Catheter options becoming fully vested concurrent with the closing of the business combination.

The Company accounts for income taxes using the asset and liability method.

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Should the Company incur interest and penalties relating to tax uncertainties, such amounts would be classified as a component of interest expense and other expense, respectively.

Basic and Diluted Net Loss per Share of Common Stock

Basic and Diluted Net Loss Per Share

Earnings per share attributable to common stockholders is calculated using the two -class method, which is an earnings allocation formula that determines earnings per share for the holders of the Company’s common shares and participating securities.

The Company’s Series A Convertible Preferred Stock, Series X Convertible Preferred Stock, and outstanding warrants contain participating rights in distributions made to common stockholders and, therefore, are participating securities.

The Company did not declare nor pay any dividends nor distributions in the current period.

Furthermore, the participating securities do not include a contractual obligation to share in the losses of the Company and are not included in the calculation of net loss per share in the periods that have a net loss.

The Company’s Series A Convertible Preferred Stock, Series X Convertible Preferred Stock, and outstanding warrants are participating securities as they contain participating rights in distributions made to common stockholders.

Since the participating securities do not include a contractual obligation to share in the losses of the Company, they are not included in the calculation of net loss per share in the periods that have a net loss.

In addition, common stock equivalent shares (whether or not participating) are excluded from the computation of diluted earnings per share in periods in which they have an anti-dilutive effect on net loss per common share.

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In periods in which the Company reports a net loss attributable to common stockholders, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders since dilutive common shares are not assumed to have been issued if their effect is anti-dilutive.

Diluted net loss per share is equivalent to basic net loss per share for the periods presented herein because common stock equivalent shares from warrants, stock options, non-vested restricted stock awards, restricted stock units, Series A Convertible Preferred Stock, and Series X Convertible Preferred Stock were antidilutive (see Note 12, Net Loss per Share).

Net loss attributable to common stockholders consists of net income or loss, as adjusted for actual and deemed dividends declared.

The Company recorded a deemed dividend for the modification of existing warrants and issuance of new warrants during the three and nine months ended September 30, 2023 of $ 0 and $ 0.8 million, respectively.

The deemed dividend is added to the net loss in determining the net loss available to common stockholders for the three and nine months ended September 30, 2023.

There was no deemed dividend for the three and nine months ended September 30, 2024.

Net loss attributable to common stockholders consists of net income or loss, as adjusted for actual and deemed dividends declared, if applicable.

Recently Announced Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

The amendments in ASU 2023-07 require disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items to reconcile to segment profit or loss, and the title and position of the entity’s CODM.

The amendments in this update also expand the interim segment disclosure requirements.

These amendments do not change how a public entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments.

The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted and the amendments in this update are required to be applied on a retrospective basis.

The Company is currently reviewing the impact that the adoption of ASU 2023-07 may have on our consolidated financial statements and disclosures.

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

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The Company is required to adopt this standard prospectively in fiscal year 2025 for the annual reporting period ending December 31, 2025.

The Company does not believe the impact of the new guidance and related codification improvements will have material impact to its financial position, results of operations and cash flows.

Business Combination

On January 9, 2023, the Company completed the acquisition of Old Catheter for the purpose of acquiring Old Catheter’s existing and developing product lines based on unique electrophysiology technology.

Pursuant to the Merger Agreement, all Old Catheter common stock shares issued and outstanding and convertible promissory notes, representing an aggregate principal of $ 25.2 million, were converted into a right to receive 14,649 .592 shares of a new class of the Company’s preferred stock, designated Series X Convertible Preferred Stock.

Additionally, all outstanding stock options to purchase Old Catheter common stock were assumed and converted into options to purchase approximately 75,367 shares of the Company's common stock.

The total purchase consideration for the Merger was $ 72.5 million which represents the sum of the (i) estimated fair value of the 14,649 .592 Series X Convertible Preferred Stock issued and (ii) the portion of the estimated fair value of $ 3.4 million representing the Company stock options issued in replacement of Old Catheter share-based payment awards as required under FASB Topic 805, Business Combinations ("Topic 805") .

The fair value of the Series X Convertible Preferred Stock includes certain discounts applied to the closing stock price of the Company, on January 9, 2023, of $ 60.90 per share.

The following table summarizes the fair value of the consideration associated with the Merger ($ in thousands):

Fair Value as of January 9, 2023

Fair value of 14,649.592 Series X convertible preferred stock issued

Fair value of Old Catheter’s fully vested stock options

Total Purchase Price

The Merger was accounted for as a business combination in accordance with Topic 805, and the Company has been determined to be the accounting acquirer.

The Company allocated the purchase price to the assets acquired and liabilities assumed at fair value.

The purchase price allocation reflects various fair value estimates and analyses, including certain tangible assets acquired and liabilities assumed, the valuation of intangible assets acquired, liabilities assumed, and goodwill, which were subject to change within the measurement period as valuations were being finalized (generally one year from the acquisition date).

Measurement period adjustments were recorded in the reporting period in which the estimates are finalized, and adjustment amounts were determined.

During the three months ended June 30, 2023, the Company recorded measurement period adjustments based on changes to certain estimates and assumptions and their related impact to the purchase price allocation.

Developed technology was revised from $ 35.1 million to $ 27.0 million;

trademarks were revised from $ 1.7 million to $ 1.3 million;

customer relationships were revised from $ 220 thousand to $ 62 thousand;

goodwill was revised from $ 56.0 million to $ 60.9 million;

and royalties payable were revised from $ 7.6 million to $ 14.2 million.

The following table summarizes the final purchase price allocations relating to the Merger (in thousands):

Assets acquired:

Cash and cash equivalents

Accounts receivable

Prepaid expenses and other current assets

Property and equipment, net

Lease right-of-use assets

Developed technology

Customer relationships

Total assets acquired

Liabilities assumed:

Accounts payable

Accrued expenses

Lease liability

Interest payable

Convertible promissory notes

Royalties payable

Total liabilities assumed

Total purchase price

All intangible assets acquired are subject to amortization and their associated acquisition date fair values and useful lives are as follows:

Intangible Assets

Developed technology- VIVO

Developed technology- LockeT

Customer relationships

Trademark- VIVO

Trademark- LockeT

Notwithstanding the above, as described in Note 7, management determined that there were indicators of asset impairment during the nine months ended September 30, 2023, and assessed the carrying values of the Company’s intangible assets and goodwill.

As a result of the impairment analysis in prior periods, the Company recorded an impairment charge of $ 60.9 million for the nine months ended September 30, 2023.

This amount represented the purchase price amount ascribed to goodwill.

Transaction costs incurred in connection with this business combination amounted to approximately $ 0 and $ 1.7 million during the three and nine months ended September 30, 2023, respectively.

Pro Forma Financial Information

The following table represents the revenue, net loss and net loss per share effect of the acquired company, as reported on a pro forma basis as if the acquisition occurred on January 1, 2023.

These pro forma results are not necessarily indicative of the results that would have occurred if the acquisition had occurred on the first day of the period presented, nor does the pro forma financial information purport to represent the results of operations for future periods.

The following information for the three and nine months ended September 30, 2023 is presented in thousands except for the per share data (in thousands, except per share data):

Three Months Ended September 30,

Nine Months Ended September 30,

Net loss attributable to common stockholders

Basic and diluted net loss per share – on a pro forma basis

The Company does not believe the impact of the new guidance and related codification improvements will have a material impact to its financial position, results of operations and cash flows.

In November 2024, the FASB issued ASU 2024 - 03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220 - 40 ):

Disaggregation of Income Statement Expenses ("ASU 2024 - 03" ).

In January 2025, the FASB issued ASU 2025 - 01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220 - 40 ), Clarifying the Effective Date ("ASU 2025 - 01" ).

ASU 2024 - 03 requires the disaggregation of certain costs and expenses in the notes to the financial statements to provide enhanced transparency into the expense captions presented on the face of the income statement.

ASU 2024 - 03, as clarified by ASU 2025 - 01, is effective for the Company’s Annual Report on Form 10 -K for the fiscal year ending December 31, 2027 and for interim periods beginning in 2028.

The guidance may be applied on a prospective or retrospective basis and early adoption is permitted.

The Company is currently evaluating the impact of adopting ASU 2024 - 03 on its consolidated financial statements.

Inventories consisted of the following (in thousands):

September 30, 2024

March 31, December 31,

Raw materials

Finished goods

There were no charges for inventory obsolescence or allowance recorded during the three and nine months ended September 30, 2024 and 2023.

Property and Equipment, net

There were no charges for inventory obsolescence or allowance recorded for the three months ended March 31, 2025 and 2024 .

Property and Equipment

Property and equipment, net consisted of the following (in thousands):

September 30, 2024

March 31, December 31,

Machinery and equipment

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Accumulated depreciation

( 117 ) ( 97 )

Property and equipment, net

Depreciation expense was $ 19 thousand and $ 45 thousand for the three and nine months ended September 30, 2024, respectively.

Depreciation expense was $ 9 thousand and $ 26 thousand for the three and nine months ended September 30, 2023, respectively.

Depreciation expense was $ 20 thousand and $ 11 thousand for the three months ended March 31, 2025 and 2024 , respectively.

Intangible Assets

The following table summarizes the Company’s intangible assets as of September 30, 2024 (in thousands):

Estimated Useful Life in Years

Gross Carrying Amount at January 9, 2024

Accumulated Amortization

Net Book Value at September 30, 2024

The following table summarizes the Company’s intangible assets as of March 31, 2025 (in thousands):

Gross Carrying

Developed technology ‐ VIVO

15 $ 8,244 $ ( 1,237 ) $ 7,007

Developed technology ‐ LockeT

14 18,770 ( 3,017 ) 15,753

Customer relationships

6 62 ( 23 ) 39

Trademarks/trade names ‐ VIVO

9 876 ( 219 ) 657

Trademarks/trade names ‐ LockeT

9 409 ( 102 ) 307

$ 28,361 $ ( 4,598 ) $ 23,763

The following table summarizes the Company’s intangible assets as of December 31, 2024 (in thousands):

Estimated Useful Life in Years

Gross Carrying Amount at January 9, 2023

Accumulated Amortization

Net Book Value at December 31, 2023

Gross Carrying

Developed technology ‐ VIVO

15 $ 8,244 $ ( 1,099 ) $ 7,145

Developed technology ‐ LockeT

14 18,770 ( 2,681 ) 16,089

Customer relationships

6 62 ( 21 ) 41

Trademarks/trade names ‐ VIVO

9 876 ( 195 ) 681

Trademarks/trade names ‐ LockeT

9 409 ( 91 ) 318

$ 28,361 $ ( 4,087 ) $ 24,274

The estimated future amortization expense for the next five years and thereafter is as follows (in thousands):

Years ending December 31,

Future Amortization Expense

Remainder of 2025

The Company uses the straight-line method to determine the amortization expense for its definite lived intangible assets.

Amortization expense, included within selling, general and administrative expenses, relating to the Company's intangible assets was $ 0.5 million and $ 1.5 million for the three and nine months ended September 30, 2024 and 2023, respectively.

The weighted average remaining amortization period for the Company’s intangible assets as of September 30, 2024, is 12.32 years.

In connection with the Merger, the excess of the purchase price over the estimated fair value of the net assets assumed of $ 60.9 million was recognized as goodwill.

The Merger was accounted for as a business combination in accordance with Topic 805, and the Company has been determined to be the accounting acquirer.

The Company allocated the purchase price to the assets acquired and liabilities assumed at fair value.

As a result, goodwill was revised from $ 56.0 million to $ 60.9 million.

The Company tests Goodwill for impairment at the reporting unit level annually in the fourth quarter or more frequently if a change in circumstances or the occurrence of events indicates that potential impairment exists.

Due to a sustained decrease in the Company’s share price during the quarter ended March 31, 2023, the Company concluded that, in accordance with ASC 350, a triggering event occurred indicating that potential impairment exists and required the Company to assess if impairment exists as of March 31, 2023.

In accordance with ASC 350, the Company performed a quantitative goodwill impairment test, which resulted in the carrying amount of the reporting unit exceeding the estimated fair value of the reporting unit, indicating that the goodwill of the reporting unit was impaired.

The Company utilized a combination of an income and market approach to assess the fair value of the reporting unit.

The income approach considered the discounted cash flow model, considering projected future cash flows (including timing and profitability), discount rate reflecting the risk inherent in future cash flows, perpetual growth rate, and projected future economic and market conditions.

The guideline public company market approach considered marketplace earnings multiples from within a peer public company group.

As of December 31, 2023, cumulative goodwill impairment charges of $ 60.9 million were incurred related to the Company’s single reporting unit and no goodwill remains as of this date.

The Company uses the straight-line method to determine amortization expense for its definite lived intangible assets.

Amortization expense, included within selling, general and administrative expenses in the condensed consolidated statement of operations, for the Company's intangible assets was $ 0.5 million and $ 0.5 million for the three months ended March 31, 2025 and 2024 , respectively.

Accrued Expenses

Accrued expenses consisted of the following (in thousands):

September 30, 2024

March 31, December 31,

Legal expenses

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Accrued expenses

The product warranty accrual related to the voluntary recall of DABRA catheters was initiated in September 2019.

The recall was closed by the FDA in July 2023 and no claims have been submitted in approximately 2 years.

As such, the Company derecognized the warranty liability of $ 192 thousand as of December 31, 2023.

As of September 30, 2024 and December 31, 2023, the accrued warranty balance was $ 0 .

$ 1,630 $ 1,548

Notes Payable

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A down payment of $ 157 thousand was made and the remaining balance of $ 290 thousand was financed over 8 months through a short-term financing arrangement with its insurance carrier.

The interest rate on the loan is 8.990 %.

Interest expense on this loan was $ 1 thousand and $ 4 thousand for the three and nine months ended September 30, 2024, respectively.

The loan balance was $ 184 thousand as of December 31, 2023.

The loan balance was paid off in May of 2024 and therefore there is no balance as of September 30, 2024.

The interest rate on the loan was 8.99 %.

Interest expense on this loan was $ 0 thousand and $ 3 thousand for the three months ended March 31, 2025 and 2024 , respectively.

The loan balance was paid off in May 2024, such that there is no remaining balance as of March 31, 2025 , and December 31, 2024 .

The Company purchased director and officer liability insurance coverage on September 26, 2024 for $ 293 thousand.

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The interest rate on the loan is 9.99 %.

Interest expense on this loan was $ 0 for the three and nine months ending September 30, 2024.

The loan balance was $ 249 thousand as of September 30, 2024.

Short Term Promissory Notes (collectively, the “Related Party Notes”)

Interest expense on this loan was $ 4 thousand for the three months ended March 31, 2025 .

The loan balance was $ 102 thousand as of March 31, 2025 and $ 177 thousand as of December 31, 2024.

Promissory Notes (Collectively, the “Related Party Notes”)

On May 30, 2024, David A.

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On July 1, 2024 and July 18, 2024, the Company entered into two short-term promissory notes with an affiliate of Mr.

Jenkins, where the affiliate loaned $ 250,000 and $ 100,000 , respectively, to the Company in exchange for the notes.

Jenkins, wherein the affiliate loaned $ 250,000 and $ 100,000 , respectively, to the Company in exchange for the short-term promissory notes.

On July 25, 2024, the Company entered into a short-term promissory note with a Trust, of which Mr.

Jenkins’ adult daughter is the trustee, where the Trust loaned $ 500,000 to the Company in exchange for the note.

All of these short-term promissory notes (the “Related Party Notes”) had a maturity date of August 30, 2024 , and bear interest at the rate of 8 % per annum.

Jenkins’ adult daughter is the trustee, wherein the Trust loaned $ 500,000 to the Company in exchange for the short-term promissory note.

All of these short-term promissory notes (the “Related Party Notes”) had a maturity date of August 30, 2024 and interest of 8 % per annum.

On August 23, 2024, the Company entered in the first amendment of the Related Party Notes, which extended the maturity date to January 31, 2026 and increased the interest rate to 12 % per annum after August 31, 2024.

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As part of the amendment, the Company paid down all accrued interest to date of $ 21 thousand.

The first amendment was accounted for as a debt modification in accordance with ASC 470-50, Debt Modifications and Extinguishment (“ASC 470-50”).

The amendment was accounted for as a debt modification in accordance with ASC 470 - 50, Debt Modifications and Extinguishment (“ASC 470 - 50” ).

Since the modified terms and conditions were not substantially different from the prior terms and conditions, the Company accounted for the debt modification as a continuation of the original debt instrument.

The Company further concluded that the debt modification did not result in any adjustments to the carrying value of the Notes.

The Related Party Notes and the debt evidenced thereby, including all principal and interest, accelerate and become immediately due and payable upon the occurrence of certain customary events of default, including failure to pay amounts owing when due, material breach of representations or warranties by the Company (unless waived by the holder of the Related Party Note or cured within 10 days following notice) and/or certain events involving a discontinuation of the Company’s business or certain types of proceedings involving insolvency, bankruptcy, receivership and the like.

Interest expense on the Related Party Notes was $ 33 thousand and $ 36 thousand for the three and nine months ended September 30, 2024, respectively.

The balance of the Related Party Notes and accrued interest was $ 1.5 million as of September 30, 2024, $ 16 thousand of which relates to accrued interest and is recorded under interest payable to related parties on the condensed consolidated balance sheets.

The Company further concluded that the debt modification did not result in any adjustments to the carrying value of the Related Party Notes.

The Related Party Notes, including all principal and interest, accelerate and become immediately due and payable upon the occurrence of certain customary events of default, including failure to pay amounts owed when due, material breach of the Company’s representations or warranties (unless waived by the holders of the Related Party Notes or cured within 10 days following notice), certain events involving the discontinuation of the Company’s business and/or certain types of proceedings involving insolvency, bankruptcy, receivership and the like.

Interest expense on the Related Party Notes was $ 45 thousand and $ 0 thousand for the three months ended March 31, 2025 and 2024, respectively.

The Related Party Notes and related accrued interest totaled $ 1.6 million as of March 31, 2025 , $ 106 thousand of which related to accrued interest and was recorded under current portion of interest payable due to related parties on the condensed consolidated balance sheets.

The principal balance of $ 1.5 million of the Related Party Notes is recorded under current portion of notes payable due to related parties on the condensed consolidated balance sheets.

The Related Party Notes and related accrued interest totaled $ 0 million as of March 31, 2024.

See Note 17, Related Parties for additional details.

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LockeT Royalty

On January 9, 2023, Old Catheter entered into an agreement with the Noteholders to forgive all accrued interest and future interest expense in exchange for a future royalty right.

Under these agreements, the Company is obligated to pay the Noteholders a total royalty equal to approximately 12 % of net sales of its LockeT device on a quarterly basis, commencing upon the first commercial sale through December 31, 2035.

Jenkins, previously Old Catheter's Chairman of the Board of Directors prior to the Merger, and, currently, the Company’s Executive Chairman of the Board of Directors and Chief Executive Officer, to forgive all accrued interest and future interest expense in exchange for a future royalty right.

Under these agreements, the Company is obligated to pay the Noteholders a total royalty equal to 11.82 % of net sales of its LockeT device on a quarterly basis, commencing upon the first commercial sale, which occurred in April 2024, through December 31, 2035.

As of March 31, 2025 and December 31, 2024, the fair value of the royalty payable related to the agreement with the Noteholders was $ 10.4 million and $ 9.2 million, respectively.

The Company recorded losses for the change in the fair value of the royalty payable of $ 1.2 million and $ 0.1 million for the three months ended March 31, 2025 and March 31, 2024, respectively.

An additional royalty will be paid to the inventor of the LockeT device as detailed in the Royalty Agreement.

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The royalty payments will apply to revenues through December 31, 2033, then will terminate regardless of whether the full $ 10.0 million has been paid.

The LockeT device had sales during the three and nine months ended September 30, 2024, and as such the Company owes the first royalty payment in relation to the Royalty Agreement.

As of September 30, 2024, the Company owes $ 17 thousand in relation to LockeT sales.

The Company recorded its first sales of LockeT devices during the year ended December 31, 2024.

The Company owed $ 21 thousand and $ 32 thousand in connection with the royalty agreements as of March 31, 2025 , and December 31, 2024 , respectively.

AMIGO System Royalty

During 2006 and 2007, Old Catheter entered into two investment grant agreements with a non-profit foundation for the purpose of funding the initial development of Old Catheter's AMIGO System, receiving a total of $ 1.6 million from the foundation.

The agreement calls for the payment of the following sales-based royalties, by Old Catheter, to the foundation, upon successful commercialization of the AMIGO System:

The agreement calls for the payment of the following sales-based royalties by Old Catheter to the foundation upon successful commercialization of the AMIGO System (in thousands, except for percentages):

Until Royalty Payment

Royalty Percentage

Until Royalty Payment Reaches a Total of

Reaches a Total of

In perpetuity

The Company is not actively marketing and selling the AMIGO System.

There was no royalty expense recorded for the three and nine months ended September 30, 2024 and 2023 in relation to the AMIGO System.

The AMIGO System royalty has been earned and payment has been deferred to a future date.

The table below represents the change in fair value of Level 3 royalties payable for the nine months ended September 30, 2024 and 2023 ($ in thousands).

See Note 2, Summary of Significant Accounting Policies, for valuation techniques.

Beginning Balance, January 1,

AMIGO royalty payable recognized in connection with the Merger

LockeT royalty payable recognized in connection with the Merger

Payments owed on royalties payable

Change in fair value of royalties payable

Ending Balance, September 30,

For the three and nine months ended September 30, 2024 and 2023 operating lease expense and cash paid for leases were as follows:

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

Operating lease expense

Cash paid for leases

The Company's lease agreements generally do not provide an implicit borrowing rate.

Therefore, the Company used a benchmark approach to derive an appropriate imputed discount rate.

The Company benchmarked itself against other companies with similar credit ratings and of comparable quality and derived an imputed rate, which was used in a portfolio approach to discount its real estate lease liabilities.

Management used an estimated incremental borrowing rate as detailed below for each lease.

Lease Terms and Discount Rate

The table below presents certain information related to the weighted average remaining lease term and the weighted average discount rate for the Company’s operating leases, as of September 30, 2024:

Weighted average remaining lease term (in years) - operating leases

Weighted average discount rate - operating leases

The Company is not actively marketing and selling the AMIGO System, such that there was no royalty expense recorded for the three months ended March 31, 2025 and 2024 in relation to the AMIGO System.

The AMIGO System royalty payable is recorded under royalties payable due to related parties in the condensed consolidated balance sheets.

The Company determines if an arrangement contains a lease at contract inception based on its ability to control a physically distinct asset in exchange for consideration.

If the arrangement contains a lease, the Company then determines the classification of the lease as either operating or finance.

For the three months ended March 31, 2025 , and the year ended December 31, 2024 , the Company only had operating leases.

For operating leases, right-of-use (“ROU”) assets and lease liabilities are initially recognized based on the present value of the future minimum lease payments over the lease term at the commencement date.

The present values of future lease payments are discounted using the interest rate implicit in the lease if it is readily determinable.

As most leases do not provide an implicit rate, the Company applies an incremental borrowing rate based on the information available at commencement date to determine the present value of future lease payments over the lease term.

The Company benchmarked itself against other companies with similar credit ratings and of comparable quality to derive an incremental borrowing rate.

Lease expense is recognized on a straight-line basis over the lease term in the condensed consolidated statements of operations.

The Company elected to utilize the short-term lease exemption to exclude recognition of ROU assets and lease liabilities from the balance sheet for leases with an initial term of 12 months or less, with payments instead being expensed on a straight-line basis over the lease term.

If a lease includes options to extend the lease term, the Company does not assume the option will be exercised in its initial lease term assessment unless there is reasonable certainty that the Company will renew based on an assessment of economic factors present as of the lease commencement date.

The Company monitors its plans to renew its material lease each reporting period.

The Company enters into contracts that contain both lease and non-lease components.

Non-lease components include costs that do not provide a right-to-use a leased asset but instead provide a service such as maintenance costs.

The Company has elected to account for the lease and non-lease components together as a single component for all classes of underlying assets.

Variable costs associated with the lease, such as maintenance and utilities, are not included in the measurement of ROU assets and liabilities.

Variable costs are expensed when the events determining the amount of variable consideration to be paid have occurred.

South Carolina Office Lease Agreement

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The space is used for office and general use.

The term of the lease began on October 1, 2022, is 38 months, and includes two months of free rent from the commencement date of the lease.

The lease contains two separate 36 month renewal periods, which require 180 days’ notice of the Company's intention to exercise.

As of the date of these condensed consolidated financial statements, the Company does not intend to exercise either of the two extension options.

The lease term began on October 1, 2022, is 38 months, and includes two months of free rent from the commencement date of the lease.

The lease contains two distinct 36 -month renewal periods, which require 180 days’ notice of the Company's intention to exercise.

As of March 31, 2025 , the Company is reassessing whether either of the two extension options will be exercised.

Accordingly, the Company determined it is not reasonably certain that the extension options will be exercised and the extension options are currently excluded from the operating right-of-use-assets and operating lease liabilities recognized in the condensed consolidated balance sheets.

Total rent is $ 3,435 per month for the first ten months following the two months of free rent, with annual increases on the anniversary of the effective date.

The Company has adopted the practical expedient under Topic 842, which permits the Company to account for each separate lease component of a contract and its associated non-lease components as a single lease payment.

As a result, beginning at lease inception on October 1, 2022, the Company recognized the lease payments and associated common area maintenance payments as a single lease payment.

New Jersey Office Lease Agreement

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The space is used for office and general use.

The term of the lease is 24 months and began on January 1, 2023.

The lease contains one 24 month renewal period, which requires 9 months’ notice if the Company intends to exercise.

The lease term began on January 1, 2023 and is 24 months.

The lease contains one 24 -month renewal period, which requires 9 months’ notice of the Company’s intent to exercise.

In March 2024, the Company notified the landlord of its intent to extend the lease for a 12 -month period.

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The space is used for office and general use.

The term of the lease is for 36 months and began on May 1, 2023.

The lease term began on May 1, 2023 and is 36 months.

The lease contains one 36 -month renewal period, which requires 180 days’ notice of the Company's intention to exercise.

As of the date of these unaudited condensed consolidated financial statements, the Company does not intend to exercise the extension option.

As of March 31, 2025 , the Company does not intend to exercise the extension option.

Total rent is $ 3,200 per month for the first year with an annual increase of three percent per year on the anniversary of the effective date.

Future lease payments for all lease obligations for the following five fiscal years and thereafter are as follows (in thousands):

The following tables present supplemental balance sheet information related to operating leases for the three months ended March 31, 2025 and 2024 (in thousands):

For the Three Months Ended

Operating lease expense

Cash paid for leases

For the Three Months Ended

Weighted average remaining lease term (in years) - operating leases

Weighted average discount rate - operating leases

8.45 % 8.64 %

Future minimum lease payments for all lease obligations for the following five fiscal years and thereafter are as follows (in thousands):

Years ending December 31:

Operating Lease

Operating Leases

Remainder of 2025

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Present value of future minimum lease payments

Operating lease right-of-use assets and lease liabilities for the Company's operating leases were recorded in the condensed consolidated balance sheets as follows:

September 30,

Operating lease right-of-use assets and lease liabilities were recorded in the condensed consolidated balance sheets as follows (in thousands):

Operating lease right-of-use assets, net

Total lease assets

Current liabilities:

Current portion of operating lease liabilities

Non-current liabilities:

Operating lease liabilities

Total lease liabilities

Total operating lease liabilities

Net Loss per Share

The Company’s Series A Convertible Preferred Stock, Series X Convertible Preferred Stock and outstanding warrants to purchase common stock have participation rights to any dividends that may be declared in the future and are therefore considered to be participating securities.

The Company’s Series A Convertible Preferred Stock, of which no shares were outstanding as of March 31, 2025 , Series X Convertible Preferred Stock, and outstanding warrants to purchase common stock have participation rights to any dividends that may be declared in the future, such that they are participating securities.

Participating securities have the effect of diluting both basic and diluted earnings per share during periods of income.

During periods of loss, no loss is allocated to the participating securities since the holders have no contractual obligation to share in the losses of the Company.

Anti-dilutive common share equivalents excluded from the computation of diluted net loss per share at September 30, 2024, consisted of Series X Convertible Preferred Stock of 1,265,601 shares, warrants of 13,170,652 , stock options of 95,813 , and no Series A convertible preferred stock, restricted stock awards or restricted stock units.

Anti-dilutive common share equivalents excluded from the computation of diluted net loss per share at September 30, 2023, consisted of Series A convertible preferred stock of 286,125 shares, Series X convertible preferred stock of 1,267,469 shares, warrants of 1,104,215 , stock options of 21,465 , and restricted stock units of 2 .

Net loss attributable to common stockholders for the nine months ended September 30, 2023, consists of net loss, as adjusted for deemed dividends.

The Company recorded a deemed dividend for the modification of existing warrants and issuance of the Series E warrants (see Note 13, Equity Offerings) of $ 0.8 million, during the nine months ended September 30, 2023.

Anti-dilutive common share equivalents excluded from the computation of diluted net loss per share at March 31, 2025 , consisted of 1,265,601 shares of common stock issuable upon conversion of Series X Convertible Preferred Stock, 15,960,613 shares of common stock issuable upon exercise of outstanding warrants, 50,001 restricted stock awards, and 2,166,184 shares of common stock issuable upon exercise of vested stock options.

The weighted-average number of common shares outstanding as of March 31, 2025 includes the shares held in abeyance upon the exercise of certain existing warrants (see Note 11, Equity Offerings).

In connection with the 2024 Warrant Inducement Offer, the Company agreed to issue the number of shares of common stock that would not cause a holder to exceed their beneficial ownership limitation and to hold the remaining balance of shares of common stock in abeyance.

Accordingly, the Company held 2,157,000 shares of common stock in abeyance as of March 31, 2025 (the “Abeyance Shares”).

The Abeyance Shares are evidenced through the holders’ existing warrants, which are now deemed to be fully prepaid.

Since the Abeyance Shares are issuable for no consideration and do not contain any other conditions that must be satisfied by the holder to ultimately receive such shares of common stock, the Abeyance Shares were included in the weighted-average number of common shares and excluded from the anti-dilutive number of warrants identified above as of March 31, 2025 .

Anti-dilutive common share equivalents excluded from the computation of diluted net loss per share at March 31, 2024 , consisted of 231,412 shares of Series A Convertible Preferred Stock, 1,265,601 shares of Series X Convertible Preferred Stock, 1,104,214 warrants, and 61,459 stock options.

Equity Offerings

Warrant Inducement Offer

On January 9, 2023, the Company reduced the exercise price of all existing warrants (the "Existing Warrants"), exercisable for 33,161 shares of the Company’s common stock held by an investor (the “Investor”), with exercise prices ranging from $ 140.00 to $ 5,265 per share to $ 40.00 per share (the "2023 Warrant Repricing").

In connection with the 2023 Warrant Repricing, the Company entered into a Warrant Inducement Offer Letter (the "2023 Inducement Letter") with the Investor pursuant to which it would exercise up to all of the 33,161 Existing Warrants (the "Inducement Offer").

In consideration for exercising the Existing Warrants pursuant to the terms of the 2023 Inducement Letter, the Company received approximately $ 1.3 million in gross proceeds.

The Company paid placement agent aggregate cash fees plus other offering costs of approximately $ 0.2 million related to the Inducement Offer, resulting in net proceeds to the Company of $ 1.1 million.

In consideration for exercising the Existing Warrants pursuant to the terms of the 2023 Inducement Letter, the Company issued the Investor a new Series E common stock purchase warrant (the "Series E Warrant") to purchase 33,161 shares of common stock at an exercise price of $ 40.00 per share.

The Series E Warrant is exercisable for five years from the date of stockholder approval.

Exercise of the Series E Warrant in full was subject to approval of the Company's stockholders other than the Investor, which was obtained at a special meeting of the Company's stockholders held on March 21, 2023 (the "Stockholders' Meeting").

The incremental fair value of the repriced warrants amounted to $ 0.3 million and the fair value of Series E warrant totaled $ 1.9 million.

The relative fair value of such amounts were recorded to additional paid-in capital concurrent with the exercise of the Existing Warrants.

As a result of the 2023 Warrant Repricing and Inducement Offer, the Company presents a deemed dividend for the modification of Existing Warrants and issuance of the Series E Warrants of $ 0 and $ 0.8 million during the three and nine months ended September 30, 2023, respectively.

The deemed dividend was included in net loss attributable to common stockholders in the calculation of net loss per share in the unaudited consolidated condensed statements of operations.

The warrants, other than the Series E Warrants that are presented in a separate table below, were valued on the date of the 2023 Warrant Repricing using the Black-Scholes model based on the following assumptions:

5/22/2020 Raise

8/3/2020 Raise

Risk-free interest rate

Expected dividend yield

Expected life (in years)

The Series E warrants were also valued on the date of the 2023 Warrant Repricing at approximately $ 1.9 million using the Black-Scholes model based on the following assumptions:

Risk-free interest rate

Expected dividend yield

Expected life (in years)

Private Placement

On January 9, 2023, the Company entered into a Securities Purchase Agreement (“Securities Purchase Agreement”) for a private placement (“Private Placement”), with the Investor.

Pursuant to the Securities Purchase Agreement, the Investor agreed to purchase, for an aggregate purchase price of approximately $ 8.0 million, (a) Class A units at a price that was the lower of $ 3.00 per unit and 90% of the 5 day volume weighted average price of the Company’s common stock immediately prior to obtainment of the approval of the Company’s stockholders of conversion of the PIPE Preferred Stock and PIPE Warrants (as each are defined below), without adjusting such price for the reverse stock split, each consisting of one tenth of one share of common stock, one tenth of one Series F common stock purchase warrant (“Series F Warrant”), and one tenth of one Series G common stock purchase warrant (“Series G Warrant”), and together with the Series F Warrants (the “PIPE Warrants”) and (b) Class B units at a price of $ 1,000 per unit, each consisting of one share of a new series of the Company’s preferred stock, designated as Series A Convertible Preferred Stock (the “PIPE Preferred Stock”), par value $0.0001, and one tenth of one Series F Warrant and one tenth of one Series G Warrant for each one-tenth of one share of the Company’s common stock underlying the PIPE Preferred Stock (each share of which is convertible into a number of shares of the Company’s common stock equal to $ 1,000 divided by the lower of $ 30.00 and 90% of the 5 day volume weighted average closing price, multiplied by ten in order to reflect the impact of the reverse stock split of the Company’s common stock immediately prior to the obtainment of the approval of the Company’s stockholders of conversion of the PIPE Preferred Stock and PIPE Warrants, or the Preferred Conversion Rate).

The closing under the Securities Purchase Agreement and the sale and issuance of the Class A units and Class B units (and the issuance of any underlying common stock) were approved at the Stockholders’ Meeting.

At the closing of the Private Placement, the Company issued 497,908 Class A units for proceeds of approximately $ 0.9 million and 7,203 Class B units for proceeds of approximately $ 7.1 million which contained preferred shares that were convertible into up to 450,123 shares of common stock, as well as the issuance of warrants described below.

The PIPE Warrants, including Series F warrants and Series G warrants, are exercisable at an exercise price of $ 30.00 per share, subject to adjustments as provided under the terms of the PIPE Warrants.

The PIPE Warrants are exercisable at any time on or after the closing date of the Private Placement until the expiration thereof, except that the PIPE Warrants cannot be exercised if, after giving effect thereto, the purchaser would beneficially own more than 4.99 %, or the Maximum Percentage, of the outstanding shares of common stock of the Company, which Maximum Percentage may be increased or decreased by the purchaser with written notice to the Company to any other percentage specified not in excess of 9.99 %.

The Series F Warrants have a term of two years from the date of stockholder approval, and the Series G Warrants have a term of six years from the date of stockholder approval.

The Series F Warrants and Series G Warrants were approved at the Stockholders’ Meeting.

The Series F warrants and Series G warrants were valued, in aggregate, at approximately $ 5.5 million using the Black-Scholes model based on the following assumptions:

Risk-free interest rate

Expected dividend yield

Expected life (in years)

The proceeds from the Securities Purchase Agreement were allocated to the equity instruments issued based on their relative fair values and recorded in additional paid-in capital.

Shares of PIPE Preferred Stock, the conversion of which was approved at the Stockholders’ Meeting, convert into common stock at the option of the holder at the Preferred Conversion Rate, subject to certain ownership limitations as described below.

The conversion price is subject to adjustment in the case of stock splits, stock dividends, combinations of shares and similar recapitalization transactions.

Subject to limited exceptions, holders of shares of PIPE Preferred Stock will not have the right to convert any portion of their Preferred Stock if the holder, together with its affiliates, would beneficially own in excess of 4.99 % (or up to 9.99 % at the election of the holder) of the number of shares of the Company’s common stock outstanding immediately after giving effect to its conversion.

Holders of PIPE Preferred Stock will be entitled to receive dividends on shares of PIPE Preferred Stock equal, on an as-if-converted-to-common stock basis, and in the same form as dividends actually paid on shares of the common stock.

Except as otherwise required by law, the PIPE Preferred Stock does not have voting rights.

The Company also entered into a registration rights agreement with the purchasers requiring the Company to register the resale of the shares of common stock, the shares issuable upon exercise of the Warrants and the shares issuable upon the conversion of the PIPE Preferred Stock.

Placement Fees

In connection with offerings completed by the Company in 2022, (the "2022 Offerings"), the Company entered into an agreement with a placement agent that, subject to satisfaction of the requirements contained therein, called for a placement fee payable based on capital raised from certain investors for a definitive time following the expiration of the agreement.

The accrued placement fee of approximately $ 1.4 million related to the 2022 Offerings is included in accrued expenses in the consolidated balance sheets as of September 30, 2024.

Additionally, the agreement called for the issuance of warrants with the following terms:

Number of shares

Exercise Price

The warrants were valued on the date of the 2022 Offerings using the Black-Scholes model based on the following assumptions:

Value ($ in millions)

Expected Volatility

Risk-Free Interest Rate

Expected Dividend Yield

Expected Term (years)

September 2024 Public Offering

On September 3, 2024, in connection with the September Public Offering (see Note 1), the Company sold an aggregate of 805,900 Common Stock Units and 2,773,000 Pre-Funded Warrant Units at a public offering price of $ 1.00 per Common Stock Unit and $ 0.9999 per Pre-Funded Warrant Unit.

The Company received gross proceeds of approximately $ 3.6 million less underwriting discounts and commissions of $ 1.0 million, resulting in net proceeds of $ 2.6 million.

On August 30, 2024, the Company entered into an Underwriting Agreement (the “Underwriting Agreement”) with Ladenburg Thalmann & Co.

as representative (the “Representative”) of the underwriters named in the Underwriting Agreement (the “Underwriters”).

Pursuant to the Underwriting Agreement, the Company completed a public offering of its securities on September 3, 2024 ( the “September 2024 Public Offering”) and sold an aggregate of (i) 805,900 Common Stock Units and (ii) 2,773,000 Pre-Funded Warrant Units at a public offering price of $ 1.00 per Common Stock Unit and $ 0.9999 per Pre-Funded Warrant Unit.

The Company collected gross proceeds of approximately $ 3.6 million before deducting underwriting discounts, commissions, and offering expenses payable by the Company of $ 1.0 million, resulting in net proceeds of $ 2.6 million.

Each Common Stock Unit consists of:

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Each Pre-Funded Warrant Unit consists of:

(i) a Pre-Funded Warrant to purchase one share of Common Stock at an exercise price of $ 0.0001 per share with no expiration date, (ii) one Series H Warrant, (iii) one Series I Warrant (iv) and one Series J Warrant.

(i) one Pre-Funded Warrant to purchase one share of Common Stock at an exercise price of $ 0.0001 per share with no expiration date, (ii) one Series H Warrant, (iii) one Series I Warrant (iv) and one Series J Warrant.

Pursuant to the Underwriting Agreement, the Company granted the Representative a 45 -day Overallotment Option to purchase up to (i) 468,041 additional shares of Common Stock, (ii) 468,041 additional Series H Warrants, (iii) 468,041 additional Series I Warrants, and/or (iv) 468,041 additional Series J Warrants, solely to cover over-allotments.

On August 30, 2024, the Underwriters partially exercised the Overallotment Option to purchase an additional 458,623 shares of Common Stock, 458,623 Series H Warrants, 458,623 Series I Warrants, and 458,623 Series J Warrants, or 458,623 Common Stock Units.

The Common Stock Units issued through the exercise of the Overallotment Option are included in the 805,900 Common Stock Units noted above.

The Overallotment Option expires on October 14, 2024, and is not expected to be exercised.

The remaining balance of the Overallotment Option is not material to the condensed consolidated financial statements as of September 30, 2024.

Furthermore, at the closing date, the Company agreed to deliver warrants to purchase an aggregate number of shares of Common Stock equal to 6% of the shares of Common Stock (i) issued in connection with the September 2024 Public Offering and (ii) issuable upon the exercise of the Pre-Funded Warrants.

The Common Stock Units issued through the exercise of the Overallotment Option are included in the 805,900 Common Stock Units noted abo ve.

The Overallotment Option expired on October 14, 2024.

Furthermore, at the closing date, the Company agreed to deliver to the Representative warrants to purchase an aggregate number of shares of Common Stock equal to 6 % of the shares of Common Stock (i) issued in connection with the September 2024 Public Offering and (ii) issuable upon the exercise of the Pre-Funded Warrants.

Therefore, the Company issued 214,734 warrants to the Representative and its designees (the “Representative Warrants”).

The Representative Warrants are part of the underwriter costs and commissions incurred in connection with the September 2024 Public Offering.

The Representative Warrants may be exercised to purchase one share of Common Stock at an exercise price of $ 1.55 per share and expires five years from the date of issuance.

The Representative Warrants may be exercised to purchase one share of Common Stock at an exercise price of $ 1.55 per share and expire five years from the date of issuance.

Each Series H Warrant, Series I Warrant, Series J Warrant (collectively, the “Series Warrants”), and Pre-Funded Warrant is immediately exercisable.

The exercise price of the Series Warrants and Pre-Funded Warrants is subject to appropriate adjustment in the event of recapitalization events, stock dividends, stock splits, stock combinations, reclassifications, reorganizations or similar events affecting the Company’s Common Stock.

Subject to limited exceptions, a holder of the Series Warrants will not have the right to exercise any portion of its Series Warrants if the holder (together with such holder’s affiliates) would beneficially own a number of shares of common stock in excess of 4.99% of the shares of Common Stock then outstanding (the “Beneficial Ownership Limitation”).

Subject to limited exceptions, a holder of the Series Warrants will not have the right to exercise any portion of its Series Warrants if the holder (together with such holder’s affiliates) would beneficially own a number of shares of common stock in excess of 4.99 %, or in the case of certain holders 9.99 %, of the shares of Common Stock then outstanding (the “Beneficial Ownership Limitation”).

Similarly, a holder of the Pre-Funded Warrants has a Beneficial Ownership Limitation of 9.99 %.

At the holder’s option, the holder of the Series Warrants may increase the beneficial ownership limitation to 19.99 % of the shares of Common Stock then outstanding, with any such increase becoming effective upon 61 days’ prior notice to the Company.

The Representative Warrants are exercisable after six months from the effective date of the Registration Statement filed by the Company on August 29, 2024.

The Representative Warrants are exercisable six months after the effective date of the Registration Statement filed by the Company on August 29, 2024.

The Representative Warrants further have a Beneficial Ownership Limitation of 4.99 %, which may be increased to 9.99 % of the shares of Common Stock then outstanding at the option of the Representative.

3 unchanged sentences

Accordingly, the September 2024 Warrants were recorded to additional paid-in capital in the condensed consolidated balance sheets.

2024 Warrant Inducement Offer

On October 25, 2024, the Company executed the 2024 Warrant Inducement Offer (see Note 1 ) with certain holders of the Company’s existing warrants (Series E, Series F, Series G, Series H and Series I Warrants, collectively the “2024 Existing Warrants”).

Pursuant to the terms of the 2024 Warrant Inducement Offer, the Company agreed to lower the exercise price per share of common stock for all holders of the 2024 Existing Warrants, including those that did not participate in the 2024 Warrant Inducement Offer.

The 2024 Existing Warrants had exercise prices ranging from $ 1.00 to $ 40.00 per share of Common Stock.

Following the closing of the 2024 Warrant Inducement Offer, the Holders immediately exercised an aggregate of (i) 33,160.8 Series E Warrants, (ii) 499,909.34 Series F Warrants, (iii) 499,909.34 Series G Warrants, (iv) 1,990,000 Series H Warrants, and (v) 2,325,000 Series I Warrants to purchase 5,347,981 shares of common stock at a reduced exercise price of $ 0.70 per share.

The Company received aggregate gross proceeds of $ 3.7 million in cash, prior to deducting placement agent fees and offering expense of $ 0.4 million.

In consideration for the immediate exercise of the 2024 Existing Warrants for cash, the Company issued unregistered new Series K common stock purchase warrants (“Series K Warrants”) to purchase up to 10,695,962 shares of common stock.

The Series K Warrants have an exercise price of $ 0.70 per share of common stock, were not exercisable until stockholders approval was obtained (“Stockholder Approval”), and have a term of 5.5 years following Stockholder Approval.

Stockholder Approval was obtained on January 13, 2025.

In connection with the closing, the Company issued Placement Agent Warrants to the Placement Agent to purchase up to 320,879 shares of common stock on the same terms as the Series K Warrants, except that the exercise price is $ 1.085 per share and the warrants are exercisable six months after the date of issuance.

As a result of the 2024 Warrant Inducement Offer, the Company recorded a deemed dividend for the modification of the 2024 Existing Warrants and issuance of the Series K Warrants of $ 5.2 million for the year ended December 31, 2024.

Furthermore, the Company assessed the Series K Warrants and Placement Agent Warrants and determined that they do not require liability classification pursuant to ASC 480.

The Series K Warrants and Placement Agent Warrants do not have any net cash settlement provisions that would preclude equity classification under ASC 815 - 40.

Accordingly, the Series K Warrants and Placement Agent Warrants were recorded to additional paid-in capital in the condensed consolidated balance sheets.

Pursuant to the terms of the 2024 Warrant Inducement Offer, in the event that the exercise of the 2024 Existing Warrants would cause a holder to exceed the beneficial ownership limitations included therein, the Company would issue the number of shares of common stock that would not cause a holder to exceed such beneficial ownership limitations and hold the remaining balance of shares of common stock in abeyance.

Accordingly, as of March 31, 2025 , the Company held an aggregate of 2,157,000 shares of common stock in abeyance (the “Abeyance Shares”).

The Abeyance Shares are evidenced through the holder’s existing warrants, which are deemed to be prepaid.

The Abeyance Shares will be held by the Company until the holder sends notice that the remaining balance of shares of common stock may be issued without surpassing the beneficial ownership limitations.

Until such time, the Abeyance Shares are evidenced through the holder’s existing warrants ( September 2024 Prepaid Series H Warrants and September 2024 Prepaid Series I Warrants) and are included in the Company’s table of outstanding warrants below.

The following table presents the number of common stock warrants outstanding:

Warrants outstanding, December 31, 2024

( 1,658,000 )

Warrants outstanding, September 30, 2024

As of September 30, 2024, and December 31, 2024, all warrants outstanding are recorded in additional paid-in capital in the condensed consolidated balance sheets.

The following table presents the number and type of common stock warrants outstanding, their exercise price, and expiration dates as of September 30, 2024:

Warrants Outstanding

Warrants outstanding, March 31, 2025

As of March 31, 2025 and December 31, 2024 , all warrants outstanding are recorded in additional paid-in capital in the condensed consolidated balance sheets.

The following table presents the number and type of common stock purchase warrants outstanding, their exercise price, and expiration dates as of March 31, 2025 :

Exercise Price

1 unchanged sentence

May 2020 Warrants

1,275 $ 5,625.00 5/20/2025

May 2020 Placement Agent Warrants

124 $ 7,031.25 5/20/2025

August 2020 Warrants

1,943 $ 4,375.00 8/3/2025

August 2020 Placement Agent Warrants

192 $ 5,468.75 7/30/2025

August 2021 Pharos Banker Warrants

148 $ 1,495.00 8/16/2026

February 2022 Series B Warrants

39,153 $ 140.00 2/4/2029

July 2022 Series C Warrants

January 2023 Series E Warrants

March 2023 Series F Warrants

March 2023 Series G Warrants

September 2024 Pre-Funded Warrants

September 2024 Series H Warrants

28,402 $ 140.00 7/22/2027

September 2024 Prepaid Series H Warrants (1)

657,000 $ — None

September 2024 Series I Warrants

1,078,900 $ 0.70 3/3/2026

September 2024 Prepaid Series I Warrants (1)

1,500,000 $ — None

September 2024 Series J Warrants

3,578,901 $ 1.00 9/3/2029

September 2024 Representative Warrants

As of September 30, 2024, the warrants issued by the Company had a weighted average exercise price of $ 5.29 .

214,734 $ 1.55 8/29/2029

October 2024 Series K Warrants

10,695,962 $ 0.70 7/13/2030

October 2024 Placement Agent Warrants

320,879 $ 1.09 4/25/2030

As of March 31, 2025 , the warrants issued by the Company had a weighted average exercise price of $ 2.20 .

( 1 ) In calculating net loss per share, the Abeyance Shares were included in the weighted-average number of common shares and excluded from the anti-dilutive number of warrants excluded from the net loss per share calculation (see Note 10, Net Loss Per Share).

Placement Fees

In connection with offerings completed by the Company in

"2022 Offerings"), the Company entered into an agreement with a placement agent that, subject to satisfaction of the requirements contained therein, called for a placement fee payable based on capital raised from certain investors for a definitive time following the expiration of the agreement.

The accrued placement fee of approximat

ely $ 1.4 million r

elated t o the

2022 Offerings is included in accrued expenses in the condensed consolidated balance sheets as of

March 31, 2025 and

December 31, 2024 .

Additionally, the agreement called for the issuance of warrants with the following terms:

Number of shares

Exercise Price

Preferred Stock

Series X Convertible Preferred Stock

As described in Note 3, above, pursuant to the Merger Agreement, all Old Catheter common stock shares issued and outstanding and convertible promissory notes, representing an aggregate principal of $ 25.2 million, were converted into a right to receive 14,649.592 shares of a new class of the Company’s preferred stock, designated Series X Convertible Preferred Stock .

Pursuant to the Merger Agreement, all Old Catheter common stock shares issued and outstanding and convertible promissory notes, representing an aggregate principal balance of $ 25.2 million, were converted into a right to receive 14,649.592 shares of a new class of the Company’s preferred stock, designated Series X Convertible Preferred Stock.

Series X Convertible Preferred Stock has no voting rights prior to the conversion into common stock.

2 unchanged sentences

Other than dividends payable in shares of Common Stock, Holders of Series X Convertible Preferred Stock will be entitled to receive dividends on shares of Series X Convertible Preferred Stock equal, on an as-if-converted-to-common stock basis, and in the same form as dividends actually paid on shares of Common Stock.

Upon consummation of the Merger, each holder of Old Catheter convertible promissory notes received, in exchange for discharge of the principal of his or its Notes, a number of shares of the Company's Series X Convertible Preferred Stock representing a potential right to convert into the Company's common stock in an amount equal to one common share for each $ 32.00 of principal amount.

On March 21, 2023, the Company held the Stockholders' Meeting, at which the stockholders approved, among other things, the issuance of 199,359 shares of common stock upon the conversion of 1,993 .581 of Series X Convertible Preferred Stock which were issued upon the closing of the Merger, see Note 3, Business Combination.

On March 23, 2023, the Company issued 197,491 shares of common stock upon the conversion of 1,974 .905 of Series X Convertible Preferred Stock.

On October 24, 2023, the remaining 1,868 shares of common stock were issued upon the conversion of 18 .676 shares of Series X Convertible Preferred Stock.

The remaining 12,656.011 shares of Series X Convertible Preferred Stock are expected to remain outstanding until the Company meets the initial listing standards of the NYSE American or another national securities exchange or is delisted from the NYSE American, at which time they will convert into common stock .

Upon consummation of the Merger, each holder of Old Catheter convertible promissory notes received, in exchange for discharge of the principal of their Notes, a number of shares of the Company's Series X Convertible Preferred Stock representing a potential right to convert into the Company's common stock in an amount equal to one common share for each $ 32.00 of principal amount.

As of March 31, 2025 and December 31, 2024, only 12,656 shares of Series X Convertible Preferred Stock are outstanding.

The 12,656 shares of Series X Convertible Preferred Stock are expected to remain outstanding until the Company meets the initial listing standards of the NYSE American or another national securities exchange or is delisted from the NYSE American, at which time they will convert into common stock.

Series A Convertible Preferred Stock

As described in Note 13, on January 9, 2023, the Company entered into a Securities Purchase Agreement for a Private Placement with the Investor.

On January 9, 2023, the Company entered into a Securities Purchase Agreement for a Private Placement with the Investor.

Pursuant to the Securities Purchase Agreement, shares of Series A Convertible Preferred Stock were issued, the conversion of which was approved at the Stockholders’ Meeting.

The Series A Convertible Preferred Stock converts into common stock at the option of the holder at the Preferred Conversion Rate, subject to certain ownership limitations as described below.

The conversion price is subject to adjustment in the case of stock splits, stock dividends, combinations of shares and similar recapitalization transactions.

Subject to limited exceptions, holders of shares of Series A Convertible Preferred Stock will not have the right to convert any portion of their Series A Convertible Preferred Stock if the holder, together with its affiliates, would beneficially own in excess of 9.99% of the number of shares of the Company’s common stock outstanding immediately after giving effect to its conversion .

Holders of Series A Convertible Preferred Stock will be entitled to receive dividends on shares of Series A Convertible Preferred Stock equal, on an as-if-converted-to-common stock basis, and in the same form as dividends actually paid on shares of the common stock.

Except as otherwise required by law, the Series A Convertible Preferred Stock does not have voting rights.

The Company also entered into a registration rights agreement with the purchasers requiring the Company to register the shares of common stock, issuable upon the conversion of the Series A Convertible Preferred Stock.

The shares have been registered for resale on an effective registration statement on Form S-1.

The following conversions of Series A Convertible Preferred Stock occurred subsequent to the issuance and prior to September 30, 2024:

After the final conversion on July 23, 2024, the Company had no shares of Series A Convertible Preferred Stock outstanding.

The Series A Convertible Preferred Stock converted into common stock at the option of the holder at the Preferred Conversion Rate, subject to certain ownership limitations as described below.

The conversion price was subject to adjustment in the case of stock splits, stock dividends, combinations of shares and similar recapitalization transactions.

Subject to limited exceptions, holders of shares of Series A Convertible Preferred Stock did not have the right to convert any portion of their Series A Convertible Preferred Stock if the holder, together with its affiliates, would beneficially own in excess of 9.99 % of the number of shares of the Company’s common stock outstanding immediately after giving effect to its conversion.

Holders of Series A Convertible Preferred Stock were entitled to receive dividends on shares of Series A Convertible Preferred Stock equal, on an as-if-converted-to-common stock basis, and in the same form as dividends actually paid on shares of the common stock.

Except as otherwise required by law, the Series A Convertible Preferred Stock did not have voting rights.

The Company also entered into a registration rights agreement with the purchasers requiring the Company to register for resale the shares of common stock issuable upon the conversion of the Series A Convertible Preferred Stock.

Those shares of common stock were registered for resale on an effective registration statement on Form S- 1.

All of the Series A Convertible Preferred Stock were converted as follows:

Date of Conversion

1 unchanged sentence

Common Shares Issued

1,750 109,355

July 24, 2023

3 unchanged sentences

July 23, 2024

Each share of Series A Convertible Preferred Stock is convertible into approximately 62.5 shares of common stock.

Each share of Series A Convertible Preferred Stock was convertible into approximately 62.5 shares of common stock.

The common stock was issued pursuant to the exemption contained in Section 3 (a)( 9 ) of the Securities Act of 1933, as amended (the “Act”), which applies to transactions in which a security is exchanged by an issuer with its existing security holders exclusively where no commission or other remuneration is paid or given directly or indirectly for soliciting such exchange.

The shares issued have been registered for resale on an effective registration statement on Form S- 1.

After the final conversion on July 23, 2024, the Company had no shares of Series A Convertible Preferred Stock outstanding.

As of March 31, 2025 and December 31, 2024, the Company had no shares of Series A Convertible Preferred Stock outstanding.

Stock-Based Compensation

3 unchanged sentences

As of July 2023, no additional awards could be made under the 2018 Plan and no shares of common stock were reserved for future issuance.

As of September 30, 2024, there are 7 non-statutory stock options outstanding under the 2018 Plan.

As of March 31, 2025 , there are 7 non-statutory stock options outstanding under the 2018 Plan.

Three expire in June 2028 and four expire in January 2030.

2018 Employee Stock Purchase Plan

In September 2018, the Company adopted the 2018 Employee Stock Purchase Plan (the “ESPP”) which permitted eligible employees to purchase the Company’s common stock at a discount through payroll deductions during defined offering periods.

In September 2018, the Company's board of directors adopted the 2018 Employee Stock Purchase Plan (the “ESPP”), which permitted eligible employees to purchase the Company’s common stock at a discount through payroll deductions during defined offering periods.

Eligible employees could elect to withhold up to 15 % of their base earnings to purchase shares of the Company’s common stock at a price equal to 85 % of the fair market value on the first day of the offering period or the purchase date, whichever was lower.

1 unchanged sentence

In April 2024, the Company formally terminated the ESPP.

For the three and nine months ended September 30, 2024 and 2023, no cash was received from the exercise of purchase rights under the ESPP in each respective period.

As of September 30, 2024, the Company had issued 95 shares of common stock since inception of the ESPP, and no shares were reserved for future issuance.

As of December 31, 2023, the Company had issued 95 shares of common stock since inception of the ESPP, and 2 shares were reserved for future issuance.

Upon termination of the ESPP in April 2024, the reserved shares were released back to the authorized pool.

Since the inception of the ESPP through its termination, the Company had issued 95 shares of common stock.

Upon termination of the ESPP, the reserved shares were released back to the authorized pool.

2020 Inducement Equity Incentive Plan

3 unchanged sentences

Upon adoption of the 2020 Plan, 64 shares of common stock were reserved for the granting of inducement stock options, restricted stock awards, restricted stock units and other forms of equity awards.

As of September 30, 2024 and December 31, 2023, zero and 54 shares of common stock were reserved for future issuance under the 2020 Plan.

In April 2024, the Company terminated the 2020 Plan at which time the reserved shares were released back to the authorized pool.

Stock Options Assumed in Merger (See Note 3, Business Combination)

At the closing of the Merger, each outstanding option to purchase Old Catheter common stock that had not previously been exercised prior to the closing of the Merger was assumed and converted into options to purchase 75,365 shares of the Company’s common stock (“Replacement Options”).

Additionally, no Old Catheter options were amended in connection with the Merger.

All the Replacement Options vested in accordance with the original terms of the grants in place at the time of the Merger.

As a result, $ 3.4 million of purchase price consideration, which represented the estimated fair value of Old Catheter’s assumed stock options, and $ 1.1 million of stock-based compensation expense, which represents the excess of the estimated fair value of the Replacement Options over the assumed Old Catheter stock options, were recognized upon the closing of the Merger.

There are no shares reserved for future issuance under the 2020 Plan as of March 31, 2025 and December 31, 2024.

2023 Equity Incentive Plan

In July 2023, the Company’s stockholders approved the 2023 Plan as defined above, which provided for the grant of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock units, performance-based stock awards and other forms of equity compensation to the Company’s employees, directors and consultants.

Stock options granted under the 2023 Plan to employees and consultants generally will vest annually over a five-year period or as determined by the Board’s Compensation Committee, while grants to non-employee directors generally vest quarterly over a three-year period.

As of September 30, 2024 and December 31, 2023, 225,085 and 50,186 shares of common stock were reserved for future issuance pursuant to the 2023 Plan.

Stock options granted under the 2023 Plan to employees and consultants generally will vest annually over a five -year period or as determined by the Board’s Compensation Committee, while grants to non-employee directors vest as determined by the Board's Compensation Committee.

For the three months ended March 31, 2025 , the Company granted two separate sets of stock options to non-employee directors, each subject to distinct vesting schedules as approved by the Board's Compensation Committee.

As of March 31, 2025 and December 31, 2024 , 880,365 and 926,882 shares of common stock were reserved for issuance pursuant to future awards under the 2023 Plan.

The number of shares available for issuance under the 2023 Plan also includes a quarterly increase commencing on September 1, 2023 by an amount equal to the lesser of (i) 10 % of the number equal to the number of shares of common stock outstanding on the applicable adjustment date less the number of shares of common stock outstanding at the beginning of the fiscal quarter immediately preceding the adjustment date, but if such number is a negative number, then the increase will be zero;

or (ii) such lesser number of shares as may be determined by the Board.

On January 8, 2024, the Board approved the issuance of a total of 28,500 non-qualified stock options under the 2023 Plan.

7,500 of these non-qualified options were issued to non-employee directors that vest at 8 1/3% per quarter for 3 years with an exercise price of $ 4.00 and expiration date of January 8, 2034 .

The remaining 21,000 non-qualified options were issued to employees and consultants and vest at 20% per year for 5 years with an exercise price of $ 4.00 and expiration date of January 8, 2034 .

On February 26, 2024, the Board approved the issuance of a total of 15,000 incentive stock options under the 2023 Plan.

All options were issued to employees and vest at 20% per year for 5 years with an exercise price of $ 4.20 and expiration date of February 26, 2034 .

On April 24, 2024, the Board approved the issuance of a total of 12,500 incentive stock options under the 2023 Plan.

All options were issued to employees and vest at 20% per year for 5 years with an exercise price of $ 4.60 and expiration date of April 24, 2034 .

On July 9, 2024, the Board approved the issuance of a total of 10,000 incentive stock options under the 2023 Plan.

All options were issued to employees and vest at 20% per year for 5 years with an exercise price of $ 3.50 and expiration date of July 9, 2034 .

The options issued during the three and nine months ended September 30, 2024 were valued at approximately $ 262 thousand using the Black-Scholes model based on the following assumptions on the date of issue:

On January 29, 2025, the Committee approved the issuance of a total of 300,000 non-qualified stock options to non-employee directors under the 2023 Plan.

These options vest in three equal annual installments over a 2 year period, with the first tranche vesting immediately on the grant date and the remaining tranches vesting on each subsequent anniversary of January 29.

These options have an exercise price of $ 0.42 and expiration date of January 29, 2035.

On January 29, 2025, the Committee approved the issuance of a total of 450,000 incentive stock options to the Company’s Chief Executive Officer under the 2023 Plan.

The options have an exercise price of $ 0.42 and expiration date of January 29, 2035.

90,000 of these options vested on January 29, 2025, with the remaining 360,000 options vesting in three equal installments of 120,000 options on each subsequent anniversary of January 29.

On January 29, 2025, the Committee approved the issuance of a total of 450,000 incentive stock options to certain executives and other employees of the Company under the 2023 Plan.

The options have an exercise price of $ 0.42 and expiration date of January 29, 2035.

Of the total shares issued 225,000 incentive stock options vest at 20 % per year for 5 years.

The remaining 225,000 options contain performance conditions related to the achievement of specified quarterly sales targets in 2025.

These performance-based options will vest and become exercisable at each quarter end once the quarterly sales target is achieved.

As of March 31, 2025, the performance condition applicable to the first quarter of 2025 was not satisfied, and accordingly, no performance-based options vested for the three months ended March 31, 2025.

On January 29, 2025, the Committee approved the issuance of a total of 130,000 incentive stock options and 25,000 non-qualified options to certain employees and consultants of the Company under the 2023 Plan.

The options have an exercise price of $ 0.42 and expiration date of January 29, 2035.

The options contain performance conditions based on the achievement of tiered sales targets for the year 2025.

As of March 31, 2025, it was probable that certain performance conditions would be satisfied and 75 % of the options granted would vest.

Accordingly, the Company recognized stock-based compensation expense for the portion of these performance-based options that are expected to vest for the three months ended March 31, 2025.

On January 29, 2025, the Committee approved the issuance of a total of 172,500 incentive stock options to certain employees of the Company under the 2023 Plan.

All options were issued to employees and vest at 20 % per year for 5 years with an exercise price of $ 0.42 and expiration date of January 29, 2035.

On January 29, 2025, the Committee approved the issuance of a total of 100,000 incentive stock options to certain employees of the Company under the 2023 Plan.

These options vest in five equal annual installments over a 4 year period, with the first tranche vesting immediately on the grant date and the remaining tranches vesting on each subsequent anniversary of January 29.

These options have an exercise price of $ 0.42 and expiration date of January 29, 2035.

The options granted for the

2023 Plan for the

three months ended March 31, 2025 were valued using the Black-Scholes model based on the following assumptions on the date of issue:

Options with Time-Based Vesting Conditions

Non-Employee Director Options Issued January 29, 2025

Employee Options Issued January 8, 2024

Employee Options Issued February 26, 2024

Employee Options Issued April 24, 2024

Employee Options Issued July 9, 2024

CEO Options Issued January 29, 2025

Employee Options (4 years) Issued January 29, 2025

Employee Options (5 years) Issued January 29, 2025

Risk-free interest rate

4.55 % 4.55 % 4.55 % 4.55 %

98.00 % 97.50 % 97.40 % 98.20 %

Expected dividend yield

0.00 % 0.00 % 0.00 % 0.00 %

Expected life (in years)

5.5 5.8 6.0 6.5

Options with Performance-Based Vesting Conditions

Employee Options with Quarterly Sales Targets Issued January 29, 2025 Employee Options with Tiered Sales Targets Issued January 29, 2025

Risk-free interest rate

4.55 % 4.55 %

98.40 % 98.00 %

Expected dividend yield

0.00 % 0.00 %

Expected life (in years)

The following is a summary of stock option activity for the 2023 Plan options for the three months ended March 31, 2025 :

Stock Options

Value (in thousands)

Outstanding at December 31, 2024

70,605 $ 20.88 8.38 $ —

Options exercised

Options granted

1,627,500 0.42 — —

Cancelled/forfeited

( 56,921 ) 0.65 — —

Outstanding at March 31, 2025

1,641,184 $ 1.29 9.76 $ —

Vested and expected to vest at March 31, 2025

1,641,184 $ 1.29 9.76 $ —

Exercisable at March 31, 2025

278,288 $ 4.95 9.56 $ —

Non-Plan Options Issued

On April 24, 2024, the Board approved the issuance of a total of 25,000 Non-Plan Options as an employment incentive for the position of Chief Commercial Officer.

The options were issued on May 1, 2024, the first day of employment and vest at 20% per year for 5 years with an exercise price of $5.321 and an expiration date of May 1, 2034 .

The non plan options issued were valued at approximately $ 131 thousand using the Black-Scholes model based on the following assumptions on the date of issue:

Non-Plan Options Issued May 1, 2024

On January 6, 2025, the Board approved and issued a total of 500,000 Non-Plan Options as an employee incentive to the Chief Financial Officer.

The options vest monthly over 3 years with an exercise price of $ 0.53 and an expiration date of January 6, 2035.

The Non-Plan Options issued were valued using the Black-Scholes model based on the following assumptions on the date of issue:

Non-Plan Options Issued January 6, 2025

Risk-free interest rate

1 unchanged sentence

Expected life (in years)

The following is a summary of stock option activity for the nine months ended September 30, 2024:

The following is a summary of stock option activity for the Non-Plan options for the three months ended March 31, 2025 :

Stock Options

Weighted Average Exercise Price

Weighted Average Remaining Life (in years)

Aggregate Intrinsic Value (in thousands)

Value (in thousands)

Outstanding at December 31, 2024

25,000 $ 5.32 9.33 $ —

Options exercised

Options granted

500,000 0.53 — —

Cancelled/forfeited

Outstanding at September 30, 2024

Vested and expected to vest at September 30, 2024

Exercisable at September 30, 2024

Restricted Stock Units

All restricted stock units have been forfeited or vested as of December 31, 2023.

Outstanding at March 31, 2025

525,000 $ 0.76 9.74 $ —

Vested and expected to vest at March 31, 2025

525,000 $ 0.76 9.74 $ —

Exercisable at March 31, 2025

27,778 $ 0.53 9.77 $ —

Restricted Stock Awards

All restricted stock awards have been forfeited or vested as of December 31, 2023.

Stock-based compensation expense for the three and nine months ended September 30, 2024 was $ 17 thousand and $ 36 thousand, respectively, in selling, general and administrative expenses in the condensed consolidated statements of operations.

Stock-based compensation expense for the three and nine months ended September 30, 2023 was $ 2 thousand and $ 1.2 million respectively, in the Company's condensed consolidated statements of operations.

Total unrecognized estimated stock-based compensation expense by award type and the remaining weighted average recognition period over which such expense is expected to be recognized at September 30, 2024 was as follows:

A summary of the restricted stock award activity for the three months ended March 31, 2025 is presented below:

Restricted Stock Awards

Outstanding at December 31, 2024

( 49,999 ) 0.47

Outstanding at March 31, 2025

50,001 $ 0.47

Stock-based compensation expense for the three months ended March 31, 2025 and 2024 was $ 91 thousand and $ 6 thousand , respectively, in selling, general and administrative expenses in the condensed consolidated statements of operations.

Unrecognized Expense (in thousands)

Remaining Weighted Average Recognition Period (in years)

Stock options

Remaining Weighted Average Recognition Period

Stock options (Non-Plan Options)

Stock options (2023 Plan Options)

Restricted stock awards

Restricted stock units

Asset Acquisition

On January 24, 2025, the Company acquired 100 % of the membership interests of Perikard, LLC, which was accounted for as an asset acquisition consisting primarily of a single patent for pericardial access technology.

The Company issued 275,000 shares of its common stock valued at $ 113 thousand as consideration and is obligated to make royalty payments equal to 10 % of net sales of the pericardial access kit for five years following the closing date.

The patent was determined to be IPR&D with no alternative future use, and accordingly, the Company recognized $ 119 thousand, consisting of $ 113 thousand of stock consideration and $ 6 thousand of direct transaction costs, as acquired in-process research and development in the condensed consolidated statements of operations for the three months ended March 31, 2025 .

As of March 31, 2025 , the Company has not recognized a liability for the contingent royalty payments because they are currently not probable or reasonably estimable.

The provision for income taxes for interim periods is determined using an estimated annual effective tax rate.

The effective tax rate may be subject to fluctuations during the year as new information is obtained, which may affect the assumptions used to estimate the annual effective tax rate, including factors such as valuation allowances against deferred tax assets, the recognition or de-recognition of tax benefits related to uncertain tax positions, if any, and changes in or the interpretation of tax laws in jurisdictions where the Company conducts business.

For the three and nine months ended September 30, 2024 and 2023, the Company did not record any federal or state income tax provision or benefit due to net losses incurred for all periods presented.

For the three months ended March 31, 2025 and 2024 , the Company recorded federal income tax benefit of $ 724 thousand and $ 0 , respectively, and no state income tax provision or benefit.

The federal income tax benefit primarily relates to an increase in net operation losses that are not subject to limitations under Section 382 of the Internal Revenue Code.

The Company’s net deferred tax assets generated mainly from net operating losses are fully offset by a valuation allowance as the Company believes it is not more likely than not that the benefit will be realized.

The Company will continue to assess its position in future periods to determine if it is appropriate to reduce a portion of its valuation allowance in the future.

As of September 30, 2024, the Company has an open sales and use tax audit with the California Department of Tax and Fee Administration covering the period from October 1, 2020 through March 31, 2023.

The Company has no open income tax audits with any taxing authority as of March 31, 2025 .

Commitments and Contingencies

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In management’s opinion, any potential loss resulting from the resolution of these matters will not have a material effect on the results of operations, financial position or cash flows of the Company.

As of September 30, 2024, the Company had no outstanding litigation.

Employee Benefit Plan

In January 2019, the Company established a defined contribution plan under Section 401(k) of the Internal Revenue Code (“401(k) Plan”).

Under the terms of the 401(k) Plan, all full-time employees were eligible to make voluntary contributions as a percentage or defined amount of compensation.

The Company made matching contributions based on 100 % of each employee’s contribution up to 3 % and 50 % of contributions between 3 % and 5 %, with the match-eligible contribution limited to 4 % of the employee’s eligible compensation.

The Company cancelled the 401(k) Plan effective March 10, 2023 and distributed all assets held by the 401(k) Plan to the participants.

The Company had no expenses related to the matching contributions for the three and nine months ended September 30, 2024 and 2023.

As of March 31, 2025 , the Company had no outstanding litigation.

Related Parties

Prior to the Merger, David A.

Jenkins, the Company’s current Executive Chairman of the Board and Chief Executive Officer, and Old Catheter’s then Chairman of the Board of Directors, and his affiliates held approximately $ 25.1 million of Old Catheter’s Convertible Promissory Notes, or the Notes, that were converted in the Old Catheter merger into 7,856 .251 shares of Series X Convertible Preferred Stock (see Note 3, Business Combination, and Note 14, Preferred Stock).

Jenkins, the Company’s current Executive Chairman of the Board and Chief Executive Officer, and Old Catheter’s Chairman of the Board of Directors, and his affiliates held approximately $ 25.1 million of Old Catheter’s Convertible Promissory Notes, or the Notes, that were converted into 7,856.251 shares of Series X Convertible Preferred Stock in connection with the Merger (see Note 12, Preferred Stock).

In consideration for forgiving the interest accrued but remaining unpaid under the Notes in an aggregate amount of approximately $ 13.9 million, Mr.

Jenkins and his affiliates also received royalty rights equal to approximately 12% of the net sales, if any, of LockeT, commencing upon the first commercial sale and through December 31, 2035 (see Note 10, Royalties Payable).

Jenkins and his affiliates also received royalty rights equal to approximately 12 % of the net sales, if any, of LockeT, commencing upon the first commercial sale and through December 31, 2035.

The Company entered into an additional royalty agreement for the LockeT device with Auston Locke, who is the son of Robert Locke, VP of Product Development.

Under this agreement, the Company will pay a 5 % royalty rate on net sales up to $ 1 million in cumulative royalties.

If a patent is obtained, the royalty rate will be 2 % of net sales until the Company has paid a total of $ 10 million in cumulative royalties.

Refer to Note 2, Summary of Significant Accounting Policies and Note 8, Royalties Payable for additional information over the royalties payable due to these related parties.

In addition to the shares described above that were issued in connection with the Notes, Mr.

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Jenkins’ adult children received 1,284.344 shares of Series X Convertible Preferred Stock in the Merger, all in exchange for their equity interests in Old Catheter in accordance with the Merger exchange ratio.

In connection with the Merger (see Note 3, Business Combination), the Company assumed $ 1.4 million of accrued expenses and advances, of which $ 1.1 million was due to Mr.

Jenkins and was paid on January 10, 2023.

As of March 31, 2025 , a total of 9,239.285 shares of Series X Preferred Stock were held by these related parties.

Jenkins’ daughter, the Company’s non-executive Chief Operating Officer, received options to purchase 14,416 shares of the Company’s common stock upon the closing of the Merger in exchange for her options to purchase shares of Old Catheter common stock, converted based on the exchange ratio in the Merger.

Of the total options to purchase 14,416 shares of the Company’s common stock, 14,081 options have an exercise price of $ 5.90 per share, and the remaining 335 options have an exercise price of $ 20.20 per share.

Margrit Thomassen, the Company’s Interim Chief Financial Officer, received options to purchase 1,676 shares of the Company’s common stock upon the closing of the merger in exchange for her options to purchase shares of Old Catheter common stock, converted based on the exchange ratio in the merger.

The options have an exercise price of $ 5.90 per share.

In January 2024, she received an option to purchase 2,500 shares of the Company’s common stock under the 2023 Plan.

The options have an exercise price of $ 4.00 per share, vest at 20 % per year for 5 years and expire in January 2034 .

Following stockholder approval on March 21, 2023, the Company issued 99,182 shares of common stock to Mr.

Jenkins and affiliates upon conversion of 991.828 shares of Series X Convertible Preferred Stock, and 23,532 shares of common stock to his adult children upon conversion of 235.320 shares of Series X Convertible Preferred Stock .

On May 1, 2024, Marie-Claude Jacques, the Company’s Chief Commercial Officer, received a non-plan option to purchase 25,000 shares of the Company’s common stock.

The options have an exercise price of $ 5.321 per share, vest at 20 % per year for 5 years and expire in May 2034.

During the three months ended September 30, 2024, the Company entered into various short-term promissory notes with various related parties (the “Related Party Notes”).

On January 29, 2025, Ms.

Jacques received an incentive stock option to purchase 250,000 shares of the Company's common stock.

The options have an exercise price of $ 0.42 per share, 25,000 options vest on the grant date and an additional 25,000 options vest annually for 4 years, 31,250 options vest quarterly upon achievement of quarterly sales targets during 2025 and expire in January 2035.

On January 6, 2025, Philip Anderson, the Company's Chief Financial Officer, received a non-plan option to purchase 500,000 shares of the Company's common stock.

The options have an exercise price of $ 0.53 per share, vest monthly over 36 months and expire in January 2035.

During the year ended December 31, 2024, the Company entered into various short-term promissory notes with various related parties (the “Related Party Notes”).

These Related Party Notes had a maturity date of August 30, 2024 and interest rates of 8 % per annum.

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See Note 7, Notes Payable for further information.

The related parties and the amounts owed to each related party are summarized in the following table (in thousands):

The related parties and the amounts owed to each related party are summarized in the following table as of March 31, 2025 (in thousands):

Related Party

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Principal Amount

Interest Paid

Interest Accrued

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235,000 pre funded warrants with an exercise price of $ 0.0001 and no expiration date;

500,000 Series H Warrants with an exercise price of $ 1.00 per share that expire on March 3, 2025 ;

500,000 Series H Warrants with an exercise price of $ 1.00 per share that expired on March 3, 2025;

500,000 Series I Warrants with an exercise price of $ 1.00 per share that expire on March 3, 2026;

and 500,000 Series J Warrants with an exercise price of $ 1.00 per share that expire on September 3, 2029.

On October 28, 2024, the Jenkins Family Charitable Institute exercised all 235,000 pre funded warrants and received 235,000 shares of common stock of the Company.

On December 31, 2024, the Jenkins Family Charitable Institute distributed 450,000 Series J warrants to its trustee and two advisors, who are daughters of Mr.

Subsequent Events

2024 Warrant Inducement Offer

On October 24, 2024, the Company executed the 2024 Inducement Offer with certain holders of the Existing Warrants.

The Existing Warrants had exercise prices ranging from $ 1.00 to $ 40.00 per share.

Following the closing of the 2024 Inducement Offer, such holders immediately exercised an aggregate of (i) 33,160.8 Series E Warrants, (ii) 499,909.34 Series F Warrants, (iii) 499,909.34 Series G Warrants, (iv) 1,990,000 Series H Warrants, and (v) 2,325,000 Series I Warrants to purchase up to 5.3 million shares of Common Stock at a reduced exercise price of $0.70 per share .

In consideration for the immediate exercise of the Existing Warrants for cash, the Company issued unregistered new Series K Common Stock Purchase Warrants (“Series K Warrants”) to purchase up to a number of shares equal to 200% of the number of shares of Common Stock issued pursuant to the exercise of the Existing Warrants.

The Series K Warrants have an exercise price of $ 0.70 per share, a term of 5.5 years following stockholder approval, and are not exercisable until such approval is obtained.

As additional consideration, the company issued placement agent warrants to purchase up to 320,879 shares of common stock on the same terms as the Series K warrants, except the exercise price is $1.085 per share and have a termination date of October 28, 2029 .

The Company received aggregate gross proceeds of approximately $ 3.7 million in cash from the exercise of the Existing Warrants pursuant to the 2024 Inducement Offer, prior to deducting placement agent fees and offering expenses of $ 0.4 million.

As of the date of the 2024 Inducement Offer, 578,900 Series H and 1,078,900 Series I warrants remained unexercised.

Prior to the repricing and execution of the 2024 Inducement Offer, the Company received additional gross proceeds of approximately $ 1.2 million from the exercise of 1,010,000 Series H Warrants and 175,000 Series I Warrants in accordance with their original terms (as summarized below).

Issuance of Securities from Warrant Exercises

Aside from the common stock issued in connection with the 2024 Warrant Inducement Offer, the Company also issued common stock in connection with the following exercises of warrants (in thousands):

Name of Warrant

Exercise Date

Shares Common Stock Issued

Number of Warrants Exercised

September 2024 Pre-Funded Warrant

September 2024 Series H Warrant

September 2024 Series I Warrant

September 2024 Pre-Funded Warrant

Cardionomic Asset Acquisition

On April 22, 2025, Cardionomix entered into a definitive asset purchase agreement with the assignor of Cardionomic (“Seller”) to purchase certain assets, which relate to late-stage treatment in development for acute decompensated heart failure (the “Purchased Assets”).

On May 5, 2025, the transaction closed.

At closing of the transaction, the Purchased Assets were acquired by Cardionomix, as is, in exchange for the issuance of 1,000,000 restricted shares of the Company’s $ 0.0001 par value common stock.

Additionally, Cardionomix issued to the Seller a promissory note (the "Note”) in the amount of $ 1.5 million, with simple interest accruing at 4 % per annum on the principal thereof and no interest or principal payable until the maturity date of the Note, which will be three years following issuance of the Note.

The accounting for the acquisition is incomplete due to the proximity of the closing date of the Acquisition to the date of this filing.

As a result, the Company is unable to disclose provisional fair value estimates of the identifiable net assets acquired.

The Company will recognize and provide additional disclosures regarding the Acquisition within its second quarter Quarterly Report on Form 10 -Q.

Issuance of Common Stock

In connection with the October 2024 Warrant Inducement Offer, shares were held in abeyance in the event that the exercise of the 2024 Existing Warrants would have otherwise caused a holder to exceed the beneficial ownership limitations set forth in the 2024 Existing Warrant.

These Abeyance Shares are held as Pre-Funded Warrants until notice is received from the holder that the balance, or a portion thereof, may be issued in compliance with the beneficial ownership limitation.

On April 24, 2025, the Company released and issued 732,000 Abeyance Shares.

May 2025 PIPE

On May 12, 2025, the Company entered into a Securities Purchase Agreement (“Securities Purchase Agreement”) for a private placement with three institutional investors ( “May 2025 PIPE Financing”).

Pursuant to the Securities Purchase Agreement, the Company sold an aggregate of (i) 1,500 PIPE Units and (ii) 1,500 additional shares of a new series of the Company’s preferred stock, designated Series B Convertible Preferred Stock, par value $ 0.0001 per share.

Each PIPE Unit consists of:

(i) one share of Series B Convertible Preferred Stock and (ii) Series L Warrants to purchase approximately 2,858 shares of Common Stock at an exercise price of $ 0.50 per share.

The aggregate stated value of the 3,000 shares of Series B Convertible Preferred Stock issued was $ 3.0 million.

As consideration for the PIPE Units and Series B Convertible Preferred Stock, the Company collected $ 1.5 million in cash and secured Convertible Promissory Notes of QHSLab, Inc.

previously held by one of the investors (“QHSLab Notes”), before deducting placement agent fees and offering expenses of $ 0.2 million (collectively, the “Placement Agent Fees”).

Each Series L Warrant is exercisable when stockholders’ approval is obtained (“Stockholder Approval”) and expires 5.5 years thereafter.

The Series L Warrants are convertible into an aggregate of 4,285,716 shares of the Company’s Common Stock and may be cashless exercised under certain circumstances.

The exercise price of each Series L Warrant is subject to appropriate adjustment in the event of recapitalization events, stock dividends, stock splits, stock combinations, reclassifications, reorganizations or similar events affecting the Company’s Common Stock.

The Series L Warrants are callable by the Company for $0.01 per share if the 20‑day volume‑weighted average price of the Company’s Common Stock exceeds $1.50 per share.

In connection with the May 2025 PIPE Financing, the Company also intends to issue Placement Agent Warrants to purchase an aggregate of 257,143 shares of Common Stock at an exercise price of $ 0.5425 per share to the Placement Agent.

The Placement Agent Warrants will terminate 5 years from the date of issuance.

Except for the exercise price and contract term, the Placement Agent Warrants will have substantially similar terms and conditions as those of the Series L Warrants.

The Series B Convertible Preferred Stock is convertible into an aggregate of 8,574,000 shares of the Company’s Common Stock at a fixed conversion rate of $ 0.35 per share, or approximately 2,858 shares of Common Stock per $1,000 of stated value.

The holders may convert the Series B Convertible Preferred Stock at the earlier of (i) the date stockholder approval is obtained (“Stockholder Approval”) or (ii) the date the NYSE American listing application for the shares of Common Stock issuable upon conversion is approved.

If the NYSE American listing application approval is obtained prior to Stockholder Approval, then the Series B Convertible Stock may only be converted up to 2,202,357 shares of Common Stock ( 19.99 % of the Company’s outstanding common stock on the date of issuance of the Series B Convertible Preferred Stock).

The Series B Convertible Preferred Stockholders participate in dividends paid to common stockholders on an as-converted basis and do not have any voting rights.

The Series B Convertible Preferred Stockholders do not have a preference upon any liquidation, dissolution, or winding-up of the Company.

Subject to limited exceptions, the holders of Series L Warrants, Placement Agent Warrants, and Series B Convertible Preferred Stock will not have the right to exercise any portion of their Series L Warrants or Placement Agent Warrants and convert any portion of their Series B Convertible Preferred Stock if the holder (together with such holder’s affiliates) would beneficially own a number of shares of common stock in excess of 4.99 % of the shares of Common Stock then outstanding (the “Beneficial Ownership Limitation”).

At the holder’s option, the holder may increase the beneficial ownership limitation to 9.99 % of the shares of Common Stock then outstanding, with any such increase becoming effective upon 61 days’ prior notice to the Company.

Mercer Street Global Opportunity Fund, LLC (“Mercer”) transferred the QHSLab Notes, which are currently in default, as partial consideration for the PIPE Units and Series B Convertible Preferred Stock issued by the Company under the Assignment Agreement dated May 12, 2025.

One QHSLab Note was originally issued on August 10, 2021 with a principal amount of $ 806,000 , had a maturity date of August 10, 2022, and an interest rate of 5 % per annum ( “2021 Note”), a default interest rate of 18 %, and a conversion rate of 20 cents per share of common stock of QHSLab.

The second QHSLab Note was originally issued on July 19, 2022 with a principal amount of $ 440,000 , had a maturity date of July 19, 2023, and interest rate of 5 % per annum ( “2022 Note”), a default interest rate of 18 %, and conversion rate of 20 cents per share of common stock of QHSLab.

The Company estimates that the approximate aggregate principal amount, plus all accrued but unpaid interest, fees and other amounts, owed by QHSLab under both Notes is equal to approximately $ 1.6 million;

however, both Notes are currently in default, there can be no assurance that they will be paid in full or at all, and their valuation is uncertain.

In connection with the May 2025 PIPE Financing, the Company also entered into a registration rights agreement with the purchasers requiring the Company to register for resale the shares of common stock issuable upon the conversion of the Series B Convertible Preferred Stock and Series L Warrants.

Failure to timely file, obtain the effectiveness of, or maintain the registration shall lead to an obligation to pay to the investors cash liquidated damages equal to 2 % of each investor’s subscription amount for then outstanding securities for every 30 -day period the lapse continues, with unpaid amounts accruing interest at 18 % per annum after a specified grace period.

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