PLSE

Business Context and Reporting Period

Pulse Biosciences, Inc. (PLSE) is a medical technology company developing Nano-pulse Stimulation (NPS) technology for nonthermal ablation of targeted cells. The company shifted its strategic focus in 2022 from dermatology to cardiology (specifically atrial fibrillation) and soft tissue ablation. This Form 10-K covers the fiscal year ended December 31, 2025. The company is classified as a non-accelerated filer and a smaller reporting company.

Key Financial Metrics

Debt and Liquidity: The company reported no long-term debt as of December 31, 2025. Total liabilities were $13.88 million, primarily consisting of lease liabilities ($7.53 million). The company generated $17.15 million in cash from financing activities in 2025, primarily from warrant exercises.

Material Changes vs. Prior Period

• Revenue Generation: The company recorded $0.35 million in product revenue in 2025, compared to zero in 2024, driven by the limited market release of the Vybrance Percutaneous Electrode System.
• Expense Growth: Total operating expenses increased by $21.03 million to $77.29 million. Research and Development (R&D) expenses rose by $12.39 million (38% increase) due to increased clinical trial costs and stock-based compensation. Selling, General, and Administrative (SG&A) expenses increased by $8.11 million (34% increase).
• Net Loss Expansion: Net loss increased by $19.20 million year-over-year, reflecting the ramp-up in clinical development and commercialization costs.
• Cash Position: Cash and cash equivalents decreased by $37.30 million during the year, though the company maintains a liquidity runway of at least 12 months.

Guidance, Outlook, and Risks

Outlook and Milestones:

• Cardiac Catheter: Received FDA approval for an Investigational Device Exemption (IDE) in December 2025 to begin a pivotal trial for atrial fibrillation. Early data from European studies showed 96% procedural success at one year.
• Cardiac Surgical Clamp: Received FDA Breakthrough Device Designation and IDE approval in September 2025; the first patient was enrolled in the pivotal trial.
• Vybrance System: Commenced the PRECISE BTN clinical trial in September 2025 to support commercialization for benign thyroid nodules. Over 300 patient procedures have been completed to date.

Risks and Contingencies:

• Liquidity: The company expects to continue incurring losses and will require additional capital to fund operations and clinical trials. Failure to secure financing could force operational reductions.
• Regulatory: Future commercialization depends on obtaining PMA approval for cardiac devices and maintaining 510(k) clearance for the Vybrance system. Regulatory delays or rejections are significant risks.
• Competition: Faces intense competition from established medical device companies (e.g., Boston Scientific, Medtronic) with greater resources and existing market share in ablation technologies.
• Concentration of Ownership: Co-Chairman Robert W. Duggan owns approximately 72% of the voting power, limiting minority shareholder influence.

Investor Verification Checklist

• Verify the enrollment progress and interim data of the pivotal IDE trials for the Cardiac Catheter and Surgical Clamp.
• Confirm the commercial uptake and reimbursement status of the Vybrance Percutaneous Electrode System following its limited market release.
• Monitor the company's cash burn rate and the timing of any future capital raises, given the $80.7 million cash balance and $54 million operating cash outflow.
• Review the status of the 2024 Rights Offering warrants, specifically the remaining 405,624 warrants subject to the 200% redemption feature.
• Assess the impact of stock-based compensation ($21.46 million in 2025) on future earnings and dilution.