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

Risks Related to Our Business and Industry

We have a history of net losses, and we expect to continue to incur losses for the foreseeable future. If we ever achieve profitability, we may not be able to sustain it.

We have incurred losses since our inception and expect to continue to incur losses for the foreseeable future. We reported net losses of $17.7 million and $10.7 million for the three months ended March 31, 2026 and 2025, respectively. As a result of these losses, as of March 31, 2026, we had an accumulated deficit of approximately $175.5 million. We expect to continue to incur significant sales and marketing, research and development, clinical and regulatory, and other expenses as we expand our commercial organization, increase marketing efforts to drive adoption of Vivistim Therapy, expand existing relationships with our customers, conduct clinical trials on our existing and future products and develop new products or add new features to our existing products, pursue any required regulatory clearances or approvals, and seek to establish broader commercial coverage. In addition, we expect our general and administrative expenses to increase due to the additional costs associated with being a public company. Additionally, we may encounter unforeseen expenses, difficulties, complications, delays, and other known and unknown obstacles as we continue to build and scale our business. The net losses that we incur may fluctuate significantly from period to period. We will need to generate significant additional revenue in order to achieve and sustain profitability. Even if we achieve profitability, we cannot be sure that we will remain profitable for any period of time.

If we fail to manage our growth effectively, our business could be materially and adversely affected.

We have experienced recent rapid growth and anticipate further growth. For example, for the three months ended March 31, 2026, our revenue was $12.1 million compared to revenue of $5.7 million for the three months ended March 31, 2025, an increase of 113% year-over-year. This growth has placed significant demands on our management, financial, operational, technological and other resources, and we expect that our future growth will continue to place significant demands on our management and other resources and will require us to continue developing and improving our operational, financial and other internal controls. In particular, continued growth increases the challenges involved in a number of areas, including managing our third-party manufacturers and supplier relationships and ensuring adequate inventory is available, recruiting and retaining sufficient skilled personnel for leadership positions, sales force and other functions, providing adequate training and supervision to maintain our high-quality standards and preserving our culture and values. We may not be able to address these challenges in a cost-effective manner, or at all.

To achieve our business objectives, we must also successfully increase our supply of products and components from third-party manufacturers to meet expected demand. If demand decreases, we will need to implement capacity and cost reduction measures involving restructuring costs. If demand increases, we will be required to make capital expenditures related to increased production. This would also put pressure on our third-party manufacturing capabilities. For example, a sudden increase in demand could require increased production of components, such as the implantable pulse generator (IPG) or stimulation lead. Adapting to changes in demand inherently involves a delay because it takes time to identify the change the market is undergoing and to implement any measures to take as a result. Finally, capacity adjustments are inherently risky because there is imperfect information, and sales trends may rapidly intensify, ebb, or even reverse. We may be unable to accurately or timely predict trends in demand and customer behavior or to take appropriate measures to mitigate risks and react to opportunities resulting from such trends. Any inability in the future to identify or to adequately and effectively react to changes in demand could have a material adverse effect on our business, financial condition and results of operations.

In addition, we may experience challenges managing the inventory of components of our Vivistim System, which can lead to excess inventory. Inventory levels in excess of customer demand may result in inventory obsolescence or expiration, which could potentially result in inventory write-downs or write-offs, which could be substantial and could impact our gross margins. Actual future demand could be less than our forecast, which may result in additional reserves and write-downs in the future, or actual demand could be stronger than our forecast, which may result in a reduction to previously recorded reserves and write-downs in the future and increase the volatility of our operating results.

In the future, we may also experience difficulties with quality control, component supply and shortages of qualified personnel, among other problems. These problems could result in delays in product availability, product quality issues, delays in our ability to reach our sales potential, delays in the development and launch of new products and increases in expenses. Any such delays, issues or increased expenses could adversely affect our business, financial condition and results of operations. In addition, rapid and significant growth will place a strain on our administrative and operational infrastructure, particularly as a newly public company. In order to manage our operations and growth, we will need to continue to improve our operational and management controls, hiring process, reporting and information technology systems and financial internal control procedures. If we do not effectively manage our growth, we may not be able to execute on our business plan, respond to competitive pressures, take advantage of market opportunities, reach our sales potential, satisfy customer requirements or maintain high-quality product offerings, which could have a material adverse effect on our business, financial condition and results of operations.

Our success depends entirely on our currently marketed Vivistim Therapy. If we are unable to successfully market and sell Vivistim Therapy, our business prospects will be materially and adversely affected, and we may be unable to achieve revenue growth and to fund our operations.

To date, all of our revenue has been derived, and we expect it to continue to be derived, from sales of our Vivistim System. Our future financial success will depend entirely on our ability to effectively and profitably market and sell Vivistim Therapy. The commercial success of Vivistim Therapy and any of our future products we develop will depend on a number of factors, including the following:

our revenue growth;

the market awareness and adoption of Vivistim Therapy, including by patients and our customers;

the scope, timing and costs of supporting the growth and expansion of our commercial organization and efforts;

the availability and amount of reimbursement for procedures using our products;

the adoption of private payor coverage of our products;

changes in the acquisition costs of finished goods and components used in our products;

the costs associated with securing additional suppliers and service providers;

the timing and costs of our research and development efforts;

the scope, rate of progress and costs of our current or future clinical and registries as well as costs associated with complying with regulatory requirements;

the cost and timing of additional regulatory clearances or approvals;

the costs of attaining, defending, and enforcing our intellectual property rights;

whether we acquire third-party products or technologies;

litigation or other claims against us for intellectual property infringement or otherwise;

the emergence of competing or complementary technologies;

our ability to raise additional funds to finance our operations;

debt service requirements;

our need to implement additional infrastructure and internal systems;

general economic, industry and market conditions or extraordinary external events, such as a recession;

the rate at which we expand internationally;

the cost associated with being a public company;

our reputation among physicians, hospitals and therapists; and whether we are required by the FDA or comparable non-U.S. regulatory authorities to conduct additional clinical trials for future or current indications.

If we fail to successfully market and sell our products, we will not be able to achieve profitability, which will have a material adverse effect on our business, financial condition and results of operations.

If we fail to effectively hire, train, and retain our direct sales force, increase our sales capabilities, or develop broad brand awareness in a cost-effective manner, our growth will be materially and adversely affected, and our business will suffer.

We have a direct sales team with substantial applicable medical device and clinical experience, as well as sales management. In order to generate future growth, we must continue to add highly qualified personnel to our commercial organization, with a strategic mix of TMs and TDSs, to drive further awareness and penetration within healthcare providers that interact with stroke survivors. Identifying and recruiting qualified commercial personnel and training them on our product, applicable federal and state laws and regulations, and on our internal policies and procedures requires significant time, expense, and attention. Once hired, the training process is lengthy because it requires significant education for new TMs and TDSs to achieve the level of clinical competency with our products expected by physicians and therapists. Upon completion of the training, our TMs and TDSs typically require lead time in the field to grow their network of accounts and achieve the productivity levels we expect them to reach in any individual territory. Furthermore, the use of our products may involve limited, non-contractual support activities provided in connection with initial education and setup prior to or at the time of implantation. The Company does not have an ongoing obligation to provide programming, reprogramming, or customer or technical support after implantation, and any such activities, if performed, are incidental and not considered significant. Also, to the extent we hire personnel from our competitors, we may have to wait until applicable non-competition or non-solicitation provisions have expired before deploying such personnel in restricted territories or incur costs to relocate personnel outside of such territories, and we may be subject to future allegations that these new hires have been improperly solicited, or that they have divulged to us proprietary or other confidential information of their former employers. Our business may be harmed if our efforts to expand and train our sales force and any future efforts to engage in direct-to-patient programs and direct-to-consumer marketing 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. Moreover, the members of our direct sales force are at-will employees. The loss of these personnel to competitors or otherwise could have a material adverse effect on our business, financial condition, and results of operations. If we are unable to attract, train and retain our direct sales force personnel or replace them with individuals of equivalent technical expertise and qualifications, if we are unable to successfully instill technical expertise in replacement personnel, or if our direct sales force personnel are unable to reach the productivity levels we expect on the timeline we expect for any reason, our revenue and results of operations could be materially and adversely affected.

The commercial success of Vivistim Therapy depends upon attaining significant market acceptance of our products by hospitals, healthcare providers, therapists, patients, caregivers and payors.

Our success depends, in part, on the acceptance of Vivistim Therapy as safe, effective and cost-effective. We cannot predict how quickly, if at all, hospitals, healthcare providers, therapists, patients, caregivers or payors will adopt Vivistim Therapy or, if adopted, how frequently Vivistim Therapy will be used. Vivistim Therapy and any future products we may develop or market may never gain broad market acceptance for some or all of our targeted indications. It is important to our success, future growth, and profitability that we are able to increase healthcare provider awareness of Vivistim Therapy and that hospitals, healthcare providers, therapists, patients, caregivers and payors believe that our products offer benefits over alternative treatment methods, and that they adopt our products. These parties may not adopt our products unless they are able to determine, based on experience, clinical data, medical society recommendations, and other analyses, that our products are safe, effective and cost-effective on a stand-alone basis and relative to competitors’ products. If physicians or payors do not find our body of published clinical evidence and data compelling or wish to wait for additional studies, they may choose not to use or provide coverage and reimbursement for or prescribe our product. Currently, there are a number of large third-party payers that have determined that our Vivistim Therapy is experimental or investigational and therefore do not cover it at this time. In addition, the long-term effects of our Vivistim Therapy beyond our current clinical trials are not yet known. Certain physicians, hospitals, therapists and payers may prefer to see longer-term safety and efficacy data than we have produced. Even if we are able to raise awareness, physicians and therapists may be slow in changing their medical treatment practices and may be hesitant to select our products for recommendation to their patients for a variety of reasons, including:

long-standing relationships with competing companies and distributors that sell other products;

lack or perceived lack of sufficient clinical evidence, including long-term data, supporting reliability, safety, clinical or economic benefits;

lack of third-party coverage or adequate reimbursement, particularly from private payors;

lack of experience with our products and concerns that we are relatively new to market; and time commitment and skill development that may be required to gain familiarity and proficiency with our products and implantation procedures.

Stroke survivors interact with a diverse network of care providers, including stroke interventionalists, neurosurgeons, neurologists, physical medicine and rehabilitation physicians, occupational and physical therapists, stroke coordinators and nurses. Each of these providers can play a role in identifying and evaluating potential Vivistim Therapy candidates. We directly engage each of these stakeholders through our field-based commercial team, as well as through specialized events, summits, and conferences. As a result, our success depends, in large part, on effectively marketing Vivistim Therapy to these healthcare providers. We aim to educate these healthcare providers regarding the patient population that would benefit from Vivistim Therapy. Acceptance of Vivistim Therapy depends upon our education of healthcare providers as to the distinctive characteristics, clinical benefits, safety, durability and ease of use of Vivistim Therapy as compared to other therapy options and any future competitor VNS devices and upon our effective communication to healthcare providers of the proper use of Vivistim Therapy as well as our ability to provide effective and timely physician, therapist and patient support, including in connection with device education and addressing any technical, quality or other concerns. However, we cannot assure you that we will achieve broad market acceptance among these practitioners. Healthcare providers may be reluctant or unwilling to invest time to learn about the benefits of Vivistim Therapy, and to deviate from practices or therapy programs which they consider to be more established. If we are not able to effectively demonstrate that the use of Vivistim Therapy is beneficial in a broad range of patients, some healthcare providers may choose to utilize Vivistim Therapy on only a subset of their total eligible patient population or not at all, and adoption of our product will be limited and may not occur as rapidly as we anticipate or at all, which would have a material adverse effect on our business, financial condition and results of operations.

Most of our customers are hospitals, which may require us to enter into contracts regarding our devices. This process can be lengthy and time-consuming and may require extensive negotiations and management time with an uncertain degree of success. If we do not receive access to hospital facilities via these contracting processes or otherwise, or if we are unable to secure contracts or tender successful bids, we may not achieve our sales and revenues goals, and our results of operations may be harmed. Furthermore, we may expend significant effort in these time-consuming processes and still may not obtain a purchase contract from such hospitals.

In addition, certain characteristics and features of Vivistim Therapy may prevent widespread market adoption. For example, some patients have reported pain, discomfort, bruising, swelling and infection after implantation as well as device related issues, such as low or high impedance (a measure of the lead’s resistance to current), which have led to explant or revision requests. These and any similar future explants or revisions could deter potential candidates from pursuing treatment or prompt physicians to favor alternative therapies. Even if physicians recommend Vivistim Therapy to patients, patients may not adopt it for a variety of reasons, including because they do not want to or are unable to undergo the implantation procedure (which involves typical risks associated with such procedures, including infection), do not perceive our device as safe, effective or cost-effective, prefer any future competitive devices or therapies (including as a result of competitive patient marketing) or because Vivistim Therapy is not reimbursed by their health insurance provider.

Also, screening patients for Vivistim Therapy requires a clinical assessment of a patient’s motor impairments, which is typically done based on the Fugl-Meyer Assessment of Upper Extremity (FMA-UE) score. The FMA-UE assessment can take about 30 minutes or more to complete, which can be longer than other clinical assessments. Follow-up assessments take about the same time. Healthcare providers that use other clinical assessments that are shorter may not want to learn how to use the FMA-UE scoring system or invest the time in a longer assessment process generally, which may impact adoption of Vivistim Therapy.

Additionally, even if our products achieve market acceptance, they may not maintain that market acceptance over time if competing products, therapies or technologies are considered safer, more effective, more cost-effective or otherwise superior. Any failure of our products to generate sufficient demand or to achieve meaningful market acceptance and penetration will harm our future prospects and have a material adverse effect on our business, financial condition, and results of operations.

Coverage and adequate reimbursement may not be available or may be subject to change for our Vivistim System, including any future products we commercialize, which could diminish our sales, increase our competition, or affect our ability to sell our currently marketed Vivistim Therapy and any future products profitably.

Our customers are generally reimbursed by third-party payors for the procedures that are required to implant our device. Because there is no separate reimbursement for supplies used in surgical procedures, including our device, the additional cost associated with the use of our products can affect the profit margin of the hospital where the procedure is performed. Some of our target customers may be unwilling to adopt our products in light of potential additional associated cost. In addition, customers that perform the procedure may be subject to reimbursement claim denials upon submission of the claim. These events, or any other decline in the amount payors are willing to reimburse our customers, could make it difficult for existing customers to continue using or to adopt our products and could create additional pricing pressure for us. If we are forced to lower the price we charge for our products, our gross margins will decrease, which could have a material adverse effect on our business, financial condition and results of operations and impair our ability to grow our business.

Based on our experience to date, third-party payors generally reimburse for the surgical procedures in which our products are used only if the patient meets the established medical necessity criteria for surgery. Some payors are moving toward a managed care system and control their healthcare costs by limiting authorizations for surgical procedures, including elective procedures using our devices. Although no uniform policy of coverage and reimbursement among payors exists and coverage and reimbursement for procedures can differ significantly from payor to payor, reimbursement decisions by particular third-party payors may depend upon a number of factors, including the payor’s determination that use of a product is:

a covered benefit under its health plan;

appropriate and medically necessary for the specific indication;

cost effective; and neither experimental nor investigational.

Third-party payors are increasingly auditing and challenging the prices charged for medical products and services with concern for upcoding, miscoding, using inappropriate modifiers, or billing for inappropriate care settings. Some third-party payors must approve coverage for new or innovative devices or procedures before they will reimburse healthcare providers who use the products or therapies. Even though a new product may have been cleared for commercial distribution by the FDA, we may find limited demand for the product unless and until reimbursement approval has been obtained from governmental and private third-party payors.

Medicare, which is administered by the Centers for Medicare and Medicaid Services (CMS), does not currently have a national coverage determination or local coverage determinations applicable to our device. As a result, coverage determinations are made on a case-by-case basis for Medicare beneficiaries. Medicaid programs are funded by both federal and state governments, and coverage and reimbursement policies vary from state to state and from year to year. Effective July 1, 2023, the New York State Medicaid fee-for-service program covers FDA-cleared vagus nerve stimulator, or VNS, devices used for stroke therapy in conjunction with rehabilitation to recover function in hands and arms after an ischemic stroke. Most commercial payors currently consider Vivistim Therapy as experimental or investigational and require prior authorization.

Obtaining and maintaining coverage and reimbursement can be a time-consuming and expensive process. For example, payors typically require us to provide supporting scientific, clinical and cost-effectiveness data for the use of our products before providing coverage. We may not be able to provide data sufficient to satisfy third-party payors that procedures using our products should be covered and reimbursed, and even if we are, such data may be time-consuming and costly to obtain and the incremental revenue from the positive coverage decisions it generates (if any) may not be sufficient to recoup the expense associated with data collection. Payors also continually review new and existing technologies for possible coverage and can, without notice, deny or reverse coverage for new or existing products and procedures. While some payors currently cover and provide reimbursement for procedures using our currently cleared or approved products on a case-by-case basis, we can give no assurance that these third-party payors will continue to provide coverage and adequate reimbursement for the procedures using our products, or that additional third-party payors will provide coverage for our products in the future. If we are not successful in reversing any non-coverage policies, or if third-party payors that currently cover or reimburse procedures in which our products are used reverse or limit their coverage in the future, or if other third-party payors issue similar non-coverage policies, this could have a material adverse effect on our business.

Third-party payors are also increasingly examining the cost effectiveness of products, in addition to their safety and efficacy, when making coverage and payment decisions. Third-party payors have instituted initiatives to limit the growth of healthcare costs using, for example, price regulation or controls and competitive pricing programs. Some third-party payors also require demonstrated superiority, on the basis of randomized clinical trials, or pre-approval of coverage, for new or innovative devices or procedures before they will reimburse healthcare providers who use such devices or procedures. It is uncertain whether our current products or any future products will be viewed as sufficiently cost effective by payors to warrant coverage and adequate reimbursement levels for procedures using such products in any given jurisdiction. For example, there can be no assurance that payors will find Vivistim Therapy attractive from a cost/benefit perspective, or that they will deem our data on economic benefits of Vivistim Therapy sufficiently persuasive.

High rates of coverage denials or prolonged, burdensome prior authorization processes by commercial and government payors may discourage physicians from recommending Vivistim Therapy to their patients. Certain of our customers have, from time to time, experienced coverage denials and extended prior authorization requirements for Vivistim Therapy, and there can be no assurance that payor behavior will improve or that such denials will not persist or increase in the future. If medical centers and physicians perceive that reimbursement is uncertain or routinely denied, they may be less willing to invest the time required to pursue appeals or recommend Vivistim Therapy to their patients, which could reduce utilization of Vivistim Therapy. Persistent denial trends could also influence hospital committees and practice groups to deprioritize Vivistim Therapy in their care protocols, further limiting adoption and adversely affecting our revenue, reputation and growth prospects.

In addition, government payors, such as CMS, have increased their efforts to control the cost, utilization and delivery of healthcare services. CMS establishes Medicare payment levels for hospitals and physicians on an annual basis, which can increase or decrease payment to such entities. The Vivistim System is typically implanted in the hospital outpatient setting, and all items and services paid under the Medicare hospital outpatient prospective payment system, or OPPS, are assigned to payment groups called Ambulatory Payment Classifications, or APCs, which group together items and services that are similar clinically and in terms of resource use. Reimbursement for professional services performed by physicians are reported using CPT codes and based on a different payment methodology. Implantation of the Vivistim System falls under CPT Code 64568 (“Incision for implantation of a cranial nerve (e.g., vagus) neurostimulator electrode array and pulse generator”). From January 1, 2023 through December 31, 2025, CMS granted transitional pass-through payment status for the Vivistim System under HCPCS code C1827 (“Generator, neurostimulator (implantable), non-rechargeable, with implantable stimulation lead and external paired stimulation controller”) when used in combination with CPT code 64568. This status is granted by CMS to facilitate access to innovative devices that significantly improves clinical outcomes as compared to currently available treatment options. Effective January 1, 2026, CPT code 64568 is assigned to New Technology APC 1580. A service is not paid under a New Technology APC until sufficient claims data have been collected to allow CMS to assign the procedure to a clinical APC group that is appropriate in clinical and resource terms. CMS generally expects this to occur within two to three years. We cannot provide any assurances that CPT code 64568 will continue to be assigned to APC 1580 during this time, or that reimbursement amount associated with any subsequent assignment to a clinical APC group will be adequate to cover the costs associated with our device. Individual states may also enact legislation that impacts Medicaid payments to hospitals and physicians.

The marketability of our products may suffer if government and commercial third-party payors fail to provide adequate coverage and reimbursement. Even if favorable coverage and reimbursement status is attained, less favorable coverage policies and reimbursement rates may be implemented in the future.

We depend on a small number of third-party contract manufacturers and suppliers, some of which are single source, to produce and package all elements comprising our Vivistim System as well as certain implantation tools, and if these suppliers and manufacturers fail to supply our Vivistim System or its components or subcomponents in sufficient quantities or at all, it will have a material adverse effect on our business, financial condition, and results of operations.

Selling, general and administrative expenses

Other income (expense), net consists primarily of interest expense on our debt obligations, including our Loan and Security Agreement, as well as amortization of debt issuance costs, interest income on our cash and cash equivalents and fair value adjustments related to our redeemable convertible preferred stock warrants and redeemable convertible preferred stock tranche liability. We expect our other income (expense), net to vary in future periods depending on the extent of our debt obligations.

Net cash used in operating activities was $9.7 million for the three months ended March 31, 2025. This was primarily due to net losses incurred during the period of $10.7 million, partially offset by increases in accounts payable of $1.5 million and accrued liabilities and other of $0.9 million, as well as non-cash share-based compensation of $0.2 million and changes in the fair value of warrant liabilities of $0.3 million.

From January 30, 2026 through February 11, 2026, we issued convertible promissory notes to certain investors in an aggregate principal amount of $40.0 million (the “Convertible Notes”). The Convertible Notes mature on January 30, 2028 (the “Maturity Date”). The Convertible Notes bear no interest for the first six months following the date of issuance (the “Interest Free Period”). Following such Interest Free Period, the Convertible Notes accrue interest at a rate of 7.0% per annum through the Maturity Date, which interest payments shall be paid in kind. Pursuant to the terms of the Convertible Notes, immediately prior to the completion of the public offering, the Convertible Notes and any accrued interest will automatically convert into shares of our common stock at the applicable conversion price. The conversion price is the lower of (a) 80% of the initial public offering price per share in the initial public offering and (b) the valuation of the Company immediately prior to the closing of the initial public offering divided by the number of fully diluted shares of capital stock (on an as-converted basis) outstanding immediately prior to the initial public offering but excluding the Convertible Notes (the “Fully Diluted Capitalization”), provided, that in no event shall such conversion price be less than the quotient obtained by dividing $226.0 million by the Fully Diluted Capitalization or greater than the quotient obtained by dividing $750.0 million by the Fully Diluted Capitalization. Immediately prior to the closing of our IPO, the Convertible Notes and any accrued paid-in-kind interest automatically converted into an aggregate of 3,333,324 shares of the Company’s common stock.

In January and February 2026, we issued Convertible Notes in an aggregate principal amount of $40.0 million. The Convertible Notes bear no interest for the first six months following the date of issuance, after which the Convertible Notes accrue interest at a rate of 7.0% per annum through maturity, which interest payments shall be paid in kind, unless earlier converted or repaid. Immediately prior to the closing of our IPO, the Convertible Notes and any accrued paid-in-kind interest automatically converted into 3,333,324 shares of the Company’s common stock. For additional information, see Note 6 – Convertible Notes and Notes Payable to our condensed financial statements included in this Quarterly Report.