EBR Systems Inc.
11/12/2025 | Press release | Distributed by Public on 11/12/2025 16:01
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes and other information included elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto and management's discussion and analysis of financial condition and results of operations for the year ended December 31, 2024. In addition to historical data, this discussion contains forward-looking statements about our business, ability to successfully commercialize our WiSE CRT System, results of operations, cash flows, financial condition and prospects based on current expectations that involve risks, uncertainties, assumptions, and other important factors. Our actual results could differ materially from such forward-looking statements. Factors that could cause or contribute to those differences include, but are not limited to, those identified below and those discussed in Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K. Additionally, our historical results are not necessarily indicative of the results that may be expected for any period in the future. We use words such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "predict," "project," "potential," "seek," "should," "will," "would," and similar expressions to identify forward-looking statements.
Overview
EBR is a U.S. based medical device company that developed the WiSE CRT System ("WiSE"), an implantable cardiac pacing system able to provide stimulation to endocardial heart tissue for the correction of heart rhythm conditions without requiring the use of leads. That implantable device is part of a cardiac resynchronization therapy ("CRT"), offering endocardial heart tissue stimulation without the complications associated with traditional lead-based systems. Cardiac rhythm management ("CRM") systems use leads to conduct electricity from an implantable pulse generator ("IPG") to electrodes that deliver therapeutic electric pulses to heart tissue. While leads are a critical part of most CRM systems, they have long been recognized as a primary shortcoming of these systems and are a leading cause of device failure.
We initially developed WiSE for use in conjunction with another implanted pacemaker to provide CRT to patients who are unable to receive CRT from a traditional lead-based system or are at high risk of complications from an upgrade procedure. WiSE CRT technology is engineered to benefit patients who have not seen success with conventional CRT or face high complication risks. By eliminating lead requirements for left ventricular pacing, WiSE CRT introduces a novel approach to cardiac pacing, with the potential to transform CRT delivery.
On April 11, 2025, we received notification that the Center for Devices and Radiological Health ("CDRH") of the Food and Drug Administration ("FDA") had completed its review of our premarket approval application ("PMA") for WiSE and approved WiSE for commercial distribution in the U.S. for adult patients who are at least 22 years of age, are indicated for CRT, have an existing or are eligible for an implanted right ventricular pacing system, and are in one of the following two categories: 1) patients in whom previous coronary sinus ("CS") lead implantation was unsuccessful, or where an implanted lead has been turned off, referred to as "previously untreatable"; or 2) patients with previously implanted pacemakers or Implantable Cardioverter-Defibrillators ("ICDs") in whom standard CRT upgrade is not advisable due to known relative contraindications for CS lead or CRT device implantation, referred to as "high risk upgrades".
We have launched WiSE with the focus on driving adoption of WiSE at key, high-volume, hospitals or medical facilities within the U.S. to be followed by select, high-volume hospitals or medical facilities in markets outside the U.S. ("OUS") that we would target after evaluating regulatory and reimbursement considerations.
| a) | U.S. Strategy |
We have implemented a Limited Market Release ("LMR"), with the following objectives:
LMR objective 1: Initial Target Accounts
| · | Launched in target accounts from the SOLVE-CRT (Stimulation of the Left Ventricular Endocardium for Cardiac Resynchronization Therapy) pivotal trial. |
| · | Leveraged existing relationships with hospitals or medical facilities that participated in previous clinical trials to streamline patient identification and device implantation. |
LMR objective 2: Expansion and Optimization
| · | Strategically expanded our field team to broaden our market presence into additional high-volume hospitals or medical facilities. |
| · | Focused on optimizing the customer training programs and enhancing EBR's business operations. |
LMR objective 3: Increase Implants Per Site
| · | The field team focused on increasing the number of cases per month per hospital or medical facility by improving hospital implant workflows and familiarity with the technology. |
As of September 30, 2025, we have seven active LMR hospitals or medical facilities.
Full Market Release
Our full market release strategy includes the following objectives:
| · | Expand market presence and maximize product adoption. |
| · | Utilize refined business operations and continue scaling the field team. |
| · | Focus on expanding into additional hospitals or medical facilities, leveraging the experience and efficiency gained from the LMR. |
| b) | OUS Strategy |
Our OUS commercial activities will not commence until we obtain regulatory approvals and certification in select, target markets. These initial target markets include Australia, the United Kingdom, and the European Union. The timing of launch in each of these OUS markets thus depends on meeting additional regulatory requirements, as well as on securing the appropriate payment coverage for WiSE in each market.
As a result of its breakthrough device designation ("BDD"), our WiSE CRT technology is eligible for incremental payment coverage in the U.S. for up to three years following FDA approval. The Centers for Medicare & Medicaid Services ("CMS") has approved of the New Technology Add-On Payment ("NTAP") for WiSE, commencing October 1, 2025. The NTAP is designed to bridge the financial gap between the costs of innovative technologies and the standard Medicare severity Diagnosis Related Groups ("MS-DRG" or "DRG") payment structure in place, while encouraging early adoption of the breakthrough medical advancements used in the inpatient setting for Medicare patients. NTAP secures the maximum reimbursement rate of 65% of the cost of WiSE. This is in addition to the DRG payments, which are intended to cover the procedure and the remaining device cost. In June 2025, we received preliminary approval for Transitional Pass-Through ("TPT") reimbursement scheme of WiSE. Preliminary approval for the TPT reimbursement scheme, will commence October 1, 2025, and is effective for three years. TPT provides hospitals with Medicare reimbursement when treating patients in an outpatient setting. In combination, these reimbursements are intended to fully cover the cost of WiSE in a hospital or outpatient setting.
Financial Overview
Since inception, we have incurred significant net losses and expect to continue to incur net losses for the foreseeable future. Since our inception, our operations have been financed primarily by net proceeds from the sale of our CDIs, common stock, convertible preferred stock, and indebtedness. As of September 30, 2025, we had $73.0 million in cash, cash equivalents, restricted cash, and marketable securities and an accumulated deficit of $388.2 million.
In May 2025, we completed an institutional placement of 55,900,000 CDIs representing the same number of common stock at $0.64 per share, for proceeds of $33,467,662, net of $2,498,398 of related issuance costs. In June 2025, we completed a non-underwritten rights offering to existing stockholders, or Securities Purchase Plan, and issued an additional 20,000,000 CDIs representing the same number of common stock at $0.64 per share, for proceeds of $12,751,318, net of $110,682 of related issuance costs.
Our WiSE CRT System received approval from the FDA for commercial distribution in April 2025, and we began commercializing WiSE during the second quarter of 2025. The commercial potential of and our ability to successfully commercialize WiSE is unproven and will require, among other things, effective sales, marketing, manufacturing, distribution, information systems and pricing strategies, as well as compliance with applicable laws and regulations. Based on our current operating plans and assumptions we believe that our existing cash, cash equivalents, and current and noncurrent marketable securities, together with projected revenue from the U.S of the WiSE CRT System will be sufficient to fund our projected operating requirements for at least the next 12 months from the date of this filing.
Factors Affecting Our Business
There are a number of factors that have impacted, and we believe will continue to impact, our results of operations and growth. These factors include:
| · | Regulatory clearances/post-approval study ("PAS"). Our business strategy depends on the successful FDA submission of our PAS and ongoing annual reporting of our WiSE CRT System to the FDA. |
| · | Market acceptance. The growth of our business depends on our ability to successfully commercialize WiSE and gain wide acceptance of WiSE by continuing to make physicians and other hospital staff aware of the benefits of WiSE to generate increased demand and frequency of use and thus increase sales to our hospital customers. Our ability to grow our business will also depend on our ability to expand our customer base in existing or new target markets. |
| · | Sales force size and effectiveness. The rate at which we grow our sales force and the speed at which newly hired salespeople become effective can impact our revenue growth or our costs incurred in anticipation of such growth. We intend to make significant investments in our sales and marketing organization by increasing the number of U.S. sales representatives and expanding our international marketing programs to help facilitate further adoption among existing hospital accounts as well as broaden awareness of our products to new hospital accounts. |
| · | Competition. Our industry is intensely competitive and, in particular, we compete with a number of large, well-capitalized companies on multiple fronts. We must strive to be successful in light of our competitors' existing and future products and related pricing and their resources to successfully market to the physicians who use our products. |
| · | Reimbursement. The level of reimbursement from third-party payors for procedures performed using our products could have a substantial impact on the prices we are able to charge for our products and how widely our products are accepted. The level at which reimbursement is set for procedures using our products, and any increase in reimbursement for procedures using our products, will depend substantially on our ability to generate clinical evidence, to gain advocacy in the respective physician societies and to work with CMS and payors, and to capitalize on the recent CMS approval of our WiSE CRT System for the NTAP, and preliminary approval for TPT reimbursement scheme beginning October 1, 2025. |
| · | Clinical results. Publications of clinical results by us, our competitors and other third parties can have a significant influence on whether, and the degree to which, our products are used by physicians and the procedures and treatments those physicians choose to administer for a given condition. |
While these factors may present significant opportunities for us, they also pose significant risks and challenges that we must address.
Components of our Consolidated Results of Operations
Revenue
We derive most of our revenue from sales of WiSE to the hospital facilities that implant our WiSE CRT System. We recognize revenue upon the transfer of goods or services to a customer at an amount that reflects the expected consideration to be received in exchange for those goods or services. Specifically, revenue from the sale of WiSE is recognized at an amount that reflects the expected consideration upon notice that our products have been used in a surgical procedure. Our revenue fluctuates primarily based on the volume of procedures performed. Our revenue is expected to continue to fluctuate in the future from quarter-to-quarter due to a variety of factors, including the success of our sales force in expanding adoption of WiSE in new accounts and the number of physicians who are aware of and implant WiSE.
Nearly all our revenue results from sales in the United States, but we also have limited sales of replacement batteries for our WiSE CRT System to hospital facilities with patients who have been or are currently enrolled in our clinical study in the United Kingdom ("UK").
Cost of Goods Sold and Gross Margin
Cost of goods sold consists primarily of costs related to materials, components and subassemblies, personnel-related expenses for our manufacturing and quality assurance employees, manufacturing overhead and charges for excess, obsolete and non-sellable inventories. Overhead costs include the cost of quality assurance, testing, material procurement, inventory control, operations supervision and management personnel, an allocation of facilities and information technology expenses, including rent and utilities, and equipment depreciation. Cost of goods sold also includes certain indirect costs such as those incurred for shipping our WiSE CRT System. We record adjustments to our inventory valuation for estimated excess, obsolete and non-sellable inventories based on assumptions about future demand, past usage, changes to manufacturing processes and overall market conditions.
We calculate gross margin as gross profit divided by revenue. Our gross margin has been and will continue to be affected by a variety of factors, primarily by our manufacturing costs, pricing, and the use of inventory that was previously expensed during our clinical trial. Our gross margin is expected to decrease over the near term as we continue to utilize inventory that was previously expensed, but over the long term our gross margin may increase to the extent our production volume increases as our fixed manufacturing costs would be spread over a larger number of units, thereby reducing our per-unit manufacturing costs. We expect our gross margin will fluctuate from period to period, however, based upon the factors described above.
Operating Expenses
Research and Development Expenses
Research and development expenses primarily consist of personnel-related expenses, including salaries, bonuses, fringe benefits and other compensation-related costs, including stock-based compensation expense, for employees engaged in research and development functions. Research and development expenses also include costs of conducting our ongoing clinical studies, such as expenses associated with our clinical research organization, or CRO, who provided project management and other services related to our SOLVE-CRT study, outside service fees paid to third party consultants and contractors related to our product candidate engineering, quality assurance and regulatory approval, as well as contract manufacturing of our product candidate and allocated facility costs.
We expense research and development costs as incurred. Non-refundable advance payments that we make for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses and other long-term assets, which are expensed as the related goods are delivered or the services are performed, or when it is no longer expected that the goods will be delivered, or the services rendered.
We anticipate that our research and development expenses will increase in the future as we:
| · | hire and retain additional personnel, including research, clinical, development, quality control, quality assurance and regulatory personnel; |
| · | conduct additional clinical studies beyond our current SOLVE-CRT study; |
| · | continue to advance the research and development of our WiSE CRT system; |
| · | develop, establish, and validate our commercial-scale current good manufacturing practice ("cGMP"). |
Selling, General and Administrative Expenses
Selling, general and administrative expenses primarily consist of personnel-related costs, including salaries, bonuses, fringe benefits and other compensation-related costs, including stock-based compensation expense, for our personnel and external contractors involved in our sales and marketing, executive, finance, legal and other administrative functions,as well as losses on the disposal of property and equipment. Selling, general and administrative expenses also include costs incurred for outside services associated with such functions, including costs associated with obtaining and maintaining our patent portfolio and professional fees for accounting, auditing, tax, legal services, and other consulting expenses.
We anticipate that our selling, general and administrative expenses will increase significantly in the future as we:
| · | hire and retain additional sales, general and administrative personnel to support the expected growth in our sales and marketing activities, research and development activities and the preclinical and clinical development of our product candidates; |
| · | continue to expand our sales, marketing and administrative function to support the sales adoption of WiSE; |
| · | pursue payor coverage and reimbursement for our current and future product candidates; |
| · | maintain, expand, and protect our intellectual property portfolio; and |
| · | incur increased expenses associated with operating as a U.S. publicly reporting company, including increased costs of accounting, audit, legal, regulatory, and tax-related services, and director and officer insurance premiums. |
Other Income (Expenses), net
Interest expense
Interest expense primarily consists of cash and non-cash interest related to our notes payable. See "Loan and Security Agreements" section below for more details about our debt agreements.
Interest income
Interest income consists of interest income, including accretion of discounts, generated from our cash, cash equivalent, and marketable securities.
Other income
Other income includes reimbursements of clinical trial expenses as well as refundable tax incentives from the Australian Taxation Office.
Gain/ (loss) on foreign currency
Gains and losses arising from the settlement and remeasurement of monetary assets and liabilities denominated in currencies other than a subsidiary's functional currency.
Critical Accounting Estimates
Our critical accounting estimates are more fully described in our Annual Report on Form 10-K for the year ended December 31, 2024. There have been no significant changes to our critical accounting estimates since December 31, 2024, except as discussed below.
Revenue Recognition
In accordance with Accounting Standards Codification 606 Revenue from Contracts with Customers ("ASC 606"), we recognize revenue when control is transferred to the customer, in an amount that reflects the consideration we expect to be entitled to in exchange for the goods or services. To recognize revenue, we apply the following five step approach: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when a performance obligation is satisfied.
We recognize all of our revenue from contracts with customers at a point in time. As the majority of revenue consists of sales of WiSE CRT System and battery replacements, where our sales representative provides assistance at the point of implantation at hospitals or medical facilities, we recognize revenue upon completion of the procedure. We also generate a small portion of our revenue from the sale of surgical tool kits that are ordered in advance of a procedure. As the performance obligation is the delivery of the product, we recognize revenue for surgical tool kits upon shipment to the customers. For all performance obligations, the standalone selling price is directly observable as these goods are sold separately by us. Sales prices are specified in the executed customer contract and purchase order prior to the transfer of control to the customer. Our standard payment terms are generally net 30 days.
Recent Accounting Pronouncements
See the section titled "Summary of Significant Accounting Policies-Recently issued accounting pronouncements" in Note 2 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
Non- GAAP Financial Measures
Adjusted earnings before interest, income taxes, depreciation and amortization ("Adjusted EBITDA"), a non-GAAP measure used by management to assess operating performance, is defined as net loss, excluding interest expense, net, depreciation and amortization, stock-based compensation, and expenses associated with our Form 10 filling. Adjusted EBITDA is intended as a supplemental measure of our performance and provides useful information to management and investors regarding our operating results.
We present Adjusted EBITDA in this filing because we believe it assists investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our ongoing operating performance. Period-to-period comparison of Adjusted EBITDA helps our management identify additional trends in our Company's financial results that may not be shown solely by period-to-period comparison of net loss. In addition, we believe that providing Adjusted EBITDA, together with a reconciliation of Adjusted EBITDA to net loss, helps investors make comparisons between our Company and other companies that may have different capital structures, different capitalized asset values, different forms of employee compensation and different strategic nonrecurring projects. Adjusted EBITDA has its limitations as an analytical tool because of the excluded items, and you should not consider it in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. Some of these limitations include:
| · | Adjusted EBITDA does not reflect interest expense and interest income because these items are not directly attributable to the performance of our business operations and may vary over time due to a variety of financing transactions that we have entered into or may enter into in the future. |
| · | Adjusted EBITDA does not reflect certain non-cash items, including depreciation and amortization, and stock-based compensation expense. We believe that excluding the effect of these expenses from Adjusted EBITDA assists management and investors in making period-to-period comparisons in our Company's operating performance because the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations. |
| · | Adjusted EBITDA does not reflect the impact of certain cash charges resulting from matters we do not find indicative of our ongoing operations, such as costs associated with our filing of Form 10-12G. |
A reconciliation between net loss and adjusted EBITDA is presented below:
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| (in thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||
| Reconciliation of net loss to non-GAAP Adjusted EBITDA | ||||||||||||||||
| Net loss | $ | (12,189 | ) | $ | (10,056 | ) | $ | (34,710 | ) | $ | (30,700 | ) | ||||
| Interest expense, net | 607 | 874 | 2,188 | 2,210 | ||||||||||||
| Depreciation and amortization | 90 | 101 | 288 | 497 | ||||||||||||
| Stock-based compensation (a) | 929 | 476 | 2,138 | 1,256 | ||||||||||||
| Expenses associated with Form 10 filling (b) | - | 542 | - | 1,214 | ||||||||||||
| Adjusted EBITDA | $ | (10,563 | ) | $ | (8,063 | ) | $ | (30,096 | ) | $ | (25,523 | ) | ||||
| (a) | Represents non-cash expense associated with our stock-based compensation payments. |
| (b) | Represents nonrecurring expenses associated with our Form 10 filing in 2024. |
Results of Operations
Comparison of the Three Months Ended September 30, 2025, to the Three Months Ended September 30, 2024
We recorded a net loss of $12.2 million in the three months ended September 30, 2025, an increase of $2.1 million, or 21.2%, from the three months ended September 30, 2024. The increased loss in 2025 was due to an increase in selling, general and administrative expenses in 2025, which was partially offset by a decrease in research and development expenses, as discussed below. Other (expense) income, net decreased in 2025 primarily due to an increase in refundable tax incentives, as discussed below.
The following table summarizes our operating results for the three months ended September 30, 2025 and 2024:
|
Three Months Ended September 30, |
Change | |||||||||||||||
| (in thousands) | 2025 | 2024 | Amount | % | ||||||||||||
| Revenue | $ | 512 | $ | - | $ | 512 | 100.0 | % | ||||||||
| Cost of goods sold | 288 | - | 288 | 100.0 | % | |||||||||||
| Gross profit | 224 | - | 224 | 100.0 | % | |||||||||||
| Operating expenses | ||||||||||||||||
| Research and development | 6,244 | 6,298 | (54 | ) | (0.9 | %) | ||||||||||
| Selling, general and administrative | 5,861 | 2,879 | 2,982 | 103.6 | % | |||||||||||
| Total operating expenses | 12,105 | 9,177 | 2,928 | 31.9 | % | |||||||||||
| Other (expense) income, net | (308 | ) | (879 | ) | 571 | (65.0 | %) | |||||||||
| Loss before income tax | (12,189 | ) | (10,056 | ) | (2,133 | ) | 21.2 | % | ||||||||
| Income tax expense | - | - | - | - | ||||||||||||
| Net Loss | $ | (12,189 | ) | $ | (10,056 | ) | $ | (2,133 | ) | 21.2 | % | |||||
We derive the majority of our revenue from sales to customers in the United States. International revenue is attributable to the battery replacements for clinical trial patients in the UK. Revenue by geography is based on the billing address of the customer. The table below summarizes our revenue by geography:
| Three Months Ended | Three Months Ended | |||||||||||||||
| September 30, 2025 | September 30, 2024 | |||||||||||||||
| (in thousands) | Amount | % | Amount | % | ||||||||||||
| United States | $ | 509 | 99.4 | % | $ | - | - | |||||||||
| International | 3 | 0.6 | % | - | - | |||||||||||
| Total Revenue | $ | 512 | 100.0 | % | $ | - | - | |||||||||
Revenue, Cost of Goods Sold, Gross Profit, and Gross Margin:
|
Three Months Ended September 30, |
Change | |||||||||||||||
| (in thousands) | 2025 | 2024 | Amount | % | ||||||||||||
| Revenue | $ | 512 | $ | - | $ | 512 | 100.0 | % | ||||||||
| Cost of goods sold | 288 | - | 288 | 100.0 | % | |||||||||||
| Gross profit | $ | 224 | $ | - | $ | 224 | 100.0 | % | ||||||||
| Gross margin | 43.8 | % | - | 43.8 | % | 100.0 | % | |||||||||
Revenue and Cost of Goods Sold
Revenue and cost of goods sold increased to $0.5 million and $0.3 million, respectively, or 100%, during the three months ended September 30, 2025, as compared to the three months ended September 30, 2024, resulting from the FDA approval of our WiSE CRT System in April 2025. During the three months ended September 30, 2025, we had commercial implants at four incrementally new hospitals in the US.
Gross Profit, and Gross Margin
Gross profit increased to $0.2 million, or 100% for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024, resulting from the FDA approval of our WiSE CRT System in April 2025. Gross margin was 43.8% for the three months ended September 30, 2025. Our gross margin was positively affected and will continue to be affected in the near future by the use of inventory that was previously expensed during our clinical trial. Excluding the use of previously expensed inventory, we would have had a negative gross margin of 25.3%.
Operating Expenses
Research and Development
The following table presents our total research and development expenses by category:
|
Three Months Ended September 30, |
Change | |||||||||||||||
| (in thousands) | 2025 | 2024 | Amount | % | ||||||||||||
| Research and development expenses: | ||||||||||||||||
| R&D personnel expense | $ | 4,981 | $ | 4,491 | $ | 490 | 10.9 | % | ||||||||
| Clinical expenses | 599 | 429 | 170 | 39.6 | % | |||||||||||
| Quality assurance | 103 | 61 | 42 | 68.9 | % | |||||||||||
| Contract manufacturing, materials & components | 484 | 935 | (451 | ) | (48.2 | %) | ||||||||||
| Facility allocation & depreciation | 77 | 382 | (305 | ) | (79.8 | %) | ||||||||||
| Total research and development expense | $ | 6,244 | $ | 6,298 | $ | (54 | ) | (0.9 | %) | |||||||
Research and development expenses decreased by $0.1 million, or 0.9%, during the three months ended September 30, 2025, as compared to the three months ended September 30, 2024. The decrease was primarily due to a $0.5 million decrease in contract manufacturing, materials and components, resulting from a decrease in professional services related to the development testing of WiSE, as well as capitalization of inventory. Facility-related expenses decreased by $0.3 million, as we capitalized certain overhead costs to inventory during the three months ended September 30, 2025. These decreases were partially offset by a $0.5 million increase in personnel-related expenses, including salaries, bonuses, and certain fringe benefits, resulting from workforce expansion, and a $0.2 million increase in clinical trial expenses.
Selling, General and Administrative Expenses
Selling, General and administrative expenses increased by $3.0 million, or 103.6%, during the three months ended September 30, 2025, as compared to the three months ended September 30, 2024. Personnel-related expenses including salaries, bonuses, stock-based compensation and certain fringe benefits increased by $2.3 million as a result of the expansion of our workforce to support our sales and marketing efforts after the FDA approval of WiSE. Travel-related expenses increased by $0.6 million due the expansion of our workforce to support our sales and marketing efforts. Facility-related expenses increased by $0.1 million, primarily resulting from the higher non-cash rent expense due to a new lease agreement entered in 2025.
Other (expense) income, net
Other (expense) income, net decreased by $0.6 million during the three months ended September 30, 2025, as compared to the three months ended September 30, 2024. Other income has increased by $0.3 million, primarily resulting from an increase in refundable tax incentives. Interest expense decreased by $0.1 million, and interest income earned on investments in marketable securities, including the accretion of discounts on marketable securities has increased by $0.2 million.
Comparison of the Nine Months Ended September 30, 2025, to the Nine Months Ended September 30, 2024
We recorded a net loss of $34.7 million in the nine months ended September 30, 2025, an increase of $4.0 million, or 13.1%, from the nine months ended September 30, 2024. The increased loss in 2025 was due to an increase in selling, general and administrative expenses in 2025, which was partially offset by a decrease in research and development expenses, as discussed below. Other (expense) income, net also decreased in 2025 primarily due to an increase in refundable tax incentives and decrease in interest expense, as discussed below.
The following table summarizes our operating results for the nine months ended September 30, 2025 and 2024:
|
Nine Months Ended September 30, |
Change | |||||||||||||||
| (in thousands) | 2025 | 2024 | Amount | % | ||||||||||||
| Revenue | $ | 682 | $ | - | $ | 682 | 100.0 | % | ||||||||
| Cost of goods sold | 374 | - | 374 | 100.0 | % | |||||||||||
| Gross profit | 308 | - | 308 | 100.0 | % | |||||||||||
| Operating expenses: | ||||||||||||||||
| Research and development | 17,614 | 20,171 | (2,557 | ) | (12.7 | %) | ||||||||||
| Selling, general and administrative | 15,488 | 8,322 | 7,166 | 86.1 | % | |||||||||||
| Total operating expenses | 33,102 | 28,493 | 4,609 | 16.2 | % | |||||||||||
| Other (expense) income, net | (1,916 | ) | (2,207 | ) | 291 | (13.2 | %) | |||||||||
| Loss before income tax | (34,710 | ) | (30,700 | ) | (4,010 | ) | 13.1 | % | ||||||||
| Income tax expense | - | - | - | - | ||||||||||||
| Net Loss | $ | (34,710 | ) | $ | (30,700 | ) | $ | (4,010 | ) | 13.1 | % | |||||
We derive the majority of our revenue from sales to customers in the United States. International revenue is attributable to the battery replacements for clinical trial patients in the UK. Revenue by geography is based on the billing address of the customer. The table below summarizes our revenue by geography:
| Nine Months Ended | Nine Months Ended | |||||||||||||||
| September 30, 2025 | September 30, 2024 | |||||||||||||||
| (in thousands) | Amount | % | Amount | % | ||||||||||||
| United States | $ | 658 | 96.5 | % | $ | - | - | |||||||||
| International | 24 | 3.5 | % | - | - | |||||||||||
| Total Revenue | $ | 682 | $ | 100 | % | $ | - | - | ||||||||
Revenue, Cost of Goods Sold, Gross Profit, and Gross Margin:
|
Nine Months Ended September 30, |
Change | |||||||||||||||
| (in thousands) | 2025 | 2024 | Amount | % | ||||||||||||
| Revenue | $ | 682 | $ | - | $ | 682 | 100.0 | % | ||||||||
| Cost of goods sold | 374 | - | 374 | 100.0 | % | |||||||||||
| Gross profit | $ | 308 | $ | - | $ | 308 | 100.0 | % | ||||||||
| Gross margin | 45.2 | % | - | 45.2 | % | 100.0 | % | |||||||||
Revenue and Cost of Goods Sold
Revenue and cost of goods sold increased to $0.7 million and $0.4 million, respectively, or 100%, during the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, resulting from the FDA approval of our WiSE CRT System in April 2025. During the nine months ended September 30, 2025, we had commercial implants at seven hospitals in the US.
Gross Profit, and Gross Margin
Gross profit increased to $0.3 million, or 100% for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, resulting from the FDA approval of our WiSE CRT System in April 2025. Gross margin was 45.2% for the nine months ended September 30, 2025. Our gross margin was positively affected and will continue to be affected in the near future by the use of inventory that was previously expensed during our clinical trials. Excluding the use of previously expensed inventory, we would have had a negative gross margin of 31.9%.
Operating Expenses
Research and Development
The following table presents our total research and development expenses by category:
|
Nine Months Ended September 30, |
Change | |||||||||||||||
| (in thousands) | 2025 | 2024 | Amount | % | ||||||||||||
| Research and development expenses: | ||||||||||||||||
| R&D personnel expense | $ | 13,829 | $ | 12,784 | $ | 1,045 | 8.2 | % | ||||||||
| Clinical expenses | 1,560 | 1,266 | 294 | 23.2 | % | |||||||||||
| Quality assurance | 273 | 185 | 88 | 47.6 | % | |||||||||||
| Contract manufacturing, materials & components | 1,744 | 4,659 | (2,915 | ) | (62.6 | %) | ||||||||||
| Facility allocation & depreciation | 208 | 1,277 | (1,069 | ) | (83.7 | %) | ||||||||||
| Total research and development expense | $ | 17,614 | $ | 20,171 | $ | (2,557 | ) | (12.7 | %) | |||||||
Research and development expenses decreased by $2.6 million, or 12.7%, during the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. The decrease was primarily due to a $2.9 million decrease in contract manufacturing, materials and components, resulting from a decrease in professional services related to the development testing of the WiSE CRT System, as well as capitalization of inventory. Facility-related expenses decreased by $1.1 million, as we capitalized certain overhead costs to inventory during the nine months ended September 30, 2025. These decreases were partially offset by a $1.0 million increase in personnel-related expenses, including salaries, bonuses, and certain fringe benefits, resulting from the normal annual salary increases and workforce expansion, and a $0.3 million increase in clinical expenses.
Selling, General and Administrative Expenses
Selling, General and administrative expenses increased by $7.2 million, or 86.1%, during the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. Personnel-related expenses including salaries, bonuses, stock-based compensation and certain fringe benefits increased by $5.2 million as a result of the expansion of our workforce to support increased adoption of our WiSE CRT System. Facility-related and other expenses increased by $0.4 million, primarily resulting from the higher non-cash rent expense due to a new lease agreement entered in 2025. Travel-related expenses increased by $1.2 million due the expansion of our workforce to support our sales and marketing efforts. Corporate expenses increased by $0.4 million, primarily resulting from the higher expenses related to insurance premiums, investor relations, and computer software.
Other (expense) income, net
Other (expense) income, net decreased by $0.3 million during the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. Other income increased by $0.3 million, primarily resulting from an increase in refundable tax incentives, and interest expense decreased by $0.3 million. These changes were partially offset by a $0.3 million decrease in interest income earned on investments in marketable securities, including the accretion of discounts on marketable securities.
Liquidity and Capital Resources
We believe that our cash and cash equivalents, and marketable securities, and anticipated revenues from sales of our WiSE CRT System will be sufficient to fund our operations for at least the next 12 months from the date of this filing. We manage our cash and capital structure to maximize shareholder return, maintain its financial condition and maintain flexibility for future strategic initiatives. We continuously assess our working capital needs, debt and leverage levels, debt maturity schedule, capital expenditure requirements and future investments. As of September 30, 2025 and December 31, 2024, we had approximately $70.4 million and $66.0 million, respectively, in cash, cash equivalents, and marketable securities. In the long-term, our ability to support our working capital and capital expenditure requirements will depend on many factors, including:
| · | our ability to successfully commercialize our WiSE CRT System; |
| · | the cost, timing and results of our clinical trials and regulatory reviews; |
| · | the cost of our research and development activities for new and modified products; |
| · | the cost and timing of establishing sales, marketing and distribution capabilities; |
| · | the terms and timing of other collaborative, licensing and other arrangements that may establish including any contract manufacturing arrangements; |
| · | the timing, receipt and amount of sales from our current and potential products; |
| · | the degree of success we experience in sales and marketing activities our products; |
| · | the emergence of competing or complementary technologies; |
| · | the impact of global business, political and macroeconomic conditions, including inflation, rising interest rates, uncertainty with respect to the federal budget, instability in the global banking system, volatile market conditions, supply chain disruptions, cybersecurity events, and global events, including regional conflicts around the world; |
| · | the cost of preparing, filing, prosecuting, maintaining, defending and enforcing any patent claims and other intellectual property rights; and |
| · | the extent to which we acquire or invest in businesses, products or technologies, although we currently have no commitments or agreements relating to any of these types of transactions. |
To the extent that current and anticipated future sources of liquidity are insufficient to fund our future business activities and cash and other requirements, we may be required to seek additional equity or debt financing. The sale of additional equity would result in additional dilution to our stockholders. The incurrence of additional debt financing would result in debt service obligations and the instruments governing such debt could provide for operating and financing covenants that would restrict our operations. In the event that additional financing is required from outside sources, there is a possibility we may not be able to raise it on terms acceptable to us or at all. Further, the current macroeconomic environment may make it difficult for us to raise capital on terms favorable to us or at all. If we are unable to raise additional capital when desired, our business, operating results, and financial condition could be adversely affected.
Loan and Security Agreements
On June 30, 2022, we entered into a loan and security agreement with Runway Growth Finance Corp. The debt is secured against substantially all of our assets, except for intellectual property, but includes all proceeds from the sale of intellectual property.
As of September 30, 2025 and December 31, 2024, the outstanding principal balance was $41,800,000, which includes final payment of 4.5% of the principal borrowings to date.
Interest on the term loan accrues on the principal amount outstanding at a floating per annum rate equal to the greater of the rate of interest noted in The Wall Street Journal Money Rates section, as the "Prime Rate" or 4.00% plus a margin of 4.9% and is payable monthly in arrears and shall be computed on the basis of a 360-day year for the actual number of days elapsed. We are required to make interest only payments from July 2022 to May 2027. The note payable has a maturity date of June 15, 2027, at which time any unpaid interest, outstanding principal balance, and a final payment of 4.5% of the original principal amount borrowed shall be due in full. If we repay the loan prior to maturity, we will be required to pay a prepayment fee of 0.5% - 1% of the outstanding principal balance. We are also required to pay a 3% success fee of the funded principal amount of the term loan at the time of a liquidity event, as defined in the loan and security agreement. The success fee is enforceable within 10 years from the execution date of the agreement.
We are subject to customary financial and reporting covenants under the loan and security agreement. As of September 30, 2025 and December 31, 2024, we were in compliance with all debt covenants.
Recent Financings
In May 2025, we completed an institutional placement of 55,900,000 CDIs representing the same number of common stock at $0.64 per share, for proceeds of $33,467,662, net of $2,498,398 of related issuance costs. In June 2025, we completed a non-underwritten rights offering to existing stockholders, or Securities Purchase Plan, and issued an additional 20,000,000 CDIs representing the same number of common stock at $0.64 per share, for proceeds of $12,751,318, net of $110,682 of related issuance costs.
Contractual Obligations and Commitments
As of September 30, 2025, we had $0.7 million in operating lease obligations for our corporate headquarters and laboratory space located in Sunnyvale, California. Additionally, in January 2025, we entered into a new lease agreement for our new corporate headquarters, laboratory and manufacturing facility in Santa Clara, California, for which we had recorded $15.4 million in operating lease obligations as of September 30, 2025.
As of September 30, 2025, the outstanding principal balance under our loan and security agreement described above was $41,800,000, which includes the final payment of 4.5% of the principal borrowings to date.
In addition, we enter into contracts in the normal course of business with third-party contract organizations for clinical trials, manufacturing and other services and products for operating purposes. In certain instances, our purchase agreements allow us to cancel, reschedule, or adjust our purchase requirements based on our business needs prior to firm orders being placed. Consequently, only a portion of our purchase commitments are firm and non-cancelable. As of September 30, 2025, our obligations under non-cancelable arrangements were approximately $12.1 million.
Working Capital
September 30, 2025, Compared to December 31, 2024
As of September 30, 2025, we had working capital of $71.9 million, comprised of current assets of $82.2 million and current liabilities of $10.3 million. Current assets, consisting of cash and cash equivalents, marketable securities, accounts and other receivables, inventory, prepaid expenses, and other current assets, increased by $17.8 million as of September 30, 2025, compared to December 31, 2024. The sale of CDIs discussed above contributed to the overall increase in cash, cash equivalents and marketable securities, resulting in a $7.7 million increase in working capital as of September 30, 2025. Additionally, the capitalization of inventory resulted in a $8.3 million increase in working capital, and an increase in the accounts and other receivables primarily due to the reimbursements for leasehold improvements resulted in a $2.3 million increase in working capital as of September 30, 2025. Current liabilities, consisting primarily of accounts payable, accrued liabilities, lease obligations, and interest payable, increased by approximately $2.0 million as of September 30, 2025, compared to December 31, 2024. The increase primarily resulted from a $1.3 million increase in accounts payable, which was mainly due to the activity related to construction of leasehold improvements at the new corporate headquarters, as well as the purchases of raw materials. The abovementioned construction of leasehold improvements also resulted in a $0.2 million increase in accrued expenses due to increase in retainage that will be payable upon the project completion. Additionally, the execution of a new lease agreement in 2025 resulted in $0.5 million increase in operating lease liabilities, which contributed to the overall increase in current liabilities.
Cash Flows
September 30, 2025, Compared to September 30, 2024
The following table summarizes our cash flows for the nine months ended September 30, 2025 and 2024:
| Nine Months Ended September 30, | ||||||||
| (in thousands) | 2025 | 2024 | ||||||
| Net cash used in operating activities | $ | (38,181 | ) | $ | (30,243 | ) | ||
| Net cash (used in) provided by investing activities | (281 | ) | 22,284 | |||||
| Net cash provided by financing activities | 46,772 | 29,802 | ||||||
| Effect of exchange rate change on cash | 18 | (11 | ) | |||||
| Net change in cash, cash equivalents and restricted cash | $ | 8,328 | $ | 21,832 | ||||
Operating Activities
Net cash used in operating activities during the nine months ended September 30, 2025, was $38.1 million, compared to $30.2 million during the nine months ended September 30, 2024, representing an increase in use of $7.9 million. This increase is primarily attributed to an increase in net loss of $4.0 million and an increase in use of cash from changes in working capital of $6.0 million, which were partially offset by an increase in non-cash adjustments of $2.1 million.
| · | The increase in net loss of $4.0 million primarily resulted from an increase in personnel costs, which was partially offset by a decrease in contract manufacturing, materials and components, as further described under "Results of Operations" above. |
| · | Non-cash adjustments increased due to decrease in gain in accretion of discount on marketable securities of $0.8 million driven by fluctuating interest rates and maturity term, $0.6 million increase in the adjustment to lease amortization due to the Company entering into a new lease agreement in 2025, and $0.9 million increases in stock-based compensation due to new options issuance to new hires and existing employees. These increases were partially offset by a $0.2 million decrease in depreciation and amortization due to assets that have been fully depreciated. |
| · | The decrease in changes from working capital activities primarily consisted of $7.1 million use of cash for inventory purchases, a $2.4 million decrease in cash provided from accounts and other receivables primarily due to the timing of collections on reimbursable leasehold improvements, and a $0.2 million increase in use of cash for deposits to vendors. These decreases were partially offset by a $2.4 million increase in the operating lease liability due to the reimbursement of tenant improvements and the amortization of the right of use operating lease asset, and a $1.3 million increase in cash provided from accounts payable and accrued expenses due to the timing of invoice payments. |
Investing Activities
Net cash used in investing activities during the nine months ended September 30, 2025, was $0.3 million, compared to $22.3 million net cash provided during the nine months ended September 30,2024, representing an increase in cash used of $22.6 million. The increase was attributable to a $18.2 million increase in the purchase of marketable securities, a $2.0 million increase in cash used for purchases of property and equipment, and a $2.4 million net decrease in cash provided from the maturities and sales of marketable securities during the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024.
Financing Activities
Net cash provided by financing activities during the nine months ended September 30, 2025 was $46.8 million, compared to $29.8 million during the nine months ended September 30, 2024, representing an increase of $17.0 million. This increase was primarily attributed to the $16.7 million increase in proceeds from a capital raise, net of issuance cost, during the nine months ended September 30, 2025, as well as by a $0.4 million increase in proceeds from exercise of stock options. These increases were partially offset by $0.1 million decrease in proceeds from borrowings on notes payable during the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024.
EBR Systems Inc. published this content on November 12, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on November 12, 2025 at 22:01 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]