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Profound Medical Corp.

Profound Medical Corp.PROFEarnings & Financial Report

Nasdaq · Health Care · Surgical & Medical Instruments & Apparatus

CompuGroup Medical SE & Co. KGaA is a German publicly listed software company based in Koblenz that develops and offers software for the healthcare sector. It produces cloud-based and digital application software to support medical and organizational activities in doctors' practices, pharmacies, medical laboratories and hospitals. According to its own figures, the company employed more than 9,200 people worldwide in 2022, and has over 1.6 million users in 56 countries. CompuGroup Medical shar...

What changed in Profound Medical Corp.'s 10-K — 2024 vs 2025

Top changes in Profound Medical Corp.'s 2025 10-K

339 paragraphs added · 355 removed · 281 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

103 edited+17 added−22 removed219 unchanged
The MDR changed several aspects of the regulatory framework for medical device marketing in Europe in order to increase regulatory oversight of all medical devices marketed in the EU (which, in turn, increased the costs, time and requirements to place innovative or high-risk medical devices on the European market).
The New EU MDR changed several aspects of the regulatory framework for medical device marketing in Europe in order to increase regulatory oversight of all medical devices marketed in the EU (which, in turn, increased the costs, time and requirements to place innovative or high-risk medical devices on the European market).
The regulatory regime for medical devices in the United Kingdom will continue to be based on the requirements derived from previous EU legislation, and the United Kingdom may choose to retain regulatory flexibility or align with the MDR going forward.
The regulatory regime for medical devices in the United Kingdom will continue to be based on the requirements derived from previous EU legislation, and the United Kingdom may choose to retain regulatory flexibility or align with the New EU MDR going forward.
By five years, 16 men completed protocol follow-up, three withdrew with PSA 6 Table of Contents Clinical Studies of TULSA for Benign Prostatic Hyperplasia (BPH), Relief of Lower Urinary Tract Symptoms (LUTS) Promising safety and feasibility of the TULSA-PRO system to relieve Lower Urinary Tract Symptoms (“ LUTS ”) associated with BPH has been demonstrated in two clinical studies showing improvements in IPSS comparable to modern minimally invasive surgical therapies.
By five years, 16 men completed protocol follow-up, three withdrew with PSA 7 Table of Contents Clinical Studies of TULSA for Benign Prostatic Hyperplasia (BPH), Relief of Lower Urinary Tract Symptoms (LUTS) Promising safety and feasibility of the TULSA-PRO system to relieve Lower Urinary Tract Symptoms (“ LUTS ”) associated with BPH has been demonstrated in two clinical studies showing improvements in IPSS comparable to modern minimally invasive surgical therapies.
If the requirements for application of the CE Mark are not (or no longer) fulfilled, or in other cases of non-compliance with applicable medical devices law: ● the Notified Body has the power to withdraw, suspend or limit the scope of the applicable certificate of conformity, in accordance with the principle of proportionality; ● the competent authorities of the EU Member States may require relevant economic operators to take the necessary actions to bring the device into compliance and/or address the risk, which can include withdrawal from the market or recall; and ● depending on the EU member state, criminal and/or administrative sanctions (e.g., fines) may apply.
If the requirements for application of the CE Mark are not (or no longer) fulfilled, or in other cases of non-compliance with applicable medical devices law: ● the Notified Body has the power to withdraw, suspend or limit the scope of the applicable certificate of conformity, in accordance with the principle of proportionality; 24 Table of Contents ● the competent authorities of the EU Member States may require relevant economic operators to take the necessary actions to bring the device into compliance and/or address the risk, which can include withdrawal from the market or recall; and ● depending on the EU member state, criminal and/or administrative sanctions (e.g., fines) may apply.
In the fourth quarter of 2016, Profound initiated a pilot commercial launch of TULSA-PRO in key European markets where the CE Mark is accepted. 4 Table of Contents We received FDA clearance for the TULSA-PRO system in August 2019 for transurethral ultrasound ablation of prostate tissue, based on results from the Company’s TACT Pivotal Clinical Trial.
In the fourth quarter of 2016, Profound initiated a pilot commercial launch of TULSA-PRO in key European markets where the CE Mark is accepted. 5 Table of Contents We received FDA clearance for the TULSA-PRO system in August 2019 for transurethral ultrasound ablation of prostate tissue, based on results from the Company’s TACT Pivotal Clinical Trial.
TULSA-PRO system complete workflow with the MRI system. 3 Table of Contents Sonalleve delivers its ultrasound energy via a disc located outside the patient. Its ultrasound energy is focused to create small cylindrical hot spots a certain distance into the patient. Overlapping cylinders create ablation of the physician-prescribed desired tissue.
TULSA-PRO system complete workflow with the MRI system. 4 Table of Contents Sonalleve delivers its ultrasound energy via a disc located outside the patient. Its ultrasound energy is focused to create small cylindrical hot spots a certain distance into the patient. Overlapping cylinders create ablation of the physician-prescribed desired tissue.
Select outcomes from clinical trial of TULSA-PRO to relieve lower urinary tract symptoms in men with BPH. 7 Table of Contents Clinical study of TULSA for treatment of radio-recurrent localized prostate cancer, Salvage TULSA (sTULSA) Salvage ablation of radio-recurrent localized prostate cancer has been evaluated in a prospective clinical study of TULSA-PRO published in 2024.
Select outcomes from clinical trial of TULSA-PRO to relieve lower urinary tract symptoms in men with BPH. 8 Table of Contents Clinical study of TULSA for treatment of radio-recurrent localized prostate cancer, Salvage TULSA (sTULSA) Salvage ablation of radio-recurrent localized prostate cancer has been evaluated in a prospective clinical study of TULSA-PRO published in 2024.
Palliative Bone Pain Treatment Pain caused by bone metastases are common in the event of malignancy and are inevitably associated with serious complications that may deteriorate the QoL of patients and become life threatening. 10 Table of Contents For patients with bone metastases, clinical evaluation reports (GCP-10277 Rev.
Palliative Bone Pain Treatment Pain caused by bone metastases are common in the event of malignancy and are inevitably associated with serious complications that may deteriorate the QoL of patients and become life threatening. 12 Table of Contents For patients with bone metastases, clinical evaluation reports (GCP-10277 Rev.
To demonstrate compliance with the General Safety and Performance Requirements (“GSPRs”) set forth in the MDR, medical device manufacturers must undergo a conformity assessment procedure, which varies according to the type of medical device and its (risk) classification, similar to the conformity assessment procedure under the MDD.
To demonstrate compliance with the General Safety and Performance Requirements (“GSPRs”) set forth in the New EU MDR, medical device manufacturers must undergo a conformity assessment procedure, which varies according to the type of medical device and its (risk) classification, similar to the conformity assessment procedure under the MDD.
TULSA will have a 0-day global period, indicating that the payment associated with the codes will only cover the work performed on the day TULSA is performed. Physicians will thereby bill for any pre or post patient visit separately using existing codes.
TULSA has a 0-day global period, indicating that the payment associated with the codes will only cover the work performed on the day TULSA is performed. Physicians will thereby bill for any pre or post patient visit separately using existing codes.
De Novo classification requests are subject to user fees, unless a specific exemption applies. 18 Table of Contents There is also a separate pathway for Humanitarian Use Devices, which are medical devices intended to benefit patients in the treatment or diagnosis of a disease or condition that affects or is manifested in not more than 8,000 individuals in the United States per year.
De Novo classification requests are subject to user fees, unless a specific exemption applies. There is also a separate pathway for Humanitarian Use Devices, which are medical devices intended to benefit patients in the treatment or diagnosis of a disease or condition that affects or is manifested in not more than 8,000 individuals in the United States per year.
The Sonalleve MR-HIFU device offers a novel, non-invasive, MRI-guided method to treat desmoid tumors. This technology is ideally suited for the treatment of desmoid tumors in a patient population that is generally young, otherwise healthy, and would like to avoid the morbidity of traditional surgical, radiation, and medical therapies for a benign disease.
The Sonalleve MR-HIFU device offers a novel, non-invasive, MRI-guided method to treat desmoid tumors. 13 Table of Contents This technology is ideally suited for the treatment of desmoid tumors in a patient population that is generally young, otherwise healthy, and would like to avoid the morbidity of traditional surgical, radiation, and medical therapies for a benign disease.
FDA for treatment of osteoid osteoma in the extremities. 9 Table of Contents Sonalleve Clinical Applications Uterine Fibroids and Adenomyosis Uterine fibroids (“ UFs ”) are the most common non-cancerous tumors in women of childbearing age.
FDA for treatment of osteoid osteoma in the extremities. ​ 11 Table of Contents Sonalleve Clinical Applications Uterine Fibroids and Adenomyosis Uterine fibroids (“ UFs ”) are the most common non-cancerous tumors in women of childbearing age.
In August 2019, the TULSA-PRO system received FDA clearance as a Class II device in the United States for thermal ablation of prescribed prostate tissue, using TULSA based on the Company’s TACT whole gland ablation pivotal study. It is also CE Marked in 1 Table of Contents the EU for ablation of targeted prostate tissue (benign or malignant).
In August 2019, the TULSA-PRO system received FDA clearance as a Class II device in the United States for thermal ablation of prescribed prostate tissue, using TULSA based on the Company’s TACT whole gland ablation pivotal study. It is also CE Marked in the EU for ablation of targeted prostate tissue (benign or malignant).
This certificate, which is 21 Table of Contents valid for up to five years, entitles the manufacturer to affix the CE Mark to its medical devices after having prepared and signed a related EC Declaration of Conformity. Therefore, when the MDD certificates become void, medical devices need to fully comply with the New EU MDR.
This certificate, which is valid for up to five years, entitles the manufacturer to affix the CE Mark to its medical devices after having prepared and signed a related EC Declaration of Conformity. Therefore, when the MDD certificates become void, medical devices need to fully comply with the New EU MDR.
It remains to be seen how UK rules will 23 Table of Contents impact regulatory requirements for our product candidates and our product in the United Kingdom. We continue to evaluate the potential impacts on our business of the TCA, and any amendments, or other agreements affecting trade between the UK and EU.
It remains to be seen how UK rules will impact regulatory requirements for our product candidates and our product in the United Kingdom. We continue to evaluate the potential impacts on our business of the TCA, and any amendments, or other agreements affecting trade between the UK and EU.
A significant risk device is one that presents a potential for serious risk to the health, safety or welfare of a patient and either is implanted, used in supporting or sustaining human life, substantially important in diagnosing, curing, mitigating or treating disease or otherwise preventing impairment of human health, or otherwise presents a potential for serious risk to a patient.
A significant risk device is one that presents a potential for serious risk to the health, safety or welfare of a patient and either is implanted, used in supporting or sustaining 21 Table of Contents human life, substantially important in diagnosing, curing, mitigating or treating disease or otherwise preventing impairment of human health, or otherwise presents a potential for serious risk to a patient.
Ultrasound energy is then delivered by the catheter in the shape of a plane or focused to a blade. 2 Table of Contents Externally, the catheter is connected to a software-controlled robot that rotates up to 360-degrees in a sweeping action to impart thermal energy and thus ablate tissue.
Ultrasound energy is then delivered by the catheter in the shape of a plane or focused to a blade. Externally, the catheter is connected to a software-controlled robot that rotates up to 360-degrees in a sweeping action to impart thermal energy and thus ablate tissue.
Both regulators and ethics committees also require the submission of periodic safety reports during a study and may request a copy of the final study report. 22 Table of Contents After a device is placed on the market, it remains subject to significant regulatory requirements.
Both regulators and ethics committees also require the submission of periodic safety reports during a study and may request a copy of the final study report. After a device is placed on the market, it remains subject to significant regulatory requirements.
Illustration of our TULSA-PRO disposable and how it is utilized during a prostate ablation procedure. TULSA-PRO delivers ultrasound energy through a transurethral catheter, a one-time-use device that is placed in the patient’s prostate through a natural orifice.
Illustration of our TULSA-PRO disposable and how it is utilized during a prostate ablation procedure. ​ 3 Table of Contents TULSA-PRO delivers ultrasound energy through a transurethral catheter, a one-time-use device that is placed in the patient’s prostate through a natural orifice.
Further, there was no indication for blood transfusions and there was no perioperative mortality. 8 Table of Contents CAPTAIN trial CAPTAIN (A Comparison of TULSA Procedure vs.
Further, there was no indication for blood transfusions and there was no perioperative mortality. 9 Table of Contents CAPTAIN trial CAPTAIN (A Comparison of TULSA Procedure vs.
Our intellectual property portfolio is both growing and dynamic and includes approximately 40 patent families representing approximately 165 granted or allowed patents and 25 patent applications in various stages of review and prosecution around the world. Many of our patents and patent applications claim electronic and mechanical aspects of hardware, software and methods related to ultrasonic ablation of tissue.
Our intellectual property portfolio is both growing and dynamic and includes approximately 40 patent families representing approximately 169 granted or allowed patents and 29 patent applications in various stages of review and prosecution around the world. Many of our patents and patent applications claim electronic and mechanical aspects of hardware, software and methods related to ultrasonic ablation of tissue.
As noted above, the TULSA procedure will have a 0-day Global Period, meaning that all post-operative visits are billed separately. This is distinct from all other comparable prostate treatments which are 90-day Global Period and therefore include bundled payments 25 Table of Contents for all post-operative visits performed in the first 90 days.
As noted above, the TULSA procedure will have a 0-day Global Period, meaning that all post-operative visits are billed separately. This is distinct from all other comparable prostate treatments which are 90-day Global Period and therefore include bundled payments for all post-operative visits performed in the first 90 days.
See Item 4, “Risk Factors” for more information. Our Technology Platform Based on the clinical data from the TACT pivotal trial and additional studies conducted in the European Union (EU), we believe physicians may elect to use TULSA-PRO to ablate benign or malignant prostate tissue in patients with a variety of prostate diseases, including prostate cancer and BPH.
See “Risk Factors” for more information. ​ 2 Table of Contents Our Technology Platform Based on the clinical data from the TACT pivotal trial and additional studies conducted in the European Union (EU), we believe physicians may elect to use TULSA-PRO to ablate benign or malignant prostate tissue in patients with a variety of prostate diseases, including prostate cancer and BPH.
A predicate device is a legally marketed device that is not subject to PMA, meaning, (i) a device that was legally marketed prior to May 28, 1976 (a “preamendments device”) and for which a PMA is not required, (ii) a device that has been reclassified from class III to class II or I, or (iii) a device that was found substantially equivalent 17 Table of Contents through the 510(k) process.
A predicate device is a legally marketed device that is not subject to PMA, meaning, (i) a device that was legally marketed prior to May 28, 1976 (a “preamendments device”) and for which a PMA is not required, (ii) a device that has been reclassified from class III to class II or I, or (iii) a device that was found substantially equivalent through the 510(k) process.
Successful commercialization of our authorized products will also depend on the cost of the system and the availability of coverage and adequate reimbursement from payors. On July 11, 2024, it was announced that U.S.
Successful commercialization of our authorized products will also depend on the cost of the system and the availability of coverage and adequate reimbursement from payors. 26 Table of Contents On July 11, 2024, it was announced that U.S.
In order to demonstrate safety and effectiveness for their medical devices, manufacturers must, save limited exceptions, conduct clinical investigations in accordance with the requirements of Annex VII and Annex XV to the MDR. Clinical investigations for medical devices usually require the approval of an ethics committees and approval by the national regulatory authorities.
In order to demonstrate safety and effectiveness for their medical devices, manufacturers must, save limited exceptions, conduct clinical investigations in accordance with the requirements of Annex VII and Annex XV to the New EU MDR. Clinical investigations for medical devices usually require the approval of an ethics committee and approval by the national regulatory authorities.
There were no attributable grade 4 or higher events, rectal injuries, severe incontinence requiring surgical intervention, or severe erectile dysfunction unresponsive to medication. 5 Table of Contents TACT clinical trial urinary continence and erectile function outcomes to five years.
There were no attributable grade 4 or higher events, rectal injuries, severe incontinence requiring surgical intervention, or severe erectile dysfunction unresponsive to medication. TACT clinical trial urinary continence and erectile function outcomes to five years.
Radical Prostatectomy in Participants with Localized Prostate Cancer) is a prospective, multi-centre randomized controlled trial of 201 subjects aimed at comparing the safety and efficacy of the TULSA procedure (performed with the TULSA-PRO system) with radical prostatectomy (“ RP ”) in men with organ-confined, intermediate-risk, Gleason Score 7 (Grade Group 2 and 3) prostate cancer.
Radical Prostatectomy in Participants with Localized Prostate Cancer, NCT05027477) is a prospective, multi-centre randomized controlled trial with target enrollment of 201 subjects (2:1 randomization) aimed at comparing the safety and efficacy of the TULSA procedure (performed with the TULSA-PRO system) with robotic radical prostatectomy (“ RP ”) in men with organ-confined, intermediate-risk, Gleason Score 7 (Grade Group 2 and 3) prostate cancer.
In five men who suffered from more severe symptoms (baseline IPSS ≥ 12 and Qmax Qmax ”) increased from 11.6 ml/s to 22.5 ml/s at 12 months. All adverse events were mild to moderate with no serious events reported. A prospective clinical study of TULSA-PRO ® for BPH has been conducted with early outcomes published in 2022.
In five men who suffered from more severe symptoms (baseline IPSS ≥ 12 and Qmax Qmax ”) increased from 11.6 ml/s to 22.5 ml/s at 12 months. All adverse events were mild to moderate with no serious events reported. A prospective Phase II clinical study of TULSA-PRO ® for BPH has been conducted with 1-year outcomes published in 2025.
According to the final rule, TULSA will have three Category 1 CPT codes to cover how therapy is delivered depending on if there are one or two physicians involved in the procedure: 51721 TULSA Device Management and 55881 TULSA Treatment, when two physicians are involved in the procedure, and 55882 TULSA Complete Procedure, when performed by a single physician.
TULSA has three Category 1 CPT codes to cover how therapy is delivered depending on if there are one or two physicians involved in the procedure: 51721 TULSA Device Management and 55881 TULSA Treatment, when two physicians are involved in the procedure, and 55882 TULSA Complete Procedure, when performed by a single physician.
We believe that use of the TULSA-PRO system as a tool to ablate prostate tissue can provide a clinician and his or her patients with the following clinical advantages: ● Clinically shown to have millimeter accuracy designed to ablate prostate tissue while sparing nearby critical structures, and that real time MR thermometry also ensures precision in ablation temperature, minimizing side effects that can occur from overheating; ● Enables clinician to define the boundaries of the tissue to be ablated, whether the whole prostate or any of its subsections, to ensure customization of the needs of each patient; ● Transurethral approach allows for ablation of even the largest prostates that may be 120 cubic centimeters or larger in size; ● Potential to be a single outpatient procedure with a rapid recovery time; and ● Designed to be compatible with leading MRI platforms and could become part of a continuum of care from MR imaging diagnosis, MR guided biopsy to MR guided treatment.
Damage to these tissues can lead to complications, including bladder problems, rectal leakage or bleeding, and erectile dysfunction. 16 Table of Contents We believe that use of the TULSA-PRO system as a tool to ablate prostate tissue can provide a clinician and his or her patients with the following clinical advantages: ● Clinically shown to have millimeter accuracy designed to ablate prostate tissue while sparing nearby critical structures, and that real time MR thermometry also ensures precision in ablation temperature, minimizing side effects that can occur from overheating; ● Enables clinician to define the boundaries of the tissue to be ablated, whether the whole prostate or any of its subsections, to ensure customization of the needs of each patient; ● Transurethral approach allows for ablation of even the largest prostates that may be 120 cubic centimeters or larger in size; ● Potential to be a single outpatient procedure with a rapid recovery time; and ● Designed to be compatible with leading MRI platforms and could become part of a continuum of care from MR imaging diagnosis, MR guided biopsy to MR guided treatment.
The spectrum of the location of service will ensure patients can be treated in whatever setting they and their physician believe appropriate and convenient for each patient. For Hospital Payment, the Final Rule has established TULSA CPT 55882 as a Level 7 Urology Ambulatory Payment Classification (“APC”) for 2025 with a Medicare National Average payment of $12,992.42.
The spectrum of the location of service will ensure patients can be treated in whatever setting they and their physician believe appropriate and convenient for each patient. For Hospital Payment, the Final Rule has established TULSA CPT 55882 as a Level 7 Urology Ambulatory Payment Classification (“APC”) for 2026 with a Medicare National Average payment of $13,479.
Class I devices are subject to “general controls,” which include establishment registration and device listing, requirements of the Quality System Regulation (“QSR”), labeling requirements, medical device reporting, and reporting of corrections and removals.
Class I devices are subject to “general controls,” which include establishment registration and device listing, quality management system requirements, labeling requirements, medical device reporting, and reporting of corrections and removals.
However, the FDA has authority to take additional enforcement actions, including: civil monetary penalties, criminal fines and prosecution, injunctions, product seizure, withdrawal of marketing authorizations, mandatory recall, and import detentions. Medical Device Clinical Studies Clinical studies are almost always required to support PMA applications and are sometimes required to support 510(k) and De Novo classification submissions.
Department of Justice take, additional enforcement actions, including: civil monetary penalties, criminal fines and prosecution, injunctions, product seizure, withdrawal of marketing authorizations, mandatory recall, and import detentions. Medical Device Clinical Studies Clinical studies are almost always required to support PMA applications and are sometimes required to support 510(k) and De Novo classification submissions.
By five years, the median PSA nadir further reduced to 0.26 ng/ml. PSA reduction was durable over the extended follow-up period, from 0.53 ng/ml at one year to 0.63 ng/ml at five years. TACT clinical trial PSA outcome to 5 years.
By five years, the median PSA nadir further reduced to 0.26 ng/ml. PSA reduction was durable over the extended follow-up period, from 0.53 ng/ml at one year to 0.63 ng/ml at five years.
Approaches that physicians and surgeons currently use to address prostate disease include: (1) watchful waiting/active surveillance; (2) simple prostatectomy; (3) radical prostatectomy (includes open, laparoscopic and robotic procedures); (4) radiation therapies including, external beam radiation therapy, brachytherapy and high dose radiation; (5) cryoablation; and (6) trans-rectal high intensity focused ultrasound (“ HIFU ”).
Approaches that physicians and surgeons currently use to address prostate disease include: (1) watchful waiting/active surveillance; (2) simple prostatectomy; (3) radical prostatectomy (includes open, laparoscopic and robotic procedures); (4) radiation therapies including, external beam radiation therapy, brachytherapy and high dose radiation; and (5) focal ablation techniques including cryoablation, trans-rectal high intensity focused ultrasound (“ HIFU ”), irreversible electroporation (IRE) and water steam ablation.
Before approving a PMA, the FDA generally also performs an on-site inspection of manufacturing facilities for the product to ensure compliance with the QSR.
Before approving a PMA, the FDA generally also performs an on-site inspection of manufacturing facilities for the product to ensure compliance with quality management system requirements.
The uterine fibroids application is also available for sale in Canada and South Korea. Sonalleve has been registered in several Middle East, North African, and Southeast Asian countries. We are also in the process of assessing current clinical research network activities and the investigator lead studies in the United States to form regulatory strategies for several potential indications.
Sonalleve has been registered in several Middle East, North African, and Southeast Asian countries. We are also in the process of assessing current clinical research network activities and the investigator lead studies in the United States to form regulatory strategies for several potential indications.
The Proposed Rule for Physician fee schedule for Non-Facility (OBL or Private Office) has set RVU at 16.25 for CPT 51721 TULSA Device Management and 263.05 RVU for CPT 55881 TULSA Treatment, when 2 physicians are involved in the TULSA procedure. If one physician performs the complete TULSA procedure, the RVU is 272.21 for CPT 55882.
The Proposed Rule for Physician fee schedule for Non-Facility (OBL or Private Office) has set RVU at 16.90 for CPT 51721 TULSA Device Management and 277.55 RVU for CPT 55881 TULSA Treatment, when 2 physicians are involved in the TULSA procedure. If one physician performs the complete TULSA procedure, the RVU is 288.50 for CPT 55882.
Item 1. BUSINESS We are a commercial-stage medical device company focused on the development and marketing of customizable, incision-free therapeutic systems for the ablation of diseased tissue utilizing our platform technologies.
Item 1. BUSINESS We are a commercial-stage medical device company focused on the development and marketing of AI-powered, MRI-guided, incision-free therapies for the ablation of diseased tissue utilizing our platform technologies.
The Final Rule for the Physician Fee Schedule has set the total Facility (HOPD or ASC) Relative Value Units (“RVU”) at 6.47 for CPT 51721 TULSA Device Management and 14.56 RVU for CPT 55881 TULSA Treatment, when 2 physicians are involved in the TULSA procedure. If one physician performs the complete TULSA procedure, the RVU is 17.91 for CPT 55882.
The Final Rule for the Physician Fee Schedule has set the total Facility (HOPD or ASC) Relative Value Units (“RVU”) at 5.75 for CPT 51721 TULSA Device Management and 12.86 RVU for CPT 55881 TULSA Treatment, when 2 physicians are involved in the TULSA procedure. If one physician performs the complete TULSA procedure, the RVU is 15.80 for CPT 55882.
Prostate cancer is one of the most common types of cancer affecting men. The annual incidence of newly diagnosed cases in 2024 is estimated to reach 299,010 in the United States according to the American Cancer Society, representing 29% of all new cancer diagnoses in men.
Prostate cancer is one of the most common types of cancer affecting men. The annual incidence of newly diagnosed cases in 2026 is estimated to reach 333,830 in the United States according to the American Cancer Society, representing about one third of all new cancer diagnoses in men.
Device manufacturers are also subject to the QSR, which includes both design control requirements and good manufacturing practice requirements (such as requirements for purchasing controls, document controls, production and process controls, labeling and packaging controls, control of nonconforming product, complaint handling, corrective and preventative actions, storage, handling, distribution, and servicing).
Device manufacturers are also subject to the quality management system rules described in the Quality System Regulation (“QSR”), which includes both design control requirements and other current good manufacturing practice (“cGMP”) requirements (such as requirements for purchasing controls, document controls, production and process controls, labeling and packaging controls, control of nonconforming product, complaint handling, corrective and preventative actions, storage, handling, distribution, and servicing).
The MDB currently recognizes the Medical Device Single Audit Program, which provides for a single audit procedure recognized by Australia, Brazil, Canada, Japan and the United States demonstrating routine compliance with quality management system requirements. We manufacture the TULSA-PRO and Sonalleve systems under a certified ISO 13485 quality management system.
The MDB currently recognizes the Medical Device Single Audit Program, which provides for a single audit procedure recognized by Australia, Brazil, Canada, Japan and the United States demonstrating routine compliance with quality management system requirements.
For the year ended December 31, 2024, approximately 78%, 8% and 14% of revenues were generated in the United States, EU and Asia, respectively, compared to approximately 71%, 26% and 3%, respectively for the year ended December 31, 2023.
For the year ended December 31, 2025, approximately 76%, 5% and 19% of revenues were generated in the United States, EU and Asia, respectively, compared to approximately 78%, 8% and 14%, respectively for the year ended December 31, 2024.
Side effects of brachytherapy are similar to those of EBRT in terms of urinary, bowel and erectile function. An alternative is HDR, in which highly radioactive seeds are temporarily inserted, then removed during the same procedure, leaving nothing implanted afterward.
The seeds irradiate the prostate over time and decay in place to background levels; they remain implanted and inert afterwards. Side effects of brachytherapy are similar to those of EBRT in terms of urinary, bowel and erectile function. An alternative is HDR, in which highly radioactive seeds are temporarily inserted, then removed during the same procedure, leaving nothing implanted afterward.
The MDR among other things: ● strengthens the rules on placing devices on the market and reinforces surveillance once they are available; ● establishes explicit provisions on manufacturers’ responsibilities for the follow-up of the quality, performance and safety of devices placed on the market; ● improves the traceability of medical devices throughout the supply chain to the end-user or patient through a unique identification number; ● sets up a central database to provide patients, healthcare professionals and the public with comprehensive information on products available in the European Union, or EU; and ● strengthens the rules for the assessment of certain high-risk devices, which may have to undergo an additional check by experts before they are placed on the market.
The New EU MDR among other things: ● strengthens the rules on placing devices on the market and reinforces surveillance once they are available; ● establishes explicit provisions on manufacturers’ responsibilities for the follow-up of the quality, performance and safety of devices placed on the market; ● improves the traceability of medical devices throughout the supply chain to the end-user or patient through a unique identification number; ● sets up a central database to provide patients, healthcare professionals and the public with comprehensive information on products available in the European Union, or EU; and ● strengthens the rules for the assessment of certain high-risk devices, which may have to undergo an additional check by experts before they are placed on the market. 23 Table of Contents An overarching requirement under the New EU MDR is that any device must be designed and manufactured in such a way that it will not compromise the clinical condition or safety of patients, or the safety and health of users and others.
Additionally, manufacturers and authorized representatives must now appoint a person responsible for regulatory compliance. In the European Union, we must establish a medical device vigilance system (for reporting incidents) and a post-marketing surveillance system (to monitor data about the device and confirm the benefits of the device continue to outweigh the risks).
In the European Union, we must establish a medical device vigilance system (for reporting incidents) and a post-marketing surveillance system (to monitor data about the device and confirm the benefits of the device continue to outweigh the risks).
Upon completion of the amalgamation, Profound commenced trading on the TSX-V. On July 13, 2018, Profound graduated from the TSX-V and commenced trading on the TSX under the symbol “PRN”.
Upon completion of the amalgamation, Profound commenced trading on the TSX-V. On July 13, 2018, Profound graduated from the TSX-V and commenced trading on the TSX under the symbol “PRN”. On October 29, 2019, Profound commenced trading on the Nasdaq Capital Market under the symbol “PROF”.
FDA enforcement typically takes the form of inspectional observations at the close of inspection, a warning letter (a public letter alleging violations of regulatory significance), or an untitled letter (a typically non-public letter alleging violations of lesser significance).
FDA enforcement typically takes the form of inspectional observations at the close of inspection, a warning letter (a public letter alleging violations of regulatory significance), or an untitled letter (a typically non-public letter alleging violations of lesser significance). However, the FDA has authority to take, or recommend that the U.S.
Devices must be labeled in accordance with the FDA’s device labeling regulations, including Unique Device Identification requirements. The FDA also regulates the promotion of medical devices, including a requirement that all device promotion be truthful and non-misleading and a prohibition against the promotion of devices for “off-label” uses, i.e., uncleared or unapproved uses.
The FDA also regulates the promotion of medical devices, including a requirement that all device promotion be truthful and non-misleading and a prohibition against the promotion of devices for “off-label” uses, i.e., uncleared or unapproved uses.
We pursue a global intellectual property strategy, registering for patent protection in all jurisdictions where we intend to carry on business, including the United States, Canada, Japan, major European markets (e.g., Germany, France, U.K., Italy, Spain and Turkey) and the emerging markets (e.g., Brazil, Russia, India, and China). 16 Table of Contents We also rely upon trade secrets, know-how and other proprietary, confidential information for the protection of our technology.
We pursue a global intellectual property strategy, registering for patent protection in all jurisdictions where we intend to carry on business, including the United States, Canada, Japan, major European markets (e.g., Germany, France, U.K., Italy, Spain and Turkey) and the emerging markets (e.g., Brazil, Russia, India, and China).
In theory, this approach minimizes damage to healthy organs and structures surrounding the cancer. The radiation beams must pass through the skin, the bladder and the rectum on the way to the prostate gland, and once they reach the gland, they encounter normal prostate cells and the nerves that control penile erections.
The radiation beams must pass through the skin, the bladder and the rectum on the way to the prostate gland, and once they reach the gland, they encounter normal prostate cells and the nerves that control penile erections.
For CE marked devices, certain modifications to the device or quality system depending on the conformity assessment procedure used must be submitted to and approved by the Notified Body before placing the modified device on the market. Economic operators, include device manufacturers, must register their establishments and devices in the EUDAMED database starting in January 2026.
For CE marked devices, certain modifications to the device or quality system depending on the conformity assessment procedure used must be submitted to and approved by the Notified Body before placing the modified device on the market.
We believe that the TULSA-PRO system may overcome certain limitations of other devices and methodologies for removing or addressing diseased prostate tissue including HIFU, such as complications associated with trans-rectal delivery and limitations relating to prostate size. We believe that a transurethral (inside out) ablation approach with millimeter accuracy has advantages over HIFU in ablating the whole gland safely.
We believe that the TULSA-PRO system may overcome certain limitations of other devices and methodologies for removing or addressing diseased prostate tissue including HIFU, such as complications associated with trans-rectal delivery, limitations relating to prostate size, and morbidity when whole-gland ablation is performed.
The TULSA procedure may reduce the risk of side effects relative to RP, with high spatial, thermal, and anatomic resolution of the target volume enabling precise ablation of prostate tissue while sparing functionally important structures.
RP effectively controls disease but carries risk of significant side effects such as long-term erectile dysfunction and urinary incontinence. The TULSA procedure may reduce the risk of side effects relative to RP, with high spatial, thermal, and anatomic resolution of the target volume enabling precise ablation of prostate tissue while sparing functionally important structures.
Competition TULSA-PRO The TULSA-PRO system is intended to ablate benign and malignant prostate tissue, however there are other treatment options for prostate disease. There are currently no marketed devices indicated for the treatment of prostate diseases or prostate cancer and our FDA indication and CE Mark in the EU also do not include treatment of any particular disease or condition.
There are currently no marketed devices indicated for the treatment of prostate diseases or prostate cancer and our FDA indication and CE Mark in the EU also do not include treatment of any particular disease or condition.
Although RFA can have a high success rate, the treatment is invasive and can potentially cause minor and major complications. It also exposes patients and operators to ionizing radiation associated with the CT imaging guidance.
Current osteoid osteoma treatment options include surgery and radiofrequency ablation, which is a less invasive option than surgical resection. Although RFA can have a high success rate, the treatment is invasive and can potentially cause minor and major complications. It also exposes patients and operators to ionizing radiation associated with the CT imaging guidance.
Regulatory Status TULSA-PRO On November 20, 2019, TULSA-PRO received approval as a class III device from Health Canada, which is key to our global expansion strategy that requires a country of origin approval for medical devices.
We manufacture the TULSA-PRO and Sonalleve systems under a certified ISO 13485 quality management system. 25 Table of Contents Regulatory Status TULSA-PRO On November 20, 2019, TULSA-PRO received approval as a class III device from Health Canada, which is key to our global expansion strategy that requires a country of origin approval for medical devices.
To achieve precise ablation, the procedure combines transurethral, robotically driven therapeutic ultrasound with real-time visualization of temperature and automated control of heating from magnetic resonance thermometry., potentially.
To achieve precise ablation, the procedure combines transurethral, robotically driven therapeutic ultrasound with real-time visualization of temperature and automated control of heating from magnetic resonance thermometry., potentially. Sonalleve Our Sonalleve system combines real-time MRI and thermometry with focused ultrasound delivered from the outside of the patient to enable precise and incision-free ablation of diseased tissue.
Centers for Medicare and Medicaid Services (“ CMS ”) has issued its proposed rules establishing, for the first time, a Category 1 CPT code for the TULSA procedure, effective January 1, 2025. On November 1, 2024, CMS announced its final rule, including final payment rates for the new TULSA codes effective in 2025.
Centers for Medicare and Medicaid Services (“ CMS ”) has issued its proposed rules establishing, for the first time, a Category 1 CPT code for the TULSA procedure, which became effective January 1, 2025.
If there is no adequate predicate to which a manufacturer can compare its proposed device, the proposed device is automatically classified as a class III device. In such cases, a device manufacturer must then fulfill the more rigorous PMA requirements or can request a risk-based classification determination for its device in accordance with the De Novo classification process.
In such cases, a device manufacturer must then fulfill the more rigorous PMA requirements or can request a risk-based classification determination for its device in accordance with the De Novo classification process.
The aforementioned information is made available in accordance with legal requirements and is not, unless otherwise specifically stated, incorporated by reference into this Annual Report on Form 10-K.
Available Information Additional information about us is available on our website at www.profoundmedical.com, on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov. The aforementioned information is made available in accordance with legal requirements and is not, unless otherwise specifically stated, incorporated by reference into this Annual Report on Form 10-K.
The principal purposes of our equity and cash incentive plans are to attract, retain and reward personnel through the granting of stock-based and cash-based compensation awards, in order to increase stockholder value and the success of our company by motivating such individuals to perform to the best of their abilities and achieve our objectives.
The principal purposes of our equity and cash incentive plans are to attract, retain and reward personnel through the granting of stock-based and cash-based compensation awards, in order to increase stockholder value and the success of our company by motivating such individuals to perform to the best of their abilities and achieve our objectives. 28 Table of Contents Corporate Information Profound is the company resulting from a “three-cornered” amalgamation involving Mira, Mira Subco (a subsidiary formed to complete the amalgamation) and Profound Medical Inc.
This procedure is used to relieve moderate to severe urinary symptoms caused by an enlarged prostate, a condition known as BPH.
This procedure is used to relieve moderate to severe urinary symptoms caused by an enlarged prostate, a condition known as BPH. This procedure is also used in adjunct to a HIFU procedure when a prostate gland is larger than 40 cubic centimeters.
Profound is now taking this concept to the next level by enabling customizable, incision-free therapies for the MRI-guided ablation of diseased tissue with the TULSA-PRO and Sonalleve systems.
The motivation of surgeons behind this evolution has been to perform procedures that reduce invasiveness, improve clinical outcomes and reduce recovery times. Profound is now taking this concept to the next level by enabling customizable, incision-free therapies for the MRI-guided ablation of diseased tissue with the TULSA-PRO and Sonalleve systems.
However, these devices can only provide symptom relief and do not impact the fibroid itself. 15 Table of Contents Uterine Artery Embolization Uterine artery embolization involves injection of embolic agents into the arteries that supply the uterus, thereby cutting off the blood supply to the fibroids. Many women require at least one day of hospitalization and heavy pain medication.
Progesterone Releasing Intra-Uterine Devices Progesterone releasing intra-uterine devices can relieve heavy bleeding caused by fibroids. However, these devices can only provide symptom relief and do not impact the fibroid itself. Uterine Artery Embolization Uterine artery embolization involves injection of embolic agents into the arteries that supply the uterus, thereby cutting off the blood supply to the fibroids.
In addition, the small but finite risk of a radiation-induced malignancy is particularly troublesome in this young patient population, considering the tumor being treated is benign. 11 Table of Contents Recently, MR-HIFU has been assessed as a non-invasive therapy of desmoid tumors, showing good clinical success and even complete tumor eradication in some cases with low number and relative mild adverse events, which typically promptly resolve.
Recently, MR-HIFU has been assessed as a non-invasive therapy of desmoid tumors, showing good clinical success and even complete tumor eradication in some cases with low number and relative mild adverse events, which typically promptly resolve.
In addition to the general controls, Class II devices are subject to “special controls,” such as performance standards, post-market surveillance requirements, patient registries and guidance documents, as identified in the classification regulation for the device type.
In addition to the general controls, Class II devices are subject to “special controls,” such as performance standards, post-market surveillance requirements, patient registries and guidance documents, as identified in the classification regulation for the device type. 19 Table of Contents If there is no adequate predicate to which a manufacturer can compare its proposed device, the proposed device is automatically classified as a class III device.
The FTC has very broad enforcement authority, and failure to abide by the substantive requirements of the FTC Act and other consumer protection laws can result in administrative or judicial penalties, including civil penalties, injunctions affecting the manner in which we would be able to market services or products in the future, or criminal prosecution.
The FTC has very broad enforcement authority, and failure to abide by the substantive requirements of the FTC Act and other consumer protection laws can result in administrative or judicial penalties, including civil penalties, injunctions affecting the manner in which we would be able to market services or products in the future, or criminal prosecution. 22 Table of Contents European Union On April 5, 2017, the EU adopted a new Medical Devices Regulation (EU) 2017/745 (the “ New EU MDR ”), which repealed and replaced the Medical Devices Directive (MDD) effective May 26, 2021.
Simple prostatectomy is contraindicated in the presence of cancer. 13 Table of Contents Radical Prostatectomy Radical prostatectomy, an open surgical removal of the entire prostate gland and some surrounding tissues, represents a current standard of care, practiced by urologists in North America and Europe, which procedure involves the removal of the localized cancerous tissue.
Radical Prostatectomy Radical prostatectomy, an open surgical removal of the entire prostate gland and some surrounding tissues, represents a current standard of care, practiced by urologists in North America and Europe, which procedure involves the removal of the localized cancerous tissue. However, the conventional open surgical technique has high post-surgery incidences of impotence and incontinence and long recovery time.
In 2024, we introduced in the United States a capital sales model in addition to the purely recurring revenue model that we have been using since 2019. We generate revenues from capital sales, one-time-use devices and related services, in the EU (principally in Germany), United States and Asia.
Since then, our business model has evolved in the United States to a capital sales model in addition to the purely recurring revenue model that we have been using since 2019. We generate revenues in the United States, EU and Asia.
The FDA may also require the manufacturer to cease its marketing activities for the modified device in the United States and/or recall the device until the appropriate marketing authorization for the modification is obtained. 19 Table of Contents The FDA has broad enforcement authority to take action against a failure to comply with the clinical trial, premarket review, or postmarket regulatory requirements discussed above and the agency conducts routine inspections of device manufacturers to determine compliance with these requirements.
The FDA has broad enforcement authority to take action against a failure to comply with the clinical trial, premarket review, or postmarket regulatory requirements discussed above and the agency conducts routine inspections of device manufacturers to determine compliance with these requirements.
On December 2, 2024, Profound Medical and Siemens Healthineers announced a definitive co-sales and co-marketing agreement of its TULSA-PRO and Free.Max MRI, to offer a complete solution for MRI-guided prostate therapy. 12 Table of Contents On December 21, 2020, we entered into a co-development agreement with GE Healthcare (the “ GE Agreement ”) whereby we and GE Healthcare agreed to a non-exclusive, worldwide license that will enable us to interface our TULSA-PRO system with certain GE Healthcare MRI scanners.
On December 21, 2020, we entered into a co-development agreement with GE Healthcare (the “ GE Agreement ”) whereby we and GE Healthcare agreed to a non-exclusive, worldwide license that will enable us to interface our TULSA-PRO system with certain GE Healthcare MRI scanners.
Simple prostatectomy has higher morbidity and longer hospitalization in comparison to less invasive therapies such as transurethral resection of the prostate.
Open simple prostatectomy can be conducted through retropubic, suprapubic, or perineal routes. Simple prostatectomy has higher morbidity and longer hospitalization in comparison to less invasive therapies such as transurethral resection of the prostate. Simple prostatectomy is contraindicated in the presence of cancer.
Proton beam therapy uses new technology to accelerate atoms to approximately 93,000 miles per second, separating the protons from the atom. While moving at this high speed, the particles are “fired” at the patient’s tumor. These charged particles deliver a very high dose of radiation to the cancer but release very little radiation to the normal tissue in their path.
Proton beam therapy is a way to deliver radiation to tumors using tiny, sub-atomic particles (protons) instead of the photons used in conventional radiation treatment. Proton beam therapy uses new technology to accelerate atoms to approximately 93,000 miles per second, separating the protons from the atom. While moving at this high speed, the particles are “fired” at the patient’s tumor.
Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the clinical protocol, GCP, or other IRB requirements or if the investigational product has been associated with unexpected serious harm to patients. 20 Table of Contents In the Consolidated Appropriations Act for 2023, Congress amended the FFDCA to require the sponsor of any pivotal clinical trial that will be used to demonstrate the safety and effectiveness of a medical device marketing authorization submission to develop a diversity action plan for such trial, and if submission of an IDE application is required, to submit such diversity action plan to the FDA.
In the Consolidated Appropriations Act for 2023, Congress amended the FFDCA to require the sponsor of any pivotal clinical trial that will be used to demonstrate the safety and effectiveness of a medical device marketing authorization submission to develop a diversity action plan for such trial, and if submission of an IDE application is required, to submit such diversity action plan to the FDA.
Watchful Waiting; Active Surveillance Watchful waiting means no treatment until there is an indication that the cancer has spread . Active surveillance is monitoring of the prostate cancer closely with PSA tests and digital rectal exams. Prostate biopsies may also be done to see if the cancer is becoming more aggressive.
Active surveillance is monitoring of the prostate cancer closely with PSA tests and digital rectal exams. Prostate biopsies may also be done to see if the cancer is becoming more aggressive. Test results will indicate whether a more aggressive treatment option should be considered.
These rates continued to improve with increasing recovery time, with 97% of patients socially continent and 87% recovering erectile function at five years.
At 12 months, 96% of men returned to baseline urinary continence, and 75% of potent men maintained or returned to erections sufficient for penetration. These rates continued to improve with increasing recovery time, with 97% of patients socially continent and 87% recovering erectile function at five years.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Such risks include, but are not limited to: ● We have a limited operating history and history of operating losses. ● Our business is capital intensive and requires significant investment. ● We are exposed to foreign currency risk, which exposure will increase as we commercialize our approved products in the United States. ● We rely on collaborative partners to assist in the sales and marketing and/or distribution of our approved products. ● We may not achieve our commercialization and future product development goals in the time frames expected, or at all. ● Our products, including the TULSA-PRO system, may not achieve or maintain expected levels of market acceptance. ● Successful commercialization of our authorized products will depend on the cost of the system and the availability of coverage and adequate reimbursement coverage from third-party payers. ● We intend to rely primarily on our in-house sales and marketing capabilities for our commercialization strategy, which will require substantial build-up and commitment of resources. ● We may experience manufacturing scaling issues in connection with our commercialization strategy. ● We rely on third parties to manufacture and supply components of our systems. ● We depend on single-source suppliers for some of the components in our systems. ● We face significant competition in the markets for our products. 27 Table of Contents ● Data from our clinical trials may not support regulatory approvals or clearances and/or reimbursement coverage for our products. ● We may rely on third parties to perform clinical trial planning, provide critical advice, conduct our clinical trials and facilitate obtaining regulatory approvals or clearances for our product candidates. ● We depend on key managerial personnel for our continued success. ● Research and development carries substantial risk and we may not be able to expand our product portfolio. ● Rising insurance costs could negatively impact our profitability. ● If we fail to properly maintain the integrity of our data or we experience a cyber-attack or other breach of these systems, our business could be adversely affected. ● A portion of our employees are unionized, and our good labor relations may not continue. ● If our facilities are damaged or destroyed, we may experience delays that could negatively impact our revenues. ● We face risks associated with acquisition of businesses and technologies. ● Our products and operations are subject to extensive government regulation and oversight both in the United States and abroad, and our failure to comply with applicable requirements could harm our business. ● We may be unable to obtain, or experience significant delays in obtaining, FDA clearances or other regulatory authorizations for our product candidates and/or enhancements to our approved or cleared products. ● Attracting patients to perform clinical trials and meeting clinical trial objectives can be more costly and time-consuming than expected and could be adversely affected by another health crisis. ● We may be subject to fines, penalties or injunctions if we are determined to be promoting the use of our products for unapproved or “off-label” uses or engaged in false or misleading promotion. ● Compliance with regulations for quality systems for medical device companies is difficult, time consuming and costly. ● Modifications to our cleared or approved products may require new regulatory clearances or approvals or may require us to recall or cease marketing our products until such additional clearances or approvals are obtained. ● If our products cause or contribute to a death or a serious injury, or malfunction in certain ways, we will be subject to medical device reporting regulations, and such events can result in voluntary corrective actions or agency enforcement actions. ● Legislative or regulatory reform of the healthcare systems in which we intend to operate may affect our ability to sell our products profitably and could adversely affect our business. ● We are subject to “fraud and abuse” laws, anti-bribery laws, environmental laws and privacy and security regulations.
Such risks include, but are not limited to: ● We have a limited operating history and history of operating losses. ● Our business is capital intensive and requires significant investment. ● We are exposed to foreign currency risk, which exposure will increase as we commercialize our approved products in the United States. 29 Table of Contents ● We rely on collaborative partners to assist in the sales and marketing and/or distribution of our approved products. ● We may not achieve our commercialization and future product development goals in the time frames expected, or at all. ● Our products, including the TULSA-PRO system, may not achieve or maintain expected levels of market acceptance. ● Successful commercialization of our authorized products will depend on the cost of the system and the availability of coverage and adequate reimbursement coverage from third-party payers. ● We intend to rely primarily on our in-house sales and marketing capabilities for our commercialization strategy, which will require substantial build-up and commitment of resources. ● We may experience manufacturing scaling issues in connection with our commercialization strategy. ● We rely on third parties to manufacture and supply components of our systems. ● We depend on single-source suppliers for some of the components in our systems. ● We face significant competition in the markets for our products. ● Data from our clinical trials may not support regulatory approvals or clearances and/or reimbursement coverage for our products. ● We may rely on third parties to perform clinical trial planning, provide critical advice, conduct our clinical trials and facilitate obtaining regulatory approvals or clearances for our product candidates. ● We depend on key managerial personnel for our continued success. ● Research and development carries substantial risk and we may not be able to expand our product portfolio. ● Rising insurance costs could negatively impact our profitability. ● If we fail to properly maintain the integrity of our data or we experience a cyber-attack or other breach of these systems, our business could be adversely affected. ● A portion of our employees are unionized, and our good labor relations may not continue. ● If our facilities are damaged or destroyed, we may experience delays that could negatively impact our revenues. ● We face risks associated with acquisition of businesses and technologies. ● Our products and operations are subject to extensive government regulation and oversight both in the United States and abroad, and our failure to comply with applicable requirements could harm our business. ● We may be unable to obtain, or experience significant delays in obtaining, FDA clearances or other regulatory authorizations for our product candidates and/or enhancements to our approved or cleared products. ● Attracting patients to perform clinical trials and meeting clinical trial objectives can be more costly and time-consuming than expected and could be adversely affected by another health crisis. ● We may be subject to fines, penalties or injunctions if we are determined to be promoting the use of our products for unapproved or “off-label” uses or engaged in false or misleading promotion. ● Compliance with regulations for quality systems for medical device companies is difficult, time consuming and costly. ● Modifications to our cleared or approved products may require new regulatory clearances or approvals or may require us to recall or cease marketing our products until such additional clearances or approvals are obtained. ● If our products cause or contribute to a death or a serious injury, or malfunction in certain ways, we will be subject to medical device reporting regulations, and such events can result in voluntary corrective actions or agency enforcement actions. ● Legislative or regulatory reform of the healthcare systems in which we intend to operate may affect our ability to sell our products profitably and could adversely affect our business. ● We are subject to “fraud and abuse” laws, anti-bribery laws, environmental laws and privacy and security regulations.
Any violation by our employees or other agents could expose us to severe penalties and other consequences that may have a material adverse effect on our business, financial condition and results of operations. ● We may not be able to protect our intellectual property rights throughout the world. ● We may incur substantial costs as a result of litigation or other proceedings relating to enforcement of our or our licensors’ patent and other intellectual property rights and we may be unable to protect our rights to, or use of, our technology. ● Our business, financial condition, cash flows and results of operations are subject to risks arising from our international operations. ● Future sales or the issuances of our securities may cause the market price of our Common Shares to decline. ● The rights of our shareholders may differ from the rights typically offered to shareholders of a U.S. corporation. ● We are a smaller reporting company, and the reduced reporting requirements applicable to smaller reporting companies may make our common shares less attractive to investors. ● If equity research analysts research or reports about our business or if they issue unfavorable commentary or downgrade our Common Shares, the price of our Common Shares could decline. ● We may be subject to securities litigation, which is expensive and could divert management attention. ● We have never paid dividends on our Common Shares and we do not anticipate paying any dividends in the foreseeable future. ● If we are unable to satisfy the requirements of Sarbanes-Oxley, or our internal controls over financial reporting are not effective, the reliability of our financial statements may be questioned. ● Any default under our existing debt that is not waived by the applicable lender could materially adversely impact our results of operations and financial results and may have a material adverse effect on the trading price of our Common Shares. ● As a foreign private issuer whose shares are listed on Nasdaq, we intend to follow certain home country corporate governance practices instead of certain Nasdaq requirements. 28 Table of Contents ● We will incur significantly increased costs and devote substantial management time as a result of operating as a U.S. public company. ● We may lose foreign private issuer status in the future, which could result in significant additional costs and expenses. ● It may be difficult for United States investors to effect service of process or enforcement of actions against us or certain of our directors and officers under U.S. federal securities laws. ● We may be a passive foreign investment company (“PFIC”) for U.S. federal income tax purposes, which generally would result in certain adverse U.S. federal income tax consequences to our U.S. shareholders. ● If we are required to register as an “investment company” under the Investment Company Act, significant compliance costs and applicable restrictions could have a material adverse effect on our business.
Any violation by our employees or other agents could expose us to severe penalties and other consequences that may have a material adverse effect on our business, financial condition and results of operations. ● We may not be able to protect our intellectual property rights throughout the world. ● We may incur substantial costs as a result of litigation or other proceedings relating to enforcement of our or our licensors’ patent and other intellectual property rights and we may be unable to protect our rights to, or use of, our technology. ● Our business, financial condition, cash flows and results of operations are subject to risks arising from our international operations. ● Future sales or the issuances of our securities may cause the market price of our Common Shares to decline. ● The rights of our shareholders may differ from the rights typically offered to shareholders of a U.S. corporation. ● We are a smaller reporting company, and the reduced reporting requirements applicable to smaller reporting companies may make our Common Shares less attractive to investors. ● If equity research analysts research or reports about our business or if they issue unfavorable commentary or downgrade our Common Shares, the price of our Common Shares could decline. ● We may be subject to securities litigation, which is expensive and could divert management attention. 30 Table of Contents ● We have never paid dividends on our Common Shares and we do not anticipate paying any dividends in the foreseeable future. ● If we are unable to satisfy the requirements of Sarbanes-Oxley, or our internal controls over financial reporting are not effective, the reliability of our financial statements may be questioned. ● Any default under our existing debt that is not waived by the applicable lender could materially adversely impact our results of operations and financial results and may have a material adverse effect on the trading price of our Common Shares. ● As a foreign private issuer whose shares are listed on Nasdaq, we intend to follow certain home country corporate governance practices instead of certain Nasdaq requirements. ● We will incur significantly increased costs and devote substantial management time as a result of operating as a U.S. public company. ● We may lose foreign private issuer status in the future, which could result in significant additional costs and expenses. ● It may be difficult for United States investors to effect service of process or enforcement of actions against us or certain of our directors and officers under U.S. federal securities laws. ● We may be a passive foreign investment company (“PFIC”) for U.S. federal income tax purposes, which generally would result in certain adverse U.S. federal income tax consequences to our U.S. shareholders. ● If we are required to register as an “investment company” under the Investment Company Act, significant compliance costs and applicable restrictions could have a material adverse effect on our business.
The market price of our Common Shares could be subject to wide fluctuations in response to many risk factors listed in this section, and others beyond our control, including: ● delays in respect of our commercialization of the TULSA-PRO system in the United States; ● adverse results or delays in our future planned data collection for the TACT Pivotal Clinical Trial and any future clinical trials that we may conduct; ● regulatory actions with respect to our products and/or product candidates; ● changes in laws or regulations applicable to our products or any future product candidates, including but not limited to clinical trial requirements for approvals; ● actual or anticipated fluctuations in our financial condition and operating results; ● actual or anticipated changes in our growth rate relative to our competitors; ● competition from existing products or new products that may emerge; ● announcements by us, our collaborators or our competitors of significant acquisitions, strategic partnerships, joint ventures, collaborations or capital commitments; ● failure to meet or exceed financial estimates and projections of the investment community or that we provide to the public; ● issuance of new or updated research or reports by securities analysts; ● fluctuations in the valuation of companies perceived by investors to be comparable to us; ● share price and volume fluctuations attributable to inconsistent trading volume levels of our shares; 60 Table of Contents ● additions or departures of key management or scientific personnel; ● disputes or other developments related to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for its products; ● announcement or expectation of additional debt or equity financing efforts; ● sales or issuances of our Common Shares by us, our insiders or our other shareholders, including by exercise of outstanding options or warrants; and ● general economic and market conditions, including tariffs or trade restrictions.
The market price of our Common Shares could be subject to wide fluctuations in response to many risk factors listed in this section, and others beyond our control, including: ● delays in respect of our commercialization of the TULSA-PRO system in the United States; ● adverse results or delays in our future planned data collection for the TACT Pivotal Clinical Trial and any future clinical trials that we may conduct; ● regulatory actions with respect to our products and/or product candidates; ● changes in laws or regulations applicable to our products or any future product candidates, including but not limited to clinical trial requirements for approvals; ● actual or anticipated fluctuations in our financial condition and operating results; ● actual or anticipated changes in our growth rate relative to our competitors; ● competition from existing products or new products that may emerge; ● announcements by us, our collaborators or our competitors of significant acquisitions, strategic partnerships, joint ventures, collaborations or capital commitments; ● failure to meet or exceed financial estimates and projections of the investment community or that we provide to the public; ● issuance of new or updated research or reports by securities analysts; 62 Table of Contents ● fluctuations in the valuation of companies perceived by investors to be comparable to us; ● share price and volume fluctuations attributable to inconsistent trading volume levels of our shares; ● additions or departures of key management or scientific personnel; ● disputes or other developments related to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for its products; ● announcement or expectation of additional debt or equity financing efforts; ● sales or issuances of our Common Shares by us, our insiders or our other shareholders, including by exercise of outstanding options; and ● general economic and market conditions, including tariffs or trade restrictions.
Levels of market acceptance for our products could be impacted by several factors, many of which are not within our control, including but not limited to: ● safety, efficacy, convenience and cost-effectiveness of our systems as a method of ablation of prostate tissue, uterine fibroids, bone metastases compared to products of our competitors or other forms of treatment; ● scope of approved uses and marketing approval or clearance; ● timing of market entry of our products versus those of our competitors; ● difficulties in, or excessive costs required in the process of, manufacturing our products; ● expanding compatibility of our systems to work with MRI scanners other than those made by Philips, Siemens and GE Healthcare, and maintaining our existing relationships with Philips, Siemens and GE Healthcare; ● infringement or alleged infringement of the patents or intellectual property rights of others; ● acceptance of the price of our products relative to those of our competitors; ● acceptance and adoption of our products by patients, physicians/clinicians and the medical community; ● the availability of training necessary for proficient use of our products, as well as willingness of physicians and technicians to participate in such training; ● the perceived risks generally associated with the use of new products and procedures; ● the placement of our products in treatment guidelines published by leading medical organizations; ● the size and growth rate of the market for our products in the major geographies in which we operate or intend to operate, in particular in the United States; and ● acceptance of our products by government and third-party payers for adequate reimbursement coverage.
Levels of market acceptance for our products could be impacted by several factors, many of which are not within our control, including but not limited to: ● safety, efficacy, convenience and cost-effectiveness of our systems as a method of ablation of prostate tissue, uterine fibroids, bone metastases compared to products of our competitors or other forms of treatment; ● scope of approved uses and marketing approval or clearance; ● timing of market entry of our products versus those of our competitors; ● difficulties in, or excessive costs required in the process of, manufacturing our products; ● expanding compatibility of our systems to work with MRI scanners other than those made by Philips, Siemens and GE Healthcare, and maintaining our existing relationships with Philips, Siemens and GE Healthcare; ● infringement or alleged infringement of the patents or intellectual property rights of others; ● acceptance of the price of our products relative to those of our competitors; ● acceptance and adoption of our products by patients, physicians/clinicians and the medical community; ● the availability of training necessary for proficient use of our products, as well as willingness of physicians and technicians to participate in such training; ● the perceived risks generally associated with the use of new products and procedures; ● the placement of our products in treatment guidelines published by leading medical organizations; 33 Table of Contents ● the size and growth rate of the market for our products in the major geographies in which we operate or intend to operate, in particular in the United States; and ● acceptance of our products by government and third-party payers for adequate reimbursement coverage.
Furthermore, we will be required to verify that our suppliers maintain facilities, procedures and operations that comply with our quality standards and applicable regulatory requirements. The FDA enforces the QSR through periodic announced or unannounced inspections of medical device manufacturing facilities, which may include the facilities of subcontractors.
Furthermore, we will be required to verify that our suppliers maintain facilities, procedures and operations that comply with our quality standards and applicable regulatory requirements. The FDA enforces the QSR/QMSR through periodic announced or unannounced inspections of medical device manufacturing facilities, which may include the facilities of subcontractors.
Patient enrollment in our clinical trials may be affected by many factors including: · the use of the investigational device and the nature of the procedures being performed under the clinical trial protocol; · the existence of a competing device with FDA marketing authorization and long-term data supporting its safety and efficacy; · clinicians’ and patients’ perceptions as to the potential advantages and risks of our investigational devices in relation to other available therapies, including any new product candidates that may be approved for the indications we are investigating; · the size and nature of the patient population; · the severity of the disease under investigation; · the eligibility criteria for the trial in question; · subject compliance with the trial protocol; · the design of the clinical trial; · the referral practices of physicians; · limitations placed on enrollment by regulatory authorities or other bodies; · the ability to monitor trial subjects adequately during and after treatment; · the proximity and availability of clinical trial sites for prospective subjects; · efforts to facilitate timely enrollment; and · other clinical trials competing for the same target patients as those of our clinical trials.
Patient enrollment in our clinical trials may be affected by many factors including: ● the use of the investigational device and the nature of the procedures being performed under the clinical trial protocol; ● the existence of a competing device with FDA marketing authorization and long-term data supporting its safety and efficacy; ● clinicians’ and patients’ perceptions as to the potential advantages and risks of our investigational devices in relation to other available therapies, including any new product candidates that may be approved for the indications we are investigating; 47 Table of Contents ● the size and nature of the patient population; ● the severity of the disease under investigation; ● the eligibility criteria for the trial in question; ● subject compliance with the trial protocol; ● the design of the clinical trial; ● the referral practices of physicians; ● limitations placed on enrollment by regulatory authorities or other bodies; ● the ability to monitor trial subjects adequately during and after treatment; ● the proximity and availability of clinical trial sites for prospective subjects; ● efforts to facilitate timely enrollment; and ● other clinical trials competing for the same target patients as those of our clinical trials.
The market price of our Common Shares could decline as a result of issuances of securities (including our Common Shares) by us, exercises of outstanding options or warrants for additional Common Shares or sales by our existing shareholders of Common Shares in the market, or the perception that these issuances or sales could occur.
The market price of our Common Shares could decline as a result of issuances of securities (including our Common Shares) by us, exercises of outstanding options for additional Common Shares or sales by our existing shareholders of Common Shares in the market, or the perception that these issuances or sales could occur.
The FDA or foreign regulatory authorities can delay, limit or deny marketing authorization or certification of a device for many reasons, including: ● our inability to demonstrate to the satisfaction of the FDA or the applicable regulatory authorities that our products are safe and effective for their intended uses; ● the disagreement of the FDA or foreign regulatory authorities with the design or implementation of our clinical trials or the interpretation of data from non- clinical studies or clinical trials; ● serious and unexpected adverse device effects experienced by subjects enrolled in our clinical trials; ● the data from our nonclinical studies and clinical trials may be insufficient to support marketing authorization, where required; ● our inability to demonstrate that the clinical and other benefits of the device outweigh the risks; ● the manufacturing process or facilities we use may not meet applicable requirements; and ● the potential for approval policies or regulations of the FDA or foreign regulatory authorities to change significantly in a manner rendering our clinical data or regulatory filings insufficient for marketing authorization.
The FDA or foreign regulatory authorities can delay, limit or deny marketing authorization or certification of a device for many reasons, including: ● our inability to demonstrate to the satisfaction of the FDA or the applicable regulatory authorities that our products are safe and effective for their intended uses; ● the disagreement of the FDA or foreign regulatory authorities with the design or implementation of our clinical trials or the interpretation of data from non- clinical studies or clinical trials; ● serious and unexpected adverse device effects experienced by subjects enrolled in our clinical trials; ● the data from our nonclinical studies and clinical trials may be insufficient to support marketing authorization, where required; ● our inability to demonstrate that the clinical and other benefits of the device outweigh the risks; ● the manufacturing process or facilities we use may not meet applicable requirements; and 44 Table of Contents ● the potential for approval policies or regulations of the FDA or foreign regulatory authorities to change significantly in a manner rendering our clinical data or regulatory filings insufficient for marketing authorization.
We believe that third-party payers, in determining reimbursement coverage for our products, including the TULSA-PRO system, generally would rely upon our clinical trial results, such as TACT and CAPTAIN, that were obtained in support of our applications for regulatory authorization; however, we may be required to provide additional data from our existing trials and/or conduct additional 36 Table of Contents clinical trials prior to obtaining reimbursement coverage for the TULSA-PRO system and other authorized products, which would likely involve significant time and expense, and may have a material adverse effect on our business, results of operations and financial condition.
We believe that third-party payers, in determining reimbursement coverage for our products, including the TULSA-PRO system, generally would rely upon our clinical trial results, such as TACT and CAPTAIN, that were obtained in support of our applications for regulatory authorization; however, we may be required to provide additional data from our existing trials and/or conduct additional clinical trials prior to obtaining reimbursement coverage for the TULSA-PRO system and other authorized products, which would likely involve significant time and expense, and may have a material adverse effect on our business, results of operations and financial condition.
We compete with several other medical device companies to hire and retain these skilled employees, and we may be unable to hire and retain such employees in numbers sufficient to increase our in-house capabilities. We currently intend to partner with one or more additional QSR-compliant and FDA-registered contract manufacturers for our TULSA-PRO systems in the United States.
We compete with several other medical device companies to hire and retain these skilled employees, and we may be unable to hire and retain such employees in numbers sufficient to increase our in-house capabilities. We currently intend to partner with one or more additional cGMP-compliant and FDA-registered contract manufacturers for our TULSA-PRO systems in the United States.
Litigation of this type could result in substantial costs and diversion of management’s attention and resources, which could adversely impact our business. Any adverse determination in litigation could also subject us to significant liabilities. 61 Table of Contents We have never paid dividends on our Common Shares and we do not anticipate paying any dividends in the foreseeable future.
Litigation of this type could result in substantial costs and diversion of management’s attention and resources, which could adversely impact our business. Any adverse determination in litigation could also subject us to significant liabilities. 63 Table of Contents We have never paid dividends on our Common Shares and we do not anticipate paying any dividends in the foreseeable future.
If we or our partners’ or service providers’ privacy or data security measures fail to comply with the GDPR requirements, we may be subject to litigation, regulatory investigations, 53 Table of Contents enforcement notices requiring us to change the way we use personal data and/or fines of up to 20 million Euros or up to 4% of the total worldwide annual turnover of the preceding financial year, whichever is higher, as well as compensation claims by affected individuals, negative publicity, reputational harm and a potential loss of business and goodwill.
If we or our partners’ or service providers’ privacy or data security measures fail to comply with the GDPR requirements, we may be subject to litigation, regulatory investigations, enforcement notices requiring us to change the way we use personal data and/or fines of up to 20 million Euros or up to 4% of the total worldwide annual turnover of the preceding financial year, whichever is higher, as well as compensation claims by affected individuals, negative publicity, reputational harm and a potential loss of business and goodwill.
If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of civil, criminal and administrative penalties, damages, monetary fines, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational 54 Table of Contents harm, diminished potential profits and future earnings, and curtailment of our operations, any of which could adversely affect our business, financial condition, results of operations or prospects.
If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of civil, criminal and administrative penalties, damages, monetary fines, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished potential profits and future earnings, and curtailment of our operations, any of which could adversely affect our business, financial condition, results of operations or prospects.
If we are unable to commercialize new products successfully, whether through a failure to achieve market acceptance, a failure to build our own in-house sales and marketing capabilities, a failure to maintain or secure new or existing marketing partners or to realize the benefits of our arrangements with our marketing and distribution partners, there may be 31 Table of Contents a material adverse effect on our business, financial condition and results of operations and it could cause the market value of our Common Shares to decline.
If we are unable to commercialize new products successfully, whether through a failure to achieve market acceptance, a failure to build our own in-house sales and marketing capabilities, a failure to maintain or secure new or existing marketing partners or to realize the benefits of our arrangements with our marketing and distribution partners, there may be a material adverse effect on our business, financial condition and results of operations and it could cause the market value of our Common Shares to decline.
We, the FDA or other regulatory authorities may suspend or terminate a clinical trial at any time if it is determined that enrolled subjects may be or are being exposed to unacceptable health risks, including the risk of death, that our devices are not manufactured under acceptable conditions or with acceptable quality, or that the trial is not being conducted according to the protocol and in compliance with Good Clinical Practice and regulatory requirements.
We, the FDA or other regulatory authorities may suspend or terminate a clinical trial at any time if it is determined that enrolled subjects may be or are being exposed to unacceptable health risks, including the risk of death, that our devices are not manufactured under acceptable conditions or with acceptable quality, or that the trial is not being conducted according to the protocol and in compliance with GCP and other regulatory requirements.
Once CE marked under the New EU MDR these changes must be disclosed to our Notified Body in the EU before implementation. The Notified Body will then assess the changes and verify whether they affect the products’ conformity with the General Safety and Performance Requirements.
Once CE marked under the New EU MDR these changes must be disclosed to our Notified Body in the EU before implementation. The Notified Body will then assess the changes and verify whether they affect the product’s conformity with the General Safety and Performance Requirements.
The determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter, and, accordingly, the next determination will be made with respect to us on June 30, 2025.
The determination of foreign private issuer status is made annually on the last business day of an issuer’s most recently completed second fiscal quarter, and, accordingly, the next determination will be made with respect to us on June 30, 2026.
The governments and regulatory authorities in the United States, the European Commission, Canada and other markets in which we expect to sell our devices may propose and adopt new legislation and regulatory requirements relating to medical product approval criteria, manufacturing and marketing requirements.
The governments and regulatory authorities in the United States, the European Union, Canada and other markets in which we expect to sell our devices may propose and adopt new legislation and regulatory requirements relating to medical product approval criteria, manufacturing and marketing requirements.
In the United States, numerous federal and state laws and regulations, including federal health information privacy laws ( e.g. , HIPAA as amended by HITECH), state data breach notification laws, state health information privacy laws and federal and state consumer protection laws ( e.g. , Section 5 of the Federal Trade Commission Act), that govern the collection, use, disclosure and protection of health-related and other personal information could apply to our operations 52 Table of Contents or the operations of our collaborators.
In the United States, numerous federal and state laws and regulations, including federal health information privacy laws ( e.g. , HIPAA as amended by HITECH), state data breach notification laws, state health information privacy laws and federal and state consumer protection laws ( e.g. , Section 5 of the Federal Trade Commission Act), that govern the collection, use, disclosure and protection of health-related and other personal information could apply to our operations or the operations of our collaborators.
If we are determined not to have complied or in the future cannot comply with a debt covenant or anticipate that we will be unable to comply with a debt covenant under any debt instrument we are a party to, including the CIBC Loan, management may seek a waiver and/or amendment to the applicable debt instrument in respect of any such covenant in order to avoid any breach or default that might otherwise result therefrom.
If we are determined not to have complied or in the future cannot comply with a debt covenant or anticipate that we will be unable to comply with a debt covenant under any debt instrument we are a party to, including the CIBC Credit Agreement, management may seek a waiver and/or amendment to the applicable debt instrument in respect of any such covenant in order to avoid any breach or default that might otherwise result therefrom.
The actual timing of these events can vary dramatically due to factors such as the uncertainties inherent in the arrangements sufficient to commercialize our products, including in respect of manufacturing, distribution and marketing, as well as market competition and 30 Table of Contents adverse results from our clinical trials, and other factors and described herein, many of which are beyond our control.
The actual timing of these events can vary dramatically due to factors such as the uncertainties inherent in the arrangements sufficient to commercialize our products, including in respect of manufacturing, distribution and marketing, as well as market competition and adverse results from our clinical trials, and other factors as described herein, many of which are beyond our control.
In addition, regulations and guidance promulgated by the FDA, the European Commission, and other regulatory bodies are often revised or reinterpreted by the agency and other relevant regulatory bodies in ways that may significantly affect our business and products.
In addition, regulations and guidance promulgated by the FDA, the European Commission, Health Canada, and other regulatory bodies are often revised or reinterpreted by the agency and other relevant regulatory bodies in ways that may significantly affect our business and products.
Disruptions at the FDA and other agencies may also slow the time necessary for new medical products to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.
In addition, disruptions at the FDA and other agencies may also slow the time necessary for new medical products to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.
The re-certification requires us to present documentation and other evidence demonstrating that the performance and the safety of the system has been maintained and that the 43 Table of Contents system continues to meet existing regulations and standards. Otherwise, the marketing and sale of our TULSA-PRO and Sonalleve systems in EU member states may be temporarily or permanently prohibited.
The re-certification requires us to present documentation and other evidence demonstrating that the performance and the safety of the system has been maintained and that the system continues to meet existing regulations and standards. Otherwise, the marketing and sale of our TULSA-PRO and Sonalleve systems in EU member states may be temporarily or permanently prohibited.
In addition, FDA approval of IDE applications may be required in support of clinical trials involving other product candidates. Clinical trials are subject to extensive monitoring, recordkeeping and reporting requirements. Clinical trials must be conducted under the oversight of an IRB and must comply with FDA regulations, including but not limited to those relating to good clinical practices.
In addition, FDA approval of IDE applications may be required in support of clinical trials involving other product candidates. Clinical trials are subject to extensive monitoring, recordkeeping and reporting requirements. Clinical trials must be conducted under the oversight of an IRB and must comply with FDA regulations, including but not limited to those relating to GCP requirements.
Because all or a substantial portion of our assets and these persons are located outside the United States, it will be difficult for United States investors to effect service of process in the United States upon us or our directors or officers, or to realize in the United States upon judgments of United States courts predicated upon civil liabilities under the U.S.
Because all or a substantial portion of our assets and these persons are located outside the United States, it will be difficult for United States investors to effect service of process in the United States upon us or our directors or officers, or to realize in the United 65 Table of Contents States upon judgments of United States courts predicated upon civil liabilities under the U.S.
This, in turn, could have a material adverse effect on our business, results of operations and financial condition. 34 Table of Contents We rely on third parties to manufacture and supply components of our systems. The TULSA-PRO and Sonalleve systems consists of common electronic components, proprietary capital equipment and proprietary one-time-use devices.
This, in turn, could have a material adverse effect on our business, results of operations and financial condition. We rely on third parties to manufacture and supply components of our systems. The TULSA-PRO and Sonalleve systems consists of common electronic components, proprietary capital equipment and proprietary one-time-use devices.
Any corrective action, whether voluntary or involuntary, as well as defending ourselves in a lawsuit, will require the dedication of 49 Table of Contents personnel time and capital, distract management from operating the business and may harm our reputation and could have a material adverse effect on our business, financial condition and operating results.
Any corrective action, whether voluntary or involuntary, as well as defending ourselves in a lawsuit, will require the dedication of personnel time and capital, distract management from operating the business and may harm our reputation and could have a material adverse effect on our business, financial condition and operating results.
Department of Justice, closely regulate compliance with all requirements governing medical device products, including requirements pertaining to marketing and promotion of devices in accordance with the provisions of the approved labeling and manufacturing of products in accordance with QSR requirements.
Department of Justice, closely regulate compliance with all requirements governing medical device products, including requirements pertaining to marketing and promotion of devices in accordance with the provisions of the approved labeling and manufacturing of products in accordance with cGMP requirements.
If any of these events occur, it may materially and adversely affect our business, financial condition, results of operations and prospects. 47 Table of Contents Modifications to our cleared or approved products may require new regulatory clearances or approvals or may require us to recall or cease marketing our products until such additional clearances or approvals are obtained.
If any of these events occur, it may materially and adversely affect our business, financial condition, results of operations and prospects. Modifications to our cleared or approved products may require new regulatory clearances or approvals or may require us to recall or cease marketing our products until such additional clearances or approvals are obtained.
Notably, the new obligations were geared to ensure that data can be accessed by US intelligence agencies only to the extent necessary and proportionate and to establish an independent and impartial redress mechanism to handle complaints from Europeans concerning the collection of their data for national security purposes.
Notably, the new obligations were geared to ensure that data can be accessed by U.S. intelligence agencies only to the extent necessary and proportionate and to establish an independent and impartial redress mechanism to handle complaints from Europeans concerning the collection of their data for national security purposes.
“Serious incident” is defined as any incident that directly or indirectly led, might have led or might lead to any of the following: (a) the death of a patient, user or other person, (b) the temporary or permanent serious deterioration of a patient’s, user’s or other person’s state of health, (c) a serious public health threat.
“Serious incident” is defined as any incident that directly or indirectly led, might have led or might lead to any of the following: (a) the death of a patient, user or other 51 Table of Contents person, (b) the temporary or permanent serious deterioration of a patient’s, user’s or other person’s state of health, (c) a serious public health threat.
Under this royalty-free license, we are subject to various obligations, including 55 Table of Contents the milestone payment of C$250,000 we paid upon obtaining FDA clearance of our TULSA-PRO system, and legal costs associated with patent application preparation, filing and maintenance.
Under this royalty-free license, we are subject to various obligations, including the milestone payment of C$250,000 we paid upon obtaining FDA clearance of our TULSA-PRO system, and legal costs associated with patent application preparation, filing and maintenance.
In addition, warranty claims brought by our customers related to third-party components may arise after the expiration of our corresponding warranty with our third-party suppliers, which would require us to bear the burden of any such warranty claims. Rising insurance costs could negatively impact our profitability.
In addition, warranty claims brought by our customers related to third-party components may arise after the expiration of our corresponding warranty with our third-party suppliers, which would require us to bear the burden of any such warranty claims. 41 Table of Contents Rising insurance costs could negatively impact our profitability.
Our inability to successfully integrate the operations of an acquired business, including a successful implementation of the technologies and assets we acquire, and realize anticipated benefits associated 40 Table of Contents with an acquisition, could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Our inability to successfully integrate the operations of an acquired business, including a successful implementation of the technologies and assets we acquire, and realize anticipated benefits associated with an acquisition, could have a material adverse effect on our business, financial condition, results of operations and cash flows.
We may be subject to private qui tam actions brought by individual whistleblowers on behalf of the federal or state governments, with potential liability under the federal False Claims Act including mandatory treble damages and significant per-claim penalties.
We may be subject to private qui tam actions brought by individual whistleblowers on behalf of the federal or state governments, with potential liability under the federal 54 Table of Contents False Claims Act including mandatory treble damages and significant per-claim penalties.
Moreover, the FDA and other regulatory authorities require us to comply with good clinical practice regulations and international standards relating to the conduct, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of trial participants are protected.
Moreover, the FDA and other regulatory authorities require us to comply with GCP regulations and international standards relating to the conduct, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of trial participants are protected.
Accordingly, we and our contract manufacturers must continuously expend time, money and effort in all areas of regulatory compliance, including manufacturing, production, product surveillance, and quality control. In the United States, the FDA and other federal and state agencies, including the U.S.
Accordingly, we and our contract manufacturers must continuously expend time, money and effort in all areas of regulatory compliance, including manufacturing, production, product surveillance, and quality control. 48 Table of Contents In the United States, the FDA and other federal and state agencies, including the U.S.
The Commission will continually review developments in the US along with its adequacy decision. Adequacy decisions can be adapted or even withdrawn in the event of developments affecting the level of protection in the applicable jurisdiction. Future actions of EU data protection authorities are difficult to predict.
The Commission will continually review developments in the U.S. along with its adequacy decision. Adequacy decisions can be adapted or even withdrawn in the event of developments affecting the level of protection in the applicable jurisdiction. Future actions of EU data protection authorities are difficult to predict.
We may be unsuccessful in making the necessary design changes and, if required, receiving the necessary regulatory approvals for such changes, and the terms of any such arrangements that we may enter into in the future with 32 Table of Contents the MRI scanner manufacturers may not be on as favorable terms.
We may be unsuccessful in making the necessary design changes and, if required, receiving the necessary regulatory approvals for such changes, and the terms of any such arrangements that we may enter into in the future with the MRI scanner manufacturers may not be on as favorable terms.
As a result, our business, results of operations and financial condition may be materially adversely affected. 35 Table of Contents We depend on single-source suppliers for some of the components in our systems. We currently rely on a single source for the manufacture of some of the components of our TULSA-PRO and Sonalleve systems.
As a result, our business, results of operations and financial condition may be materially adversely affected. We depend on single-source suppliers for some of the components in our systems. We currently rely on a single source for the manufacture of some of the components of our TULSA-PRO and Sonalleve systems.
Additionally, such changes could mean we would no longer be able to rely on existing MDD CE Marks under the transition periods and would need to obtain a CE Mark under the New EU MDR. Our contract manufacturers are subject to regulatory compliance by the FDA, Health Canada and regulatory authorities in the EU and other jurisdictions.
Additionally, such changes could mean we would no longer be able to rely on existing MDD CE Marks under the transition periods and would need to obtain a CE Mark under the New EU MDR. 50 Table of Contents Our contract manufacturers are subject to regulatory compliance by the FDA, Health Canada and regulatory authorities in the EU and other jurisdictions.
Under the FDORA amendments to the DFDCA, any application for marketing authorization of the cyber device must include a software bill of materials and a cybersecurity plan describing the methods by which the manufacturer will monitor, identify and address cybersecurity vulnerabilities.
Under the FDORA amendments to the DFDCA, any application for marketing authorization of the cyber device 52 Table of Contents must include a software bill of materials and a cybersecurity plan describing the methods by which the manufacturer will monitor, identify and address cybersecurity vulnerabilities.
In that event, our reputation could be damaged and adoption of our products would be impaired. In addition to promoting our products in a manner consistent with our clearances and approvals, we must have adequate substantiation for the claims we make for our products.
In that event, our reputation could be damaged and adoption of our products would be impaired. 49 Table of Contents In addition to promoting our products in a manner consistent with our clearances and approvals, we must have adequate substantiation for the claims we make for our products.
If the assessment is favorable the Notified Body will issue a new CE Certificate of Conformity or an 48 Table of Contents addendum to the existing certificates attesting compliance with the General Safety and Performance Requirements.
If the assessment is favorable the Notified Body will issue a new CE Certificate of Conformity or an addendum to the existing certificates attesting compliance with the General Safety and Performance Requirements.
On March 31, 2024, we were in breach of the covenant in the CIBC Loan that revenue for any fiscal quarter must be 15% greater than revenue for the same fiscal quarter in the prior fiscal year. Prior to such breach, we obtained a waiver from CIBC, pursuant to which CIBC has waived such breach.
On March 31, 2024, we were in breach of the covenant in the Original CIBC Credit Agreement that revenue for any fiscal quarter must be 15% greater than revenue for the same fiscal quarter in the prior fiscal year. Prior to such breach, we obtained a waiver from CIBC, pursuant to which CIBC has waived such breach.
Depending upon the results of our research and development programs and the availability of financial resources, we could decide to accelerate, terminate or reduce certain projects, or commence 29 Table of Contents new ones.
Depending upon the results of our research and development programs and the availability of financial resources, we could decide to accelerate, terminate or reduce certain projects, or commence new ones.
If we were required to register as an investment company under the Investment Company Act, we would incur substantial expenses associated with such registration, and we would become subject to substantial regulation with respect to our capital structure, management, operations, transactions with affiliated persons, asset composition, including restrictions with respect to diversification and industry concentration, and other matters, which would have a material adverse effect on our business.
If we were required to register as an investment company under the Investment Company Act, we would incur substantial expenses associated with such registration, and we would become subject to substantial regulation with respect to our capital structure, management, operations, transactions with affiliated persons, asset composition, including restrictions with respect to diversification and industry concentration, and other matters, which would have a material adverse effect on our business. 66 Table of Contents Item 1B.
However, we cannot be certain that any extension will be granted or, if granted, what the applicable time period or the scope of patent 57 Table of Contents protection afforded during any extended period will be.
However, we cannot be certain that any extension will be granted or, if granted, what the applicable time period or the scope of patent protection afforded during any extended period will be.
On September 26, 2023, an amendment to the CIBC Loan changed financial covenants. The revised covenants specify that unrestricted cash must be greater than either (i) negative EBITDA for the most recent nine -month period or (ii) $7,500, reported monthly.
On September 26, 2023, an amendment to the CIBC Credit Agreement changed financial covenants. The revised covenants specified that unrestricted cash must be greater than either (i) negative EBITDA for the most recent nine -month period or (ii) $7,500, reported monthly.
Various states have also enacted laws modeled after the False Claims Act. 51 Table of Contents The U.S. federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”), imposes criminal and civil liability on any person who knowingly and willfully executes, or attempts to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false, fictitious, or fraudulent statements or representations in connection with the delivery of, or payment for, healthcare benefits, items or services relating to health care matters.
The U.S. federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”), imposes criminal and civil liability on any person who knowingly and willfully executes, or attempts to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false, fictitious, or fraudulent statements or representations in connection with the delivery of, or payment for, healthcare benefits, items or services relating to health care matters.
The system is designed to be in compliance with regulations in many different jurisdictions, including the QSR mandated by the FDA in the United States and the requirements of the MDD and New EU MDR in the European Union, including the international standard ISO 13485 required by the member states in Europe that recognize the CE Mark.
The system is designed to be in compliance with regulations in many different jurisdictions, including the QSR, and the new QMSR effective as of February 2, 2026, mandated by the FDA in the United States and the requirements of the MDD and New EU MDR in the European Union, including the international standard ISO 13485 required by the member states in Europe that recognize the CE Mark.
The process of obtaining a PMA or De Novo classification is much more costly and uncertain than the 510(k) clearance process and generally takes from one to three years, or 41 Table of Contents even longer, from the time the application is submitted to the FDA.
The process of obtaining PMA approval or De Novo classification is much more costly and uncertain than the 510(k) clearance process and generally takes from one to three years, or even longer, from the time the application is submitted to the FDA.
Failure to comply with the new rules and regulations could 50 Table of Contents result in enforcement actions or the assessment of other penalties.
Failure to comply with the new rules and regulations could result in enforcement actions or the assessment of other penalties.
When an entity is determined to have violated the False Claims Act, it may be required to pay up to three times the actual damages sustained by the United States government, plus civil penalties of up to approximately $25,000 for each separate false claim.
When an entity is determined to have violated the False Claims Act, it may be required to pay up to three times the actual damages sustained by the United States government, plus civil penalties of up to approximately $25,000 for each separate false claim. Various states have also enacted laws modeled after the False Claims Act.
In the United States, the methods used in, and the facilities used for, the manufacture of medical devices must comply with the QSR, which is a complex regulatory scheme that covers the procedures and documentation of the design, testing, production, process controls, quality assurance, labeling, packaging, handling, storage, distribution, installation, and servicing of medical devices.
In the United States, the methods used in, and the facilities used for, the manufacture of medical devices must comply with the QSR, and starting on February 2, 2026 the new QMSR, which is a complex regulatory scheme that covers the procedures and documentation of the design, testing, production, process controls, quality assurance, labeling, packaging, handling, storage, distribution, installation, and servicing of medical devices.
Our reliance on third-party manufacturers and suppliers involves a number of additional risks, including, among other things: ● contract manufacturers or suppliers may fail to comply with regulatory requirements or make errors in manufacturing that could negatively affect the efficacy or safety of our products or cause delays in shipments of products; ● we or our contract manufacturers and suppliers may not be able to respond to unanticipated changes in customer orders, and if orders do not match forecasts, our suppliers may have excess or inadequate inventory of materials and components; ● we or our contract manufacturers and suppliers may be subject to price fluctuations of raw materials and key components due to a lack of long-term supply arrangements for key components; ● we or our contract manufacturers and suppliers may lose access to critical services and components, resulting in an interruption in the manufacture, assembly and shipment of our products; ● fluctuations in demand for products that our contract manufacturers and suppliers manufacture for others may affect their ability or willingness to deliver components in a timely manner; ● suppliers or contract manufacturers may wish to discontinue supplying components or services for risk management reasons; ● we may not be able to find new or alternative components or reconfigure our system and manufacturing processes in a timely manner if the necessary components become unavailable; and ● contract manufacturers and suppliers may encounter financial hardships unrelated to our demand, which could inhibit their ability to fulfill orders and meet our requirements.
Our reliance on third-party manufacturers and suppliers involves a number of additional risks, including, among other things: ● contract manufacturers or suppliers may fail to comply with regulatory requirements or make errors in manufacturing that could negatively affect the efficacy or safety of our products or cause delays in shipments of products; ● we or our contract manufacturers and suppliers may not be able to respond to unanticipated changes in customer orders, and if orders do not match forecasts, our suppliers may have excess or inadequate inventory of materials and components; ● we or our contract manufacturers and suppliers may be subject to price fluctuations of raw materials and key components due to a lack of long-term supply arrangements for key components; ● we or our contract manufacturers and suppliers may lose access to critical services and components, resulting in an interruption in the manufacture, assembly and shipment of our products; ● fluctuations in demand for products that our contract manufacturers and suppliers manufacture for others may affect their ability or willingness to deliver components in a timely manner; ● suppliers or contract manufacturers may wish to discontinue supplying components or services for risk management reasons; ● we may not be able to find new or alternative components or reconfigure our system and manufacturing processes in a timely manner if the necessary components become unavailable; and ● contract manufacturers and suppliers may encounter financial hardships unrelated to our demand, which could inhibit their ability to fulfill orders and meet our requirements. 37 Table of Contents If any of these risks materialize or worsen, it could significantly increase costs and impact our ability to meet demand for our products, in particular in respect of our planned commercialization of TULSA-PRO in the United States.
Regulatory bodies, such as the FDA, enforce good manufacturing practice requirements, such as the QSR in the United States, and other regulations through periodic announced or unannounced inspections. We and our contract manufacturers have been, and anticipate in the future being, subject to such inspections.
Regulatory bodies, such as the FDA, enforce device cGMP requirements, such as the QSR and QMSR in the United States, and other regulations through periodic announced or unannounced inspections. We and our contract manufacturers have been, and anticipate in the future being, subject to such inspections.
The New EU MDR among other things: ● Strengthens the rules on placing devices on the market and reinforces surveillance once they are available; 42 Table of Contents ● Establishes explicit provisions on manufacturers’ responsibilities for the follow-up of the quality, performance and safety of devices placed on the market; ● Improves the traceability of medical devices throughout the supply chain to the end-user or patient through a unique identification number; ● Sets up a central database to provide patients, healthcare professionals and the public with comprehensive information on products available in the EU; and ● Strengthens the rules for the assessment of certain high-risk devices, which may have to undergo an additional check by experts before they are placed on the market.
The New EU MDR among other things: ● Strengthens the rules on placing devices on the market and reinforces surveillance once they are available; ● Establishes explicit provisions on manufacturers’ responsibilities for the follow-up of the quality, performance and safety of devices placed on the market; ● Improves the traceability of medical devices throughout the supply chain to the end-user or patient through a unique identification number; ● Sets up a central database to provide patients, healthcare professionals and the public with comprehensive information on products available in the EU; and ● Strengthens the rules for the assessment of certain high-risk devices, which may have to undergo an additional check by experts before they are placed on the market. 45 Table of Contents These modifications may have an effect on the way we design and manufacture product and products candidates and conduct our business in the EU and EEA.
We do not believe that we are an “investment company” under the Investment Company Act, but we can provide no assurance that we will not be deemed an “investment company” in the future. 64 Table of Contents Section 3(a)(1)(A) of the Investment Company Act defines the term “investment company” to mean any issuer that “is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting, or trading in securities.” Section 3(a)(1)(C) of the Investment Company Act defines “investment company” as any issuer which “is engaged or proposes to engage in the business of investing, reinvesting, owning, holding, or trading in securities, and owns or proposes to acquire investment securities having a value exceeding 40 per centum of the value of such issuer’s total assets (exclusive of government securities and cash items) on an unconsolidated basis.” Generally, any issuer meeting the definition of an investment company is subject to all applicable provisions of the Investment Company Act and must register with the Commission under Section 8 of the Investment Company Act, unless it meets the terms and conditions of various exceptions provided by the Investment Company Act or in rules adopted by the SEC under the Investment Company Act.
Section 3(a)(1)(A) of the Investment Company Act defines the term “investment company” to mean any issuer that “is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting, or trading in securities.” Section 3(a)(1)(C) of the Investment Company Act defines “investment company” as any issuer which “is engaged or proposes to engage in the business of investing, reinvesting, owning, holding, or trading in securities, and owns or proposes to acquire investment securities having a value exceeding 40 per centum of the value of such issuer’s total assets (exclusive of government securities and cash items) on an unconsolidated basis.” Generally, any issuer meeting the definition of an investment company is subject to all applicable provisions of the Investment Company Act and must register with the Commission under Section 8 of the Investment Company Act, unless it meets the terms and conditions of various exceptions provided by the Investment Company Act or in rules adopted by the SEC under the Investment Company Act.
For example, the United States government has sought to apply the Anti-Kickback Statute to device manufacturers’ financial relationships with physician consultants.
For example, the United States government has sought to apply the Anti-Kickback 53 Table of Contents Statute to device manufacturers’ financial relationships with physician consultants.
If we are unable to establish such arrangements when, and as necessary, we could be required to undertake these activities at our own expense, which would significantly increase capital requirements and may delay the development, approval and future commercialization of our product candidates, which could have a material adverse effect on our business, financial condition and operating results.
If we are unable to establish such arrangements when, and as necessary, we could be required to undertake these activities at our own expense, which would significantly increase capital requirements and may delay the development, approval and future commercialization of our product candidates, which could have a material adverse effect on our business, financial condition and operating results. 40 Table of Contents We depend on key managerial personnel for our continued success.
We expect to incur significant operating losses even as we begin to commercialize the TULSA-PRO system in the United States following our FDA clearance, which will require significant expenditures to increase our sales and marketing capabilities and expand our manufacturing and distribution capacity, as well as other expenses related to increasing reimbursement coverage and gaining market acceptance among patients, physicians/clinicians and others in the medical community.
We have incurred and we expect to incur additional significant operating losses even as we commercialize the TULSA-PRO system in the United States, which requires significant expenditures to increase our sales and marketing capabilities and expand our manufacturing and distribution capacity, as well as other expenses related to increasing reimbursement coverage and gaining market acceptance among patients, physicians/clinicians and others in the medical community.
In particular, we and some of our suppliers are required to comply with the QSR and international standards for the manufacture of products and other regulations which cover the methods and documentation of the design, testing, production, control, quality assurance, labeling, packaging, storage and shipping of any product for which we obtain regulatory clearance 45 Table of Contents or approval.
In particular, we and some of our suppliers are required to comply with cGMP standards for the manufacture of medical devices and other regulations which cover the methods and documentation of the design, testing, production, control, quality assurance, labeling, packaging, storage and shipping of any product for which we obtain regulatory clearance or approval.
In addition, as of December 31, 2024, the maximum number of Common Shares reserved for issuance under this plan is 3,905,175 Common Shares or such other number as may be approved by the holders of the voting shares of the Company. We expect that the price of our Common Shares may fluctuate significantly.
In addition, as of December 31, 2025, the maximum number of Common Shares reserved for issuance under this plan is 4,718,173 Common Shares or such other number as may be approved by the holders of the voting shares of the Company. We expect that the price of our Common Shares may fluctuate significantly.
We rely on the compatibility of our products with MRI scanners in the successful commercialization of our products. We have designed our TULSA-PRO system to be capable of integration with some of the MRI scanners from three of the major MRI manufacturers (Philips, Siemens and GE Healthcare), and the Sonalleve system with one MRI manufacturer (Philips).
We have designed our TULSA-PRO system to be capable of integration with some of the MRI scanners from three of the major MRI manufacturers (Philips, Siemens and GE Healthcare), and the Sonalleve system with one MRI manufacturer (Philips).
Since inception, we have incurred significant losses each year. For the year ended December 31, 2024, we recorded a net loss of $27,816,000, and for the year ended December 31, 2023, we recorded a net loss of $28,323,000.
Since inception, we have incurred significant losses each year. For the year ended December 31, 2025, we recorded a net loss of $42,570,000, and for the year ended December 31, 2024, we recorded a net loss of $27,816,000.
The FDA and foreign regulatory agencies regulate, among other things, with respect to medical devices: design, development and manufacturing; testing, labeling, content and language of instructions for use and storage; clinical trials; product safety; establishment registration and device listing; marketing, sales and distribution; pre-market clearance, classification and approval; recordkeeping procedures; advertising and promotion; recalls and field safety corrective actions; post-market surveillance, including reporting of deaths or serious injuries and malfunctions that, if they were to recur, could lead to death or serious injury; post-market approval trials; and product import and export.
The FDA and foreign regulatory agencies regulate, among other things, with respect to medical devices: design, development and manufacturing; testing, labeling, content and language of instructions for use and storage; clinical trials; product safety; establishment registration and device listing; marketing, sales and distribution; pre-market clearance, classification and approval; record keeping procedures; advertising and promotion; recalls and field safety corrective actions; post-market surveillance, including reporting of deaths or serious injuries and malfunctions that, if they were to recur, could lead to death or serious injury; post-market approval trials; and product import and export. 43 Table of Contents The regulations to which we are subject are complex and have tended to become more stringent over time.
We cannot be sure that a license would be available to us on acceptable terms, or at all. 58 Table of Contents Because some patent applications in certain jurisdictions may be maintained in secrecy until the patents are issued, because patent applications in the United States and many other jurisdictions are typically not published until 18 months after filing and because publications in the scientific literature often lag behind actual discoveries, we cannot be certain that others have not filed patent applications for technology covered by our or our licensors’ issued patents or our pending applications or our licensors’ pending applications, or that we or our licensors were the first to invent the technology.
Because some patent applications in certain jurisdictions may be maintained in secrecy until the patents are issued, because patent applications in the United States and many other jurisdictions are typically not published until 18 months after filing and because publications in the scientific literature often lag behind actual discoveries, we cannot be certain that others have not filed patent applications for technology covered by our or our licensors’ issued patents or our pending applications or our licensors’ pending applications, or that we or our licensors were the first to invent the technology.
Risk Factors Relating to Our Operating History and Financial Condition We have a limited operating history and history of operating losses. We commenced operations in June 2008 and only began generating revenues in 2017. As of December 31, 2024, we had an accumulated deficit of $245,170,000 and had cash and cash equivalents of $54,912,000.
Risk Factors Relating to Our Operating History and Financial Condition We have a limited operating history and history of operating losses. We commenced operations in June 2008 and only began generating revenues in 2017. As of December 31, 2025, we had an accumulated deficit of $287,740,000 and had cash and cash equivalents of $59,723,000.
In order conduct our clinical trials, we must recruit, screen and enroll eligible patients. Patients may be identified from the investigator’s own clinical practice or hospital or may be referred by another physician. Potential clinical trial participants must provide informed consent before undergoing certain clinical tests that are used to determine patient eligibility based on inclusion/exclusion criteria.
Patients may be identified from the investigator’s own clinical practice or hospital or may be referred by another physician. Potential clinical trial participants must provide informed consent before undergoing certain clinical tests that are used to determine patient eligibility based on inclusion/exclusion criteria.
Additionally, recurring revenue for any fiscal quarter must be 15% greater than the same quarter in the prior fiscal year, reported quarterly. As of December 31, 2024, we were in compliance with these covenants. Future compliance depends on achieving specific revenue, EBITDA, and cash levels.
Additionally, recurring revenue for any fiscal quarter must be 15% greater than the same quarter in the prior fiscal year, reported quarterly. As of December 31, 2024, we were in compliance with these covenants.
The availability of equity or debt financing will be affected by, among other things, our commercial progress and market acceptance in respect of the TULSA-PRO system and other approved products, as well as the results of our research and development, our ability to obtain regulatory approvals, the state of the capital markets generally, strategic alliance agreements, and other relevant considerations.
The availability of equity or debt financing will be affected by, among other things, our commercial progress and market acceptance in respect of the TULSA-PRO system and other approved products, as well as the results of our research and development, our ability to obtain regulatory approvals, the state of the capital markets generally, strategic alliance agreements, and other relevant considerations. 31 Table of Contents Any additional financing may not be obtained on favorable terms, if at all.
Any of the foregoing could result in negative publications, negative sentiment or adverse events or regulatory actions in respect of our products, thereby limiting market acceptance and sales of our products, which could have a material adverse effect on our business, financial condition and results of operations.
Any of the foregoing could result in negative publications, negative sentiment or adverse events or regulatory actions in respect of our products, thereby limiting market acceptance and sales of our products, which could have a material adverse effect on our business, financial condition and results of operations. 34 Table of Contents We rely on the compatibility of our products with MRI scanners in the successful commercialization of our products.
We intend to rely primarily on our in-house sales and marketing capabilities for our commercialization strategy, which will require substantial build-up and commitment of resources. We intend to rely primarily on our in-house sales and marketing capabilities in order to advance our commercialization strategy, particularly in the United States in respect of our FDA-cleared TULSA-PRO system.
We intend to rely primarily on our in-house sales and marketing capabilities in order to advance our commercialization strategy, particularly in the United States in respect of our FDA-cleared TULSA-PRO system.
Such third parties may not perform satisfactorily, including failing to meet deadlines for the completion of clinical trials. We may rely on third parties to provide clinical trial planning conduct certain clinical trials, perform data collection and analysis and provide marketing, manufacturing, regulatory advice and other services that are crucial to our business.
We may rely on third parties to provide clinical trial planning conduct certain clinical trials, perform data collection and analysis and provide marketing, manufacturing, regulatory advice and other services that are crucial to our business.
In the European Union, we may be subject to the General Data Protection Regulation (“GDPR”) which went into effect in May 2018 and which imposes obligations on companies that operate in our industry with respect to the processing of personal data and the cross-border transfer of such data.
These privacy laws may impact our business activities and exemplify the vulnerability of our business to the evolving regulatory environment related to personal data. 55 Table of Contents In the European Union, we may be subject to the General Data Protection Regulation (“GDPR”) which went into effect in May 2018 and which imposes obligations on companies that operate in our industry with respect to the processing of personal data and the cross-border transfer of such data.
The regulations to which we are subject are complex and have tended to become more stringent over time. Regulatory changes could result in restrictions on our ability to carry on or expand our operations, higher than anticipated costs or lower than anticipated sales. The FDA enforces its regulatory requirements through, among other means, periodic announced or unannounced inspections.
Regulatory changes could result in restrictions on our ability to carry on or expand our operations, higher than anticipated costs or lower than anticipated sales. The FDA enforces its regulatory requirements through, among other means, periodic announced or unannounced inspections.
If we are unable to satisfy commercial demand for our products, in particular our TULSA-PRO system in the United States, due to our inability (or the inability of any of our contract manufacturers) to assemble and test such products in sufficient quantities with consistent quality control, and in compliance with applicable regulatory requirements (and in a cost-efficient manner), our ability to commercialize such products successfully, and market acceptance of our products could be adversely affected as our target customers may instead purchase or use our competitors’ products.
Any such quality control issues may negatively affect production and sales of our products, and may require increased repair or re-engineering costs due to product returns, defects and increased expenses due to switching to alternate suppliers, and reputational damage, any of which could negatively affect our business and reputation. 36 Table of Contents If we are unable to satisfy commercial demand for our products, in particular our TULSA-PRO system in the United States, due to our inability (or the inability of any of our contract manufacturers) to assemble and test such products in sufficient quantities with consistent quality control, and in compliance with applicable regulatory requirements (and in a cost-efficient manner), our ability to commercialize such products successfully, and market acceptance of our products could be adversely affected as our target customers may instead purchase or use our competitors’ products.
Our foreign operations are subject to risks inherent in conducting business abroad, such as: difficulties in coordinating and managing foreign operations, price and currency exchange controls, political and economic instability, compliance with multiple regulatory regimes, differing degrees of protection for intellectual property, unexpected changes in foreign regulatory requirements and restrictive governmental actions.
Our foreign operations are subject to risks inherent in conducting business abroad, such as: difficulties in coordinating and managing foreign operations, price and currency exchange controls, political and economic instability, compliance with multiple regulatory regimes, differing degrees of protection for intellectual property, unexpected changes in foreign regulatory requirements and restrictive governmental actions. 61 Table of Contents As of March 2026, U.S. tariff actions announced in 2025 have been halted and replaced with new tariff actions, which are subject to ongoing litigation and negotiations.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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We consider risks from cybersecurity threats alongside other company risks as part of our overall risk assessment process. We employ a range of 65 Table of Contents tools and services, including phishing training, regular network and endpoint monitoring, audits and vulnerability assessments to inform our risk identification and assessment.
We consider risks from cybersecurity threats alongside other company risks as part of our overall risk assessment process. We employ a range of tools and services, including phishing training, regular network and endpoint monitoring, audits and vulnerability assessments to inform our risk identification and assessment.
In general, our board of directors oversees risk management activities designed and implemented by our management, and considers 66 Table of Contents specific risks, including, for example, risks associated with our strategic plan, business operations, and capital structure. The board of directors is responsible for the oversight of risks from cybersecurity threats.
Cybersecurity Governance: Management Cybersecurity is an important part of our risk management processes and an area of focus for our board of directors and management. In general, our board of directors oversees risk management activities designed and implemented by our management, and considers specific risks, including, for example, risks associated with our strategic plan, business operations, and capital structure.
Our incident response plan coordinates the activities we take to prepare for, detect, respond to and recover from cybersecurity incidents, which include processes to triage, assess severity for, escalate, contain, investigate and remediate the incident, as well as to comply with potentially applicable legal obligations and mitigate damage to our business and reputation.
Our incident response plan coordinates the activities we take to prepare for, detect, respond to and recover from cybersecurity incidents, which include processes to triage, assess severity for, escalate, contain, investigate and remediate the incident, as well as to comply with potentially applicable legal obligations and mitigate damage to our business and reputation. 67 Table of Contents As part of the above processes, we engage with third parties, including annually having a qualified third-party review our incident response plan and our cybersecurity measures to help identify areas for continued focus, improvement and compliance.
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As part of the above processes, we engage with third parties, including annually having a qualified third-party review our incident response plan and our cybersecurity measures to help identify areas for continued focus, improvement and compliance.
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The board of directors is responsible for the oversight of risks from cybersecurity threats.
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Cybersecurity Governance: Management Cybersecurity is an important part of our risk management processes and an area of focus for our board of directors and management.

Item 2. Properties

Properties — owned and leased real estate

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Item 2. PROPERTIES We currently lease office space in and around the Mississauga, Ontario and Vantaa, Finland area. We lease office space at 2400 Skymark Avenue, Unit 6, Mississauga, Ontario, Canada, containing approximately 38,148 square feet of office and manufacturing space pursuant to a lease agreement that expires in September 2026. This is our corporate headquarters.
Item 2. PROPERTIES We currently lease office space in and around the Mississauga, Ontario and Vantaa, Finland area. We lease office space at 2400 Skymark Avenue, Unit 6, Mississauga, Ontario, Canada, containing approximately 38,148 square feet of office and manufacturing space pursuant to a lease agreement that expires in September 2026.
We also lease office space at Äyritie 4B, 01510 Vantaa, Finland, pursuant to a lease agreement that expires in December 2025. This lease replaced a lease at the same address which expired in December 2024. The initial lease term for this lease was less than twelve months.
This is our corporate headquarters. 68 Table of Contents We also lease office space at Äyritie 4B, 01510 Vantaa, Finland, pursuant to a lease agreement that expires in December 2026. This lease replaced a lease at the same address which expired in December 2025. The initial lease term for this lease was less than twelve months.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors. Item 4. MINE SAFETY DISCLOSURES Not applicable. 67 Table of Contents PART II
Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors. Item 4. MINE SAFETY DISCLOSURES Not applicable. PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Any future determination related to dividend policy will be made at the discretion of our board of directors and will depend upon, among other factors, our results of operations, financial condition, capital requirements, contractual restrictions, business prospects and other factors our board of directors might deem relevant. Item 6. [RESERVED] ​
Any future determination related to dividend policy will be made at the discretion of our board of directors and will depend upon, among other factors, our results of operations, financial condition, capital requirements, contractual restrictions, business prospects and other factors our board of directors might deem relevant. ​ 69 Table of Contents Item 6. [RESERVED] ​
Stockholders As of March 7, 2025, we had 30,039,809 outstanding common shares, no outstanding preferred shares, and approximately 8,364 holders of record of our outstanding common shares. Unregistered Sales of Securities None. Issuer Purchases of Equity Securities None. Dividend Policy We have never declared or paid cash dividends on our common shares.
Stockholders As of March 5, 2026, we had 36,293,640 outstanding common shares, no outstanding preferred shares, and approximately 9,557 holders of record of our outstanding common shares. Unregistered Sales of Securities None. Issuer Purchases of Equity Securities None. Dividend Policy We have never declared or paid cash dividends on our common shares.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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On March 3, 2025, we entered into an amended and restated credit agreement with CIBC (the “ CIBC Credit Agreement ”), which amended the terms of the CIBC Loan and the existing long-term debt provided under the Original CIBC Credit Agreement was repaid with proceeds from a new revolving line of credit provided by CIBC to us.
CIBC Loan On March 3, 2025, we entered into an amended and restated credit agreement with CIBC (the “ CIBC Credit Agreement ”), which amended the terms of the CIBC Loan and the existing long-term debt provided under the Original CIBC Credit Agreement was repaid with proceeds from a new revolving line of credit provided by CIBC to us.
As additional information becomes available or actual amounts are determinable, the recorded estimates are revised and reflected in operating results in the year in which they are determined. Critical accounting policies Revenue Revenue is derived primarily from the sale of the TULSA-PRO and Sonalleve systems and one time use devices. All products generally contain a one-year warranty.
As additional information becomes available or actual amounts are determinable, the recorded estimates are revised and reflected in operating results in the year in which they are determined. Critical accounting policies Revenue Revenue is derived primarily from the sale of the TULSA-PRO and Sonalleve systems and one-time use devices. All products generally include a one-year warranty.
We intend to use net proceeds from the public offering to fund the continued commercialization of the TULSA-PRO system in the United States, the continued development and commercialization of the TULSA-PRO system and the SONALLEVE system globally and for working capital and general corporate purposes.
We intend to use net proceeds from the Public Offering and Private Placement to fund the continued commercialization of the TULSA-PRO system in the United States, the continued development and commercialization of the TULSA-PRO system and the Sonalleve system globally and for working capital and general corporate purposes.
We intend to use net proceeds from the Public Offering and Private Placement to fund the continued commercialization of the TULSA-PRO system in the United States, the continued development and commercialization of the TULSA-PRO system and the SONALLEVE system globally 72 Table of Contents and for working capital and general corporate purposes.
We intend to use net proceeds from the public offering and private placement to fund the continued commercialization of the TULSA-PRO system in the United States, the continued development and commercialization of the TULSA-PRO system and the Sonalleve system globally and for working capital and general corporate purposes.
Our lead product (the “ TULSA-PRO system ”) combines real-time MRI, robotically driven transurethral sweeping-action thermal ultrasound with closed-loop temperature feedback control for the ablation of prostate tissue. The 68 Table of Contents product is comprised of one-time-use devices and durable equipment that are used in conjunction with a customer’s existing MRI scanner.
Our lead product (the “ TULSA-PRO system ”) combines real-time MRI, robotically driven transurethral sweeping-action thermal ultrasound with closed-loop temperature feedback control for the ablation of prostate tissue. The product is comprised of one-time-use devices and capital equipment that are used in conjunction with a customer’s existing MRI scanner.
We expect to continue to devote substantial resources to expand procedure adoption and acceptance of our products. We may require additional capital to fund R&D activities and any significant expansion of operations.
We expect to continue to devote substantial resources to expand procedure adoption and acceptance of our products. 74 Table of Contents We may require additional capital to fund R&D activities and any significant expansion of operations.
To achieve this core principle, the Company applies the five-step revenue model to contracts within its scope: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract and (v) recognize revenue when (or as) the entity satisfies a performance obligation.
To achieve this core principle, we apply the five-step revenue model to contracts within our scope: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract and (v) recognize revenue when (or as) the entity satisfies a performance obligation.
Outside of North America, we generate most of our revenues from our system sales (both TULSA-PRO and Sonalleve) in Europe and Asia where we deploy a more traditional hybrid business model, charging for the system separately as capital and an additional per patient charge for the one-time-use devices and associated Genius services.
Outside of North America, we generate most of our revenues from our system sales (both TULSA-PRO and Sonalleve) in Europe and Asia where we deploy a hybrid business model, charging for the system separately as capital and an additional charge for the one-time-use devices.
Any failure on our part to raise additional funds on terms favorable to us or at all may require us to significantly change or curtail current or planned operations in order to conserve cash until such time, if ever, that sufficient proceeds from operations are generated, and could result in us not being in a position to take advantage of business opportunities, in the termination or delay of clinical trials for our products, in curtailment of product development programs designed to identify new products, in the sale or assignment of rights to technologies, product and/or an inability to file market approval applications at all or in time to competitively market products. ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ 2024 ​ 2023 ​ ​ $ $ Cash provided by (used in) operating activities (23,453) ​ (22,609) Cash provided by (used in) financing activities 54,696 ​ 1,756 Foreign exchange on cash (2,544) ​ 549 Net increase (decrease) in cash 28,699 ​ (20,304) ​ Operating Activities Net cash provided by (used in) operating activities for the year ended December 31, 2024 was $(23,453).
Any failure on our part to raise additional funds on terms favorable to us or at all may require us to significantly change or curtail current or planned operations in order to conserve cash until such time, if ever, that sufficient proceeds from operations are generated, and could result in us not being in a position to take advantage of business opportunities, in the termination or delay of clinical trials for our products, in curtailment of product development programs designed to identify new products, in the sale or assignment of rights to technologies, product and/or an inability to file market approval applications at all or in time to competitively market products. ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ 2025 ​ 2024 ​ ​ $ ​ ​ ​ $ Cash provided by (used in) operating activities (38,207) ​ (23,453) Cash provided by (used in) investing ​ (242) ​ — Cash provided by (used in) financing activities 41,138 ​ 54,696 Foreign exchange on cash 2,122 ​ (2,544) Net increase in cash 4,811 ​ 28,699 ​ Operating Activities Net cash provided by (used in) operating activities for the year ended December 31, 2025 was $(38,207).
The Company recognizes revenue when the customer obtains control of promised goods or services and in an amount that reflects the consideration to which the Company expects to be entitled to receive in exchange for those goods or services.
We recognize revenue when the customer obtains control of promised goods or services and in an amount that reflects the consideration which we expect to be entitled to receive in exchange for those goods or services.
During that time, we expect that our expenses will increase, primarily due to the continued commercialization of TULSA-PRO and Sonalleve. Use of Proceeds 2024 Offering and non-brokered private placement We received net proceeds of $21,079 from the Public Offering and Private Placement completed in January 2024.
During that time, we expect that our expenses will increase, primarily due to the continued commercialization of TULSA-PRO and Sonalleve. Use of Proceeds 2025 Offering and non-brokered private placement We received net proceeds of $40,801 from the Public Offering and Private Placement completed in December 2025.
Externally the catheter is connected to a software controlled robotic manipulator that rotates up to 360-degree in a sweeping action to impart thermal energy and thus ablation of tissue.
Focused ultrasound energy is then delivered by the catheter in the shape of a blade. Externally the catheter is connected to a software controlled robotic manipulator that rotates up to 360-degree in a sweeping action to impart thermal energy and thus ablation of tissue.
For the year ended December 31, 2024, we recorded revenue totaling $10,680, with $2,440 from the one-time sale of capital equipment and $8,240 from recurring – non-capital revenue. For the year ended December 31, 2023, we recorded revenue of $7,199, with $393 from the one-time sale of capital equipment and $6,806 from recurring – non-capital revenue.
For the year ended December 31, 2024, we recorded revenue of $10,680, with $2,440 from the one-time sale of capital equipment and $8,240 from recurring – non-capital revenue.
Net finance (income) expense Net finance (income) expense is primarily comprised of the following: (i) the CIBC Credit Agreement (as defined herein) accreting to the principal amount repayable and its related interest expense; (ii) interest income from cash and cash equivalents; (iii) the lease liability interest expense; and (iv) the interest income on trade and other receivables.
Net finance (income) expense Net finance (income) expense is primarily comprised of the following: (i) the CIBC Credit Agreement (as defined herein) accreting to the principal amount repayable and its related interest expense; and (ii) interest income from cash and cash equivalents.
Overview We are a commercial-stage medical device company focused on the development and marketing of customizable, incision-free therapeutic systems for the image guided ablation of diseased tissue utilizing its platform technologies and leveraging the healthcare system’s existing imaging infrastructure.
Overview We are a commercial-stage medical device company focused on the development and marketing of AI-powered, MRI-guided, incision-free therapies for the ablation of diseased tissue utilizing our platform technologies and leveraging the healthcare system’s existing imaging infrastructure.
For the year ended December 31, 2024, we recorded a cost of sales of $3,643, related to the sale of medical devices, capital and non-capital, which reflects a 66% gross profit.
For the year ended December 31, 2025, we recorded a cost of sales of $4,705, related to the sale of medical devices, capital and non-capital, which reflects a 71% gross profit.
Financing Activities Net cash provided by (used in) financing activities for the year ended December 31, 2024 was $54,696 primarily from the proceeds of the issuance of common shares of $57,211, net of issuance costs, and proceeds of $45 from the exercise of share options which were offset by the $2,560 repayments of long-term debt.
Net cash provided by (used in) financing activities for the year ended December 31, 2024 was $54,696 primarily from the proceeds of the issuance of common shares of $57,211, net of issuance costs, and proceeds of $45 from the exercise of share options which were offset by the $2,560 repayments of long-term debt. 75 Table of Contents Foreign Exchange on Cash Cash was impacted by the change in the foreign exchange rates for the Company’s foreign currency denominated cash (non-USD).
This resulted in an increase in headcount, travel and marketing fees. Non-cash charges consisted primarily of share-based compensation, amortization and depreciation. Net cash provided by (used in) operating activities for the year ended December 31, 2023 was $(22,589).
This resulted in an increase in headcount, travel and R&D expenses. Non-cash charges consisted primarily of share-based compensation, amortization and depreciation. Net cash provided by (used in) operating activities for the year ended December 31, 2024 was $(23,453).
Indicators that there is no reasonable expectation of recovery include, amongst others, failure to make contractual payments for a period of greater than 180 days past due.
Uncollectible accounts are written-off against the allowance when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst others, failure to make contractual payments for a period of greater than 180 days past due.
Trade and other receivables are stated net of an allowance for expected credit losses. The Company grants credit to customers in the normal course of business and maintains an allowance for expected credit losses which reflect the current estimate of expected credit losses expected to be incurred over the life of the receivables.
We grant credit to customers in the normal course of business and maintains an allowance for expected credit losses which reflect the current estimate of expected credit losses expected to be incurred over the life of the receivables.
Capital equipment Capital equipment revenue consists of the sale of capital equipment including installation and training amounts. Revenue is recognized when the Company transfers control to the customer, which is generally at the time of shipment. The Company’s customer arrangements generally do not provide a right of return.
Revenue is recognized when the Company transfers control to the customer, which is generally at the time of shipment. The Company’s customer arrangements generally do not provide a right of return.
Sonalleve delivers its ultrasound energy via a disc located outside the patient. Its ultrasound energy is focused to create small cylindrical hot spots a certain distance into the patient. Overlapping cylinders create ablation of the physician-prescribed desired tissue.
Sonalleve delivers its ultrasound energy via a disc located outside the patient. Its ultrasound energy is focused to create small cylindrical hot spots a certain distance into the patient. Overlapping cylinders create ablation of the physician-prescribed desired tissue. Similar to TULSA-PRO, Sonalleve also provides for controlled temperature increases to achieve cell kill.
We believe that in the hands of trained physicians, our systems have the ability to provide customizable, incision-free ablative therapies with the precision of real-time MRI visualization and thermometry, focused ultrasound and closed-loop temperature feedback control.
The physician is in charge of using the Profound devices and decides which tissue needs to be ablated to impart therapeutic effect. We believe that in the hands of trained physicians, our systems have the ability to provide customizable, incision-free ablative therapies with the precision of real-time MRI visualization and thermometry, focused ultrasound and closed-loop temperature feedback control.
The increase of $3,481 or 48% in revenue for the year ended December 31, 2024, was the result of higher recurring revenue and capital sales in the United States during 2024.
The increase of $5,418 or 51% in revenue for the year ended December 31, 2025, was the result of higher recurring revenue and capital sales in the United States and overseas during 2025.
Additionally, the CIBC Credit Agreement provides that we may request a one-time increase in the principal amount of the revolving line of credit up to a maximum amount of $10,000, which is subject to the approval of CIBC in its sole discretion. 73 Table of Contents Cash Flow We manage liquidity risk by monitoring actual and projected cash flows.
Additionally, the CIBC Credit Agreement provides that we may request a one-time increase in the principal amount of the revolving line of credit up to a maximum amount of $10,000, which is subject to the approval of CIBC in its sole discretion.
Profound’s Technology TULSA-PRO and Sonalleve share the common technological concept of using MRI to enable visualization by the surgeon of desired tissue in real time. Both products also use thermal ultrasound technology to gently heat and ablate tissue using the real-time thermometry capability of the MRI.
Profound’s Technology TULSA-PRO and Sonalleve share the common technological concept of using MRI to enable visualization by the surgeon of desired tissue in real time.
Net finance (income) expense increased $661 to ($1,436) during the year ended December 31, 2024, compared to ($775) during the year ended December 31, 2024.
Net finance (income) expense decreased $366 to $(1,070) during the year ended December 31, 2025, compared to $(1,436) during the year ended December 31, 2024.
Contractual obligations The following table summarizes our significant contractual obligations: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ Between 1 ​ ​ Carrying ​ Future cash ​ Less than 1 ​ year and 5 ​ ​ amount ​ flows ​ Year ​ years ​ ​ $ $ $ $ Accounts payables and accrued liabilities ​ 1,317 ​ 1,317 ​ 1,317 ​ — Lease liability ​ 460 1 ​ 480 ​ 274 ​ 206 Long-term debt 4,661 ​ 5,282 ​ 2,034 ​ 3,248 Total 6,438 ​ 7,079 ​ 3,625 ​ 3,454 1 Present value of the lease payments that are not paid, discounted using the interest rate implicit in the lease.
Contractual obligations The following table summarizes our significant contractual obligations: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ ​ ​ ​ ​ ​ ​ Between 1 ​ ​ Carrying ​ Future cash ​ Less than 1 ​ year and 5 ​ ​ amount ​ flows ​ Year ​ years ​ ​ $ ​ ​ ​ $ ​ ​ ​ $ ​ ​ ​ $ Accounts payables and accrued liabilities ​ 5,378 ​ 5,378 ​ 5,378 ​ — Lease liability ​ 213 1 ​ 216 ​ 216 ​ — Long-term debt 4,499 ​ 4,898 ​ 304 ​ 4,594 Total 10,090 ​ 10,492 ​ 5,898 ​ 4,594 1 Present value of the lease payments that are not paid, discounted using the interest rate implicit in the lease.
R&D Expenses R&D expenses are comprised of costs incurred in performing R&D activities, including new product development, continuous product improvement, investment in clinical trials and related clinical manufacturing costs, materials and supplies, salaries and benefits, consulting fees, patent procurement costs, and occupancy costs related to R&D activity. 71 Table of Contents For the year ended December 31, 2024, R&D expenses increased by $2,541, or 18% to $16,965 compared to $14,424 for the year ended December 31, 2023.
R&D Expenses R&D expenses are comprised of costs incurred in performing R&D activities, including new product development, continuous product improvement, investment in clinical trials and related clinical manufacturing costs, materials and supplies, salaries and benefits, consulting fees, patent procurement costs, and occupancy costs related to R&D activity.
On September 26, 2023 an amendment to the CIBC Loan resulted in a change to the financial covenants.
On September 30, 2025, an amendment to the CIBC Credit Agreement resulted in a change to one of the financial covenants.
Results of Operations The following selected financial information as at and for the years ended December 31, 2024 and 2023 have been derived from the audited consolidated financial statements and should be read in conjunction with those audited consolidated financial statements and related notes. ​ ​ ​ ​ ​ ​ ​ ​ ​ For years ended December 31, ​ ​ 2024 2023 ​ ​ $ ​ $ Revenue ​ ​ 10,680 ​ ​ 7,199 Operating expenses ​ 40,099 ​ ​ 32,963 Other (income) expense ​ (5,244) ​ ​ (200) Net loss for the year ​ 27,816 ​ ​ 28,323 Basic and diluted loss per share ​ 1.12 ​ ​ 1.34 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended ​ December 31 ​ ​ ​ 2024 ​ 2023 ​ Change ​ ​ $ $ $ % Revenue ​ 10,680 ​ 7,199 ​ 3,481 ​ 48 % Cost of sales 3,643 2,887 756 26 % Gross profit 7,037 4,312 2,725 63 % Gross margin ​ 66 % 60 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Expenses ​ Research and development 16,965 14,424 2,541 18 % Selling, general and administrative 23,134 18,539 4,595 25 % Total operating expenses 40,099 32,963 7,136 22 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other (income) expense ​ Net finance (income) expense (1,436) (775) (661) 85 % Net foreign exchange (gain) loss (3,808) 575 (4,383) (762) % Total other (income) expense (5,244) (200) (5,044) 2,522 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss before income taxes 27,818 28,451 (633) (2) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income taxes (2) (128) 126 (98) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss attributed to shareholders for the year 27,816 28,323 (507) (2) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other comprehensive (income) loss ​ Item that may be reclassified to profit or loss ​ Foreign currency translation adjustment 2,823 (644) 3,467 (538) % Net loss and comprehensive loss for the year 30,639 27,679 2,960 11 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss per share ​ Basic and diluted net loss per common share 1.12 1.34 (0.22) (16) % Basic and diluted weighted average common share outstanding 24,765,503 21,182,558 ​ ​ 70 Table of Contents Recent Developments On January 2, 2024, the Company closed a public offering, resulting in the issuance of 2,666,667 common shares at a price of $7.50, for gross proceeds of $20,000.
Results of Operations The following selected financial information as at and for the years ended December 31, 2025 and 2024 have been derived from the audited consolidated financial statements and should be read in conjunction with those audited consolidated financial statements and related notes. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For years ended December 31, ​ ​ 2025 ​ ​ ​ 2024 ​ ​ $ ​ $ Revenue ​ ​ 16,098 ​ ​ 10,680 Operating expenses ​ 52,647 ​ ​ 40,099 Other (income) expense ​ 1,064 ​ ​ (5,244) Net loss for the year ​ 42,570 ​ ​ 27,816 Basic and diluted loss per share ​ 1.41 ​ ​ 1.12 ​ 71 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended ​ ​ ​ ​ December 31, ​ ​ ​ 2025 ​ 2024 ​ Change ​ ​ $ ​ ​ ​ $ ​ ​ ​ $ ​ ​ ​ % Revenue ​ 16,098 ​ 10,680 ​ 5,418 ​ 51 % Cost of sales 4,705 3,643 1,062 29 % Gross profit 11,393 7,037 4,356 62 % Gross margin ​ 71 % 66 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Expenses ​ ​ ​ ​ ​ Research and development 20,596 16,965 3,631 21 % Selling, general and administrative 32,051 23,134 8,917 39 % Total operating expenses 52,647 40,099 12,548 31 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other (income) expense ​ ​ ​ ​ ​ Net finance (income) expense (1,070) (1,436) 366 (25) % Net foreign exchange (gain) loss 2,134 (3,808) 5,942 (156) % Total other (income) expense 1,064 (5,244) 6,308 (120) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss before income taxes 42,318 27,818 14,500 52 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income taxes 252 (2) 254 (12,700) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss attributed to shareholders for the year 42,570 27,816 14,754 53 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other comprehensive (income) loss ​ ​ ​ ​ ​ Item that may be reclassified to profit or loss ​ ​ ​ ​ ​ Foreign currency translation adjustment (2,283) 2,823 (5,106) (181) % Net loss and comprehensive loss for the year 40,287 30,639 9,648 31 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loss per share ​ ​ ​ ​ ​ Basic and diluted net loss per common share 1.41 1.12 0.29 26 % Basic and diluted weighted average common share outstanding 30,232,966 24,765,503 ​ ​ ​ ​ Recent Developments On December 22, 2025, we closed a public offering, resulting in the issuance of 5,142,870 common shares at a price of $7.00 per share, for gross proceeds of $36,000.
The Company considers various factors in establishing, monitoring, and adjusting its allowance for expected credit losses, including the aging of the accounts and aging trends, the historical level of charge-offs, and specific credit exposures related to particular customers.
We consider various factors in establishing, monitoring, and adjusting our allowance for expected credit losses, including the aging of the accounts and aging trends, the historical level of charge-offs, and specific credit exposures related to particular customers. We also monitor other risk factors and forward-looking information, such as country risk, when determining credit limits for customers and establishing adequate allowances.
Liquidity and Capital Resources As of December 31, 2024, we had cash of $54,912 compared to $26,213 as of December 31, 2023. Historically, our primary source of cash has been financing activities, e.g., equity offerings as well as the CIBC Loan (as defined below).
Historically, our primary source of cash has been financing activities, e.g., equity offerings as well as the CIBC Loan (as defined below).
Revenue is comprised of recurring – non-capital revenue, which consists of the sale of one-time-use devices, lease of medical devices, procedures and services associated with extended warranties and capital equipment, which is the one-time sale of capital equipment.
Recurring – non-capital Recurring - non-capital revenue consists of the sale of one-time-use devices and services associated with extended warranties. Revenue from sale of one-time-use devices is recognized when control is transferred to the customers, which generally occurs at the time of shipment.
The amount of revenue to be recognized is based on the transaction price the Company expects to receive in exchange for its goods and services.
The amount of revenue to be recognized is based on the transaction price the Company expects to receive in exchange for its goods and services. For contracts that contain multiple performance obligations, the Company allocates the transaction price to each performance obligation and recognizes the related revenue when or as control of each individual performance obligation is transferred to customers.
A cash flow forecast is performed regularly to ensure that we have sufficient cash to meet our operational needs while maintaining sufficient liquidity. Our cash requirements depend on numerous factors, including market acceptance of our products, the resources devoted to developing and supporting the products and other factors.
Our cash requirements depend on numerous factors, including market acceptance of our products, the resources devoted to developing and supporting the products and other factors.
Key Components of Our Results of Operations Revenue We deploy a hybrid recurring revenue business model in the United States to market TULSA-PRO, i) charging a one-time payment that includes a supply of our one-time-use device, use of the system as well as our Genius services that support each TULSA center with clinical and patient recruitment and ii) a traditional model of charging for the system separately as capital and an additional per patient charge for the one-time-use devices and associated Genius services.
Key Components of Our Results of Operations Revenue We deploy a hybrid revenue business model in the United States to market TULSA-PRO by charging for the system separately as capital and an additional charge for the one-time-use devices. The Sonalleve product is marketed primarily outside North America deploying a one-time capital sales model with limited recurring service revenue.
The amended covenants are that unrestricted cash must at all times be greater of: (i) to the extent EBITDA is negative for such period, EBITDA for the most recent nine-month period or (ii) $7,500, reported on a monthly basis; and that recurring revenue for any fiscal quarter must be 15% greater than recurring revenue for the same fiscal quarter in the prior fiscal year, reported on a quarterly basis.
The amended covenant is that unrestricted cash must at all times be greater of: (i) to the extent that EBITDA is a negative number or loss for the most recent six-month period, the amount of such loss, or (ii) $10,000, reported on a monthly basis. We are in compliance with these financial covenants as of December 31, 2025.
Net cash provided by (used in) financing activities for the year ended December 31, 2023 was $1,756 primarily of proceeds from the issuance of warrants of $2,423 and proceeds of $245 from the exercise of share options which were offset by the $912 repayments of long-term debt. 74 Table of Contents Foreign Exchange on Cash Cash was impacted by the change in the foreign exchange rates for the Company’s foreign currency denominated cash (non-USD).
Financing Activities Net cash provided by (used in) financing activities for the year ended December 31, 2025 was $41,138 primarily from the proceeds of the issuance of common shares of $41,420, net of issuance costs, and proceeds of $8 from the exercise of share options which were offset by the $290 repayments of long-term debt.
Revenue from sale of one-time-use devices is recognized when control is transferred to the customers, which generally occurs at the time of shipment. Service revenue related to extended warranties is deferred and recognized on a straight-line basis over the extended warranty period covered by the customer contract.
Service revenue related to extended warranties is deferred and recognized on a straight-line basis over the extended warranty period covered by the customer contract. 76 Table of Contents Capital equipment Capital equipment revenue consists of the sale of capital equipment including installation and training amounts, which includes sales to distributors.
TULSA-PRO delivers its ultrasound energy through a transurethral catheter, a one-time-use device that is placed in the patient’s prostate through a natural orifice. Focused ultrasound energy is then delivered by the catheter in the shape of a blade.
Both products also use thermal ultrasound technology to gently heat and ablate tissue using the real-time thermometry capability of the MRI. 70 Table of Contents TULSA-PRO delivers its ultrasound energy through a transurethral catheter, a one-time-use device that is placed in the patient’s prostate through a natural orifice.
Sales to distributors The Company markets and sells its products primarily through its direct sales force, which sells its products to end customers. A portion of the Company’s revenue is generated by sales to distributors primarily in Europe and Asia. When the Company transacts with a distributor, its contractual arrangement is with the distributor and not with the end customer.
Sales to distributors We market and sell our products primarily through our direct sales force, which sells our products to end customers. A portion of our revenue is generated by sales to distributors. In markets where we do not maintain a direct presence, we engage distribution partners.
For the year ended December 31, 2023, we recorded a cost of sales of $2,887, related to the sale of medical devices, capital and non-capital, which reflects a 60% gross profit.
For the year ended December 31, 2024, we recorded a cost of sales of $3,643, related to the sale of medical devices, capital and non-capital, which reflects a 66% gross profit. The gross profit was higher in 2025 by $4,356 or 62% due to increased selling prices coupled with the growth in the number of capital systems sold.
Whether the Company transacts business with and receives the order from a distributor or directly from an end customer, its revenue recognition policy and resulting pattern of revenue recognition for the order are generally the same. Critical accounting estimates Trade and other receivables The key judgements and estimates are used in determining the allowance for expected credit losses.
Critical accounting estimates Trade and other receivables The key judgements and estimates are used in determining the allowance for expected credit losses. Trade and other receivables are stated net of an allowance for expected credit losses.
On January 16, 2024, the Company closed a non-brokered private placement, resulting in the issuance of 391,667 common shares at a price of $7.50, for gross proceeds of $2,938. On December 10, 2024, we closed a public offering, resulting in the issuance of 5,366,705 common shares at a price of $7.50 per share, for gross proceeds of $40,250.
On December 30, 2025, we closed a private placement, resulting in the issuance of 921,428 common shares at a price of $7.00, for gross proceeds of $6,450.
The principal use of the operating cash flows during the year related to a net loss of $28,323 and an increase in net operating asset and liabilities of $540 and by non-cash charges of $5,174.
The principal use of the operating cash flows during the year related to a net loss of $42,570 and a decrease in net operating assets and liabilities of $1,713 and partially offset by non-cash charges of $6,076. The cash used in operating expenses was primarily due to the increased efforts supporting the commercialization and expansion of our products and teams.
The increase in R&D expenses was largely due to increased headcount and lower reimbursement of workforce costs associated with research projects, increased enrolment for the CAPTAIN trial and recruitment efforts, and higher material expenditures due to spending on R&D initiatives to increase compatibility with MRI scanners, reduce design costs and improve efficiencies.
For the year ended December 31, 2025, R&D expenses increased by $3,631, or 21% to $20,596 compared to $16,965 for the year ended December 31, 2024. The increase in R&D expenses was largely due to increased headcount, increased enrolment for the CAPTAIN trial and higher material expenditures and travel associated with the trial, and increased testing and design modification.
SG&A expenses for the year ended December 31, 2024 increased by $4,595, or 25% to $23,134 compared to $18,539 for the year ended December 31, 2023.
SG&A expenses for the year ended December 31, 2025 increased by $8,917, or 39% to $32,051 compared to $23,134 for the year ended December 31, 2024. The increase in SG&A was due to increased sales force and commission payments, increased travel for conferences, customer visits and educational events throughout the year.
The gross profit was higher in 2024 by $2,725 or 63% due to manufacturing operating at higher efficiency rates based on improvements that have been implemented and the growth in the number of capital systems sold. Operating Expenses Operating expenses consist of two components: research and development (“ R&D ”) and selling, general and administrative (“ SG&A ”).
Operating Expenses Operating expenses consist of two components: research and development (“ R&D ”) and selling, general and administrative (“ SG&A ”).
The increase in SG&A was due to increased sales force and commission payments, the release of commercial segments and marketing advertisement campaigns, increased travel for conferences, bad debt expense and costs associated with hosting our educational event Pro-Talk Live in September 2024. Offsetting these amounts was a decrease to insurance due to lower premium rates.
Offsetting these amounts was a decrease to insurance due to lower premium rates and a reduction in bad debt expense.
Removed
We deploy a hybrid recurring revenue business model in the United States to market TULSA-PRO, i) charging a one-time payment that includes a supply of our one-time-use device, use of the system as well as our Genius services that support each TULSA center with clinical and patient recruitment and ii) a traditional model of charging for the system separately as capital and an additional per patient charge for the one-time-use devices and associated Genius services..
Added
Revenue is comprised of (a) recurring – non-capital revenue, which consists of the sale of one-time-use devices and services associated with extended warranties and (b) capital equipment, which is the one-time sale of capital equipment and the lease of capital equipment. 72 Table of Contents For the year ended December 31, 2025, we recorded revenue totaling $16,098, with $6,368 from the one-time sale of capital equipment and $9,730 from recurring – non-capital revenue.
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The Sonalleve product is marketed primarily outside North America in European and Asian countries, deploying a capital sales model.
Added
The decrease in net finance (income) expense was due to the decrease in interest income from cash and cash equivalents due to a lower cash balance. 73 Table of Contents Liquidity and Capital Resources As of December 31, 2025, we had cash of $59,723 compared to $54,912 as of December 31, 2024.
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Outside of North America, we generate most of our revenues from our system sales in Europe and Asia, where we deploy a more traditional hybrid business model, charging for the system separately as a capital sale and an additional per patient charge for the one-time-use devices and associated Genius services.
Added
On December 22, 2025, we received net proceeds of $34,379 from the public offering of 5,142,870 Common Shares at an offering price of $7.00 per share. On December 30, 2025, we received net proceeds of $6,422 from the private placement of 921,428 Common Shares at an offering price of $7.00 per share.
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Similar to TULSA-PRO, Sonalleve also provides for controlled temperature increases to achieve cell kill. 69 Table of Contents The physician is in charge of using the Profound devices and decides which tissue needs to be ablated to impart therapeutic effect.
Added
As of December 31, 2025, we had yet to use any of the proceeds.
Removed
The Sonalleve product is marketed primarily outside North America in European and Asian countries deploying a one-time capital sales model with limited recurring service revenue.
Added
Future compliance with the financial covenants included in the CIBC Credit Agreement is dependent upon achieving certain revenue, EBITDA, and anticipated unrestricted cash levels. Cash Flow We manage liquidity risk by monitoring actual and projected cash flows. A cash flow forecast is performed regularly to ensure that we have sufficient cash to meet our operational needs while maintaining sufficient liquidity.
Removed
The increase in net finance (income) expense was due to the change in the amortized cost of trade and other receivables being fully recognized, increase in interest income from cash and cash equivalents and decrease in the CIBC Loan interest and accretion expenses.
Added
This resulted in an increase in headcount, travel and marketing fees. Non-cash charges consisted primarily of share-based compensation, amortization and depreciation. Investing Activities Net cash provided by (used in) investing activities for the year ended December 31, 2025 was $(242) which consisted of purchases of property and equipment and intangible assets.
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In addition, there have been no material adjustments to the cost or timing of the business objective previously disclosed in such prospectus supplement. ​ ​ ​ ​ ​ Total spending as ​ ​ of December 31, ​ ​ 2024 ​ ​ $ TULSA-PRO commercialization ​ 11,660 Sonalleve development and commercialization ​ 1,951 Working capital and general corporate purposes ​ 7,468 Total ​ 21,079 ​ On December 10, 2024, we received net proceeds of $36,132 from the public offering of 5,366,705 Common Shares at $7.50.
Added
When we transact with a distributor, our contractual arrangement is with the distributor and not with the end customer. Whether we transact business with and receive the order from a distributor or directly from an end customer, our revenue recognition policy and resulting pattern of revenue recognition for the order are generally the same.
Removed
As of December 31, 2024, we had yet to use any of the proceeds. ​ CIBC Loan We entered into a credit agreement with Canadian Imperial Bank of Commerce (“ CIBC ”) on November 3, 2022 (the “ Original CIBC Credit Agreement ”), for gross proceeds of C$10,000, maturing on November 3, 2027, with an interest rate based on CIBC prime plus 2% (the “ CIBC Loan ”).
Removed
We were required to make interest-only payments until October 31, 2023, and monthly repayments on the principal of C$208 plus accrued interest commenced on October 31, 2023. All of our obligations under the Original CIBC Credit Agreement are guaranteed by our current and future subsidiaries and include security of first priority interests in our and our subsidiaries’ assets.
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Initially, we had financial covenants in relation to the CIBC Loan where unrestricted cash is at all times greater than EBITDA for the most recent six-month period, reported on a monthly basis and that revenue for any fiscal quarter must be 15% greater than revenue for the same fiscal quarter in the prior fiscal year, reported on a quarterly basis.
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On May 3, 2024, a second amendment to the CIBC Loan resulted in another amendment to the financial covenants.
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The amended covenants are that the recurring revenue covenant shall not be tested for any fiscal quarter in the 2024 fiscal year so long as unrestricted cash is no less than 2.5 multiplied by the principal amount of outstanding CIBC Loan at all times. We are in compliance with these financial covenants as at December 31, 2024.
Removed
On May 3, 2024, a second amendment to the CIBC Loan resulted in another amendment to the financial covenants.
Removed
The amended covenants are that the recurring revenue covenant shall not be tested for any fiscal quarter in the 2024 fiscal year so long as unrestricted cash is no less than 2.5 multiplied by the outstanding principal amount of the CIBC Loan at all times. We are in compliance with these financial covenants as at December 31, 2024.
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The cash used in operating expenses was primarily due to the increased headcount and commission payments, increased sales and marketing efforts in the US and overall consulting and legal fees. Non-cash charges consisted primarily of share-based compensation, amortization and depreciation.
Removed
For contracts that contain multiple performance obligations, the Company allocates the transaction price to each performance obligation and recognizes the related revenue when or as control of each individual performance obligation is transferred to customers. 75 Table of Contents Recurring – non-capital Recurring - non-capital revenue consists of the sale of one-time-use devices and services associated with extended warranties.
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The Company also monitors other risk factors and forward-looking information, such as country risk, when determining credit limits for customers and establishing adequate allowances. Uncollectible accounts are written-off against the allowance when there is no reasonable expectation of recovery.