CapsoVision, Inc

Previous wording

We are a global medical technology company that develops advanced imaging and AI technologies, deployed in our capsule endoscopy solutions to identify abnormalities of the GI tract for diagnostic and screening purposes. Our capsule endoscope system, currently comprising the CapsoCam Plus single-use capsule and the CapsoCloud and CapsoView software, including 360 degree panoramic visualization of the small-bowel mucosa to investigate abnormalities such as obscure GI bleeding and Crohn’s disease, while our AI assisted pathology detection tools detect and highlight suspected abnormalities for a clinician, reducing their time to review the video and making capsule endoscopy more financially attractive to their practice. Our cloud-based solution enables medical professionals to access their patients’ videos and review those videos anytime, anywhere, 24/7, without a need to have an on-site server and maintain it, while accumulating an immense data trove on the cloud storage for AI training.

Current wording

We are a global medical technology company that develops advanced imaging and AI technologies, deployed in our capsule endoscopy solutions to identify abnormalities of the GI tract for diagnostic and screening purposes. Our capsule endoscope system, currently comprising the CapsoCam Plus single-use capsule and the CapsoCloud and CapsoView software, provides 360 degree panoramic visualization of the small-bowel mucosa to investigate abnormalities such as obscure GI bleeding and Crohn’s disease, while our AI assisted pathology detection tools detect and highlight suspected abnormalities for a clinician, reducing their time to review the video and making capsule endoscopy more financially attractive to their practice. Our cloud-based solution enables medical professionals to access their patients’ videos and review those videos anytime, anywhere, 24/7, without a need to have an on-site server and maintain it, while accumulating an immense data trove on the cloud storage for AI training.

Previous wording

We were founded in 2005 and are headquartered in Saratoga, California. We sell our small bowel capsule system to our provider customers (i.e., primarily gastroenterologists practicing in clinics and/or hospitals) both internationally and in the U.S. through our global sales and marketing team. In the U.S., we sell to customers directly. Internationally we sell both directly and through qualified exclusive distributors in specified regions. Our largest international shipping destinations in thesix months ended June 30, 2026 include France, Germany, and Saudi Arabia. As of June 30, 2026, our CapsoCam Plus has been used in over 176,000 patients. We currently manufacture and intend to continue manufacturing our CapsoCam capsules included in our GI-tract capsule endoscopy solution (including CapsoCam Colon capsules). To assist us in manufacturing our GI-tract capsule endoscopy products, we rely on component suppliers and assembly manufacturers based in Asia (particularly Taiwan and Japan).

Current wording

We were founded in 2005 and are headquartered in Saratoga, California. We sell our small bowel capsule system to our provider customers (i.e., primarily gastroenterologists practicing in clinics and/or hospitals) both internationally and in the U.S. through our global sales and marketing team. In the U.S., we sell to customers directly. Internationally we sell both directly and through qualified exclusive distributors in specified regions. Our largest international shipping destinations in thenine months ended September 30, 2026 include France, Germany, and Colombia. As of September 30, 2026, our CapsoCam Plus has been used in over 184,000 patients. We currently manufacture and intend to continue manufacturing our CapsoCam capsules included in our GI-tract capsule endoscopy solution (including CapsoCam Colon capsules). To assist us in manufacturing our GI-tract capsule endoscopy products, we rely on component suppliers and assembly manufacturers based in Asia (particularly Taiwan and Japan).

Previous wording

As part of our effort to expand and grow our revenues beyond small-bowel-related, we are developing our next pipeline capsule endoscope product, CapsoCam Colon. Our CapsoCam Colon capsule (i) leverages CapsoCam Plus’s existing capsule design with its panoramic view and (ii) incorporates both our self-developed AI to automatically detect polyps and polyp-size measurement tool enabled by a 3D sensor in the capsule (polyp size being highly correlated with a polyp’s risk of becoming cancer).

Current wording

As part of our effort to expand and grow our revenues beyond small-bowel-related revenues, we are developing our next pipeline capsule endoscope product, CapsoCam Colon. Our CapsoCam Colon capsule (i) leverages CapsoCam Plus’s existing capsule design with its panoramic view and (ii) incorporates both our self-developed AI to automatically detect polyps and a polyp-size measurement tool enabled by a 3D sensor in the capsule (polyp size being highly correlated with a polyp’s risk of becoming cancer).

Previous wording

In the second quarter of 2025 we filed our 510(k) submission to the U.S. Food and Drug Administration (the “FDA”) for our initial CapsoCam Colon capsule endoscopy solution (the “First-Generation Product”). We received responses from the FDA in September 2025. During our meeting with the FDA in December 2025, the FDA raised inquiries on topics including panoramic image processing methodology, and the proposed study design, sample size and primary endpoint for an extended study. Based on our communications with the FDA, we have decided not to further pursue the submission and approval for the First-Generation Product, and to prioritize our resources for the development of our second-generation of CapsoCam Colon capsule (the “Second-Generation Product”), which features improved imaging quality and increased field of review with use of AI and better lens. We also expanded a second arm pivotal study to enroll approximately 800 patients at up to 20 sites in the U.S. in preparation for submitting a new 510(k) application for the Second-Generation Product. As of the date of this Quarterly Report, we have completed the enrollment process of the second arm pivotal study with 801 patients enrolled. We currently expect to submit the 510(k) application for the Second-Generation Product in the fourth quarter of 2026, subject to any further requests from the FDA.

Current wording

In the second quarter of 2025 we filed our 510(k) submission to the U.S. Food and Drug Administration (the “FDA”) for our initial CapsoCam Colon capsule endoscopy solution (the “First-Generation Product”). We received responses from the FDA in September 2025. During our meeting with the FDA in December 2025, the FDA raised inquiries on topics including panoramic image processing methodology, and the proposed study design, sample size and primary endpoint for an extended study. Based on our communications with the FDA, we have decided not to further pursue the submission and approval for the First-Generation Product, and to prioritize our resources for the development of our second-generation of CapsoCam Colon capsule (the “Second-Generation Product”), which features improved imaging quality and increased field of review with use of AI and better lens. We also expanded a second arm pivotal study to enroll approximately 800 patients at up to 20 sites in the U.S. in preparation for submitting a new 510(k) application for the Second-Generation Product. As of the date of this Quarterly Report, we have completed the second arm pivotal study with 801 patients enrolled. We currently expect to submit the 510(k) application for the Second-Generation Product in the fourth quarter of 2026, subject to any further requests from the FDA.

Previous wording

Since we continue to invest in AI to improve our existing products, we completed a clinical study to demonstrate the benefits of our incorporation of AI technology into CapsoCam Plus, our existing product for the small bowel. We submitted the related 510(k) application to the FDA in December 2025. In response to the FDA’s feedback, we submitted a proposal to the FDA in April 2026. As further requested by the FDA, we will conduct further demographic analysis of the study data and expect to submit the analysis to the FDA by the end of August 2026. We anticipate obtaining FDA clearance by the end of the third quarter of 2026 with commercialization planned to begin in US shortly thereafter. We also made the initial EU submission in January 2026 and submitted the related technical documents in July 2026. By the time of this Quarterly Report we have commercialized in EU.

Current wording

Since we continue to invest in AI to improve our existing products, we completed a clinical study to demonstrate the benefits of our incorporation of AI technology into CapsoCam Plus, our existing product for the small bowel. We submitted the related 510(k) application to the FDA in December 2025. In response to the FDA’s feedback, we submitted a proposal to the FDA in April 2026. As further requested by the FDA, we conducted further demographic analysis of the study data and submitted the analysis to the FDA at the end of August 2026. AI Highlights™, our AI-assisted reading feature for the CapsoCam Plus® system, received clearance from the FDA on September 25, 2026. Its commercialization began in the US on November 2, 2026. We also made the initial EU submission in January 2026 and submitted the related technical documents in July 2026. We commercialized in EU in August 2026. Because of the shorter reading time needed by doctors and improved accuracy, the Company expects the addition of AI Highlights to accelerate CapsoCap Plus sales growth, with the commercial impact anticipated in 2027.

Previous wording

Longer term, we believe our CapsoCam family of products, incorporating our panoramic imaging solution, can be adapted to address new GI medical indications. Potential new medical indications include esophageal medical conditions (such as esophageal varices) and pancreatic cancer. In connection with our efforts to address pancreatic cancer, we submitted an FDA “Breakthrough Device Designation” application for our capsule endoscopy solution on November 6, 2025. A response from FDA in January 2026 determined that the CapsoCam UGI does allow for visualization of the papilla and its abnormalities, for both pre-cancerous and cancerous lesions. Due to the fact that the device does not specifically define diagnostic criteria, the application was not approved. Following the FDA’s response, we initiated a study for early pancreatic cancer detection using the CapsoCam UGI system in May 2026. This study will build on established scientific literature and engage leading opinion leaders, including leadership of leading societies in the pancreatobiliary field, to define malignancy diagnosis criteria with the device. This study is expected to enroll up to 140 patients using the CapsoCam UGI system. As of the date of this Quarterly Report three patients have been enrolled in this study. The study continues and we are working on expanding a number of clinical sites participating in the study. We expect to resubmit the Breakthrough Device Designation application following the study, when additional data is available. The breakthrough designation is a part of the on-going project, potentially supplementing the regulatory pathway and approval for early pancreas cancer detection. However, additional research and studies to collect data may delay our anticipated timeline for obtaining the regulatory clearance (including obtaining the Breakthrough Device Designation) and may increase our research and development costs.

Current wording

Longer term, we believe our CapsoCam family of products, incorporating our panoramic imaging solution, can be adapted to address new GI medical indications. Potential new medical indications include esophageal medical conditions (such as esophageal varices) and pancreatic cancer. In connection with our efforts to address pancreatic cancer, we submitted an FDA “Breakthrough Device Designation” application for our capsule endoscopy solution on November 6, 2025. A response from FDA in January 2026 determined that the CapsoCam UGI does allow for visualization of the papilla and its abnormalities, for both pre-cancerous and cancerous lesions. Due to the fact that the device does not specifically define diagnostic criteria, the application was not approved. Following the FDA’s response, we initiated a study for early pancreatic cancer detection using the CapsoCam UGI system in May 2026. This study will build on established scientific literature and engage leading opinion leaders, including leadership of leading societies in the pancreatobiliary field, to define malignancy diagnosis criteria with the device. This study is expected to enroll up to 140 patients using the CapsoCam UGI system. As of the date of this Quarterly Report, three patients have been enrolled in this study. The study continues and we are working on expanding a number of clinical sites participating in the study. Building on two active community-based clinical sites, we have executed a clinical trial agreement with a third site and are in various stages of contracting and feasibility discussions with more than a dozen larger medical centers with expertise in pancreatic ductal adenocarcinoma (PDAC), which we expect will help to accelerate patient enrollment. We expect to resubmit the Breakthrough Device Designation application following the study, when additional data is available. The breakthrough designation is a part of the on-going project, potentially supplementing the regulatory pathway and approval for early pancreas cancer detection. However, additional research and studies to collect data may delay our anticipated timeline for obtaining the regulatory clearance (including obtaining the Breakthrough Device Designation) and may increase our research and development costs.

Previous wording

As of June 30, 2026, we had an accumulated deficit of $170.2 million. To date, we have funded our operations primarily through proceeds from the sale of shares of our convertible preferred stock, IPO and Private Placement proceeds and cash generated from the sale of CapsoCam capsules and the use of CapsoCloud or CapsoView, CapsoCloud data access, and capsule video reading service.

Current wording

As of September 30, 2026, we had an accumulated deficit of $177.5 million. To date, we have funded our operations primarily through proceeds from the sale of shares of our convertible preferred stock, IPO, the private placement of our common stock that closed in March 2026 (the “Private Placement”), the registered direct offering of our common stock that closed in September 2026 (the “September 2026 Securities Purchase Agreement”) and sales of our common stock under our at-the-market offering program established in August 2026 (the “ATM Program”) and cash generated from the sale of CapsoCam capsules and the use of CapsoCloud or CapsoView, CapsoCloud data access, and capsule video reading service.

Previous wording

introducing complementary products such as our (a) capsule delivery device with full commercialization expected in the fourth quarter of 2026, and (b) patency capsule (for verifying whether a capsule endoscope can pass through the bowel without retention prior to an exam) with the FDA 510(k) application submitted in July 2026; (v) facilitating increased telemedicine adoption following FDA clearance in December 2024 of remote ingestion of our CapsoCam Plus, allowing patients to ingest our capsules in the comfort of their own homes with remote provider supervision; and (vi) following related FDA 510(k) clearance (expected by the end of the third quarter of 2026), commercializing our updated CapsoCam Plus which incorporates our AI assisted pathology detection technology.

Current wording

Success in further penetrating the small bowel capsule endoscopy market. Until commercialization of our CapsoCam Colon capsule (targeted for within one quarter after FDA clearance is provided), to grow our revenues (and, in turn, reduce our expected losses and negative cash flows), we intend to grow our small-bowel-related revenues by, among other things: (i) retaining and growing our customer base; (ii) cost-effectively increasing the size and effectiveness of our U.S. and international sales teams and our customer-support function; (iii) pursuing the pediatric market (with children comprising a significant portion of the Crohn’s disease patient population); (iv) introducing complementary products such as our (a) capsule delivery device with full commercialization expected in the first quarter of 2027, and (b) patency capsule (for verifying whether a capsule endoscope can pass through the bowel without retention prior to an exam) with the FDA 510(k) application submitted in July 2026, for which we received questions from the FDA in September 2026 and expect clearance in the first quarter of 2027; (v) facilitating increased telemedicine adoption following FDA clearance in December 2024 of remote ingestion of our CapsoCam Plus, allowing patients to ingest our capsules in the comfort of their own homes with remote provider supervision; and (vi) following related FDA 510(k) clearance in September 2026, commercializing our updated CapsoCam Plus which incorporates our AI assisted pathology detection technology.

Previous wording

Success in further developing our AI product features. We plan to continue investing to (i) improve the pathology-detection and classification accuracy and the scope of our AI algorithms and (ii) apply AI, including large language models, to streamline the diagnostic and medical-report-generation processes, which in turn improves the efficiency and effectiveness of our healthcare provider customers. Our CapsoCloud platform in the ordinary course collects patient videos and physician diagnostic reports that, with patient consent, we can utilize as a dataset for training and validating our AI algorithms. This ever-expanding patient pathology dataset is unique among capsule endoscopy companies, and together with our in-house team of AI experts, provides a competitive advantage. Ongoing investment is required to apply expert labels to the accumulated image data and to modify, train, and test the algorithms on this labeled data to expand applications beyond the current horizon.

Current wording

Success in further developing our AI product features. We plan to continue investing to (i) improve the pathology-detection and classification accuracy and the scope of our AI algorithms and (ii) apply AI, including large language models, to streamline the diagnostic and medical-report-generation processes, which in turn improves the efficiency and effectiveness of our healthcare provider customers. Our CapsoCloud platform in the ordinary course collects patient videos and physician diagnostic reports that, with patient consent, we can utilize as a dataset for training and validating our AI algorithms. This ever-expanding patient pathology dataset is unique among capsule endoscopy companies, and together with our in-house team of AI experts, provides a competitive advantage. Ongoing investment is required to apply expert labels to the accumulated image data and to modify, train, and test the algorithms on this labeled data to expand applications beyond the current horizon. AI Highlights, our AI-assisted reading tool for the CapsoCam Plus system which is available for both adults and pediatric patients aged two and older, is now commercialized in EU and the US, integrates with our CapsoView software and CapsoCloud platform and is designed to reduce the time physicians spend reviewing small bowel capsule endoscopy studies performed for suspected small bowel bleeding by recognizing, marking and prioritizing images containing suspected abnormal lesions for physician review.

Previous wording

Due to the potential increase in costs of revenue, expected as a result of U.S. trade policies changes, including increasing tariffs on imports, our gross profit/gross margin may be adversely impacted.

Current wording

Due to the potential increase in costs of revenue, expected as a result of U.S. trade policies changes, including increasing tariffs on imports, and increases in the costs of electronic components used in our products (including memory components) our gross profit/gross margin may be adversely impacted.

Previous wording

In the near term, we expect our clinical development expenses to vary as a percent of revenue as, among others, we (i) continued the second arm of our CapsoCam Colon pivotal study involving the second generation of that capsule (incorporating further advanced features designed to improve the accuracy of CapsoCam Colon) with the second arm involving 801 patients enrolled, and (ii) conducted additional research and studies to collect data for the development of CapsoCam UGI.

Current wording

In the near term, we expect our clinical development expenses to decline as a percent of revenue as, among others, we (i) completed the enrollment of the second arm of our CapsoCam Colon pivotal study involving the second generation of that capsule (incorporating further advanced features designed to improve the accuracy of CapsoCam Colon) with the second arm involving 801 patients enrolled, and (ii) conduct additional research and studies to collect data for the development of CapsoCam UGI, which is a less expensive project.

Previous wording

Our revenue for the three months ended June 30, 2026 and 2025 was $3.6 million and $3.3 million, respectively, representing a period-over-period growth of $0.3 million or approximately 10% (7% in the U.S. and 20% internationally). The primary driver for the revenue growth was a 13% increase in the number of CapsoCam Plus capsules sold offset by a period-over-period decrease of approximately 3% in the average selling price due to competitive pricing pressure. Our revenue for the six months ended June 30, 2026 and 2025 was $6.4 million and

Current wording

Our revenue for the three months ended September 30, 2026 and 2025 was $3.6 million and $3.5 million, respectively, representing a period-over-period growth of $0.1 million or approximately 1% (1% decrease in the U.S. and 8% increase internationally). The primary driver for the revenue growth was an increase in the number of CapsoCam Plus capsules sold internationally, offset by decrease in the number of CapsoCam Plus capsules sold in the U.S. Our revenue for the nine months ended September 30, 2026 and 2025 was $10.0 million and $9.6 million, respectively, representing a period-over-period growth of $0.4 million or approximately 4% (0% in the U.S. and 17% internationally). The primary driver for the revenue growth was a 13% increase in the number of CapsoCam Plus capsules sold internationally supported by 3% increase in average selling prices for international customers.

Previous wording

For the three months ended June 30, 2026 and 2025, international sales accounted for 25% and 23% of total revenue. For the six months ended June 30, 2026 and 2025, international sales accounted for 26% and 23% of total revenue.

Current wording

For the three months ended September 30, 2026 and 2025, international sales accounted for 24% and 22% of total revenue. For the nine months ended September 30, 2026 and 2025, international sales accounted for 25% and 22% of total revenue.

Previous wording

As we continued to scale our business, costs of revenue increased $0.3 million, or 18%, for the three months ended June 30, 2026, compared to the three months ended June 30, 2025 from $1.5 million to $1.8 million. The increased costs of revenue was attributable to increased unit sales of CapsoCam Plus for the small-bowel. For the six months ended June 30, 2026, compared to the six months ended June 30, 2025 the cost of revenue was $3.2 million and $2.8 million, respectively, which represented an increase of $0.4 million, or 16% period-over-period. The increased costs of revenue was attributable to $0.3 million due to increased unit sales of CapsoCam Plus for the small-bowel and the related services and $0.1 million due to to increased customs and tariffs due to the change in U.S. customs policy.

Current wording

As we continued to scale our business, costs of revenue increased $0.2 million, or 11%, for the three months ended September 30, 2026, compared to the three months ended September 30, 2025 from $1.6 million to $1.8 million. The increased costs of revenue was primarily attributable to higher unit material costs, a write-off of obsolete inventory and an increase in stock-based compensation expenses due to new stock-option grants. For the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025 the cost of revenue was $5.0 million and $4.4 million, respectively, which represented an increase of $0.6 million, or 14% period-over-period. The increased costs of revenue was primarily attributable to $0.1 million increase of compensation expenses for production employees, $0.1 million increase in stock-based compensation expenses due to new stock-option grants, $0.1 million increase of cost for CapsoCloud and $0.2 million due to increased customs and tariffs due to the change in U.S. customs policy.

Previous wording

Gross profit increased $0.1 million, or 3%, for the three months ended June 30, 2026, compared to the three months ended June 30, 2025, from $1.8 million to $1.9 million. For the three months ended June 30, 2026 and 2025, the gross margin was 51% and 55%, respectively. Gross profit decreased $(0.1) million, or (3)%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, from $3.3 million to $3.2 million. For the six months ended June 30, 2026 and 2025, the gross margin was 50% and 54%, respectively. The increase in gross profit was a result of increased CapsoCam Plus unit sales and the related software component, while the decline of the gross margin is due to a pressure on selling prices we have when operating in a highly competitive market and changes the U.S. government made to the trade policies and tariffs at the beginning of the year resulting in an increase in expenses for customs and tariffs.

Current wording

Gross profit decreased $0.2 million, or 8%, for the three months ended September 30, 2026, compared to the three months ended September 30, 2025, from $1.9 million to $1.8 million. For the three months ended September 30, 2026 and 2025, the gross margin was 49% and 54%, respectively. Gross profit decreased $0.3 million, or 5%, for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025, from $5.2 million to $5.0 million. For the nine months ended September 30, 2026 and 2025, the gross margin was 50% and 54%, respectively. The decrease in gross profit and gross margin is due to higher unit material costs, a write off of obsolete inventory, and increased stock-based compensation expense related to stock options granted in June.

Previous wording

The following tables provide a summary for our key operating expenses forthe three and six months ended June 30, 2026 and 2025.

Current wording

The following tables provide a summary for our key operating expenses forthe three and nine months ended September 30, 2026 and 2025.

Previous wording

Research and development expenses increased $3.2 million, or 50%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, from $6.5 million to $9.7 million. The increase was primarily due to a $2.3 million increase attributable to expenses associated with ongoing clinical trials, a $0.9 million increase in expenses for non-recurring engineering services driven by the development of the new CMOS image sensor under the development agreement with Canon Inc., and an increase in stock-based compensation expenses for $0.1 million due to new stock-option grants.

Current wording

Research and development expenses increased $2.0 million, or 16%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025, from $12.6 million to $14.5 million. The increase was primarily due to a $1.6 million increase attributable to expenses associated with ongoing clinical trials, and an increase in stock-based compensation expensesof $0.4 million due to new stock-option grants.

Previous wording

General and administrative expenses increased $1.0 million, or 80%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, from $1.2 million to $2.2 million. The increase was due to expenses operating as a public company of $0.2 million (insurance expenses increased $0.1 million, Board of Directors cash compensation expense increased $0.1 million), increase in stock-based compensation expenses of $0.3 million, primarily due to new stock-option grant, and software expenses of $0.1 million (expenses for a new ERP implementation and software necessary for operating as a public company). Additionally, expenses in the second quarter of 2025 were offset by $0.2 million due to funds received from the U.S. federal government as part of a COVID-19 relief program. Another $0.2 million increase of expenses period-over-period is a result of foreign currency gains in the second quarter 2025 compared to immaterial loss in the comparable period of 2026.

Current wording

General and administrative expenses increased $1.3 million, or 25%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025, from $5.1 million to $6.4 million. The increase was due to expenses operating as a public company of $0.3 million (insurance expenses increased $0.2 million, Board of Directors cash compensation expense increased $0.1 million), an increase in stock-based compensation expenses of $0.6 million, primarily due to new stock-option grants, and software expenses of $0.2 million (expenses for a new ERP implementation and software necessary for operating as a public company). This increase was partially offset by a decrease in expenses for audit and consulting ($0.3 million) that were higher in the first half of 2025 due to the preparation of the Company's financial statements in connection with the IPO. Additionally, expenses in the second quarter of 2025 were offset by $0.2 million received from the U.S. federal government as part of a COVID-19 relief program. Another $0.3 million increase of expenses period-over-period is a result of foreign currency gains in the first half of 2025 compared to immaterial loss in the comparable period of 2026.

Previous wording

Our reported net loss attributable to CapsoVision common stockholders for the three months ended June 30, 2026 and 2025 totaled approximately $7.5 million and $4.6 million, respectively, representing a period-over-period increase of $2.9 million or 62%. Our reported net loss attributable to CapsoVision common stockholders for the six months ended June 30, 2026 and 2025 totaled approximately $14.5 million and $10.0 million, respectively, representing a period-over-period increase of $4.5 million or 45%.

Current wording

Our reported net loss attributable to CapsoVision common stockholders for the three months ended September 30, 2026 and 2025 totaled approximately $7.3 million and $7.9 million, respectively, representing a period-over-period decrease of $0.6 million or 7%. Our reported net loss attributable to CapsoVision common stockholders for the nine months ended September 30, 2026 and 2025 totaled approximately $21.9 million and $18 million, respectively, representing a period-over-period increase of $3.9 million or 22%.

Previous wording

To date, we have financed our operations primarily through the net proceeds we have received from the sales of our convertible preferred stock, IPO and Private Placement as well as cash generated from sales of our CapsoCam Plus capsule endoscopy solution. We have generated losses from our operations as reflected in our accumulated deficit of $170.2 million as of June 30, 2026. Net cash used in operating activities was $14.5 million and $9.5 million for the six months ended June 30, 2026 and 2025, respectively.

Current wording

To date, we have financed our operations primarily through the net proceeds we have received from the sales of our convertible preferred stock, IPO, Private Placement, sale of securities in a Registered Direct Offering via Securities Purchase Agreement and 2026 ATM Program, as well as cash generated from sales of our CapsoCam Plus capsule endoscopy solution. We have generated losses from our operations as reflected in our accumulated deficit of $177.5 million as of September 30, 2026. Net cash used in operating activities was $21.5 million and $15.2 million for the nine months ended September 30, 2026 and 2025, respectively.

Previous wording

Our interim (unaudited) financial statements for the six months ended June 30, 2026 included in this Quarterly Report on Form 10-Q note that there is substantial doubt about our ability to continue as a going concern within one year after the date of issuance of those financial statements (see Note 2. GOING CONCERN). This means that we have expressed substantial doubt about our ability to continue our operations without an additional infusion of capital from external sources. Our interim (unaudited) financial statements have been prepared on a going concern basis and do not include any adjustments to reflect the future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may be necessary should we be unable to continue as a going concern. If we are unable to finance our operations, our business would be in jeopardy and we might not be able to continue operations and might have to liquidate our assets. In that case, investors might receive less than the value at which those assets are carried on our interim (unaudited) financial statements for the six months ended June 30, 2026, and it is likely that investors would lose all or a part of their investment. See “Risk Factors—Business and Industry Risks—Our Quarterly Report, our unaudited financial statements for the six months ended June 30, 2026 and our audited financial statements for the year ended December 31, 2025 include a footnote raising substantial doubt about our ability to continue as a ‘going concern’ and we will likely need to raise additional financing to fund our business and revenue growth plans."

Current wording

Our interim (unaudited) financial statements for the nine months ended September 30, 2026 included in this Quarterly Report on Form 10-Q note that there is substantial doubt about our ability to continue as a going concern within one year after the date of issuance of those financial statements (see Note 2. GOING CONCERN). This means that we have expressed substantial doubt about our ability to continue our operations without an additional infusion of capital from external sources, an increase in revenues, or cost reduction. Our interim (unaudited) financial statements have been prepared on a going concern basis and do not include any adjustments to reflect the future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may be necessary should we be unable to continue as a going concern. If we are unable to finance our operations, our business would be in jeopardy and we might not be able to continue operations and might have to liquidate our assets. In that case, investors might receive less than the value at which those assets are carried on our interim (unaudited) financial statements for the nine months ended September 30, 2026, and it is likely that investors would lose all or a part of their investment. See “Risk Factors—Business and Industry Risks—Our Quarterly Report, our unaudited financial statements for the nine months ended September 30, 2026 and our audited financial statements for the year ended December 31, 2025 include a footnote raising substantial doubt about our ability to continue as a ‘going concern’ and we will likely need to raise additional financing to fund our business and revenue growth plans."

Previous wording

As of June 30, 2026, we had approximately $9.1 million in cash and cash equivalents. From our inception through June 30, 2026, we have received aggregate gross proceeds of $143.6 million from sales of our convertible preferred stock, which were automatically converted into shares of our common stock in connection with the completion of our IPO. To provide for additional liquidity prior to the completion of our IPO, on May 28, 2025 we received $1 million as a note payable from an existing investor. The note payable, together with interest thereon (at 1% per month) was repaid shortly after completion of our IPO. On July 3, 2025 we completed our IPO from which we received the net proceeds in the amount of $23.4 million. On March 16, 2026 we closed the Private Placement and received the net proceeds in the amount of $13.4 million.

Current wording

As of September 30, 2026, we had approximately $21.8 million in cash and cash equivalents. From our inception through September 30, 2026, we have received aggregate gross proceeds of $143.6 million from sales of our convertible preferred stock, which were automatically converted into shares of our common stock in connection with the completion of our IPO. To provide for additional liquidity prior to the completion of our IPO, on May 28, 2025 we received $1 million as a note payable from an existing investor. The note payable, together with interest thereon (at 1% per month) was repaid shortly after completion of our IPO. On July 3, 2025 we completed our IPO from which we received the net proceeds in the amount of $23.4 million. On March 16, 2026 we closed the Private Placement and received the net proceeds in the amount of $13.4 million. On September 17, 2026 we entered into a securities purchase with investors and received the net proceeds in the amount of $17.8 million. In the third quarter of 2026 we sold 276,446 shares of our common stock under the ATM Program and received the net proceeds in the amount of $1.7 million. As of September 30, 2026, shares of our common stock having an aggregate offering price of up to approximately $98.2 million remained available for sale under the ATM Program.

Previous wording

As of June 30, 2026, we had an accumulated deficit of $170.2 million and cash and cash equivalents of $9.1 million. On March 16, 2026, we completed the Private Placement with the net proceeds to us of approximately $13.4 million. Based on our current operating plan, we believe that our existing cash balances will not be sufficient to fund our operations for at least the next 12 months after the date of issuance of these financial statements.

Current wording

As of September 30, 2026, we had an accumulated deficit of $177.5 million and cash and cash equivalents of $21.8 million. On March 16, 2026, we completed the Private Placement with the net proceeds to us of approximately $13.4 million. On September 17, 2026, we entered into a securities purchase agreement with investors pursuant to which we closed the Registered Direct Offering with net proceeds to us of approximately $17.8 million. In the third quarter of 2026, we also raised approximately $1.7 million in net proceeds under the ATM Program. Based on our current operating plan, we believe that our existing cash balances will not be sufficient to fund our operations for at least the next 12 months after the date of issuance of the financial statements included in this Quarterly Report on Form 10-Q.

Previous wording

For the six months ended June 30, 2026, net cash used in operating activities totaled $14.5 million, primarily driven by the net loss of $14.5 million for the period. Additional contributing factors included a $1.7 million increase in inventory to meet increased demand, a $1.4 million increase in accrued expenses and other current liabilities and a $0.7 million decrease in accounts payable, mainly due to research and development expenses and increased clinical trial expenses, as well as $0.9 million increase in stock-based compensation expenses due to new grants.

Current wording

For the nine months ended September 30, 2026, net cash used in operating activities totaled $21.5 million, primarily driven by the net loss of $21.9 million for the period. Additional contributing factors included a $1.8 million increase in inventory to meet expected increased demand, a $1.7 million increase in accrued expenses and other current liabilities, mainly due to research and development expenses, a $0.4 million increase on other long-term assets due to deferring shelf registration costs, as well as $1.9 million increase in stock-based compensation expenses, primarily due to new grants.

Previous wording

For the six months ended June 30, 2025, net cash used in operating activities was $9.5 million, primarily attributable to the net loss of $10.0 million. Cash outflows were further impacted by a $0.4 million increase in inventory to meet increased demand, and a $1.0 million increase in accrued expenses and other current liabilities, mainly due to research and development expenses and increased headcount related expenses.

Current wording

For the nine months ended September 30, 2025, net cash used in operating activities was $15.2 million, primarily attributable to the net loss of $17.9 million. Cash outflows were further impacted by a $0.6 million increase in inventory to meet increased demand, and a $2.2 million increase in accrued expenses and other current liabilities, mainly due to research and development expenses and increased headcount related expenses.

Previous wording

Net cash used in investing activities during the six months ended June 30, 2026 and 2025 was immaterial and consisted of purchases of property and equipment.

Current wording

Net cash used in investing activities during the nine months ended September 30, 2026 and 2025 was immaterial and consisted of purchases of property and equipment.

Previous wording

Net cash provided by financing activities during the six months ended June 30, 2026 consisted primarily of $14.0 million in gross proceeds from the Private Placement, net of issuance costs of $0.6 million. For the six months ended June 30, 2025, net cash provided by financing activities consisted primarily of $1.0 million from note payable received from an existing investor and $0.2 million in proceeds from the exercise of options on common stock and warrants.

Current wording

Net cash provided by financing activities during the nine months ended September 30, 2026 consisted primarily of $14.0 million in gross proceeds from the Private Placement, net of issuance costs of $0.6 million, $18.0 million in gross proceeds from Securities Purchase Agreement in the Registered Direct Offering, $1.7 million in proceeds from the ATM Program net of placement fee, and $0.2 million in proceeds from the exercise of options on common stock and warrants. For the nine months ended September 30, 2025, net cash provided by financing activities consisted primarily of $23.4 million in net proceeds from the IPO and $0.2 million in proceeds from the exercise of options on common stock and warrants.

Previous wording

Our contractual obligations at June 30, 2026 include operating lease payments of $0.7 million due within 18 months, purchase commitments to raw material suppliers of $1.0 million due within 21 months and $1.8 million in outstanding purchase commitment for the development agreement with Canon Inc. due in 9 months. We expect to fund these obligations through our existing cash balances and cash flows from operations.

Current wording

Our contractual obligations at September 30, 2026 include operating lease payments of $0.9 million due within 33 months, purchase commitments to raw material suppliers of $1.0 million due within 18 months and $1.5 million in outstanding purchase commitment for the development agreement with Canon Inc. due in 6 months. We expect to fund these obligations through our existing cash balances and cash flows from operations.