Picard Medical, Inc. (PMI) - 10-Q Summary for Period Ended June 30, 2026
Business Context and Reporting Period
This is an unaudited quarterly report (Form 10-Q) for Picard Medical, Inc. for the three and six months ended June 30, 2026. The Company designs, manufactures, and sells the SynCardia Total Artificial Heart (TAH), an FDA-approved device for patients with end-stage heart failure. The Company is classified as a non-accelerated filer, a smaller reporting company, and an emerging growth company. As of August 17, 2026, there were 2,338,634 shares of common stock outstanding. Subsequent to the reporting period, the Company completed a 50-for-1 reverse stock split effective July 31, 2026.
Key Financial Metrics (Six Months Ended June 30, 2026)
| Metric | Amount (in thousands) |
|---|---|
| Total Revenues | $4,104 |
| Gross Profit | $891 |
| Operating Loss | $(9,140) |
| Net Loss | $(13,276) |
| Net Loss Per Share (Basic & Diluted) | $(7.93) |
| Cash and Cash Equivalents (End of Period) | $38 |
| Net Cash Used in Operating Activities | $(5,152) |
| Total Assets | $9,167 |
| Total Liabilities | $7,451 |
| Stockholders' Equity | $1,716 |
Material Changes vs. Prior Comparable Period
- Revenue Growth: Total revenues increased 50% to $4.1 million from $2.7 million in the prior year period, driven by a 41% increase in product sales and the introduction of rental revenue ($226k).
- Profitability: The Company moved from a gross loss of $(485k) in the prior year to a gross profit of $891k, primarily due to improved inventory management and product margins.
- Operating Expenses: Operating expenses increased 60% to $10.0 million. Research and Development (R&D) expenses rose 111% to $3.3 million due to new product development (Emperor TAH). Selling, General, and Administrative (SG&A) expenses increased 43% to $6.8 million, largely due to a $1.2 million increase in stock-based compensation.
- Debt and Fair Value Adjustments: The Company recognized a $9.3 million loss on the settlement of debt and a $5.7 million gain from the change in fair value of the Senior Secured Note and warrant liabilities. These non-cash items significantly impacted the net loss.
- Liquidity: Cash and cash equivalents decreased from $11.5 million at the beginning of the period to $38k at period end, reflecting significant debt repayments and operating losses.
Guidance, Outlook, Risks, and Unusual Items
- Going Concern: The Company has concluded there is substantial doubt about its ability to continue as a going concern for at least twelve months from the date of the report due to recurring operating losses and negative cash flows. Additional financing is required to fund operations.
- NYSE Compliance: The Company received a notice of noncompliance regarding stockholders' equity and net losses. A Compliance Plan was accepted by NYSE American on July 22, 2026, allowing the Company to maintain its listing subject to achieving milestones by November 8, 2027.
- Debt Settlements: Significant debt restructuring occurred, including the settlement of the Senior Secured Note via cash payments and the issuance of common stock. The Company also extinguished various convertible notes and related party loans.
- Legal Proceedings: A putative securities class action lawsuit (Louie v. Picard Medical, Inc.) was filed in February 2026. An amended complaint was filed in July 2026 alleging material omissions in the IPO registration statement. The Company intends to defend vigorously.
- Internal Controls: Management identified material weaknesses in internal control over financial reporting, specifically regarding segregation of duties and the lack of a formal multi-level review process.
Investor Verification Checklist
- Liquidity Runway: Verify the Company's ability to secure additional debt or equity financing given the $38k cash balance and substantial doubt regarding going concern status.
- Debt Obligations: Confirm the status of the remaining Senior Secured Note ($567k fair value) and any new debt instruments issued subsequent to June 30, 2026.
- Customer Concentration: Note that a single customer (Customer A) accounted for 81% of revenue in the six months ended June 30, 2026.
- Stock-Based Compensation: Review the impact of the $1.5 million stock-based compensation expense on future cash burn and dilution.
- Legal Exposure: Monitor the progress of the securities class action lawsuit and potential financial impact.
- Reverse Stock Split: Ensure all share counts and per-share data are adjusted for the 50-for-1 reverse stock split completed in July 2026.