Note 1. Organization and Nature of Operations

The Company

Catheter Precision, Inc. ("Catheter" or the "Company”) was incorporated in California on September 4, 2002, and reincorporated in Delaware in July 2018. 

On January 9, 2023, Catheter entered into the Amended and Restated Agreement and Plan of Merger (the "Merger Agreement") with Catheter Precision, Inc. (“Old Catheter”), a privately held Delaware corporation. Under the terms of the Merger Agreement, Old Catheter became a wholly owned subsidiary of Catheter, together referred to as the Company, in a stock-for-stock merger transaction (the "Merger"). The Company’s current operating activities primarily relate to Old Catheter’s historical business, which comprises the design, manufacture and sale of new and innovative medical technologies in the field of cardiac electrophysiology (“EP”). 

One of the Company’s two primary products is the VIVO System, which is an acronym for View into Ventricular Onset (“VIVO” or “VIVO System”). VIVO is a non-invasive imaging system that offers 3D cardiac mapping to help with localizing the sites of origin of idiopathic ventricular arrhythmias in patients with structurally normal hearts prior to EP procedures. The VIVO System is commercially available in the European Union and has been placed at several hospitals in Europe. United States Food and Drug Administration ("FDA") 510(k) clearance was received, and the Company began commercial sales of VIVO in 2021 in the United States.

The Company’s second primary product, LockeT® (“LockeT”), is a suture retention device indicated for wound healing by distributing suture tension over a larger area in the patient in conjunction with a figure of eight suture closure and is intended to temporarily secure sutures and aid clinicians in locating and removing sutures efficiently. In addition, LockeT is a sterile, Class I product that was registered with the FDA in February 2023. Clinical studies for LockeT began during the year ended December 31, 2023. These studies are planned to show the product’s effectiveness and benefits, including faster wound closure and patient ambulation/discharge, potentially resulting in higher procedural volumes and lower costs for the healthcare provider and/or insurance payor. This information is intended to provide crucial data that will improve marketability by establishing the effectiveness of the medical device and a competitive advantage. The Company recorded its first commercial sale of LockeT to distributors in May 2024. In April 2025, a U.S. patent for the product was granted by the United States Patent and Trademark Office. The Company also obtained the CE Mark approval for LockeT, permitting the marketing and sale of LockeT in the European Union, Switzerland and Turkey. Since receipt of the CE Mark, the Company has signed agreements with new distributors in the United Kingdom, Italy, Spain, Portugal, Switzerland, the Middle East, South Africa and Brunei.

The Company’s product portfolio also includes the Amigo® Remote Catheter System (the "AMIGO" or "AMIGO System"), a robotic arm that serves as a catheter control device. The Company owns the intellectual property related to AMIGO, and this product is under consideration for future research and development of a generation 2 product.

On February 17, 2025, the Company formed a new subsidiary, Cardionomix, Inc. ("Cardionomix"), to acquire certain assets previously held by Cardionomic, Inc. ("Cardionomic"), a third party entity that has ceased operations. The Company owns 82% of Cardionomix’s issued and outstanding common stock. The Company’s Chief Executive Officer and Chairman of the Board of Directors and certain of his affiliates own 12% of the subsidiary’s issued and outstanding common stock. The remaining 6% of the subsidiary’s outstanding common stock was issued to certain third parties as finder's fees in connection with the asset acquisition.

On May 5, 2025, Cardionomix acquired certain assets primarily related to Cardionomics' Cardiac Pulmonary Nerve Stimulation (“CPNS”) System, which is a novel technology for the late-stage treatment of acute decompensated heart failure. The CPNS System consists of electrical simulation via a temporary catheter inserted into the pulmonary artery that targets the root cause of heart failure by stimulating the autonomic cardiac nerves to restore autonomic balance. The CPNS System has not yet left the development stage or been submitted for regulatory approval. 

On June 20, 2025, the Company formed a new subsidiary, KardioNav, Inc. ("KardioNav"), to pursue the advancement, development, and commercialization of electrophysiology mapping technologies. The Company assigned certain intellectual property related to the VIVO System that is not currently under development to KardioNav, while Chelak iECG ("Chelak"), an unrelated third party, assigned certain intellectual property related to technology designed to interface with implanted cardiac devices to facilitate improved pre-ablation mapping and localization of arrhythmogenic tissue to KardioNav. The intellectual property assigned by Chelak consisted solely of patents and related know-how at a conceptual stage, the development of which has not yet been advanced into a developed technology or product. KardioNav intends to integrate the Company’s VIVO mapping intellectual property with Chelak’s patents to develop a system that interfaces with implanted cardiac devices to enable improved pre-ablation mapping and more precise localization of arrhythmogenic tissue. Research and development activities in animals and humans commenced during September 2025. 

The Company owns 57% of KardioNav's issued and outstanding common stock, while Chelak owns 33% of the subsidiary's issued and outstanding common stock. The Company's Chief Executive Officer and Chairman of the Board of Directors and certain of his affiliates own the remaining 10% of the subsidiary's issued and outstanding common stock.

On December 31, 2025, in connection with the second amendment of the Related Party Notes described in Note 7, Notes Payable, the Company sold the Perikard membership interests for de minimis proceeds to Mr. Jenkins. The disposal primarily related to the acquired patents for acquired pericardial access technology. See Note 14, Asset Acquisitions, for additional information.

Reverse Stock Split

On January 13, 2025, at a Special Meeting of Stockholders of the Company, the stockholders approved an amendment to the Amended and Restated Certificate of Incorporation of the Company, which included an increase in the authorized capital stock to 70 million shares, consisting of 60 million shares of common stock and 10 million shares of preferred stock. The amendment was effected on January 13, 2025. On October 10, 2025, at a Special Meeting of Stockholders of the Company, the stockholders approved an additional amendment to the Amended and Restated Certificate of Incorporation of the Company, which included an increase in the authorized capital stock to 510 million shares, consisting of 500 million shares of common stock and 10 million shares of preferred stock. The amendment was effected on October 17, 2025.

On July 25, 2025, at the Annual Meeting of Stockholders of the Company, the stockholders approved an amendment to the Amended and Restated Certificate of Incorporation of the Company (the “Amendment”) to effect a reverse stock split within specified parameters. The Board approved the Amendment and set the ratio of the reverse stock split at 1-for-19. The Amendment was effective August 15, 2025, effecting a reverse stock split in which each nineteen (19) shares of the Company’s common stock, par value $0.0001 per share, issued and outstanding immediately prior to the effective time, automatically combined into one (1) validly issued, fully paid and non-assessable share of the Company’s common stock, par value $0.0001 per share.

No fractional shares were issued as a result of the reverse stock split. Stockholders who would otherwise have been entitled to receive a fractional share were entitled to receive their pro rata portion of the net proceeds obtained from the aggregation and sale by the exchange agent of the fractional shares resulting from the reverse stock split (reduced by any customary brokerage fees, commissions and other expenses). All references to share and per share amounts for all periods presented in the consolidated financial statements have been retrospectively restated to reflect this reverse stock split. All rights to receive shares of common stock under outstanding securities, including but not limited to, warrants and options, were adjusted to give effect to the reverse stock split. Furthermore, proportionate adjustments were made to the per share exercise price and the number of shares of common stock that may be purchased upon exercise of outstanding warrants and stock options granted by the Company, and the number of shares of common stock reserved for future issuance under the Company’s Equity Incentive Plan.

Going Concern

The consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities in the normal course of business, and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or amounts and classification of liabilities that may result from uncertainty related to its ability to continue as a going concern.

The Company has incurred recurring net losses from operations and negative cash flows from operating activities since inception. During the year ended  December 31, 2025, the Company incurred $17.7 million in net losses and used $8.3 million in cash for operating activities. As of December 31, 2025, the Company had an accumulated deficit of $309.5 million, working capital deficit of $3.5 million, and cash and cash equivalents of $0.1 million.

Management expects operating losses and negative cash flows to continue for the foreseeable future. The Company needs to raise additional capital until it is able to generate revenues from operations sufficient to fund its research, development, and commercial operations. 

On May 12, 2025, the Company executed a Securities Purchase Agreement for a private placement with three institutional investors and sold an aggregate of (i) 1,500 PIPE Units and (ii) 1,500 additional shares of a new series of the Company's preferred stock, designated Series B Convertible Preferred Stock, par value $0.0001 per share. Each PIPE Unit consisted of (i) one share of Series B Convertible Preferred Stock and (ii) Series L Warrants to purchase approximately 150 shares of common stock at an exercise price of $9.50 per share. As consideration for the PIPE Units and Series B Convertible Preferred Stock, the Company collected $1.5 million in cash and two secured Convertible Promissory Notes of QHSLab, Inc. (the “QHSLab Notes”), previously held by one of the investors, before deducting placement agent fees and offering expenses of $0.4 million (see Note 11, Equity Offerings). 

On May 19, 2025, the Company entered into an At Market Offering Agreement (the “ATM Agreement”) and, through December 31, 2025, issued 887,852 shares of common stock under the ATM Agreement in exchange for gross proceeds of $4.0 million before deduction of commissions and offering expenses of $0.3 million. 

On December 26, 2025, the Company issued an unsecured convertible notes payable with a principal amount of $102 thousand and a discount of $2 thousand to Boot Capital LLC for cash proceeds of $100 thousand. The Company further issued an unsecured convertible note payable with a principal amount of $204 thousand and a discount of $4 thousand to Vanquish Funding Group Inc. for cash proceeds of $200 thousand. The convertible notes payable have a maturity date of September 30, 2026 and stated interest rate of 10% per annum, which shall be payable when the principal amount is due. Any principal amount or interest that is not paid when due shall bear the default interest of 22% per annum.

On December 31, 2025, the Company entered into the second amendment of the Related Party Notes, which extended the maturity date of the notes payable to the Jenkins Family Charitable Institute to January 31, 2028, and the notes payable to FatBoy Capital, L.P. ("FatBoy") and Mr. Jenkins to January 31, 2029. As part of the second amendment, the Company issued 170,000 Series M Warrants to FatBoy and Mr. Jenkins, respectively, and transferred the Perikard membership interests to Mr. Jenkins for de minimis proceeds. All other terms and conditions remained unchanged.

On December 31, 2025, we entered into the Series J Exchange Agreement ("Royalty Right Exchange") with Mr. Jenkins and FatBoy to exchange future and accrued royalty rights of $2.7 million for an aggregate of 9,490 shares of the Company's newly designated Series J Convertible Preferred Stock, par value $0.0001 per share and stated value of $1,000 per share.

On February 6, 2026, the Company entered into a Securities Purchase Agreement with certain accredited investors for a private placement financing and issued an aggregate of (i) 392,608 shares of the Company's common stock, par value $0.0001 per share, at a per share purchase price of $1.43 and (ii) 1,616.33 shares of newly designated Series C-1 Convertible Preferred Stock par value $0.0001 per share, with a stated value of $1,000 per share for gross proceeds of $2.2 million. The investors agreed to purchase newly designated Series C-2 and Series C-3 Convertible Preferred Stock, par value $0.0001 per share, with stated values of $1,000 per share, under additional closings for aggregate gross proceeds of $1.6 million per closing. The additional closings are subject to certain closing conditions, including stockholder approval to issue shares of common stock in excess of 19.99% of the Company’s issued and outstanding shares of common stock and to effect a reverse stock split (“Stockholder Approval”) and, solely with respect to the closing of the Series C-3 Convertible Preferred Stock, declaration of the effectiveness of the Registration Statement filed for the resale of the common stock underlying the Series C-1, C-2, and C-3 Convertible Preferred Stock. The investors also have the right, but not the obligation, to purchase up to an aggregate of $39.2 million of Series C-4 Convertible Preferred Stock, par value $0.0001 per share, with stated value of $1,000 per share in one or more closings.

On February 6, 2026, the Company also agreed to lower the exercise price of existing warrants and the conversion price of the Series B Convertible Preferred Stock to $1.78 per share for certain holders as consideration for exercising the existing warrants and converting the Series B Convertible Preferred Stock, resulting in aggregate proceeds of $0.4 million.

On March 9, 2026, the Company entered into an additional Securities Purchase Agreement with certain accredited investors for a private placement financing pursuant to which the investors agreed to purchase 1,853 shares of Series C-1 Convertible Preferred Stock, par value of $0.0001 per share and stated value of $1,000 per share, for aggregate gross proceeds of $1.9 million. The investors agreed to purchase newly designated Series C-2 and Series C-3 Convertible Preferred Stock, par value $0.0001 per share, with stated values of $1,000 per share, under additional closings for aggregate gross proceeds of $1.9 million per closing. The additional closings are subject to closing conditions, including approval from the Company’s stockholders to issue shares of common stock in excess of 19.99% of the Company’s issued and outstanding shares of common stock and, solely with respect to the closing for the Series C-3 Convertible Preferred Stock, effectiveness of the Registration Statement filed to register the resale of common stock underlying the Series C-1, C-2, and C-3 Convertible Preferred Stock. The investors also have the right, but not the obligation, to purchase up to an aggregate of $35.6 million of Series C-4 Convertible Preferred Stock, par value $0.0001 per share, with stated value of $1,000 per share in one or more closings.

Based on the Company’s liquidity resources, there is substantial doubt about the Company’s ability to continue as a going concern within 12 months from the date of issuance of the consolidated financial statements. The accompanying consolidated financial statements have been prepared on the basis of the Company continuing to operate in the normal course of business and do not reflect any adjustments to the assets and liabilities related to the substantial doubt of its ability to continue as a going concern.

Management plans to raise additional capital through public or private equity, debt financing, or other innovative and specialty financing strategies in order to fulfill its operating and capital requirements for at least 12 months from the date of issuance of the consolidated financial statements. However, the Company may not be able to secure such financing in a timely manner or on favorable terms, if at all. Furthermore, if the Company issues equity securities to raise additional funds, its existing stockholders may experience dilution, and the new equity securities may have rights, preferences and privileges senior to those of the Company’s existing stockholders.