Basis of Measurement

The consolidated financial statements have been prepared on the historical cost basis except as otherwise noted.

Functional and Reporting Currencies

The functional currency for Canada and our subsidiaries in the United States and Switzerland is U.S. dollars, which is also our reporting currency.

The functional currency for our Japanese subsidiary, as determined by management, is the Japanese Yen. The Japanese Yen is translated for financial reporting purposes, with translation gains and losses recorded as a component of other comprehensive income or loss.

With respect to transactions denominated in currencies other than the functional currencies of the Company and its wholly owned operating subsidiaries, monetary assets and liabilities are remeasured at the period-end rates. Revenue and expenses are measured at the exchange rates prevailing on the transaction dates. All exchange gains or losses resulting from these transactions are recognized in the consolidated statements of operations and comprehensive loss.

Segment Reporting

The Company reports segment information based on the “management” approach. The management approach designates the internal reporting used by management for making decisions and assessing performance as the source of the Company’s reportable segments. Beginning in the third quarter of 2025, the Company changed its presentation of segment operating results to reflect an incremental segment to our business – Development Services – which did not exist prior to the third quarter of 2025. The change in segments did not result in any changes to the composition, product lines, our prior period amounts disclosed in our previously existing segments. See Note 17, Segment Information, for further information. The Company’s reportable segments consist of Diagnostics, Therapeutic Devices, and Development Services.

Investment Securities

Our investment securities, which are comprised of corporate bonds/notes and US treasuries, are accounted for in accordance with ASC 320, Investments – Debt Securities (“ASC 320”). The Company considers all of its securities for which there is a determinable fair market value, and there are no restrictions on the Company’s ability to sell within the next twelve months, as available for sale. We classify these securities as both current and non-current depending on their time to maturity. Available-for-sale securities are carried at fair value, with unrealized gains and losses reported as a component of comprehensive loss.

Inventories

Inventories

Inventories are stated at the lower of cost or net realizable value. The Company utilizes the specific identification and First in, First out (“FIFO”) method to track inventory costs. The Company records reserves, when necessary, to reduce the carrying value of inventory to its net realizable value. Management considers forecast demand in relation to the inventory on hand, competitiveness of product offerings, market conditions and product life cycles when determining excess and obsolescence and net realizable value adjustments. At the point of loss recognition, a new, lower-cost basis for that inventory is established, and any subsequent improvements in facts and circumstances do not result in the restoration or increase in that newly established cost basis.

Leases

Leases

We determine if an arrangement is a lease at inception, in accordance with ASC 842, Leases, (“ASC 842”). All operating lease commitments with a lease term greater than 12 months are recognized as right-of-use (ROU) assets and lease liabilities, measured at the present value of future lease payments. Leases with an initial term of 12 months or less are not recorded on the balance sheet and are expensed on a straight-line basis over the lease term.

We primarily enter into manufacturing and office space leases, which may include options to extend. Our lease agreements do not contain any material residual value guarantees or restrictive covenants.

ROU assets represent our right to control the use of an explicitly or implicitly identified fixed asset for a period of time and lease liabilities represent our obligation to make lease payments arising from the lease. Control of an underlying asset is conveyed to us if we obtain the rights to direct the use of and to obtain substantially all of the economic benefits from using the underlying asset.

Lease liabilities are measured using the rate implicit in the lease, if readily determinable. If not, we use our incremental borrowing rate (IBR) based on available information at lease commencement. Lease payments included in the measurement of lease liabilities consist of fixed payments. Our leases contain non-lease components and activities that do not transfer a good or service to us. These were not considered components of the contract and, therefore, were not included in the net ROU assets or lease liabilities.

The lease term includes the non-cancelable period plus any renewal options that we are reasonably certain to exercise.

Impairment of Long-Lived and Indefinite-Lived Intangible Assets

The Company evaluates long-lived assets, including property, equipment, and definite-lived intangible assets, for impairment whenever events or circumstances indicate that their carrying value may not be recoverable. If the sum of estimated undiscounted future cash flows expected to be generated by an asset or asset group is less than its carrying value, an impairment loss is recognized. The impairment loss is measured as the excess of the asset’s carrying amount over its fair value.

Indefinite-lived intangible assets are tested for impairment at least annually or when impairment indicators arise. If the carrying amount exceeds the fair value, an impairment loss is recognized.

Cost of Revenue

Cost of goods sold consists of overhead, materials, labor, shipping costs, and a portion of depreciation incurred internally to produce and receive the products. Shipping and handling costs incurred by the Company are included in cost of revenue.

Stock-based Compensation

Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with ASC 718, Compensation—Stock Compensation, (“ASC 718”). Stock-based compensation expense is recognized for awards granted to employees and directors based on the fair value of the awards on the grant date. The Company’s stock-based compensation includes stock options, which are classified as equity awards, and stock appreciation rights (SARs), which are classified as liability awards.

The Company calculates stock-based compensation for stock options using the fair value method. The fair value of stock options at the grant date is determined using the Black-Scholes Option Pricing Model. The resulting fair value is recognized as compensation expense over the vesting period of the award using the graded vesting method. The Company’s stock option plans do not require the settlement of awards by transferring cash or other assets. Therefore, stock options are classified as equity awards. Compensation expense recognized during the period reflects the fair value of stock-based payment awards that are ultimately expected to vest. In accordance with ASC 718, the Company recognizes forfeitures of employee awards as they occur.

The Company accounts for SARs under ASC 718 as liability-classified awards because they are settled solely in cash and do not result in the issuance of equity. The fair value of SARs is measured at the grant date and remeasured at each reporting date until settlement. Changes in fair value are recognized as compensation expense in the consolidated statement of operations in the period of remeasurement. The fair value of SARs is determined using the Black-Scholes Option Pricing Model, incorporating significant assumptions such as expected stock price volatility, expected term of the award, and risk-free interest rate.

SARs vest over the defined vesting period, and compensation expense is recognized based on the proportion of the vesting period that has elapsed. Upon exercise, participants receive a cash payment equal to the excess of the fair market value of a share of common stock on the exercise date over the exercise price of the SAR.

Comprehensive Loss

Our comprehensive loss is reported in accordance with ASC 220, Income Statement — Reporting Comprehensive Income (“ASC 220”). Comprehensive loss is net loss plus certain items that are recorded directly to shareholders’ equity. The Company has recorded a currency translation adjustment associated with the translation of its Japanese subsidiary to the reporting currency.