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

•Our Quarterly Report, our unaudited financial statements for the threesix months ended MarchJune 31,30, 2026 and our audited financial statements for the year ended December 31, 2025 and include a footnote raising substantial doubt about our ability to continue as a “going concern” and we will likely need to raise additional financing to fund our business and revenue growth plans.

We have incurred net losses since inception, and we expect to incur additional losses in the foreseeable future. For the threesix months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025, we incurred net losses of $7.0$14.5 million and $5.4$10.0 million, respectively. As of MarchJune 31,30, 2026 we had an accumulated deficit of $162.7$170.2 million. Our accumulated deficit reflects significant front-end spending and investment related to both completed and ongoing key operational milestones, including: (i) the initial and continued development of CapsoCam Plus and CapsoCloud, our cloud-based platform; (ii) development of our next pipeline capsule endoscope, CapsoCam Colon; (iii) initial development and ongoing improvements to our AI assisted pathology detection tools and technologies; and (iv) funding of completed and ongoing related clinical and other studies. As we execute on our business strategy to grow our business and revenues (including seeking FDA 510(k) clearance for CapsoCam Colon), we will continue to incur development costs and clinical study expenses and will make additional investments. Additionally, as a public company, we will incur significant legal, accounting and other expenses that we did not incur as a private company. Accordingly, we expect to continue to incur losses for at least the near-term and we may never achieve profitability or, if we do achieve profitability, sustain profitability. Our failure to achieve and sustain profitability in the future would make it more difficult to finance our business and accomplish our strategic objectives, which would have a material adverse effect on our business, financial condition and results of operations.

Our Quarterly Report, our unaudited financial statements for the threesix months ended MarchJune 31,30, 2026 and our audited financial statements for the year ended December 31, 2025 include a footnote raising substantial doubt about our ability to continue as a “going concern” and we will likely need to raise additional financing to fund our business and revenue growth plans.

Our Quarterly Report, our unaudited financial statements for the threesix months ended MarchJune 31,30, 2026 and our 2025 audited financial statements include a footnote raising substantial doubt about our ability to continue as a going concern. We have funded our historical net losses and negative cash flows through the issuance of convertible preferred stock, IPO and Private Placement. As of MarchJune 31,30, 2026, we had cash and cash equivalents of approximately $17.9$9.1 million, including $14 million raised through the Private Placement.million.

•Further penetrating the small bowel market in the U.S. and internationally, including by (i) increasing the size and effectiveness of our U.S. and international sales teams; (ii) pursuing the pediatric market (with children comprising a significant portion of the Crohn’s disease patient population) following FDA clearance in December 2024 for this newly indicated patient population; (iii) introducing complementary products such as our (a) capsule delivery device with full commercialization expected in the fourth quarter of 2026 and (b) patency capsule (for verifying a capsule endoscope can pass through the bowel without retention prior to an exam) with tentative FDA 510(k) submissionapplication plannedsubmitted byin the end of the second quarter ofJuly 2026; and (iv) facilitating increased telemedicine adoption following FDA clearance in December 2024 of remote ingestion of our CapsoCam Plus, allowing patients to ingest our capsules in the comfort of their own homes with remote provider supervision.

•Incorporating our AI assisted pathology detection technology into our CapsoCam Plus capsule. We conducted related clinical studies to demonstrate the benefits of our AI technology as incorporated into CapsoCam Plus and submitted the related 510(k) application to the FDA in December 2025. WeIn alsoresponse madeto the initialFDA’s EUfeedback, submissionwe submitted a proposal to the FDA in JanuaryApril 20262026. As further requested by the FDA, we will conduct further demographic analysis of the study data and are targetingexpect to submit the relatedanalysis technical documents into the secondFDA quarterby the end of August 2026. We anticipate to obtainobtaining FDA clearance by the middleend of 2026 and EU clearance in the third quarter of 2026 with commercialization planned to begin in US andshortly thereafter. We also made the initial EU shortlysubmission thereafter.in January 2026 and submitted the related technical documents in July 2026. By the time of this Quarterly Report we have commercialized in EU.

The second generation of our CapsoCam Colon solution incorporates our AI assisted pathology detection technology. The second-generation product will incorporate improvements—such as a new lens and illumination optics with an increased field of view and improved image quality—designed to increase the accuracy (measured in terms of polyp-detection sensitivity and specificity) and benefits of using our CapsoCam Colon solution to visualize the colon and detect and measure polyps. We plan to focus our regulatory efforts on first obtaining U.S. FDA clearance followed by obtaining EU clearance. We plan to use the clinical results of the second arm of our pivotal study to support submission to the FDA of a 510(k) application in the thirdfourth quarter of 2026. FDA review of our 510(k) submissions may be delayed and we may not receive 510(k) clearances from the FDA on a timely basis or at all. Staff reductions in the FDA office charged with regulating devices may cause delay. Related risks with respect to, among other things, receiving requisite regulatory clearances and the timing thereof and commercializing our CapsoCam Colon capsule endoscopy solution are described further below under this “Risk Factors” section including “Our longer term efforts to expand our GI-tract capsule endoscopy solutions beyond small bowel and colon pathologies and medical conditions may not succeed,” and “We may not obtain or may experience delays in obtaining 510(k) clearance for our planned second generation of our CapsoCam Colon solution (with improved optics and other components), which would adversely impact our ability to commercialize this product and generate related revenue.”

We believe our CapsoCam Plus (small bowel) and CapsoCam Colon solutions, incorporating our panoramic imaging solution, can be adapted to address new GI medical indications. In connection with our efforts to address pancreatic cancer, we submitted an FDA “Breakthrough Device Designation” for our capsule endoscopy solution on November 6, 2025. A response from FDA in January 2026 determined that the CapsoCam UGI does allow for visualization of the papilla and its abnormalities, for both pre-cancerous and cancerous lesions. Due to the fact that the device does not specifically define diagnostic criteria, the application was not approved. Following the FDA’s response, we initiated a study for early pancreatic cancer detection using the CapsoCam UGI system in May 2026. This study will build on established scientific literature and engage leading opinion leaders, including leadership of leading societies in the pancreatobiliary field, to define malignancy diagnosis criteria with the device. This study is expected to enroll up to 140 patients using the CapsoCam UGI system. As of May 11, 2026, the firstdate patientof hasthis Quarterly Report, three patients have been enrolled in this study The study continues and we are working on the expansion of a number of clinical sites participating in the study. We expect to resubmit the Breakthrough Device Designation application following the study, when additional data is available. The breakthrough designation is a part of the on-going project, potentially supplementing the regulatory pathway and approval for early pancreas cancer detection. However, additional research and studies to collect data may delay our anticipated timeline for obtaining the regulatory clearance (including obtaining the Breakthrough Device Designation) and may result in an increase in our research and development expenditures that exceed our current expectations and there can be no assurance that our reshaped strategy will be successful. A Breakthrough Device Designation prioritizes a device in the FDA’s review queue for all future regulatory submissions and accelerates communications (i.e., negotiations and feedback) with the FDA, thereby expediting the marketing application process. However, our proposed capsule endoscopy solution may not meet the eligibility requirements for this designation and, even if a Breakthrough Device Designation is received, it may not receive the FDA authorization required to market the proposed capsule endoscopy solution.

Our growth strategy includes increasing our international revenues and potential entry into new international markets (including through qualified exclusive distributors in targeted regions). In the threesix months ended MarchJune 31,30, 2026 and 2025, international sales accounted for approximately 28%26% and 23% of our revenue, respectively. Our largest international shipping destinations in the threesix months ended MarchJune 31,30, 2026 include France, Germany and Saudi Arabia. Some of our existing and new international markets may be highly regulated and competitive. However, we may face significant challenges and risks in expanding in existing and entering into new international markets (including risks related to expanding our market share and customer base), such as the following:

Notably, one competitor, Ankon (through its affiliate AnX Robotics), has already established a market presence with their FDA-cleared AI product for the small bowel in the U.S. and various other markets outside the U.S. This puts us at a market disadvantage until we can launch our own AI product for the small bowel, subject to FDA clearance which is anticipated to occur by the middleend of the third quarter of 2026. The delay in our product launch could result in a loss of market share and reduced revenue opportunities, as potential customers may opt for the already available and proven solutions from our competitors. Additionally, the competitive landscape is further impacted by the pricing strategies of Asia-based capsule endoscopy companies, such as Ankon (China), Jinshan (China) and IntroMedic (South Korea), who are offering their products at lower than average prices. This aggressive pricing approach could pressure us to lower our prices to remain competitive, potentially impacting our profit margins.

If other companies or institutions develop or market methods that do not require fasting or bowel cleansing or require less stringent preparation, our products may become less attractive to patients. For example, non-invasive stool-based DNA tests generally requiresrequire no specific dietary restrictions or bowel preparation and enablesenable patients to collect a stool sample at home using the provided kit and send it to the lab for analysis. Such test may be more attractive to low-risk or average-risk patients who require more convenient options for GI-tract screening. Also, recent advancements in medical research have opened up new possibilities for early detection and screening of colorectal cancer by leveraging key metabolites and early diagnostic biomarkers. Advances in technology or alternative screening methods that eliminate or reduce the need for fasting or bowel cleansing could provide a more convenient and patient-friendly option, potentially making our CapsoCam capsules less competitive. Should such alternatives gain acceptance in the market, we may experience a decline in demand for our products, which could materially and adversely affect our business, financial condition, and results of operations. Additionally, our ability to compete effectively may be further challenged if these new methods are protected by patents or other intellectual property rights that we cannot circumvent.

For the three months ended MarchJune 31,30, 2026, we recorded a provider complaint rate of approximately 3.7%2.5% (based on number of capsules sold in such period). For 2025, we recorded a provider complaint rate of approximately 2.5% (based on number of capsules sold in 2025). The bulk of recorded complaints related to patient failure to (i) timely retrieve the capsule following completion of the procedure and (ii) enter the correct serial number or use the correct shipping label when returning the capsule for download. Although small, these failures indicate potential issues with the usability or clarity of instructions provided to patients by providers or us and shipment and inventory management issues. These issues, in turn, can significantly impact customer and patient satisfaction and our reputation and potential sales.

Capsule retention by a patient refers to the capsule getting stuck in the GI tract, which can occur due to various reasons such as strictures, tumors, or inflammatory bowel diseases. We believe the industry retention rate may be as high as 2%. Based on (i) incidences reported to us for all CapsoCam capsule patients in the three months ended MarchJune 31,30, 2026, and (ii) total CapsoCam capsules sold by us in the same periodperiod, retention rate was less than 1/10 of 1%. However, we believe our retention rate is understated due to (i) underreporting by providers and patients and, relatedly, (ii) the fact that most retained capsules are eventually excreted without the need for invasive intervention and medication may be used to encourage this process. In some instances, endoscopic retrieval or surgical intervention may be necessary to remove the retained capsule. Aspiration is rare but potentially fatal where the capsule is accidentally inhaled into the respiratory tract instead of being swallowed into the esophagus. For the three months ended MarchJune 31,30, 2026, there was noone complaint regarding an aspiration incident involving a CapsoCam capsule.

The U.S. federal government has shut down multiple times in the past, and certain regulatory agencies, including the FDA, the CMS ,CMS, the U.S. International Trade Commission, the U.S. Patent and Trademark Office (“USPTO”) , the U.S. Department of Defense, and the U.S. Department of Veterans Affairs, have had to furlough employees and suspend some of their activities. A prolonged shutdown could delay regulatory reviews and approvals, litigation proceedings, or government program implementations and could ultimately disrupt or delay our research and development, manufacturing, commercialization, or intellectual property enforcement activities. Any such delays or disruptions could have a material adverse effect on our business, financial condition, results of operations, and prospects.

In seeking 510(k) clearance for our AI technology as incorporated into CapsoCam PlusPlus, we are (i) utilizing the NaviCam ProScan as the predicate device (confirmed with the FDA) and (ii) currently conducting a retrospective clinical study of the CapsoCam Plus solution with the AI technology incorporated to analyze in vivo videos from completed, real-world clinical cases, to assess the performance of the AI technology for small bowel. Similar to the first arm of our CapsoCam Colon pivotal study, the study seeks to demonstrate that the AI technology can (i) reliably and accurately identify and analyze images and video of the small bowel to detect abnormalities as quantified by diagnostic accuracy measures such as sensitivity and specificity, and, in doing so, (ii) aid qualified physicians in achieving improved diagnostic performance relative to not using AI.

We provide remote capsule endoscopy reading services through board-certified physicians to our customers with $98$148 and $85$146 thousand in revenue for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. Our relationships with board-certified physicians are subject to various state laws including those with respect to physician licensing requirements. The interpretation and enforcement of these laws vary significantly across states, and there is no assurance that our current practices will remain compliant. If regulatory authorities determine that our arrangements with physicians violate these laws, we may be forced to restructure or terminate these relationships, leading to potential disciplinary actions, penalties, and a loss of revenue.

We depend on Aureliance, our authorized agent and importer in the EU and EEA for a significant portion of our revenue. It has historically contributed a significant percentage of our revenue generated from EU countries, such that if it were to materially reduce or terminate its business with us, our revenue generated from such countries would suffer. For the threesix months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025, Aureliance represented approximately 12%11% and 9%10% of our revenue, respectively. As of MarchJune 31,30, 2026 and December 31, 2025, Aureliance represented approximately 31%25% and 22% of our accounts receivable balance, respectively. The loss of it or a significant reduction in its business with us could have a material adverse effect on our financial condition and results of operations.

We were founded in 2005 and are headquartered in Saratoga, California. We sell our small bowel capsule system to our provider customers (i.e., primarily gastroenterologists practicing in clinics and/or hospitals) both internationally and in the U.S. through our global sales and marketing team. In the U.S., we sell to customers directly. Internationally we sell both directly and through qualified exclusive distributors in specified regions. Our largest international shipping destinations in the threesix months ended MarchJune 31,30, 2026 include France, Germany, and Saudi Arabia. As of MarchJune 31,30, 2026, our CapsoCam Plus has been used in over 167,000176,000 patients. We currently manufacture and intend to continue manufacturing our CapsoCam capsules included in our GI-tract capsule endoscopy solution (including CapsoCam Colon capsules). To assist us in manufacturing our GI-tract capsule endoscopy products, we rely on component suppliers and assembly manufacturers based in Asia (particularly Taiwan and Japan).

In the second quarter of 2025 we filed our 510(k) submission to the U.S. Food and Drug Administration (the “FDA”) for our initial CapsoCam Colon capsule endoscopy solution (the “First-Generation Product”). We received responses from the FDA in September 2025. During our meeting with the FDA in December 2025, the FDA raised inquiries on topics including panoramic image processing methodology, and the proposed study design, sample size and primary endpoint for an extended study. Based on our communications with the FDA, we have decided not to further pursue the submission and approval for the First-Generation Product, and to prioritize our resources for the development of our second-generation of CapsoCam Colon capsule (the “Second-Generation Product”), which features improved imaging quality and increased field of review with use of AI and better lens. We also expanded a second arm pivotal study to enroll approximately 800 patients at up to 20 sites in the U.S. in preparation for submitting a new 510(k) application for the Second-Generation Product. As of the date of this Quarterly Report, over 600 patientswe have beencompleted enrolledthe inenrollment process of the second arm pivotal study.study with 801 patients enrolled. We currently expectsexpect to submit the 510(k) application for the Second-Generation Product in the thirdfourth quarter of 2026.2026, subject to any further requests from the FDA.

Since we continue to invest in AI to improve our existing products, we completed a clinical study to demonstrate the benefits of our incorporation of AI technology into CapsoCam Plus, our existing product for the small bowel. We submitted the related 510(k) application to the FDA in December 2025. WeIn receivedresponse feedback fromto the FDAFDA’s infeedback, March 2026 andwe submitted oura responsesproposal to the FDA in April 2026. WeAs further requested by the FDA, we will continueconduct engagingfurther withdemographic analysis of the FDAstudy data and expect to obtainsubmit the analysis to the FDA by the end of August 2026. We anticipate obtaining FDA clearance by the middleend of 2026.the Thethird quarter of 2026 with commercialization is planned to begin in US shortly thereafter. We also made the initial EU submission in January 2026 and submitted the related technical documents in July 2026. By the time of this Quarterly Report we have commercialized in EU.

Longer term, we believe our CapsoCam family of products, incorporating our panoramic imaging solution, can be adapted to address new GI medical indications. Potential new medical indications include esophageal medical conditions (such as esophageal varices) and pancreatic cancer. In connection with our efforts to address pancreatic cancer, we submitted an FDA “Breakthrough Device Designation” application for our capsule endoscopy solution on November 6, 2025. A response from FDA in January 2026 determined that the CapsoCam UGI does allow for visualization of the papilla and its abnormalities, for both pre-cancerous and cancerous lesions. Due to the fact that the device does not specifically define diagnostic criteria, the application was not approved. Following the FDA’s response, we initiated a study for early pancreatic cancer detection using the CapsoCam UGI system in May 2026. This study will build on established scientific literature and engage leading opinion leaders, including leadership of leading societies in the pancreatobiliary field, to define malignancy diagnosis criteria with the device. This study is expected to enroll up to 140 patients using the CapsoCam UGI system. As of May 11, 2026, the firstdate patientof hasthis Quarterly Report three patients have been enrolled in this study. The study continues and we are working on expanding a number of clinical sites participating in the study. We expect to resubmit the Breakthrough Device Designation application following the study, when additional data is available. The breakthrough designation is a part of the on-going project, potentially supplementing the regulatory pathway and approval for early pancreas cancer detection. However, additional research and studies to collect data may delay our anticipated timeline for obtaining the regulatory clearance (including obtaining the Breakthrough Device Designation) and may increase our research and development costs.

As of MarchJune 31,30, 2026, we had an accumulated deficit of $162.7$170.2 million. To date, we have funded our operations primarily through proceeds from the sale of shares of our convertible preferred stock, IPO and Private Placement proceeds and cash generated from the sale of CapsoCam capsules and the use of CapsoCloud or CapsoView, CapsoCloud data access, and capsule video reading service.

Success in further penetrating the small bowel capsule endoscopy market. Until commercialization of our CapsoCam Colon capsule (targeted for thewithin middleone ofquarter 2027after FDA clearance is provided), to grow our revenues (and, in turn, reduce our expected losses and negative cash flows), we intend to grow our small-bowel-related revenues by, among other things: (i) retaining and growing our customer base; (ii) cost-effectively increasing the size and effectiveness of our U.S. and international sales teams and our customer-support function; (iii) pursuing the pediatric market (with children comprising a significant portion of the Crohn’s disease patient population); (iv) introducing complementary products such as our (a) capsule delivery device with full commercialization expected in the fourth quarter of 2026, and (b) patency capsule (for verifying whether a capsule endoscope can pass through the bowel without retention prior to an exam) with tentativethe FDA 510(k) submissionapplication plannedsubmitted byin the end of the second quarter ofJuly 2026; (v) facilitating increased telemedicine adoption following recent FDA clearance in December 2024 of remote ingestion of our CapsoCam Plus, allowing patients to ingest our capsules in the comfort of their own homes with remote provider supervision; and (vi) following related FDA 510(k) clearance (expected by the middleend of the third quarter of 2026), commercializing our updated CapsoCam Plus which incorporates our AI assisted pathology detection technology.

Due to the potential increase in costcosts of revenue, expected as a result of U.S. trade policies changes, including increasing tariffs on imports, our gross profit/gross margin may be adversely impacted.

In the near term, we expect our clinical development expenses to vary as a percent of revenue as, among others, we (i) continued the second arm of our CapsoCam Colon pivotal study involving the second generation of that capsule (incorporating further advanced features designed to improve the accuracy of CapsoCam Colon) with the second arm expectedinvolving to involve approximately 800801 patients enrolled at up to 20 sites in the U.S. and plan to refine the study based on the FDA comments to the first arm pivotal study, (ii) continued clinical development of our updated small bowel CapsoCam Plus capsule incorporating our AI assisted pathology detection technology,enrolled, and (iiiii) conducted additional research and studies to collect data for the development of CapsoCam UGI.

In addition to clinical trials costs, our research and development costs also includesinclude engineering for our AI technology, hardware development, and regulatory personnel.

Results of Operations for the Three and Six Months Ended MarchJune 31,30, 2026 and 2025

For the three months ended MarchJune 31,30, 2026 and 2025, international sales accounted for 28%25% and 23% of total revenue. For the six months ended June 30, 2026 and 2025, international sales accounted for 26% and 23% of total revenue.

As we continued to scale our business, costs of revenue increased $0.2$0.3 million, or 13%,18%, for the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025 from $1.3$1.5 million to $1.5$1.8 million. The increased costs of revenue was attributable to increased unit sales of CapsoCam Plus for the small-bowel. For the six months ended June 30, 2026, compared to the six months ended June 30, 2025 the cost of revenue was $3.2 million and $2.8 million, respectively, which represented an increase of $0.4 million, or 16% period-over-period. The increased costs of revenue was attributable to $0.3 million due to increased unit sales of CapsoCam Plus for the small-bowel and the related services and $0.1 million due to to increased customs and tariffs due to the change in U.S. customs policy.

Gross profit decreasedincreased $0.2$0.1 million, or 11%,3%, for the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025, from $1.5$1.8 million to $1.3$1.9 million. For the three months ended MarchJune 31,30, 2026 and 2025, the gross margin was 48%51% and 55%, respectively. Gross profit decreased $(0.1) million, or (3)%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, from $3.3 million to $3.2 million. For the six months ended June 30, 2026 and 2025, the gross margin was 50% and 54%, respectively. The decreaseincrease in gross profit was a result of increased CapsoCam Plus unit sales and the related software component, while the decline of the gross margin is due to a pressure on selling prices we have when operating in a highly competitive market and changes the U.S. government made to the trade policies and tariffs at the beginning of the year resulting in an increase in expenses for customs and tariffs.

The following tables provide a summary for our key operating expenses for the three and six months ended MarchJune 31,30, 2026 and 2025.

Selling and marketing expenses increased $0.1 million, or 7%,5%, for the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025, from $2.0$1.8 million to $2.1$1.9 million. The increase was due to a headcount increase of 4 employees in the sales and marketing organization, including insides sales, that resulted in an increase in stock-based compensation expenses,expenses asdue wellto asnew anstock-option increase in insurance expenses.grant.

Research and development expenses increased $1.3$1.9 million, or 43%,57%, for the three months ended MarchJune 31,30, 2026, compared to the three months ended MarchJune 31,30, 2025, from $3.1$3.4 million to $4.4$5.3 million. The increase was primarily due to $0.9a $1.3 million increase attributable to expenses associated with ongoing clinical trials andtrials, a $0.4 million net increase ofin expenses for non-recurring engineering services driven by the development of the new CMOS image sensor under the development agreement with Canon Inc.Inc., and head count increase of 4 employees in the research and development resulted in an $0.1 million increase in compensation expenses and stock-based compensation expenses for $0.1 million due to new stock-option grants.

General and administrative expenses increased $0.1$1.0 million, or 5%,80%, for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025, from $1.8$1.2 million to $1.9$2.2 million. The increase was due to expenses operating as a public company forof $0.2 million (insurance expenses increased $0.1 million, Board of Directors cash compensation expense increased $0.1 million), increase in stock-based compensation expenses forof $0.1$0.3 million, primarily due to new stock-option grant per the consulting agreement with Mr. Wen-Hung Tsai,grant, and software expenses for software forof $0.1 million (expenses for a new ERP implementation and software necessary for operating as a public company). This increase was partially offset by a decrease inAdditionally, expenses for audit (for $0.1 million) and consulting (for $0.2 million) that were higher in the firstsecond quarter of 2025 were offset by $0.2 million due to funds received from the preparationU.S. federal government as part of thea Company'sCOVID-19 financialrelief statementsprogram. Another $0.2 million increase of expenses period-over-period is a result of foreign currency gains in connectionthe withsecond quarter 2025 compared to immaterial loss in the IPO.comparable period of 2026.

Our reported net loss attributable to CapsoVision common stockholders for the three months ended MarchJune 31,30, 2026 and 2025 totaled approximately $7.0$7.5 million and $5.4$4.6 million, respectively, representing a period-over-period increase of $1.7$2.9 million or 31%.62%. Our reported net loss attributable to CapsoVision common stockholders for the six months ended June 30, 2026 and 2025 totaled approximately $14.5 million and $10.0 million, respectively, representing a period-over-period increase of $4.5 million or 45%.

To date, we have financed our operations primarily through the net proceeds we have received from the sales of our convertible preferred stock, IPO and Private Placement as well as cash generated from sales of our CapsoCam Plus capsule endoscopy solution. We have generated losses from our operations as reflected in our accumulated deficit of $162.7$170.2 million as of MarchJune 31,30, 2026. Net cash used in operating activities was $6.1$14.5 million and $5.0$9.5 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively.

Our interim (unaudited) financial statements for the threesix months ended MarchJune 31,30, 2026 included in this Quarterly Report on Form 10-Q note that there is substantial doubt about our ability to continue as a going concern within one year after the date of issuance of those financial statements (see Note 2. GOING CONCERN). This means that we have expressed substantial doubt about our ability to continue our operations without an additional infusion of capital from external sources. Our interim (unaudited) financial statements have been prepared on a going concern basis and do not include any adjustments to reflect the future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may be necessary should we be unable to continue as a going concern. If we are unable to finance our operations, our business would be in jeopardy and we might not be able to continue operations and might have to liquidate our assets. In that case, investors might receive less than the value at which those assets are carried on our interim (unaudited) financial statements for the threesix months ended MarchJune 31,30, 2026, and it is likely that investors would lose all or a part of their investment. See “Risk Factors—Business and Industry Risks—Our Quarterly Report, our unaudited financial statements for the threesix months ended MarchJune 31,30, 2026 and our audited financial statements for the year ended December 31, 2025 include a footnote raising substantial doubt about our ability to continue as a ‘going concern’ and we will likely need to raise additional financing to fund our business and revenue growth plans."

As of MarchJune 31,30, 2026, we had approximately $17.9$9.1 million in cash and cash equivalents. From our inception through MarchJune 31,30, 2026, we have received aggregate gross proceeds of $143.6 million from sales of our convertible preferred stock, which were automatically converted into shares of our common stock in connection with the completion of our IPO. To provide for additional liquidity prior to the completion of our IPO, on May 28, 2025 we received $1 million as a note payable from an existing investor. The note payable, together with interest thereon (at 1% per month) was repaid shortly after completion of our IPO. On July 3, 2025 we completed our IPO from which we received the net proceeds in the amount of $23.4 million. On March 16, 2026 we closed the Private Placement and received the grossnet proceeds in the amount of $14$13.4 million.

As of MarchJune 31,30, 2026, we had an accumulated deficit of $162.7$170.2 million and cash and cash equivalents of $17.9$9.1 million. On March 16, 2026, we completed the Private Placement with the grossnet proceeds to us of approximately $14$13.4 million. Based on our current operating plan, we believe that our existing cash balances will not be sufficient to fund our operations for at least the next 12 months after the date of issuance of these financial statements.

For the threesix months ended MarchJune 31,30, 2026, net cash used in operating activities totaled $6.1$14.5 million, primarily driven by the net loss of $7.0$14.5 million for the period. Additional contributing factors included a $0.4$1.7 million increase in inventory to meet increased demand, a $1.4 million increase in accrued expenses and other current liabilities,liabilities and a $0.2$0.7 million increasedecrease in accounts payable, mainly due to research and development expenses and increased clinical trial expenses, as well as $0.3$0.9 million increase in stock-based compensation expenses due to new grants.

For the threesix months ended MarchJune 31,30, 2025, net cash used in operating activities was $5.0$9.5 million, primarily attributable to the net loss of $5.4$10.0 million. Cash outflows were further impacted by a $0.4 million increase in inventory to meet increased demand, and a $0.8$1.0 million increase in accrued expenses and other current liabilities, mainly due to research and development expenses,expenses includingand on-goingincreased clinicalheadcount trials.related expenses.

Net cash used in investing activities during the threesix months ended MarchJune 31,30, 2026 and 2025 was immaterial and consisted of purchases of property and equipment.

Net cash provided by financing activities during the threesix months ended MarchJune 31,30, 2026 consisted primarily of $14$14.0 million in gross proceeds from the Private Placement.Placement, net of issuance costs of $0.6 million. For the threesix months ended MarchJune 31,30, 2025, net cash provided by financing activities wasconsisted immaterialprimarily of $1.0 million from note payable received from an existing investor and consisted$0.2 ofmillion thein proceeds from the exercise of options on common stock options and warrants.

Our contractual obligations at MarchJune 31,30, 2026 include operating lease payments of $0.9$0.7 million due within 18 months, purchase commitments to raw material suppliers of $1.0 million due within 21 months and $2.2$1.8 million in outstanding purchase commitment for the development agreement with Canon Inc. due in 129 months. We expect to fund these obligations through our existing cash balances and cash flows from operations.