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

On May 8, 2026, we received the NYSE Notice from the NYSE indicating we were no longer in compliance with the Section 1003(a)(ii) in the Company Guide since the Company reported stockholders’ equity of $3.8 million as of December 31, 2025, and had net losses in three of its four most recent fiscal years then ended (the "Stockholders' Equity Rule"). The Company intendstimely to submitsubmitted its PlanCompliance by June 7, 2026,Plan, advising of actions it has taken or will take to regain compliance with Section 1003(a)(ii) of the Guide by November 8, 2027. On July 22, 2026, PMI received a letter from the NYSE American stating that the PMI's Compliance Plan had been accepted. There can be no guarantee that NYSE will accept the Company’s Compliance Plan or that the Company will meet requirements of its quarterly reviews and/or regain compliance by the November 8, 2027, deadline.

If the NYSE delists our Class A common stock from trading on its exchange and we are not able to list such securities on another national securities exchange, we expect such securities could be quoted on an over-the-counter market. If this were to occur, we and our stockholders could face significant material adverse consequences including:

PMI functions as a holding company and owns 100% of the membership interests of SynCardia. Business operations are carried out by and through SynCardia, and accordingly most of the information set forth in this Quarterly Report on Form 10-Q relates to the business of SynCardia. SynCardia is a medical technology company that manufactures and sells the only U.S. Food and Drug Administration (“FDA”) and Health Canada approved SynCardia TAH, which fully replaces the function of a failing human heart. To date, more than 2,100 SynCardia TAHs have been implanted in patients across 27 countries, and the SynCardia TAH is an established bridge to heart transplantation for patients with biventricular heart failure, also referred to as end-stage heart failure, in the U.S. and around the globe. SynCardiaWe isare also pursuing additional research and advancements in medical technology, including the next-generation,next-generation Emperor Total Artificial Heart (“Emperor TAH”), which is designed to combine the proven SynCardia TAH ventricles with the Company’s next-generation electromechanical Emperor Drive System. The Emperor TAH is being developed as a platform to a fully implantable total artificial heart and driver-less heart,eliminate the Emperorneed TAH.for Bothexternal thedrivers. SynCardia andThe Emperor TAH areis subject to additional development and regulatory review.

Implantation of the SynCardia TAH is covered by the U.S. Centers for Medicare and Medicaid Services under National Coverage Determination 20.9.1 and is generally reimbursed under Diagnosis Related Group 001, the highest reimbursement category for cardiac procedures. Hospital reimbursement varies based on case complexity and institutional adjustments. Because reimbursement is determined primarily by the procedure rather than the specific device used, hospitals evaluate mechanical circulatory support technologies based on clinical suitability and overall cost effectiveness within the applicable reimbursement framework. We currently have SynCardia TAH inventory available to support near-term customer requirements.

On May 8, 2026, the Company received a notice of noncompliance from NYSE Regulation (“NYSE Notice”) stating that it iswas not in compliance with Section 1003(a)(ii) in the NYSE American Company Guide (the “Company Guide”) since the CompanyPMI reported stockholders’ equity of $3.8 million as of December 31, 2025, and had net losses in three of its four most recent fiscal years then ended (the "Stockholders' Equity Rule"). In order to maintain the Company’sour listing on the NYSE American, the NYSE American has requested that the CompanyPMI submit a plan of compliance (the “Compliance Plan”) by June 7, 2026, advising of actions it has taken or will take to regain compliance with Section 1003(a)(ii) of the Company Guide by November 8, 2027. Subsequently, PMI timely filed the Plan with NYSE American. On July 22, 2026, we received a letter from the NYSE American stating that PMI's Compliance Plan had been accepted.

Comparison of ThreeSix Months Ended MarchJune 31,30, 2026 and 2025

Total revenues increased by $0.5$1.4 million, or 85%,50%, for the threesix months ended MarchJune 31,30, 2026, as compared to the threesix months ended MarchJune 31,30, 2025. This increase is due to an increase in U.S. product sales of $0.6$1.5 million, an increase in rest of world sales of $0.2 million, offset by a $0.1$0.4 million decrease in salesEurope in Europe.sales.

Research and development expenses increased by $1.1$1.7 million, or 135%,111%, for the threesix months ended MarchJune 31,30, 2026, as compared to the threesix months ended MarchJune 31,30, 2025. The increase was primarily attributable to increased activity and phase scheduling in the new product research. We do not track expenses by product candidate. While research and development supply expense are isolated by product, personnel are not. Research and Development personnel do not work on current product production, therefore labor expense is not isolated by product.

Selling, general and administrative expenses increased by $0.8$2.0 million, or 39%,43%, for the threesix months ended MarchJune 31,30, 2026, as compared to the threesix months ended MarchJune 31,30, 2025. The increase was primarily attributable to a $0.8$1.2 million increase in stock based compensation expenses, a $0.2 million in franchise tax fees, a $0.1 million increase in employee benefits and a $0.5 million increase in professional and legal expenses.

Total other incomeexpenses (expense) increaseddecreased by $0.8$1.4 million, or 36%,25%, for the threesix months ended MarchJune 31,30, 2026, as compared to the threesix months ended MarchJune 31,30, 2025. The increasedecrease was attributed to the increase of loss on settlement of debt,debt and loss on Warrant Exchange, offset by changes in fair value of the Senior Secured Note and warrant liabilities.

We have incurred operating losses since inception, including net losses of $7.6$13.3 million and $5.6$12.3 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. While we already have FDA-approved products that are generating commercial revenue, the business needs to scale up in order to offset a large, fixed overhead cost from our site in Tucson, Arizona. Moreover, we are also investing heavily in the development of updates and next generation devices; therefore, we expect to continue to incur significant expenses and operating losses for the foreseeable future. Furthermore, we expect to incur additional expenses with transitioning to, and operating as, a public company.

To date, we have funded our operations primarily with the proceeds from Series A-1 Preferred Stock, loans from related parties, convertible notes and cash received from, in exchange for shares of common shares,stock, or loans payable from other investors. In September 2025, the Company consummated our Initial Public Offering. See also Note 1 to the condensed consolidated financial statements.

In December 2025, the Company entered into a Securities Purchase Agreement pursuant to which the Company issued $15.0 million aggregate principal amount of Senior Secured NotesNote due 2028, with the right to issue up to an additional $35.0 million in subsequent closings.

Net cash used in operating activities of $3.8$5.2 million for the threesix months ended MarchJune 31,30, 2026, was primarily attributable to $7.6$ 13.3 million net lossloss, and non-cash$5.7 expenses related tomillion net changes in fair value of the Senior Secured Note and warrant liability of $3.0 million,liability, offset by $0.7$9.3 million non-cash loss on settlement of debt, $0.9 million increase in accounts payable and accrued expensesexpenses, and$1.5 million in stock based compensation, a $0.5 million increase in the loss on settlementwarrant ofexchange, notes$0.6 payablemillion ofin $6.1provision million.for excess and obsolete inventory, $0.7 million in inventory, $0.2 million in prepaid and other current asset.

Net cash used in operating activities of $2.2$4.8 million for the threesix months ended MarchJune 31,30, 2025, was primarily attributable to $5.6$12.3 million net loss, offset by $0.5$2.5million in embedded derivative loss, $0.6 million increase in accountsincreased receivableinventory, $2.4 million amortization of discount on debt issued, $0.2 million amortization of ROU asset, and $0.5$1.8 million increase in accounts payable and accrued expenses.

Net cash used in investing activities was $0.03 million and $0 million for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively.

Net cash used in financing activities was $7.5$6.3 million for the threesix months ended MarchJune 31,30, 2026, primarily consisting of repayment of $7.4$9.5 million of notes payable, $0.9 million of repayments of loans from related parties, and $0.02$0.03 million repayments of finance lease obligations, offset by $0.7 million of proceeds from related party loans, and $0.04$0.06 million of stock option exercise.exercise, $3.1 million of proceeds from issuance of Common stock and warrants.

Net cash provided by financing activities was $2.8$5.1 million for the threesix months ended MarchJune 31,30, 2025, which primarily consistingconsisted of net proceeds of $1.0$2.0 million from the issuance of convertible notesnotes, and $1.4 million related party loans, and $0.5$1.5 million from the issuance of common stock.stock, and $1.6 million net of related party loans.

As of MarchJune 31,30, 2026 and December 31, 2025, we had no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources.