What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-13 compared with 2025-08-11 · 142 added, 117 removed, 199 unchanged (57% of the section changed)

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The statements contained in this Quarterly Report that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.

Forward-looking statements can be identified by words such as “believe,” “anticipate,” “may,” “might,” “can,” “could,” “continue,” “depends,” “expect,” “expand,” “forecast,” “intend,” “predict,” “plan,” “rely,” “should,” “will,” “may,” “seek,” or the negative of these terms and other similar expressions, although not all forward-looking statements contain these words.

These statements include, but are not limited to, our expectations with respect to our timing and need for future financing, including our ability to increase the availability under our at-the-market offering, expectations regarding Cardionomix clinical trials and FDA approval, and our expectations with respect to developing the products that may be offered by our Cardionomix and KardioNav subsidiaries.

Forward-looking statements can be identified by words such as “believe,” “anticipate,” “may,” “might,” “can,” “could,” “continue,” “depends,” “expect,” “expand,” “explore,” “forecast,” “intend,” “predict,” “plan,” “pursue,” “pursuit,” “rely,” “should,” “will,” “may,” “seek,” or the negative of these terms and other similar expressions, although not all forward-looking statements contain these words.

Statements concerning current conditions, operations or activities may also be forward-looking if they imply a continuation of current conditions, operations or activities.

These statements include, but are not limited to, our descriptions of possible sources of financing that we are exploring, expectations regarding our operating businesses, including statements regarding our plans for conducting research and development with respect to, as well as securing appropriate FDA registrations and approvals of our products, including but not limited to those of our Cardionomix and KardioNav subsidiaries, as well as express and implied statements regarding our ability to continue as a going concern, sustain operations, and remain listed on the NYSE American, our expectations with respect to our timing and need for future financing, expectations regarding clinical studies of LockeT and the data they are expected to provide, including the impact of such data on marketing and FDA submissions, and our expectations with respect to our business strategy to become a leading medical device company in the field of cardiac electrophysiology, and to provide patients, hospitals, and physicians with novel technologies and solutions to improve the lives of patients with cardiac arrhythmias, and our aim to establish our products as integral tools used by cardiac electrophysiologists and their colleagues during ablation treatment of ventricular arrhythmias by reducing procedure time, patient complications and increasing procedural success, and possible sale of the QHS Notes.

You should read these statements carefully because they discuss future expectations, contain projections of future results of operations or financial condition, or state other “forward-looking” information.

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These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including, but not limited to, those described in Item 1A.

Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2024.

Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2024, as well as those described below.

To the extent that any risk factor set forth below is inconsistent with or expands upon a risk factor set forth in the 10‑K, the risk factor described below supersedes the prior disclosure.

These risks include, but are not limited to, that:

we will be unable to develop the assets acquired in by KardioNav and Cardionomix unless we are able to obtain additional financing, which may not be available on acceptable terms or at all, the results of anticipated trials may not turn out as we currently expect and future trials may not occur on the time tables we expect or may be more costly than anticipated, we will be required to raise additional funds to finance our operations and continue as a going concern , and we may not be able to do so when necessary, and/or the terms of any financings may not be advantageous to us, and we may require additional funds sooner than our current expectations;

our business has a history of losses, will incur additional losses, and may never achieve profitability;

our ability to increase our at-the-market offering availability is subject to obtaining necessary approvals, certifications, legal opinions and accounting comfort letters, and there is no guaranty that we can do so successfully, we have identified material weaknesses in our internal control over financial reporting and these material weaknesses could adversely affect our ability to report our results of operations and financial condition accurately and in a timely manner;

if we pursue a strategic transaction, such as a crypto treasury strategy, it may change the primary focus of our business, and our management team could be diverted from pursuing our present core business and from obtaining regulatory approval for our products in development;

we will be unable to develop the assets acquired in by KardioNav and Cardionomix unless we are able to obtain additional financing in sufficient amounts to fund our current business, any future businesses we may enter into and to fund our products in development, which financing may not be available on acceptable terms or at all, and could require significant changes in our management and business focus, the results of anticipated trials may not turn out as we currently expect and future trials may not occur on the time tables we expect or may be more costly than anticipated, or may be abandoned due to lack of financing or changes in our business focus, we will be required to raise additional funds to finance our operations and continue as a going concern , and we may not be able to do so when necessary, and/or the terms of any financings may not be advantageous to us or could require changes to governance or operations, and we may require additional funds sooner than our current expectations and we may be required to significantly dilute our existing stockholders in order to raise sufficient operating funds assuming that we are able to raise funds at all, which is uncertain;

our stockholder equity is near the minimum level prescribed by the NYSE American and if we are unable to maintain minimum listing requirements, we are liable to be delisted from the NYSE American;

our common stock may be subject to extreme market volatility and trading patterns and may experience rapid and substantial increases or decreases unrelated to our operating performance or prospects, or macro or industry fundamentals, which could occur for a number of reasons including but not limited to analyst recommendations, changes in our industry or the overall markets, significant acquisitions or other strategic transactions by or involving us or our subsidiaries, among other reasons;

our operating business has a history of losses, is expected to incur additional losses, and may never achieve profitability;

our past performance may not be a reliable indicator of future performance, including but not limited to in the event of a strategic transaction;

historical trends should not be used to anticipate results or trends in future periods;

our ability to increase our at-the-market offering availability in the future is subject to obtaining necessary approvals, certifications, legal opinions and accounting comfort letters, and there is no guaranty that we can do so successfully;

we have identified material weaknesses in our internal control over financial reporting and these material weaknesses could adversely affect our ability to report our results of operations and financial condition accurately and in a timely manner;

compliance with Sarbanes-Oxley Act Section 404 could have a material adverse impact on our business;

we will not be able to reach profitability unless we are able to achieve our product expansion and growth goals;

we will not be able to reach profitability unless we are able to achieve our product expansion and growth goals or engage in a strategic transaction which realigns our business focus;

our VIVO launch plans require significant investment in infrastructure and sales representatives;

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litigation and other legal proceedings may adversely affect our business;

if we make acquisitions or divestitures, we could encounter difficulties that harm our business;

if we make acquisitions or divestitures, we could encounter difficulties that harm our business, and entering into a strategic transaction could materially alter our business model and focus;

failure to attract and retain sufficient qualified personnel could also impede our growth;

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our future operating results depend upon our ability to obtain components in sufficient quantities on commercially reasonable terms or according to schedules, prices, quality and volumes that are acceptable to us, and suppliers may fail to deliver components, or we may be unable to manage these components effectively or obtain these components on such terms;

if hospitals, physicians and patients do not accept our current and future products or if the market for indications for which any product candidate is approved is smaller than expected, we may be unable to generate significant revenue, if any;

the recent coronavirus outbreak (“COVID-19”) adversely affected our financial condition and results of operations and we cannot provide any certainty as to whether there will be future impacts from COVID-19 or another pandemic;

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and certain non-U.S.

jurisdictions, our business plans include expanding uses for our products, which will require additional clearances;

jurisdictions;

our current business plans for our current operating business include expanding uses for our products, which if implemented would require additional clearances;

even after clearance is obtained, our products remain subject to extensive regulatory scrutiny;

reductions in staffing and funding at FDA and other federal agencies could cause delays in the development and approval of our products;

our business may be adversely affected by changes and uncertainty in the health care industry including health care public‑policy developments;

if we or our suppliers fail to comply with the FDA’s Quality System Regulation, or QSR, or any applicable state equivalent, our operations could be interrupted, and our potential product sales and operating results could suffer;

if any of our products cause or contribute to a death or a serious injury, or malfunction in certain ways, we will be required to report under applicable medical device reporting regulations, which can result in voluntary corrective actions or agency enforcement actions;

healthcare reform initiatives and other administrative and legislative proposals may adversely affect our business, financial condition, results of operations and cash flows in our key markets, and if we are unable to obtain and maintain patent protection for our products, our competitors could develop and commercialize products and technology similar or identical to ours, and our ability to successfully commercialize our existing products and any products we may develop, and our technology may be adversely affected.

These forward-looking statements reflect our beliefs and views with respect to future events and are based on estimates and assumptions as of the date of this Quarterly Report and are subject to risks and uncertainties.

Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements.

healthcare reform initiatives and other administrative and legislative proposals may adversely affect our business, financial condition, results of operations and cash flows in our key markets;

if we are unable to obtain and maintain patent protection for our products, our competitors could develop and commercialize products and technology similar or identical to ours, and our ability to successfully commercialize our existing products and any products we may develop, and our technology may be adversely affected;

and there is no guarantee that we will be able to sell the QHS Notes, and any short-term sale may produce proceeds that are less than the market or stated value of such assets and less than the proceeds that could have been obtained if they were liquidated in the ordinary course.

If we enter into a strategic transaction, such as a merger, acquisition or crypto treasury policy, we may become subject to additional risks in addition to those described above, which risks would be identified and disclosed in conjunction with consummating any such transaction.

There is no guarantee that we will be able to identify and enter into any such strategic transaction.

The forward-looking statements in this report and identified above reflect our beliefs and views with respect to future events and are based on estimates and assumptions as of the date of this Quarterly Report and are subject to risks and uncertainties including those described in the cautionary statements above.

Given these risks and uncertainties, you should not place undue reliance on the forward-looking statements.

We qualify all of the forward-looking statements in this Quarterly Report by these cautionary statements.

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Unless otherwise expressly stated, we obtained this industry, business, market, and other data from reports, research surveys, studies, and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data, and similar sources.

References to “we”, “us”, “our” and “the Company” refer to Catheter Precision, Inc.

References to “we”, “us”, “our”, "Catheter" and “the Company” refer to Catheter Precision, Inc.

Catheter Precision, Inc.

("Catheter" or the "Company) was incorporated in California on September 4, 2002, and reincorporated in Delaware in July 2018.

was incorporated in California on September 4, 2002, and reincorporated in Delaware in July 2018.

Catheter was initially formed to develop, commercialize, and market its advanced excimer laser-based platform for use in the treatment of vascular and dermatological immune-mediated inflammatory diseases.

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We own 82% of Cardionomix’s issued and outstanding common stock.

Our Chief Executive Officer and Chairman of the Board and certain of his affiliates own 12%, while the remaining 6% of the outstanding common stock was issued to certain third parties as finder's fees for the asset acquisition (see Note 14, Asset Acquisition in the consolidated financial statements included elsewhere in this Quarterly Report).

Our Chief Executive Officer and Chairman of the Board and certain of his affiliates own 12%, while the remaining 6% of the outstanding common stock was issued to certain third parties as finder's fees for the asset acquisition (see Note 2, Summary of Significant Accounting Policies in the condensed consolidated financial statements included elsewhere in this Quarterly Report).

On May 5, 2025, Cardionomix acquired certain assets primarily related to the Cardiac Pulmonary Nerve Stimulation ("CPNS") System previously held by Cardionomic (see Note 14, Asset Acquisition in the consolidated financial statements included elsewhere in this Quarterly Report).

The CPNS System represents a novel technology for the late-stage treatment of acute decompensated heart failure by stimulating the autonomic cardiac nerves to restore autonomic balance.

The CPNS System is a novel technology for the late-stage treatment of acute decompensated heart failure by stimulating the autonomic cardiac nerves to restore autonomic balance.

The CPNS System is in development and has yet to obtain regulatory approval.

Cardionomix plans to complete the pivotal clinical trial for the CPNS System and obtain necessary regulatory approvals from the FDA for use and commercialization.

On June 20, 2025, the Company formed a new subsidiary, KardioNav, Inc.

("KardioNav"), to pursue the advancement, development, and commercialization of certain intellectual property assigned to KardioNav.

The Company transferred certain intellectual property related to the VIVO System to KardioNav, which is not currently being developed by the Company, while Chelak, an unrelated third party, transferred certain patents related to a medical device designed to interface with implanted cardiac devices to KardioNav.

The Company transferred certain intellectual property related to the VIVO System to KardioNav, while Chelak iECG, Inc.

("Chelak"), an unrelated third party, transferred certain patents related to a medical device designed to interface with implanted cardiac devices to KardioNav.

KardioNav intends to integrate the VIVO mapping intellectual property with Chelak's assigned patents to develop a system that interfaces with implanted cardiac devices to enable improved pre-ablation mapping and more precise localization of arrhythmogenic tissue.

Research and development activities are in the planning phase for this medical device.

Research and development activities in animals and humans have begun.

The Company owns 57% of the subsidiary's issued and outstanding common stock, while Chelak owns 33% of the subsidiary’s issued and outstanding common stock.

The Company's Chief Executive Officer and Chairman of the Board of Directors and certain of his affiliates own the remaining 10% of the subsidiary’s issued and outstanding common stock.

See Note 2, Summary of Significant Accounting Policies in the condensed consolidated financial statements included elsewhere in this Quarterly Report.

One of our two primary products is the View into Ventricular Onset (“VIVO” or “VIVO System”), which is a non-invasive imaging system that offers 3D cardiac mapping to help with localizing the sites of origin of idiopathic ventricular arrhythmias in patients with structurally normal hearts prior to EP procedures.

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LockeT is intended to temporarily secure sutures and aid clinicians in locating and removing sutures efficiently.

LockeT is a sterile Class I product that was registered with the FDA in February 2023, at which time we began initial shipments to distributors.

In May 2023, Catheter submitted LockeT for CE Mark approval.

CE Mark approval was received in April 2025.

We are in discussion with multiple international distributors to sell LockeT in countries which require CE Mark before marketing can begin.

In May 2024, we recognized our first sale of LockeT.

LockeT is a sterile Class I product that was registered with the FDA in the U.S.

We recognized our first sale of LockeT in May 2024.

In September 2024, we received notification of the issuance of our first LockeT patent in the country of China and we also completed a Middle East distribution agreement for LockeT.

In April 2025, we received notification of the issuance of our first LockeT patent in the United States by the United States Patent and Trademark Office.

In April 2025, we received notification of the issuance of our first LockeT patent in the U.S.

by the United States Patent and Trademark Office.

In April 2025, Catheter also obtained the CE Mark approval for LockeT, permitting the marketing and sale of LockeT in the European Union, Switzerland and Turkey.

Since receipt of the CE Mark, we have signed agreements with new distributors in the United Kingdom, Italy, Spain, Portugal, Switzerland, the Middle East, South Africa and Brunei.

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

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Our business strategy is to become a leading medical device company in the field of cardiac electrophysiology, and we are dedicated to developing and delivering electrophysiology products to provide patients, hospitals, and physicians with novel technologies and solutions to improve the lives of patients with cardiac arrhythmias.

We aim to establish both LockeT and VIVO as integral tools used by cardiac electrophysiologists and their colleagues during ablation treatment of ventricular arrhythmias by reducing procedure time, patient complications and increasing procedural success.

We aim to establish our products as integral tools used by cardiac electrophysiologists and their colleagues during ablation treatment of ventricular arrhythmias by reducing procedure time, patient complications and increasing procedural success.

Recent Developments

PeriKard Asset Acquisition

On January 14, 2025, we entered into a Membership Interest Purchase Agreement (the "Agreement”) with Cardiofront, LLC (“Seller”) to purchase the issued and outstanding membership interests of PeriKard, LLC, a wholly-owned subsidiary of Seller.

The primary purpose was to purchase patented technology for commercialization within the broader cardiac treatment and electrophysiology industry.

Pursuant to the Agreement, we issued 275,000 shares of our common stock valued at $113 thousand to the Seller in exchange for 100% of the membership interests of PeriKard, LLC (“Acquisition”).

On January 14, 2025, we entered into a Membership Interest Purchase Agreement ("Agreement”) with Cardiofront, LLC (“Seller”) to purchase the issued and outstanding membership interests of PeriKard, LLC, a wholly-owned subsidiary of Seller.

The primary purpose of the acquisition was to purchase patented technology for commercialization within the broader cardiac treatment and electrophysiology industry.

Pursuant to the Agreement, we issued 14,473 shares of our common stock valued at $113 thousand to the Seller in exchange for 100% of the membership interests of PeriKard, LLC.

Furthermore, we may be obligated to make royalty payments equal to 10% of net sales of the pericardial access kit for five years following the closing date.

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The acquisition was accounted for as an asset acquisition consisting primarily of a single patent for pericardial access technology.

The patent was determined to be in-process research and development ("IPR&D") with no alternative future use, and accordingly, we 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 June 30, 2025, we have not recognized a liability for the contingent royalty payments because they are currently not probable or reasonably estimable.

As of September 30, 2025, we have not recognized a liability for the contingent royalty payments because they are currently not probable or reasonably estimable.

Cardionomic Asset Acquisition

On May 5, 2025, Cardionomix acquired the CPNS System.

As consideration to Cardionomic, we issued 1,000,000 shares of our restricted common stock valued at $0.3 million, and Cardionomix issued a promissory note valued at $1.3 million (the “Note Payable”).

As consideration to Cardionomic, we issued 52,631 shares of our restricted common stock valued at $0.3 million, and Cardionomix issued a promissory note valued at $1.3 million (“Note Payable”).

The Note Payable was issued with a principal balance of $1.5 million and stated interest of 4% per annum with no interest or principal payable until the maturity date, which is three years following the date of issuance.

The acquisition was accounted for as an asset acquisition consisting primarily of the CPNS System, which was deemed to be an IPR&D Asset with no alternative future use.

Accordingly, we recognized the consideration transferred of $1.9 million, consisting of $0.3 million in stock consideration, $1.3 million in note payable, and $0.3 million in direct transaction costs, as acquired research and development expense in the condensed consolidated statement of operations for the three and six month period ended June 30, 2025.

The minority equity interest holders are presented as non-controlling interests in the accompanying condensed consolidated balance sheets, statements of operations, and statements of stockholders’ equity.

Accordingly, we recognized $1.9 million, consisting of $0.3 million of stock consideration, $1.3 million of note payable, and $0.3 million of direct transaction costs, as acquired in-process research and development in the condensed consolidated statement of operations for the nine months ended September 30, 2025.

May 2025 PIPE Financing

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(i) one share of Series B Convertible Preferred Stock and (ii) Series L common stock purchase warrants ("Series L Warrants") to purchase approximately 150 shares of common stock at an exercise price of $9.50 per share.

As consideration for the PIPE Units and Series B Convertible Preferred Stock, we collected gross proceeds of $1.5 million in cash and QHSLab Notes previously held by one of the investors, and valued at $864 thousand as of May 12, 2025, before deducting placement agent fees and offering expenses of $0.4 million (collectively, the “Placement Agent Fees”).

As consideration for the PIPE Units and Series B Convertible Preferred Stock, we collected gross proceeds of $1.5 million in cash and QHSLab Notes, previously held by one of the investors, valued at $864 thousand as of May 12, 2025, before deducting placement agent fees and offering expenses of $0.4 million (collectively, “Placement Agent Fees”).

The Series L Warrants are currently exercisable and expire on January 25, 2031.

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The Series L Warrants are callable for $0.19 per share, if the volume‑weighted average price of the Company’s common stock for 20 consecutive trading days exceeds $28.50 per share and the Series L Warrants have not been exercised.

Stockholder approval of the exercise of the Series L Warrants was obtained on July 25, 2025.

In connection with the May 2025 PIPE Financing, we also issued Placement Agent Warrants to purchase an aggregate of 13,534 shares of common stock at an exercise price of $10.3075 per share to the Placement Agent.

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Except for the exercise price, contract term, call option and change in control provision, the Placement Agent Warrants have the same terms and conditions as the Series L Warrants.

We assessed the Series L Warrants and Placement Agent Warrants issued in connection with the May 2025 PIPE Financing and determined that they do not require liability classification pursuant to ASC 480.

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

We determined that the Series L and Placement Agent Warrants do not require liability classification pursuant to ASC 480.

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

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

See Note 11, Equity Offerings in the condensed consolidated financial statements included elsewhere in this Quarterly Report for additional information on the provisions for the Series L and Placement Agent Warrants.

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The registration statement became effective on May 30, 2025.

Subject to specified exceptions, failure to 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.

During the three and six months ended June 30, 2025, we issued 2,202,357 shares of common stock in connection with the conversion of 771 shares of its Series B Convertible Preferred Stock.

Subject to specified exceptions, failure to maintain the registration statement 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.

During the nine months ended September 30, 2025, we issued 115,912 shares of common stock upon the conversion of 771 shares of our Series B Convertible Preferred Stock.

At the Market Offering Agreement

On May 19, 2025, we entered into an At Market Offering Agreement (the “ATM Agreement”) with Ladenburg.

Based on the most recent prospectus supplement filed by the Company, under the ATM Agreement, we may currently offer and sell up to an aggregate of approximately $3.2 million of shares of common stock, par value $0.0001 per share, through Ladenburg.

The ATM shares are issued pursuant to previously filed and effective Registration Statement on Form S-3 (File No.

On May 19, 2025, we entered into an At Market Offering Agreement (“ATM Agreement”) with Ladenburg.

Based on the original prospectus supplement filed by the Company, under the ATM Agreement, we could offer and sell up to $1.3 million of shares of common stock, par value $0.0001 per share, through Ladenburg.

On June 13, 2025, the Company filed a prospectus supplement increasing the aggregate amount available to be sold to $3.2 million under the ATM ("Shares").

On August 7, 2025, the Company filed a prospectus supplement, which supersedes and replaces the prospectus supplement dated June 13, 2025, increasing the aggregate amount of shares available to be sold to $4.3 million.

The Shares have been and will continue to be issued pursuant to the Company's previously filed and effective Registration Statement on Form S-3 (File No.

333-284217), which was initially filed with the Securities and Exchange Commission on January 10, 2025 and declared effective on January 22, 2025.

We have currently sold $2.73 million of shares pursuant to the ATM Agreement.

We have no obligation to sell, and Ladenburg is not obligated to buy or sell, any of the shares under the ATM Agreement and may at any time suspend offers under the ATM Agreement.

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The Company has agreed to pay Ladenburg a commission equal to 3% of the aggregate gross proceeds from sale of its shares of common stock.

June 30, 2025,

September 30, 2025,

868,582 shares of common stock had been sold under the ATM Agreement for gross proceeds of

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On June 20, 2025, the Company formed KardioNav to pursue the advancement, development, and commercialization of certain intellectual property assigned to KardioNav.

The Company transferred certain intellectual property related to the VIVO System to KardioNav, while Chelak, an unrelated third party, transferred certain patents related to a medical device designed to interface with implanted cardiac devices to KardioNav.

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The Company's Chief Executive Officer and Chairman of the Board of Directors and certain of his affiliates own the remaining 10% of the subsidiary’s issued and outstanding common stock.

The minority equity interest holders are presented as non-controlling interest in the accompanying condensed consolidated balance sheet, statement of operations, and statement of stockholders’ equity as of and for the nine months ended September 30, 2025.

See Note 2, Summary of Significant Accounting Policies in the condensed consolidated financial statements included elsewhere in this Quarterly Report for additional information.

Components of our Results of Operations for the Three and Six Months Ended June 30, 2025 and 2024

Components of our Results of Operations for the Three and Nine Months Ended September 30, 2025 and 2024

Our current activities primarily relate to the design, manufacture and sale of new and innovative medical technologies in the field of cardiac electrophysiology.

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We recognize revenues for software upgrade services evenly over time over the term of the contract.

We did not recognize any revenues for software upgrade services for the three and six months ended June 30, 2025 and 2024.

We did not recognize any revenues for software upgrade services for the three and nine months ended September 30, 2025 and 2024.

LockeT 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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We are a business that has operations within multiple countries.

During the three and six months ended June 30, 2025, approximately 18% and 13%, respectively, of our sales were derived from customers outside of the United States.

During the three and six months ended June 30, 2024, approximately 35% and 62%, respectively, of our sales were derived from customers outside the United States.

During the three and nine months ended September 30, 2025, approximately 24% and 17%, respectively, of our sales were derived from customers outside of the United States.

During the three and nine months ended September 30, 2024, approximately 35% and 52%, respectively, of our sales were derived from customers outside of the United States.

Cost of revenues

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

Results of Operations for the Three and Six Months Ended June 30, 2025 and 2024

Results of Operations for the Three and Nine Months Ended September 30, 2025 and 2024

The following table sets forth the results of the Company's operations for the periods presented (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Cost of revenues

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Research and development expenses

Acquired in-process research and development

Acquired in-process research and development expenses

Change in fair value of royalties payable due to related parties

Change in fair value of trading debt securities

Other (expense) income, net (1)

Income tax benefit

(1) Constitutes the operating activities within other income (expense), net in the consolidated statements of operations, except for the change in fair value of royalties payable due to related parties that is presented separately in the table above.

The increase in revenues of approximately $119 thousand for the three months ended June 30, 2025 as compared to the corresponding period in the prior year was due to an increase of $102 thousand and $17 thousand in LockeT and VIVO System sales, respectively.

The increase in revenues of approximately $180 thousand for the six months ended June 30, 2025 as compared to the corresponding period in the prior year was due to an increase of $230 thousand in LockeT sales, partially offset by a $50 thousand decrease in VIVO System sales.

The decrease in VIVO System sales was primarily driven by an overall reduction in VIVO patch sales in the European Union ("EU"), which accounted for the majority of product sales in 2024.

This decline was primarily attributable to reduced sales efforts resulting from changes in commercial leadership and the prolonged medical leave of a key EU-based sales consultant throughout 2024 and during the six months ended June 30, 2025.

Income tax benefit (provision)

The increase in revenues of approximately $130 thousand for the three months ended September 30, 2025 as compared to the corresponding period in the prior year was due to an increase of $92 thousand and $38 thousand in LockeT and VIVO System sales, respectively.

The increase in revenues of approximately $310 thousand for the nine months ended September 30, 2025 as compared to the corresponding period in the prior year was due to an increase of $322 thousand in LockeT sales, partially offset by a $12 thousand decrease in VIVO System sales.

The increase in LockeT sales is primarily the result of our sales team's efforts to effectively prove the procedural efficiency, cost-effectiveness and improved patient experience resulting from the use of LockeT compared with incumbent or competing closure devices to prospective new hospital customers.

Accordingly, we have entered into long-term contracts with a number of those hospitals, which has resulted in receiving initial and repeat orders as the LockeT devices are used and consumed in clinical procedures.

The nine-month period to date decrease in VIVO System sales was primarily driven by an overall reduction in VIVO patch sales in the European Union ("EU"), which accounted for the majority of product sales in 2024.

Cost of revenues

The decrease in cost of revenues of approximately $2 thousand for the three months ended June 30, 2025, as compared to the corresponding period in the prior year was primarily due to higher volume-based, supplier discounts for LockeT.

We submitted larger consolidated purchase orders, received larger volume-based discounts, and achieved a higher product margin for LockeT devices for the three months ended June 30, 2025 as compared to the corresponding period in the prior year.

The increase in cost of revenues of $4 thousand for the six months ended June 30, 2025, as compared to the corresponding period in the prior year was primarily due to an increase in sales, partially offset for higher product margins for LockeT devices.

The increase in cost of revenues of approximately $8 thousand and $12 thousand for the three and nine months ended September 30, 2025, respectively, as compared to the corresponding period in the prior year was primarily due to an increase in LockeT sales, partially offset by higher product margins for LockeT devices.

We submitted larger consolidated purchase orders, received larger volume-based, supplier discounts, and achieved a higher product margin for LockeT devices for the three and nine months ended September 30, 2025 as compared to the corresponding period in the prior year.

Selling, general and administrative expenses

The increase in selling, general and administrative expenses of approximately $0.2 million for the three months ended June 30, 2025 as compared to the corresponding period in the prior year was primarily due to an increase in salaries and benefits of $0.2 million The increase in selling, general and administrative expenses of approximately $1.0 million for the six months ended June 30, 2025 as compared to the corresponding period in the prior year was primarily due to an increase in salaries and benefits of $0.9 million and an increase in stock-based compensation expense of $0.2 million, partially offset by a decrease in consulting fees of $0.1 million .

The increase in salaries and benefits for the three and six months ended June 30, 2025 as compared to the corresponding periods in the prior year was primarily due to an increase in headcount from 15 employees as of June 30, 2024 to 21 employees as of June 30, 2025, including the CFO position that had been vacant since January 2024, and was filled in January 2025.

Additionally, 3 employees that departed in the first quarter of 2024 were subsequently replaced with new hires with higher annual salaries.

The increase in stock-based compensation expense for the three and six months ended June 30, 2025 was primarily due to the grant of 2,127,500 plan options and 500,000 non-plan options to certain employees during the six months ended June 30, 2025, as compared to 56,000 plan options and 25,000 non-plan options granted to certain employees during the six months ended June 30, 2024.

The increase in selling, general and administrative expenses of approximately $0.1 million for the three months ended September 30, 2025 as compared to the corresponding period in the prior year was due to an increase in professional fees of $0.2 million and an increase in stock-based compensation expense of $0.1 million, partially offset by a decrease in salaries and benefits of $0.2 million.

The increase in professional fees primarily relates to an increase in accounting and audit fees, while the increase in stock-based compensation expense primarily relates to an increase in plan and non-plan options granted to certain employees and directors.

The decrease in salaries and benefits was primarily due to the departure of the Chief Commercial Officer at the end of the second quarter of 2025 as well as the termination of two employees during the three months ended September 30, 2025 as compared to the corresponding period in the prior year.

None of the terminated employees have been replaced.

The increase in selling, general and administrative expenses of approximately $1.1 million for the nine months ended September 30, 2025 as compared to the corresponding period in the prior year was due to an increase in salaries and benefits of $0.7 million, an increase in stock-based compensation expense of $0.2 million, and an increase in professional fees of $0.2 million.

The increase in salaries and benefits was primarily due to an increase in headcount of sales employees in the second quarter of 2024 that worked for the Company for the entirety of 2025.

Additionally, the CFO position that had been vacant for most of 2024 was filled in January 2025.

The increase in salaries and benefits is partially offset by the departure of certain employees in 2025 that have not been replaced during the nine months ended September 30, 2025.

The increase in stock-based compensation expense primarily relates to an increase in plan and non-plan options granted to certain employees and directors, while the increase in professional fees primarily relates to an increase in accounting and audit fees.

Research and development expenses

The increase in research and development expenses of approximately $0.1 million for both the three and six months ended June 30, 2025 as compared to the corresponding periods in the prior year was primarily due to hiring a full-time employee in January 2025 who is tasked with research and development activities and therefore contributed to an increase in salaries and benefits under research and development expenses of $0.1 million .

Acquired in-process research and development

The increase in acquired in-process research development of approximately $1.8 million and $2.0 million for the three and six months ended June 30, 2025 as compared the corresponding periods in the prior year primarily relates to the two asset acquisitions completed in 2025.

On January 24, 2025, we 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 patent was determined to be IPR&D with no alternative future use, and accordingly, we 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.

On May 5, 2025, we acquired certain assets primarily related to Cardionomic’s CPNS System, which were deemed to be IPR&D assets with no alternative future use.

Accordingly, we recognized $1.9 million, consisting of $0.3 million in stock consideration, $1.3 million in note payable, and $0.3 million in direct transaction costs, as acquired in-process research and development in the condensed consolidated statements of operations for the three and six months ended June 30, 2025.

The increase in research and development expenses of approximately $0.2 million for the three months ended September 30, 2025, as compared to the corresponding period in the prior year, was primarily due to an increase in professional fees o f $0.1 million and an increase in salaries and benefits of $0.1 million.

The increase in research and development expenses of approximately $0.4 million for the nine months ended September 30, 2025, as compared to the corresponding period in the prior year, was primarily due to an increase in professional fees of $0.2 million and an increase in salaries and benefits of $0.2 million.

The increase in professional fees primarily relates to research and development activities led by Chelak, which was engaged by KardioNav to develop a system that interfaces with implanted cardiac devices to enable improved pre-ablation mapping and more precise localization of arrhythmogenic tissue.

The increase in salaries and benefits primarily relates to a full-time employee, who is solely tasked with research and development activities, and who was hired in January 2025.

Acquired in-process research and development expenses

The increase in acquired in-process research and development expenses of approximately $2.0 million for the nine months ended September 30, 2025 as compared the corresponding period in the prior year primarily relates to two of the asset acquisitions completed in 2025.

On January 24, 2025, we acquired 100% of the membership interests of Perikard, LLC for $119 thousand.

Since the acquired assets were deemed to be IPR&D with no alternative future use, we recognized total acquisition costs of $119 thousand as acquired in-process research and development in the condensed consolidated statements of operations for the nine months ended September 30, 2025.

On May 5, 2025, we acquired certain assets primarily related to Cardionomic’s CPNS System, which were also deemed to be IPR&D assets with no alternative future use.

Accordingly, we recognized $1.9 million as acquired in-process research and development in the condensed consolidated statements of operations for the nine months ended September 30, 2025.

Change in fair value of royalties payable due to related parties

At each reporting period, the fair value of the royalties payable due to related parties is calculated using the discounted cash flow method.

The increase of $0.2 million and $1.2 million in the change in fair value of royalties payable due to related parties for the three and six months ended June 30, 2025, respectively, as compared to the corresponding periods in the prior year, is primarily due to additional future estimated royalty payments of $0.9 million related to sales of the LockeT device.

Since the United States Patent and Trademark Office approved a US patent for the LockeT device in April 2025, in line with the Royalty Agreement, the Company is obligated to pay an additional royalty equal to 2% of net sales of LockeT devices.

This increase is partially offset by a decrease in the discount rate used in the discounted cash flow method, which decreased by 5.5% from 26.0% at June 30, 2024 to 20.5% at June 30, 2025.

Other income (expense), net

The decrease in other income (expense), net of $56 thousand for the three months ended June 30, 2025, as compared to the corresponding period in the prior year primarily relates to an increase in interest expense of $62 thousand partially offset by the change in fair value of trading debt securities of $10 thousand.

During the three months ended June 30, 2025, we incurred interest expense of $19 thousand in connection with the note payable issued by Cardionomix on May 5, 2025, and $45 thousand in connection with the Related Party Notes issued by us throughout June and July 2024.

During the three months ended June 30, 2024, we only incurred $4 thousand in interest expense in connection with the Related Party Notes.

The change in fair value of trading debt securities relates to the QHSLab Notes, which were received as consideration for the Series B Convertible Preferred Stock and Series L Warrants issued on May 12, 2025.

The decrease in other income (expense), net of $114 thousand for the six months ended June 30, 2025, as compared to the corresponding period in the prior year primarily relates to an increase in interest expense of $108 thousand and a decrease in interest income of $19 thousand, partially offset by an increase of $10 thousand in change in fair value of trading debt securities.

The increase in interest expense primarily relates to the note payable issued by Cardionomix and the Related Party Notes, which incurred $19 thousand and $90 thousand in interest expense during the six months ended June 30, 2025 as compared to $0 and $4 thousand in the corresponding period in the prior year.

The decrease in interest income primarily relates to lower gains in marketable securities recorded under cash and cash equivalents in the condensed consolidated balance sheets.

As noted above, the change in fair value of trading debt securities relates to financial instruments acquired during the six months ended June 30, 2025, which did not exist in the corresponding period in the prior year.

Income tax benefit

The increase in income tax benefit of approximately $1.0 million and $1.7 million for the three and six months ended June 30, 2025 as compared to the corresponding periods in the prior year relates to an increase in net operating losses that are not subject to limitations under Section 382 of the Internal Revenue Code.

The change in fair value of royalties payable due to related parties decreased approximately $2.0 million and $0.7 million for the three and nine months ended September 30, 2025, respectively, as compared to the corresponding period in the prior year.

The decrease primarily reflects lower projected LockeT sales growth and a reduction in the discount rate which decreased to 19.5%.

Change in fair value of trading debt securities

The change in fair value of trading debt securities of $107 thousand and $117 thousand for the three and nine months ended September 30, 2025, respectively, as compared to the corresponding periods in the prior year, relate primarily to the QHSLab Notes, which were received as consideration for the Series B Convertible Preferred Stock and Series L Warrants issued on May 12, 2025.

Other (expense) income, net

The increase in other expense, net of $50 thousand and $174 thousand for the three and nine months ended September 30, 2025, respectively, as compared to the corresponding periods in the prior year, primarily relates to an increase in interest expense incurred in connection with the note payable issued by Cardionomix on May 5, 2025 and the short-term note payables issued by KardioNav on July 11, 2025.

Income tax benefit (provision)

The increase in income tax provision of approximately $78 thousand for the three months ended September 30, 2025 and an increase in income tax benefit of $1.6 million for the nine months ended September 30, 2025, as compared to the corresponding periods in the prior year primarily relates to changes in the estimated amount of net operating losses that are not subject to limitations under Section 382 of the Internal Revenue Code .

Liquidity and capital resources

As of June 30, 2025, we had cash and cash equivalents of $0.8 million and an accumulated deficit of $301.5 million.

For the six months ended June 30, 2025, net cash used by operating activities was $4.6 million.

As of September 30, 2025, we had cash and cash equivalents of $1.1 million and an accumulated deficit of $303.8 million.

For the nine months ended September 30, 2025, net cash used in operating activities was $6.8 million.

We have incurred recurring net losses from operations and negative cash flows from operating activities since inception.

On May 12, 2025, we raised gross proceeds of $1.5 million in cash and acquired $0.9 million in trading debt securities, before deducting placement agent fees and offering expenses of $0.4 million, in connection with the May 2025 PIPE Financing.

Through June 30, 2025, we raised gross proceeds of $1.7 million, before deduction of commissions and offering expenses of $0.2 million, in connection with the ATM.

Through September 30, 2025, we raised gross proceeds of $4 million, before deduction of commissions and offering expenses of $0.3 million, in connection with the ATM.

See Note 11, Equity Offerings in the condensed consolidated financial statements included elsewhere in this Quarterly Report for additional information on the financing events.

We expect operating losses and negative cash flows to continue for the foreseeable future until our sales and gross profit increase sufficiently to cover our operating expenses.

We expect our current operating expenses to remain relatively fixed.

We believe that our current cash on hand of $978 thousand as of August 5, 2025 will not be sufficient to fund our current operations, including without limitation, to repay our outstanding short-term notes that will become due and payable on January 31, 2026.

Because expected revenues are not adequate to fund our anticipated operating costs and liabilities beyond such point, we expect the need for additional financing sometime prior to the end of the current quarter.

We are currently evaluating potential means of raising cash, including the continuation of our at the market offering registered with the Securities and Exchange Commission, as well as through future debt and equity financing transactions to fund our operations and pay our debts as they come due.

If we are unable to do so, we will be required to reduce our spending rate to align with expected revenue levels and cash reserves, although there can be no guarantee that we will be successful in doing so.

We expect operating losses and negative cash flows to continue for the foreseeable future unless our sales and gross profit increase sufficiently to cover our operating expenses.

We expect our current operating expenses to remain relatively fixed for the near term, absent entering into a transformative strategic transaction.

We believe that our current cash on hand of $377 thousand as of November 5, 2025 will not be sufficient to fund our current operations, and if we are unable to secure additional financing we will be unable to fund planned expenditures and meet obligations through the end of the fourth quarter.

Further, we have outstanding short-term notes that will become due and payable within the next twelve months, including notes to related parties which come due in January of 2026, and in July of 2026.

Therefore, even if we obtain financing in the fourth quarter, depending upon the amount of any financing we do obtain, we may continue to experience insufficient liquidity for the foreseeable future.

We are currently evaluating potential means of raising cash, as described below, to fund our operations and to pay our debts as they come due.

If we are unable to do so, we will be required to reduce our spending to align with expected revenue levels and cash reserves, although there can be no guarantee that we will be successful in doing so.

If we are unable to do so, we will be required to suspend a portion or all of our operations and/or potentially seek relief from our creditors.

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

On August 7, 2025, we filed a prospectus supplement that will allow us to sell up to $1.5 million additional shares in our ATM offering;

however, there is no guarantee that market conditions will allow us to sell enough common stock to raise this amount at prices that we consider adequate.

As a result of these factors, management has concluded that there is substantial doubt about the Company’s ability to continue as a going concern for a period of one year after the date the condensed consolidated financial statements for the quarter ended June 30, 2025 are issued.

As described above and previously disclosed, the Company remains committed to the aggressive and creative pursuit of financing, despite great challenges to securing capital on our preferred terms.

Any assets that are liquidated to meet our current urgent liquidity needs may produce proceeds that are less than the market or stated value of such assets and less than the proceeds that could have been obtained if they were liquidated in the ordinary course.

Due to the challenging economic environment, we have explored and continue to explore a wide variety of possible capital-raising and strategic transactions, including but not limited to private equity offerings, registered issuances, credit facilities, and convertible debt, or sale of the QHS Notes, as well as other innovative and specialty finance strategies such as a crypto asset treasury policy or business combination.

There is no guarantee that we will succeed in securing the financing or other strategic transaction needed to sustain the Company or that any such transaction will be on our preferred terms.

As a result of these factors, we have concluded that there is substantial doubt about the Company’s ability to continue as a going concern for a period of one year after the date the condensed consolidated financial statements for the quarter ended September 30, 2025 are issued.

The Company’s condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Cash Flows for the Six Months Ended June 30, 2025 and 2024 (in thousands)

Six Months Ended June 30,

Cash Flows for the Nine Months Ended September 30, 2025 and 2024 (in thousands)

Nine Months Ended September 30,

Net cash provided by (used in):

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Net cash used in operating activities

During the six months ended June 30, 2025, net cash used in operating activities of $4.6 million primarily related to the net loss of $9.5 million.

This was partially offset by non-cash adjustments related to change in fair value of royalties payable due to related parties of $2.8 million, acquired in-process research and development of $2.0 million, and depreciation and amortization of $1.1 million.

During the six months ended June 30, 2024, net cash used in operating activities of $3.6 million related to the net loss of $6.9 million, partially offset by an increase in operating assets and liabilities of $0.6 million and non-cash adjustments primarily consisting of change in fair value of royalties due to related parties of $1.6 million and depreciation and amortization of $1.0 million.

During the nine months ended September 30, 2025, net cash used in operating activities of $6.8 million primarily related to the net loss of $11.8 million.

This was partially offset by an increase in operating assets and liabilities of $0.8 million and non-cash adjustments related to change in fair value of royalties payable due to related parties of $2.1 million and acquired in-process research and development of $2.0 million.

During the nine months ended September 30, 2024, net cash used in operating activities of $6.4 million primarily related to the net loss of $11.0 million, partially offset by an increase in operating assets and liabilities of $0.2 million and non-cash adjustments primarily consisting of change in fair value of royalties due to related parties of $2.8 million and depreciation and amortization of $1.6 million.

Net cash used in investing activities

During the six months ended June 30, 2025, net cash used in investing activities of $23 thousand consisted of purchases of property and equipment of $17 thousand, and purchases of acquired in-process research and development of $6 thousand.

During the six months ended June 30, 2024, net cash used in investing activities of $67 thousand consisted of purchases of property and equipment.

During the nine months ended September 30, 2025, net cash used in investing activities of $51 thousand consisted of purchases of property and equipment of $17 thousand and purchases of acquired in-process research and development of $34 thousand.

During the nine months ended September 30, 2024, net cash used in investing activities of $67 thousand consisted of purchases of property and equipment.

Net cash provided by financing activities

During the six months ended June 30, 2025, net cash used in financing activities of $2.6 million consisted of net proceeds from issuance of common stock and other equity-classified instruments, partially offset by $0.1 million in payments on notes payable.

During the six months ended June 30, 2024, net cash used in financing activities of $0.2 million primarily consisted of proceeds from notes payable due to related parties of $0.7 million, partially offset by payments on deferred financing costs of $0.3 million and payments on notes payable of $0.2 million.

During the nine months ended September 30, 2025, net cash provided by financing activities of $5.0 million consisted of net proceeds from issuance of common stock and other equity-classified instruments of $4.9 million, and proceeds from the issuance of notes payable of $0.3 million, partially offset by $0.2 million in payments on notes payable.

During the nine months ended September 30, 2024, net cash provided by financing activities of $4.2 million primarily consisted of proceeds from issuance of common stock and other equity-classified instruments of $2.6 million and proceeds from the issuance of notes payable due to related parties of $1.5 million.

Off-balance sheet arrangements

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The discussion and analysis of our financial position and results of operations is based on our condensed consolidated financial statements included elsewhere in this Quarterly Report, which have been prepared in accordance with U.S.

The preparation of these consolidated financial statements requires us to make estimates and assumptions for the reported amounts of assets, liabilities, revenue, expenses and related disclosures.

The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions for the reported amounts of assets, liabilities, revenue, expenses and related disclosures.

We regularly evaluate estimates and assumptions related to asset acquisitions, including the provisions for legal contingencies, income taxes, deferred income tax asset valuation allowances, royalties payable due to related parties, trading debt securities, share based compensation, evaluation of impairment of long-lived assets, valuation of long-lived assets and their associated estimated useful lives, and revenues.

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The Company periodically reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that such assets might be impaired and the carrying value of the long-lived assets may not be recoverable.

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.

Trading Debt Securities

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

The Company recognizes a liability for future, estimated royalty payments at fair value under current portion of royalties payable due to related parties and royalties payable due to related parties in the condensed consolidated balance sheets if it is payable within the next 12 months and under royalties payable due to related parties in the condensed consolidated balance sheets if it is payable 12 months after the balance sheet date.

The royalties payable due to related parties are 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.

The fair value measurement of royalties payable due to related parties includes significant 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.

Royalties payable due to related parties equal 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.

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New Accounting Pronouncements

See Note 2 in the consolidated financial statements included elsewhere in this Quarterly Report for a description of new accounting pronouncements, including the expected dates of adoption and estimated effects on our results of operations, financial position, and cash flows as applicable.

See Note 2 in the condensed consolidated financial statements included elsewhere in this Quarterly Report for a description of new accounting pronouncements, including the expected dates of adoption and estimated effects on our results of operations, financial position, and cash flows as applicable.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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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 2. Management’s Discussion and Analysis