ADGM 10-K & 10-Q changes, risk factors and insider trading

We are a medical device company that has incurred net losses in each quarterly and annual period since inception and that has not yet generated any meaningful revenue. We expect to incur increasing costs as we continue to devote substantially all of our resources towards the development and anticipated further commercialization of our main product,platform technology, vCLAS. We cannot be certain if we will ever generate meaningful revenue or if or when we will produce sufficient revenue from operations to support our costs. Even if profitability is achieved, we may not be able to sustain profitability. Adagio MedicalWe incurred net losses of $75.0$25.1 million and $36.6$75.0 million in 20242025 and 2023,2024, respectively. As of December 31, 20242025 and December 31, 2023,2024, Adagio Medicalwe had an accumulated deficit of $70.6$95.6 and $133.6$70.6 million.million, respectively. We expect to incur substantial losses and negative cash flows for the foreseeable future. In addition, as a public company, we incur significant legal, accounting, and other expenses that we did not incur as a private company. These increased expenses may make it harder for us to achieve and sustain future profitability. We may incur significant losses in the future for a number of reasons, many of which are beyond our control, including the other risks described in this report and in our other filings with the SEC. TheseEven conditionsif raisewe substantialachieve doubtprofitability, aboutwe may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to become and remain profitable could depress the value of our company and could impair our ability to raise capital, expand our business, maintain our development efforts, obtain regulatory approvals or certificates, diversify our product offerings or continue asour a going concern.operations.

Our independent auditors have included an explanatory paragraph in their audit report regarding the Company’sour ability to continue as a going concern. This going concern risk may materially limit our ability to raise additional funds through the issuance of new debt or equity or may adversely affect the terms upon which such capital may be available. The inability to obtain sufficient financing on acceptable terms could have a material adverse effect on the Company’sour financial condition, results of operations, and business prospects We are actively pursuing strategies to mitigate these risks, including a recent restructuring of its business. However, there can be no assurance that these efforts will prove successful or that we will achieve its intended financial stability. The failure to successfully address these going concern risks may materially and adversely affect our business, financial condition, and results of operations. Investors should consider the substantial risks and uncertainties inherent in our business before investing in our securities.prospects.

As there are changes in our business environment occurenvironment, we have adjusted, and may further, adjust our business strategies to meet these changes and we may otherwise decide to further restructure our operations or particular businesses or assets. Our new organization and strategies may not produce the anticipated benefits, such as supporting our growth strategies and enhancing shareholder value. Our new organizationvalue, and strategies could be less successful than our previous organizational structure and strategies. In addition, external eventsevents, including changes in technology, changes in acceptance of our products and changes in macroeconomic conditionsconditions, may impair the value of our assets. When these changes or events occur, we may incur costs to change our business strategy and may need to write-down the value of assets. For example, current economic conditions, including relatively high interest rates, inflation and potential economic slowdowns, as well as our business decisions, may reduce the value of some of our assets. We also make investments in existing or new businesses, including re-investing in the expansion of our sales and build-out of our efforts in Europe. In any of these events, our costs may increase or returns on new investments may be lower than prior to the change in strategy or restructuring.

Our future success is largely dependent on our ability to successfully develop and commercialize our pipeline products, which are based on innovative yet complex technologies andand, at any time, can be in various stages of development. We are investing substantially all of our management efforts and financial resources in the development and commercialization of such products. For planning purposes, we estimate the timing of the accomplishment of various scientific, clinical, regulatory and other product development and commercialization goals, which we sometimes refer to as milestones. These milestones include the commencement or completion of scientific studies and clinical studies and the submission of regulatory applications. We base these milestones on a variety of assumptions, which are subject to numerous risks and uncertainties. There is a risk we will not achieve these milestones on a timely basis or at all. Even if we achieve these milestones, the actual timing of the achievement of these milestones can vary dramatically compared to our estimates, often for reasons beyond our control. Our ability to achieve milestones and generate future revenue from our current and/or future products depends on a number of additional factors, including:

Physicians play a significant role in determining the course of a patient’s treatment, and, as a result, the type of treatment that will be utilized and provided to a patient. We focus our sales, marketing and education efforts primarily on cardiac electrophysiologists, and aim to educate referring physicians regarding the patient population that would benefit from our products. However, we cannot assure you that we will achieve broad market acceptance among these practitioners.

Our estimates of the total addressable markets for our current products and products under development are based on a number of internal and third-party estimates, including, without limitation, the number of patients with cardiac arrhythmias and the assumed prices at which we can sell our products in markets that have not been established or that we have not yet entered. While we believe our assumptions and the data underlying our estimates are reasonable, these assumptions and estimates may not be correct and the conditions supporting our assumptions or estimates may change at any time, thereby reducing the predictive accuracy of these estimates. As a result, our estimates of the total addressable market for our current or future products may prove to be incorrect. If the actual number of patients who would benefit from our products, the price at which we can sell products,products or the total addressable market for our products is smaller than we have estimated, it may impair our sales growth and have an adverse impact on our business.

If we or the third parties with whom we work experience a significant disruption in our information technology systemssystems, data, or security incidents, our business could be adversely affected, including our ability to operate, the loss of confidential and proprietary information, increased remediation costs, and reputational damage.

We rely, or will rely, on information technology systems to keep financial records, facilitate our research and development initiatives, manage our manufacturing operations, maintain quality control, fulfill customer orders, maintain corporate records, communicate with staff and external parties and operate other critical functions. Our information technology systems and those of the third parties with whom we work, including our vendors and partnerspartners, are potentially vulnerable to disruption due to breakdown, malicious intrusion and computer viruses or other disruptive events, including, but not limited to, natural disasters and catastrophes. Cyberattacks and other malicious internet-based activity continue to increase, and cloud-based platform providers of services have been and are expected to continue to be targeted. Methods of attacks on information technology systems and data security breaches change frequently, are increasingly complex and sophisticated, including social engineering and phishing scams, and can originate from a wide variety of sources. In addition to traditional computer “hackers,” malicious code, such as viruses and worms, attacks enhanced or facilitated by AI, supply-chain attacks, supply-chain attacks, employee theft or misuse, denial-of-service attacks and sophisticated nation-state and nation-state supported actors now engage in attacks, including advanced persistent threat intrusions.intrusions DespiteIn particular, severe ransomware attacks are becoming increasingly prevalent and can lead to significant interruptions in our effortsoperations, ability to create security barriers to such threats, it is virtually impossible for us to entirely mitigate these risks. In addition, we have not finalizedprovide our informationproducts technologyor services, loss of sensitive data and dataincome, securityreputational proceduresharm, and therefore,diversion ourof informationfunds. technologyExtortion systemspayments may alleviate the negative impact of a ransomware attack, but we may be moreunwilling susceptibleor unable to cybersecurity attacks than ifmake such securitypayments proceduresdue wereto, finalized.for Despiteexample, anyapplicable of our currentlaws or futureregulations efforts to protect against cybersecurity attacks and data security breaches, there is no guarantee that our efforts are adequate to safeguard against allprohibiting such attacks and breaches. Moreover, it is possible that we may not be able to anticipate, detect, appropriately react and respond to, or implement effective preventative measures against, all cybersecurity incidents.payments.

If our security measures, or those of our vendors and partners, are compromised due to any cybersecurity attacks or data security breaches, including as a result of third-party action, employee or customer error, malfeasance, stolen or fraudulently obtained log-in credentials or otherwise, our business and reputation may be harmed, we could become subject to litigation and we could incur significant liability. If we were to experience a prolonged system disruption in our information technology systems or those of certain of our vendors and partners, it could negatively impact our ability to serve our customers, which could adversely impact our business, financial condition, results of operations and prospects. If operations at our facilities were disrupted, it may cause a material disruption in our business if we are not capable of restoring functionality on an acceptable timeframe. In addition, our information technology systems, and those of our vendors and partners, are potentially vulnerable to data security breaches, whether by internal bad actors, such as employees or other third parties with legitimate access to our or our third-party providers’ systems, or external bad actors, which could lead to the exposure of personal data, sensitive data and confidential information to unauthorized persons. Any such data security breaches could lead to the loss of trade secrets or other intellectual property, or could lead to the exposure of personal information, including sensitive personal information, of our employees, customers and others, any of which could have a material adverse effect on our business, reputation, financial condition and results of operations. Certain data privacy and security obligations have required us to implement and maintain specific security measures or industry-standard or reasonable security measures to protect our information technology systems and sensitive information.

In addition, any such access, disclosure or other loss or unauthorized use of information or data could result in legal claims or proceedings, regulatory investigations or actions, and other types of liability under laws that protect the privacy and security of personal information, including federal, state and foreign data protection and privacy regulations, violations of which could result in significant penalties and fines. In addition, U.S. and international laws and regulations that have been applied to protect user privacy (including laws regarding unfair and deceptive practices in the U.S. and the General Data Protection RegulationGDPR in the European Union) may be subject to evolving interpretations or applications. Furthermore, defending a suit, regardless of its merit, could be costly, divert management’s attention and harm our reputation. In addition, although we seek to detect and investigate data security incidents, security breaches and other incidents of unauthorized access to our information technology systems and data can be difficult to detect and any delay in identifying such breaches or incidents may lead to increased harm and legal exposure. Moreover, there could be public announcements regarding any cybersecurity incidents and any steps we take to respond to or remediate such incidents, and if securities analysts or investors perceive these announcements to be negative, it could, among other things, have a material adverse effect on the price of common stock.

The cost of protecting against, investigating, mitigating and responding to potential breaches of our information technology systems and data security breaches and complying with applicable breach notification obligations to individuals, regulators, partners and others can be significant. As cybersecurity incidents continue to evolve, we may be required to expend significant additional resources to continue to modify or enhance our protective measures or to investigate and remediate any information security vulnerabilities. We may not in the future, however, detect and remediate all such vulnerabilities including on a timely basis. Further, we have and may in the future experience delays in developing and deploying remedial measures and patches designed to address identified vulnerabilities. The inability to implement, maintain and upgrade adequate safeguards could have a material adverse effect on our business, financial condition, results of operations and prospects.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in our financial statements and accompanying notes. We base our estimates on historical experience and estimates and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets, liabilities, equity, and expenses that are not readily apparent from other sources. For example, in connection with the implementation of the new revenue accounting standardstandard, if and when we have product sales, management makes judgments and assumptions based on our interpretation of the new standard. The new revenue standard is principle-based and interpretation of those principles may vary from company to company based on their unique circumstances. It is possible that interpretation, industry practice and guidance may evolve as we apply the new standard. If our assumptions underlying our estimates and judgements relating to our critical accounting policies change or if actual circumstances differ from our assumptions, estimates or judgements, our operating results may be adversely affected and could fall below our publicly announced guidance or the expectations of securities analysts and investors, resulting in a decline in the market price of common stock.

Our research and development processes and manufacturing involve the controlled use of hazardous materials, including select chemicals that may be flammables,flammable, toxic or corrosives.corrosive. We do not currently have research processes involving biohazard materials. We cannot eliminate the risk of accidental contamination or discharge and any resultant injury from these materials. In addition, the products involve the use of a high-powered laser system, which could result in injury. We may be sued for any injury or contamination that results from our use or the use by third parties of these materials. We do not currently maintain separate environmental liability coverage and any such contamination or discharge could result in significant cost to us in penalties, damages and suspension of our operations.

In September 2023, we announced the first Ventricular Tachycardia (“VT”) ULTCULTA procedure performed using the Adagio VT Cryoablation System in the United States as part of the FULCRUM-VT early feasibility (“EFS IDE”) clinical trial. Delays in the completion of these and other clinical testing could significantly affect our product development costs. The completion of clinical trials can be delayed for a number of reasons, including delays related to: inability to enroll sufficient numbers of study subjects in a timely manner; unexpected or serious adverse effects related to our medical device candidate experienced by patients in a clinical trial; and retaining patients who have initiated a clinical trial, but may withdraw due to treatment protocol, adverse effects from the therapy, lack of effectiveness from the treatment or personal issues or who may not return for a sufficient number of post-operative visits. Clinical trials may also be delayed, suspended or terminated as a result of ambiguous or negative interim results, or results that are inconsistent with earlier results. In addition, a clinical trial may be suspended or terminated by us, the FDA, other regulatory authorities, or other numerous unforeseen factors or events during or because of the clinical trial process, including:

We may not be successful in the commercialization of our productsproducts, if approved, if we fail to establish relationships and successfully collaborate with leading life science companies and research institutions.institutions or if we are unable to establish effective distribution channels and sales and marketing functions.

Our limited commercialization experience and no approved or cleared products in the United States make it difficult to evaluate our current business and assess our prospects. We also currently have limited sales and marketing experience. If we are unable to establish effective sales and marketing capabilities or if we are unable to commercialize any of our products,capabilities, we may not be able to effectively commercialize any of our products, generate product revenue, sustain revenue growth and compete effectively. InShould orderone toor generatemore futureof growth,our products be approved, we plan to continue to expand and leverage our sales and marketing infrastructure to increase our customer base and grow our business. Identifying and recruiting qualified sales and marketing personnel and training them on our products, applicable federal and state laws and regulations,regulations and on our internal policies and procedures requires significant time, expense and attention. ItOur oftenbusiness, takesfinancial several months or more before a sales representative is fully trainedcondition and productive.results Ourof businessoperations may be harmed if our efforts to expand and train our sales force do not generate a corresponding increase in revenue, and our higher fixed costs may slow our ability to reduce costs in the face of a sudden decline in demand for our products. Any failure to hire, develop and retain talented sales and marketing personnel, to achieve desired productivity levels in a reasonable timeframe or timely leverage our fixed costs could have a material adverse effect on our business, financial condition and results of operations. Moreover, the members of our direct sales force are at-will employees.employees Theand the loss of these personnel to competitors or otherwise could materially harm our business. In addition, our ability to increase our customer base and achieve broader market acceptance of our products will depend to a significant extent on our ability to expand our marketing efforts. If we are unablefail to retainsuccessfully promote, maintain and protect our direct sales force personnel or replace them with individuals of equivalent technical expertise and qualifications,brand, or if we areincur unablesubstantial expenses in an unsuccessful attempt to successfullypromote instilland technical expertise in replacement personnel,maintain our revenuebrand, we may fail to attract or retain the physician acceptance necessary to realize a sufficient return on our brand building efforts, or to achieve the level of brand awareness that is critical for broad adoption of our products, which would have an adverse effect on our business, financial condition and results of operations could be materially harmed.operations.

These factors also make it difficult for us to forecast our financial performance and growth, and such forecasts are subject to a number of uncertainties, including our ability to successfully develop additional products that add functionality, reduce the cost of products sold, broaden our commercial portfolio offerings and obtain FDA 510(k) clearance or PMA approval for, and successfully commercialize, market and sell, our planned or future products in the United States or in international markets. If our assumptions regarding the risks and uncertainties we face, which we use to plan our business, are incorrect or change due to circumstances in our business or our markets, or if we do not address these risks successfully, our operating and financial results could differ materially from our expectations and our business could suffer.

Our products may not be successful if there areis inadequate physician training, practice and patient selection.

The success of our products dependswill depend in part on the skill of the physician performing the catheter-based procedures and on their adherence to our stated patient selection criteria and proper techniques that we provide in training sessions. For example, we train physicians to ensure correct use of our products; however, physicians rely on their previous medical training and experience when performing catheter-based procedures, and we cannot guarantee that all such physicians will have the necessary skills or experience to safely and effectively perform these procedures. We do not control which physicians perform these procedures or how much training they receive, and physicians who have not completed our training sessions may nonetheless attempt to perform catheter-based procedures with our products. In addition, a perception by physicians that our products are difficult to use may negatively impact adoption. If physicians perform these procedures in a manner that is inconsistent with our labeled indications, with components that are not our products, with patients who are not indicated for treatment with our products or without adhering to or completing our training sessions, the patient outcomes may be negative or inconsistent with the outcomes achieved in clinical trials. This could negatively impact the perception of patient benefits and safety associated with our products and limit adoption of our products and catheter-based thrombectomy procedures generally, which could have a material adverse effect on our business, financial condition and results of operations.

We rely on third-party suppliers to provide us with certain components of our products, some of which are single-source suppliers. In some cases, we do not have long-term supply agreements with, or guaranteed commitments from, our suppliers, including single-source suppliers. We depend on our suppliers to provide us and our customers with components and materials in a timely manner that meet our and their quality, quantity and cost requirements. These suppliers may encounter problems during manufacturing for a variety of reasons, any of which could delay or impede their ability to meet our demand. Our suppliers may also fail to comply with applicable federal, state or foreign laws or regulations, cease producing the components and materials required for our products or otherwise decide to cease doing business with us. If the suppliers, including the single-source suppliers, that we use are unable or unwilling to manufacture the components or materials in our required volumes, or at specified times, we may have to identify and qualify acceptable additional or alternative suppliers. This qualification process could take up to a few months and we may not find sufficient capacity in a timely manner or at an acceptable cost to satisfy our production requirements. Any supply interruption from our suppliers or failure to obtain alternative suppliers for any of the components used in our products would limit our ability to manufacture our products and could have a material adverse effect on our business, financial condition and results of operations.

We are a medical device company focused on developing and commercializing products for the treatment of cardiac arrhythmias with our novel, proprietary, catheter-based UTLCUltra-Low Temperature Ablation (“ULTA”) technology. Our initial focus is on the treatment of VT.ventricular tachycardia (“VT”). VT is a rapid, abnormal heart rhythm, or arrhythmia, that originates in the heart'sheart’s lower chambers, or ventricles, potentially leading to impaired blood flow issues and, if sustained, VT can be fatal. VTVT-associated issudden stronglycardiac associateddeath with(“SCD”) coronary artery disease, with an estimated 15% of patients with coronary artery disease found to have VT, and SCD caused by VT accountaccounts for approximately half300,000 ofdeaths each year in the deathsUnited relatedStates. toRadio cardiacFrequency causes. (“RF”) ablation catheters currently used to treat VT were primarily designed and approved for the treatment of atrial fibrillation (“AF”) and are therefore not designed to optimally treat the specifics of the ventricular anatomy and disease. As a result, VT procedures performed with current devices can be overly complex,complex withand can lead to sub-optimal outcomes, factors that have potentially leadingled to the limited growth in the market for VT ablations.

We believe that our purpose-built solution for treating the ventricle, with its differentiated design and benefits, has the potential to drive additionalpenetration and market growth in ablative treatment of the large, underserved VT patient population.

We have established a robust cadence of clinical data designed to evaluate our technology and gain regulatory approvals of our product portfolio. Preliminary data suggest that our approach to treating VT offers a favorable combination of safety, acute and chronic effectiveness,effectiveness compared to the current standard of care, including ablations performed using RF and pulsed field ablation (“PFA”) energy. Our first-in-human CRYOCURE-VT trial included 64 patients in nine centers in the E.U.European Union and Canada. The outcomes of this trial, which were used to support CE Mark approval, include a 0% rate of major adverse events, 94% acute procedural success, 60% freedom from sustained VT and 81% freedom from implantable cardioverter defibrillator (“ICD”) shock at six months. Our VTvCLASTM. Cryoablation System for VT has obtained European CE Mark approval. In the U.S.,United States, our 206-patient209-patient FULCRUM-VT IDE pivotal clinical trial iscompleted currentlyenrollment enrollingin patientsOctober 2025 across twentynineteen (2019) centers in the U.S.United States and Canada. UponThe completion,study includes patients with both ischemic and non-ischemic (NICM) cardiomyopathies (LVEF=35+/-10%, 33% NICM, 75% with congestive heart failure). In our preliminary acute safety and efficacy results, acute clinical success, defined as non-inducibility of target ventricular arrhythmias, was 97.4%, with all clinically-relevant VTs eliminated in 96.7% of patients tested by post-ablation programmed electrical stimulation. Key safety findings included a 2.4% rate of major adverse events including four (1.9%) peri-procedural deaths, of which weone anticipate(0.5%) was adjudicated by an independent Clinical Events Committee as definitely related to the investigational device. We plan to share the six-month results of the FULCRUM-VT trial in April 2026 at the secondHeart halfRhythm of2026 2025,Conference we expectand to submit the results of this trial to support our application for FDA approval of our VTvCLASTM Cryoablation System.System in the first half of 2026.

We have also developed a technology that utilizes ULTCULTA in combination with Pulsed Field Ablation,PFA, which we call Pulsed Field Cryoablation.Cryoablation (“PFCA”). Early demonstration of PFCA technology has been performed in the European PARALELL trial in patients with persistent atrial fibrillation and in preclinical studies targeting VT ablations.

We have not launched commercially in the U.S. but are working towards obtaining the necessary regulatory approvals to do so. We have incurred net losses in each year since our inception in 2011. As of December 31, 20242025 and December 31, 2023,2024, we had an accumulated deficit of $70.6$95.6 million and $133.6$70.6 million, respectively. Our net loss was $$25.1 million for the year ended December 31, 2025 (53.8Successor), $53.8 million for the period from July 31, 2024 to December 31, 2024 (Successor), $(21.3)and $21.3 million for the period from January 1, 2024 to July 30, 2024 (Predecessor), and $(36.6) million for the year ended December 31, 2023 (Predecessor), respectively. The net cash used in operating activities was $13.5$19.0 million, $16.0$13.5 million, and $25.7$16.0 million, respectively. Substantially all of our net losses resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations. As of December 31, 20242025 and December 31, 2023,2024, we had cash of $20.6$17.1 million and $1.4$20.6 million, respectively.

The accompanying consolidated financial statements have been prepared on a basis that assumes we will continue as a going concern, which contemplatecontemplates the realization of assets and liabilities in the normal course of business. We have limited revenue and have experienced recurring operating losses and negative cash flows from operations since our inception and anticipate that we will continue to do so for at least the next several years. These factors raise substantial doubt about the ability to continue as a going concern for the twelve-month period from the date the consolidated financial statements were made available. Additionally, management believes our current cash and cash equivalents are not sufficient to fund operations for at least the next 12 months from the issuance date of the consolidated financial statements and therefore there is substantial doubt about our ability to continue as a going concern. See Note 1-Organization and Description of Business in our consolidated financial statements for additional information on the going concern assessment.

The need for additional capital in the future will depend in part on the scope and costs of our development and clinical activities. To date, we have not generated any significant revenue from the sale of commercialized products. OurOnce we conduct a full commercial launch, our ability to generate product revenue will depend on the successful development and eventual commercialization of our products in the United States.products. Until such time, if ever, we expect to finance our operations through the sale of equity or debt, borrowings under credit facilities, or through potential collaborations, other strategic transactionstransactions, or government and other grants. Adequate capital may not be available to us when needed or on acceptable terms. If we are unable to raise capital, we could be forced to delay, reduce, suspendsuspend, or cease our research and development programs or any future commercialization efforts, which would have a negative impact on our business, prospects, operating resultsresults, and financial condition. See the section of this Report titled “Risk Factors” for additional information.

On July 31, 2024, the Closing Date, we consummated the Business Combination pursuant to the terms of the Business Combination Agreement. Pursuant to the Business Combination Agreement, on the Closing Date, (i) ARYA Merger Sub merged with and into ARYA,ARYA (the “ARYA Merger”) and Company Merger Sub merged with and into Legacy Adagio,Adagio (the “Adagio Merger” and, together with the ARYA Merger, the “Mergers”), with ARYA and Legacy Adagio surviving the Mergers and, after giving effect to such Mergers, each of ARYA and Legacy Adagio becoming a wholly-ownedwholly owned subsidiary of ListCo,ListCo (the time that the ARYA Merger became effective being referred to as the “ARYA Merger Effective Time,” the time that the Adagio Merger became effective being referred to as the “Adagio Merger Effective Time,” the time after which both Mergers became effective being referred to as the “Closing,” and the date on which the Closing occurred being referred to as the “Closing Date”), (ii) ListCo filed with the Secretary of State of the State of Delaware an amended and restated certificate of incorporation of ListCo, and the board of directors of ListCo approved and adoptadopted amended and restated bylaws of ListCo, and (iii) ListCo changed its name to Adagio Medical Holdings, Inc.

Prior to the 2024 annual general meeting, holders of 2,707,555 shares of ARYA’s redeemable Class A ordinary shares exercised their right to redeem such shares for cash at a redemption price of approximately $11.56 per share, for an aggregate redemption amount of approximately $31.3 million.

Pursuant to the subscription agreements, the PIPE Investors have committed financing valued at $64.5 million (the “2024 PIPE Financing”).

The 2024 PIPE Financing included:

Further, in connection with the execution of the Business Combination Agreement, certain investors (“Convert Investors”) executed a securities purchase agreement, dated February 13, 2024, with ListCo (the “Convertible Security Subscription Agreement”), pursuant to which ListCo issued on the Closing Date to the Convert Investors $20.0 million of 13% senior secured convertible notes (the “Convertible Securities Notes”), which were converted into shares of the Company’sour common stock at a conversion price of $10.00 per share, subject to adjustment, and 1,500,000 warrants (the “Convert Warrants”), each Convert Warrant being exercisable on a cashless basis or for cash at a price of $24.00 per share, subject to adjustment. Such $20.0 million of financing in the form of Convertible Securities Notes includes the conversion of the February 2024 Convertible Notes (as defined below) into Convertible Securities Notes and Convert Warrants at Closing,Closing. asRefer further described into Note 9-9 - Debt in our consolidated financial statements.statements for additional details.

Our business strategy relies significantly on innovation to develop and introduce new products and to differentiate our products from our competitors. We expect our research and development expenditures to increase as we make additional investments to support our growth strategies. We plan to increase our research and development expenditures with internal initiatives, as well as potentially licensing or acquiring technology from third parties.initiatives. We also expect expenditures associated with our manufacturing organization to grow over time as production volume increases and we bring new products to market. Our internal and external investments will be focused on initiatives that we believe will offer the greatest opportunity for growth and profitability. With a significant investment in research and development, a strong focus on innovation and a well-managed innovation process, we believe we can continue to innovate and grow.

WeHistorically, generatewe have generated product revenue primarily from the sale of the catheters used with our consoles. We sellhave sold our products directly to hospitals and medical centers. To a lesser extent, we also generategenerated lease revenue from the implied rental of consoles loaned to customers at no charge. We recognize revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers, when we transfer promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Please refer to Note 2-“ Summary of Significant Accounting Policies” in our consolidated financial statements for additional details on our revenue recognition policy. Our revenue is subject to fluctuation due to the foreign currency in which our products are sold.

We do not track research and development expenses by project or product, as we are at an earlier stage in our pre-clinical and clinical development. ManagementOur management believes that the breakdown of research and development expenses by project or product would be arbitrary and would not provide a meaningful assessment.

Selling, general and administrative expenses consist primarily of salaries, and employee-related costs (including stock-based compensation) for personnel in executive, finance and other administrative functions, allocated rent and facilities costs, legal fees relating to intellectual property and corporate matters, professional fees for accounting and consulting services, marketingpublic costscompany and corporatecosts, insurance costs, and transactionmarketing costs in connection with the Business Combination.costs. We expense all selling, general and administrative costs as incurred. In future periods we expect our selling, general and administrative expenses to increase as we continue to expand on our operations and grow our business.

We recorded the convertible notes issued in October 2022 (the “October 2022 Convertible Notes,Notes”), April 2023 (the “April 2023 Convertible Notes”), November 2023 (the “November 2023 Convertible Notes”), February 2024 (the “February 2024 Convertible Notes”, or the “2024 Bridge Financing Notes,Notes”), May 2024 (the “May 2024 Convertible Notes”), June 2024 (the “June 2024 Convertible Notes”), and July 2024 (the “July 2024 Convertible SecuritiesNotes”) (collectively, “Legacy Adagio Convertible Notes”), at fair value at issuance and subsequently remeasure them to fair value at each reporting period. The change in fair value of the Convertible Securities Notes, excludingincluding amounts related to interest, is recorded in “Convertible notes fair value adjustment,adjustment.” while amounts related to interest are recorded as interest expense in the consolidated statements of operations and comprehensive loss.

Interest expense is primarily incurred from our outstanding debt obligations, including those under the October 2022 Convertible Notes, the Bridge Financing Notes, the Convertible Securities Notes,Notes and the SVB Term Loan (as defined below).

Comparison for the year ended December 31, 2025 (Successor) to the periods from January 1, 2024 to July 30, 2024 (Predecessor), and from July 31, 2024 to December 31, 2024 (Successor), to the year ended December 31, 2023 (Predecessor).

OurRevenue revenueswas werenil for the year ended December 31, 2025 (Successor), compared to $0.3 million and $0.3 million for the periods from July 31, 2024 to December 31, 2024 (Successor) and from January 1, 2024 to July 30, 2024 (Predecessor), respectively, andrepresenting $0.3a milliondecrease forof $0.6 million. The decrease was primarily due to the repurchase of previously sold inventory during the year ended December 31, 20232025 (PredecessorSuccessor)., Thewhich increaseoffset of $0.3 million, or 101%, is due to the increase of consumablegross sales. ForThis theinventory year ended December 31, 2024, and 2023, revenuebuyback was generated onlyundertaken in Europeanconnection markets.with our pause in commercial activity in Europe.

Cost of revenue was $0.7 million for the year ended December 31, 2025 (Successor), compared to $1.9 million and $1.4 million for the periodperiods from July 31, 2024 to December 31, 2024 (Successor) and from January 1, 2024 to July 30, 2024 (Predecessor), respectively, andrepresenting wasa $1.3 million for the year ended December 31, 2023 (Predecessor). The increasedecrease of $2.0$2.6 million, or 154%,79%. The decrease was primarily resultedattributable fromto a $1.4 million increasepause in costcommercial activity in Europe during 2025 and the related impact of goods sold related to increased sales of $0.6 million, an increaseinventory ofbuyback $0.8 million related to the write off of obsolete inventory, a $0.5 million increaseconducted in theconnection depreciation of Consoles, and $0.1 million increase in employee benefits.thereto.

Research and development expenses were $10.6 million for the year ended December 31, 2025 (Successor), compared to $4.6 million and $7.6 million for the period from July 31, 2024 to December 31, 2024 (Successor) and from January 1, 2024 to July 30, 2024 (Predecessor), respectively, andrepresenting wasa $15.4decrease millionof for$1.6 the year ended December 31, 2023. The $3.2 million decrease,million, or 21%,13%. This decrease was primarily relateddriven toby a $2.0 million decrease of manufacturing absorption costs, $1.7 million decrease in product manufacturing costs, $1.0 million decrease in clinicalquality trialassurance expense,costs, $0.4a $0.5 million decrease in animalpre-clinical testing cost, $0.3 million decrease intrial costs relatedand toother consultingresearch and prototypes,development costs, and a $0.1 million decrease in travel,operations and $0.8 million decrease in payroll. The decrease in research and development expenses results from Legacy Adagio receiving CE Marking on VT Cryoablation in March 2024.costs.

Our clinical trial expenses relate to trials for our iCLAS atrial ULTCULTA catheter and system (CYROCURE-2), iCLAS atrial ULTCULTA catheter and system (iCLAS for PsAFpersistent atrial fibrillation), vCLAS ventricular ULTCULTA catheter (CYROCURE-VT), vCLAS ventricular ULTCULTA catheter (FULCRUM-VT), and PFCA catheter. Clinical trial costs include the expenses related to clinical trial studies and other related expenses. Quality assurance includes regulatory fees and third-party service fees. Pre-clinical trial costs and other research and development costs include the expenses resulting from professional fees, prototypes, and animal testing. Operational costs include expenses related to product manufacturing.

Selling, general and administrative expenses were $10.6 million for the year ended December 31, 2025 (Successor), compared to $7.0 million and $13.0 million for the periodperiods from July 31, 2024 to December 31, 2024 (Successor) and from January 1, 2024 to July 30, 2024 (Predecessor), respectively, and $11.5 million for the year ended December 31, 2023 (Predecessor).respectively. The increasedecrease in selling, general and administrative expenses of $8.5$9.5 million, or 74%,47%, iswas primarily due to anthe increaseabsence of $5.2SPAC-related millioncorporate expenses that were incurred in professionalthe feesperiods whichfrom includeJuly legal31, 2024 to December 31, 2024 (Successor) and accountingfrom feesJanuary related1, 2024 to July 30, 2024 (Predecessor) compared to the transactionyear costsended associatedDecember with31, the2025 Business(Successor) Combination,and ana increasedecrease in payroll and personnel expenseexpenses ofrelated $3.0to million,lower andheadcount anduring increasethe inyear buildingended andDecember maintenance31, costs of $0.3 million.2025.

We recorded a $30.3 million Goodwill impairment charge in 2024, with no comparable charges in 2023.2025. Refer to Note 7-Goodwill7 – Goodwill, net and Intangible Assets, net in our consolidated financial statements for additional details.

We recorded intangible asset impairment charges of $18.9 million in 2024, with no comparable charges in 2023.2025. Refer to Note 7-Goodwill7 – Goodwill, net and Intangible Assets, net in our consolidated financial statements for additional details.

InterestThe expensechange wasin $1.1fair value of warrant liabilities resulted in a gain of $20 thousand for the year ended December 31, 2025, compared to a gain of $6.6 million and $1.8$0.2 million for the periodperiods from July 31, 2024 to December 31, 2024 (Successor) and from January 1, 2024 to July 30, 2024 (Predecessor), respectively,respectively. andThe waschanges $1.7in millionfair forvalue were primarily driven by changes in the yearCompany’s endedcommon Decemberstock 31, 2023 (Predecessor). The increase of $1.3 million, or 76%, was related to additional interest incurred from the Bridge Financing Notes and the Convertible Securities Notes.price.

We are a medical device company that has incurred net losses in each quarterly and annual period since inception and that has not yet generated any meaningful revenue. We expect to incur increasing costs as we continue to devote substantially all of our resources towards the development and anticipated further commercialization of our main platform technology, vCLAS. We cannot be certain if we will ever generate meaningful revenue or if or when we will produce sufficient revenue from operations to support our costs. Even if profitability is achieved, we may not be able to sustain profitability. We incurred net losses of $13.7 million for the six months ended June 30, 2026, and $25.1 million and $75.0 million in 2025 and 2024, respectively. As of MarchJune 31,30, 2026, December 31, 2025 and December 31, 2024, we had an accumulated deficit of $102.6,$109.4 million, $95.6 million and $70.6 million, respectively. We expect to incur substantial losses and negative cash flows for the foreseeable future. In addition, as a public company, we incur significant legal, accounting, and other expenses that we did not incur as a private company. These increased expenses may make it harder for us to achieve and sustain future profitability. We may incur significant losses in the future for a number of reasons, many of which are beyond our control, including the other risks described in this report and in our other filings with the SEC. Even if we achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to become and remain profitable could depress the value of our company and could impair our ability to raise capital, expand our business, maintain our development efforts, obtain regulatory approvals or certificates, diversify our product offerings or continue our operations.

The following discussion and analysis of our financial condition and results of operations should be read together with the condensed consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q (this “Report”). Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors. Please see “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in this Report. Unless the context otherwise requires, references in this section of the Report to “we,” “us,” “Adagio,” and “the Company” refer to the business and operations of Adagio Medical Holdings, Inc. and its consolidated subsidiaries. References to our “management” or our “management team” refer to our officers and directors.

We are a medical device company focused on developing and commercializing products for the treatment of cardiac arrhythmias with our novel, proprietary, catheter-based Ultra-Low Temperature Ablation (“ULTA”) platform technology. Our initial focus is on the treatment of ventricular tachycardia (“VT”). VT is a rapid, abnormal heart rhythm, or arrhythmia, that originates in the heart's lower chambers, or ventricles, potentially leading to impaired blood flow and, if sustained, VT can be fatal. VT-associated sudden cardiac death (“SCD”) accounts for approximately 300,000 deaths each year in the U.S.United States. Radio Frequency (“RF”) ablation catheters currently usedapproved to treat VT were primarily designed and approved for the treatment of atrial fibrillation (“AF”) and are therefore not designed to optimally treat the specifics of the ventricular anatomy and disease. As a result, VT procedures performed with current devices can be overly complex and can lead to sub-optimal outcomes, factors that have potentially led to the limited growth of VT ablation procedures, and the consequential unmet need in the marketlarge forpopulation VTof ablations.patients suffering from VT.

Our clinically tested, proprietary ULTA products are purpose-built to treat patients with VT and are designed to address the unique anatomy of the ventricle and the specific needs of the VT patient. Our ULTA approach is built on the hypothesis that large and durable lesions extending through the depth of both diseased and healthy muscular tissue of the ventricle of the heart (ventricular myocardium) is a foundation for improving the effectiveness of VT ablations and patient outcomes. Our differentiated catheters are designed forto create large, durable, deepdeep, titratable lesions within the ventricleventricle, all through an endocardial approach and with no required irrigation. In October 2025, we announced completion of enrollment in our FULCRUM-VT Pivotal U.S. Food and Drug Administration (“FDA”) Investigational Device Exemption (“IDE”) study evaluating theour vCLASTMfirst generation vCLAS Ventricular Ablation System for the treatment of monomorphicSustained ventricularMonomorphic tachycardiaVentricular Tachycardia (“MMVTSMVT”) in patients with both ischemic and nonischemic cardiomyopathy.cardiomyopathy, and in May 2026 we announced the submission of our Premarket Approval (“PMA”) application to the FDA for the vCLAS Ventricular Ablation System. The vCLAS System, whichSystem was granted Breakthrough Device Designation by the FDA in April 2025, is built on the Company’s proprietary ULTA technology platform.2025.

We arehave also currently developingdeveloped a nextfaster, generation ULTA technology for VT. We received IDE approval from the FDA in April 2026 to expand the Company’s FULCRUM-VT trial to evaluate the safety and effectiveness of oursmaller next-generation vCLAS ULTAUltra Ventricular Ablation System for the treatment of Sustained Monomorphic Ventricular Tachycardia (“SMVT”). The next-generation catheter,System, which requires only a single freeze, is being designed to improve customer usability and integration with the existing ablation laboratory workflow. ThevCLAS next-generation catheterUltra features a more flexible, smaller diameter shaft that is compatible with the industry-standard 8.5 Fr sheaths,sheaths and is designed to operateoperates at lower ablation temperatures resulting in the shorter, single-freeze ablationablations. protocol.In April 2026 we received IDE approval from the FDA to evaluate the safety and effectiveness of our vCLAS Ultra Ventricular Ablation System for the treatment of SMVT.

We have also developed a proprietary dual-therapy ablation technology that utilizes ULTA in combination with PFA, which we call Pulsed Field Cryoablation (“PFCA”)., that combines PFA with our ULTA technology. Early demonstration of PFCA technology has been performed in the European PARALELL trial in patients with persistent atrial fibrillation and in preclinical studies targeting VT ablations.

We have incurred net losses each year since our inception in 2011. As of MarchJune 31,30, 2026, and December 31, 2025, we had an accumulated deficit of $102.6$109.4 million and $95.6 million, respectively. For the three and six months ended MarchJune 31,30, 2026,2026 and MarchJune 31,30, 2025, our net loss was $7.0$6.7 million, $13.7 million, $3.9 million and $7.7$11.7 million, respectively. The net cash used in operating activities was $4.1$9.4 million and $7.2$11.9 million, for the six months ended June 30, 2026 and June 30, 2025, respectively. Substantially all of our accumulated deficit has resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations. As of MarchJune 31,30, 2026, and December 31, 2025, we had cash of $12.9$7.7 million and $17.1 million, respectively.

As of the report date, we do not believe our existing cash and cash equivalents are sufficient to fund our operating and capital expenditure requirements for at least 12 months from the date of issuance of the audited consolidated financial statements included in this Report. Based on our current research and development plans, we expect to have sufficient resources to fund our planned operations into the thirdfourth quarter of 2026. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our capital resources sooner than expected. No assurance can be given as to whether additional needed financing will be available on terms acceptable to us, if at all. If sufficient funds on acceptable terms are not available when needed, we may be required to suspend or forego certain planned activities. Failure to manage discretionary spending or raise additional financing, as needed, could adversely impact our ability to achieve our intended business objectives and may have an adverse effect on our results of operations and future prospects. These factors raise substantial doubt about our ability to continue as a going concern for the twelve-month period from the date of this filing with the SEC. Refer to Note 1 - Description of Organization and Business Operations in our condensed consolidated financial statements for additional information on the going concern assessment.

In February 2025, we announced a strategic realignment of resources to prioritize the completion of our FULCRUM-VT U.S. pivotal IDE clinical trial and our product design optimization program. As part of this realignment, we paused the limited European launch of our vCLAS™ catheter and significantly reduced commercial activities. As a result, we did not generate revenue during the periodthree and six months ended MarchJune 31,30, 2026.2026 and June 30, 2025.

Cost of revenue includes raw materials, direct labor, manufacturing overhead, shipping and receiving costs and other less significant indirect costs related to the production of our products. Cost of revenue also includes the depreciation expense of consoles loaned to the customers. Such ongoing cost is presented with research and development cost for the period ended MarchJune 31,30, 2026.

Other income (expense) income, net primarily consists of foreign currency unrealized and realized gain/loss, and other income related to our research and development (“R&D”) tax credit.

Comparison for the three and six months ended MarchJune 31,30, 2026 to the three and six months ended MarchJune 31,30, 2025

Revenue was nil for each of the three and six months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025, due to our pause in commercial activity in Europe.

Cost of revenue was nil for the three months ended MarchJune 31,30, 2026, compared to $0.3 million for the three months ended MarchJune 31,30, 2025, representing a decrease of $0.3 million, or 100%. The decrease was primarily attributable to the pause in commercial activity in Europe. Depreciation expense related to consoles loaned to customers is generally classified within cost of revenue; however, because we did not generate revenue during the three months ended March 31, 2026, such depreciation expense is now reflected within research and development expenses for the period.

Research and development expenses were $2.7$2.5 million for the three months ended MarchJune 31,30, 2026, compared to $3.7$2.0 million for the three months ended MarchJune 31,30, 2025, representing aan decreaseincrease of $1.0$0.5 million, or 25%.24%. The decreaseincrease was primarily attributable to lower clinical trial expenses and lower producthigher development costs, including consulting,consulting and prototyping, and project-related support, partially offset by higher operational costs, including the aforementioned depreciation expense.expense, partially offset by lower clinical trial expenses.

Our clinical trial expenses relate to trials for our iCLASvCLAS atrialVentricular ULTAAblation catheterCatheter (FULCRUM-VT) and system (CYROCURE-2), iCLAS atrial ULTA catheter and system (iCLAS for persistent atrial fibrillation), vCLAS ventricular ULTA catheter (CYROCURE-VT), vCLAS ventricular ULTAUltra catheter (FULCRUM-VT), and PFCA catheter.. Clinical trial costs include the expenses related to clinical trial studies and other related expenses. Quality assurance includes regulatory fees and third-party service fees. Pre-clinical trial costs and other research and development costs include the expenses resulting from professional fees, prototypes, and animal testing. Operational costs include expenses related to product manufacturing.

Selling, general, and administrative expenses were $2.5 million for the three months ended MarchJune 31,30, 2026, compared to $3.5$2.4 million for the three months ended MarchJune 31,30, 2025, representing aan decreaseincrease of $1.0$0.1 million, or 29%.3%. The decreaseincrease was primarily dueattributable to higher stock-based compensation expenses, partially offset by lower professional services expenses, regulatory reporting expenses, and payroll and personnel expenses during the three months ended MarchJune 31,30, 2026, as compared to the three months ended MarchJune 31,30, 2025.

InterestSelling, expensegeneral, wasand $0.8administrative expenses were $4.9 million for the threesix months ended MarchJune 31,30, 2026, compared to $0.7$6.0 million for the threesix months ended MarchJune 31,30, 2025, representing ana increasedecrease of $0.1$1.1 million, or 18%.17%. The increasedecrease was relatedprimarily due to interestlower incurredprofessional fromservices expenses, regulatory reporting expenses, and payroll and personnel expenses during the Convertiblesix Securitiesmonths Notes.ended June 30, 2026, as compared to the six months ended June 30, 2025.

InterestThe incomechange wasin $107fair value of warrant liabilities resulted in a gain of $181 thousand for the three months ended MarchJune 31,30, 2026, compared to $164a loss of $141 thousand for the three months ended MarchJune 31,30, 2025, representing a decrease of $57 thousand, or 35%. The decrease was due to interest income on cash balances in an asset management account.2025.

OtherInterest income, netexpense was $70.0$0.8 thousandmillion for the three months ended MarchJune 31,30, 2026, compared to other$0.7 expense, net of $46.0 thousandmillion for the three months ended MarchJune 31,30, 2025, representing an increase of $0.1 million.million, or 12%. The net increase in other income of $0.1 million was primarily attributablerelated to foreigninterest currencyincurred unrealizedfrom andthe realizedConvertible loss.Securities Notes.

To date, we have financed our operations primarily through the sale of equity securities, convertible promissory notes and an initial term loan advance of $3.0 million and a right to borrow a subsequent term loan advance of $2.0 million with Silicon Valley Bank (the “SVB Term Loan”). The loan with SVB was repaid in full in 2024. In connection with the closing of the Business Combination on July 31, 2024, we received net proceeds of $84.2 million. Since inception we have incurred operating losses and negative cash flows and anticipate continuing to do so for at least the next several years.

As of MarchJune 31,30, 2026, and December 31, 2025, we had cash and cash equivalents of $12.9$7.7 million and $17.1 million, respectively, and current obligations consisting primarily of $1.2$0.7 million and $1.1 million of accounts payable, respectively, and $7.1$6.6 million and $7.0 million of accrued liabilities, respectively. For the threesix months ended MarchJune 31,30, 2026, net losses were $7.0$13.7 million. For the threesix months ended MarchJune 31,30, 2025, net losses were $7.7$11.7 million. For the threesix months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025, net cash used in operating activities was $4.1$9.4 million, and $7.2$11.9 million, respectively. We do not believe our existing cash and cash equivalents will be sufficient to fund operations for at least the next twelve months from the issuance date of the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10Q.10-Q. We believe that this raises substantial doubt about our ability to continue as a going concern. See “—Going Concern and Operating Outlook.”

On October 14, 2025, we entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with certain accredited healthcare investors (the “Purchasers”) pursuant to which we issued and sold to the Purchasers in a private placement (the “Private Placement”): (i) 9,792,506 shares (the “Shares”) of our common stock, par value $0.0001 per share (the “Common Stock”), or pre-funded warrants (the “2025 PIPE Pre-Funded Warrants”) to purchase shares of Commonour Stockcommon stock in lieu thereof, and (ii) accompanying (a) Tranche A Warrants to purchase an aggregate of 6,012,943 shares of Commonour Stockcommon stock (or pre-funded warrants in lieu thereof) (the “Tranche A Warrants”), (b) Tranche B Warrants to purchase an aggregate of 6,012,943 shares of Commonour Stockcommon stock (or pre-funded warrants in lieu thereof) (the “Tranche B Warrants”) and (c) Tranche C Warrants to purchase an aggregate of 6,012,943 shares of Commonour Stockcommon stock (or pre-funded warrants in lieu thereof) (the “Tranche C Warrants” and, together with the Tranche A and Tranche B Warrants, the “Milestone Warrants”), for aggregate gross proceeds of approximately $19 million (excluding up to approximately $31 million of additional aggregate gross proceeds that may be received in the future upon the cash exercise in full of the Milestone Warrants issued in the Private Placement), before deducting placement agent fees and other expenses payable by us. Each Share and each 2025 PIPE Pre-Funded Warrant sold pursuant to the Securities Purchase Agreement was accompanied by one Tranche A Warrant, one Tranche B Warrant and one Tranche C Warrant. The combined purchase price of each Share and accompanying Milestone Warrants is $1.9403 (which includes $0.2303 for the Milestone Warrants sold with each Share in accordance with the rules and regulations of The Nasdaq Stock Market LLC). The combined purchase price of each 2025 PIPE Pre-Funded Warrant and accompanying Milestone Warrant is $1.9402 (equal to the combined purchase price per Share and accompanying Milestone Warrants, minus $0.0001). Entities affiliated with Perceptive Advisors LLC, an affiliate of ours, purchased 2025 PIPE Pre-Funded Warrants and Milestone Warrants for an aggregate purchase price of $4,250,000.

Each Milestone Warrant is exercisable for one share of Commonour Stockcommon stock at an exercise price of $1.71 per share. The MilestoneTranche A Warrants expired unexcised in May 2026. The Tranche B and Tranche C Warrants will expire upon the earlier of (i) five years from the date of issuance or (ii) (a) for the Tranche A Warrants, the date that is thirty (30) days following our announcement of results from our FULCRUM-VT IDE pivotal clinical trial, (b) for the Tranche B Warrants, the date that is thirty (30) days following our announcement of FDA approval of our vCLAS Cryoablation System, and (cb) for the Tranche C Warrants, the date that is thirty (30) days following our announcement of FDA approval of our second generation vCLAS catheter system. The 2025 PIPE Pre-Funded Warrants are exercisable for one share of Commonour Stockcommon stock at an exercise price of $0.0001 per share. The 2025 PIPE Pre-Funded Warrants are immediately exercisable and may be exercised at any time until all of the 2025 PIPE Pre-Funded Warrants are exercised in full.

A holder (together with its affiliates) of the 2025 PIPE Pre-Funded Warrants or Milestone Warrants, as the case may be, may not exercise any portion of the 2025 PIPE Pre-Funded Warrants or Milestone Warrants to the extent that the holder would own more than 4.99% (or, at the holder’s option upon issuance, 9.99%) of our outstanding Commoncommon Stockstock immediately after exercise, which percentage may be changed at the holder’s election to a lower or higher percentage not in excess of 19.99% upon 61 days’ notice to us subject to the terms of the 2025 PIPE Pre-Funded Warrants or the Milestone Warrants. In lieu of making the cash payment otherwise contemplated to be made to us upon exercise of a Milestone Warrant, after the deadline for effectiveness of the registration statement to be filed pursuant to the Registration Rights Agreement, the holder may elect instead to receive upon such exercise (either in whole or in part) the net number of shares of Commonour Stockcommon stock determined according to a formula set forth in the Milestone Warrants, provided that such cashless exercise shall only be permitted if, at the time of such exercise, there is no effective registration statement registering the resale of shares of Commonour Stockcommon stock underlying the Milestone Warrants or if the prospectus contained in such registration statement is not available for the resale of shares of Commonour Stockcommon stock underlying the Milestone Warrants by the Milestone Warrant holder.

In lieu of making the cash payment otherwise contemplated to be made to us upon exercise of a 2025 PIPE Pre-Funded Warrant in payment of the aggregate exercise price, the holder may elect instead to receive upon such exercise (either in whole or in part) the net number of shares of Commonour Stockcommon stock determined according to a formula set forth in the 2025 PIPE Pre-Funded Warrants.

Refer to Note 9 –- Warrants in our condensed consolidated financial statements for additional details.

We believe that our existing cash and cash equivalents will enable us to fund our ongoing development and submission activities to support FDA evaluation of our first and next generation ULTA products. We will require additional capital to fund continued clinical activities for our next-generation product, to fund our manufacturing activities, to fund precommercialcommercial activities of our programs and for working capital and general corporate purposes. The assessment of our ability to meet our future obligations is inherently judgmental, subjective and susceptible to change. Based on our current research and development plans, we expect to have sufficient resources to fund our planned operations into the thirdfourth quarter of 2026.

Comparison for the threesix months ended MarchJune 31,30, 2026 to the threesix months ended MarchJune 31,30, 2025

Net cash used in operating activities for the threesix months ended MarchJune 31,30, 2026 was $4.1$9.4 million, consisting primarily of a net loss of $7.0$13.7 million, adjusted by non-cash items of $1.8$3.4 million and net changes in operating assets and liabilities of $1.1$0.9 million. Non-cash items primarily consisted of $0.2$0.4 million in depreciation and amortization, $0.4$0.9 million in stock-based compensation, $1.1$2.2 million from the change in fair value of convertible notes payable, and $0.1$50 millionthousand from the change in fair value of warrant liabilities. Changes in operating assets and liabilities included a $0.8$1.6 million increase in other accrued liabilities,liabilities and a $0.1$0.3 million decrease in prepaid expenses and other current assets, partially offset by a $0.3 million increase in inventory, a $0.4 million decrease in accrued liabilities, and a $0.1$0.4 million increasedecrease in accounts payable.

Net cash used in operating activities for the threesix months ended MarchJune 31,30, 2025 was $7.2$11.9 million, consisting primarily of a net loss of $7.7$11.7 million, adjusted by non-cash items of $0.2$0.5 million and net changes in operating assets and liabilities of $0.2$0.3 million. Non-cash items primarily consisted of $0.3$0.5 million in depreciation and amortization, $0.2$0.5 million in stock-based compensation, andpartially offset by a $0.2$1.6 million net gain from the change in fair value of convertible notes payable. Changes in operating assets and liabilities included a $0.3$1.5 million increasedecrease in inventoryaccounts payable and a $0.6$0.3 million decrease in accrued liabilities, partially offset by a $0.7$0.8 million decrease in inventory and a $1.4 million increase in other accrued liabilities.

Net cash used in investing activities for the threesix months ended MarchJune 31,30, 2026 and the threesix months ended MarchJune 31,30, 2025 was $2$8 thousand and $0.3 million, respectively. The decrease in cash used in investing activities was due to the decrease in purchases of property.property and equipment.

Net cash provided by (used in) financing activities for the threesix months ended MarchJune 31,30, 2026 and 2025 was nil.

During the threesix months ended MarchJune 31,30, 2026, there have been no material changes to our critical accounting policies from those disclosed in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the 2025 Annual Report.