Like millions of other investors, I got Robinhood and started trading during the pandemic. Unlike most of those investors, I carefully studied hundreds of earnings reports for clues to future performance, and I was able to identify many future winners, such as OPRX, OTRK, FUBO, and PLUG. My style of investing is identifying key information from earnings transcripts and reports that signify growth.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned ...

New program delivers TULSA Procedure’s precision treatment - minimal side effects, no overnight hospital stay – to Medicare patients across TexasTORONTO, Sept. 23, 2025 (GLOBE NEWSWIRE) -- Profound Medical Corp. (NASDAQ:PROF; TSX:PRN) (“Profound” or the “Company”), a commercial-stage medical device company developing AI-powered, incision-free therapies for ablating diseased tissue, announced today the launch of a first-of-its-kind TULSA program by Texas Prostate and Dallas Medical Center to meet the growing ...

Core Insights - Profound Medical Corp. is a commercial-stage medical device company focused on customizable, incision-free therapies for ablation of diseased tissue [3] Company Overview - Profound Medical Corp. is developing and marketing innovative medical technologies, including TULSA-PRO and Sonalleve, aimed at treating various medical conditions [3][4][5] TULSA-PRO Technology - TULSA-PRO combines real-time MRI, AI-enhanced planning, and robotically-driven ultrasound for precise treatment of prostate diseases, including cancer and benign prostatic hyperplasia [4] - The TULSA procedure is incision-free, radiation-free, and performed in a single session, with a treatment temperature of 55-57°C, ensuring minimal recovery time for patients [4] - TULSA-PRO has received CE marking, Health Canada approval, and 510(k) clearance from the FDA [4] Sonalleve Technology - Sonalleve is a therapeutic platform approved for treating uterine fibroids and palliative pain from bone metastases, with CE marking and FDA approval under a Humanitarian Device Exemption [5] - The technology is also approved by the China National Medical Products Administration for non-invasive treatment of uterine fibroids [5] - Profound is exploring additional treatment markets for Sonalleve, including non-invasive ablation of abdominal cancers [5] Upcoming Event - Management will participate in the Lake Street Capital Markets "BIG9" Conference on September 11, 2025, in New York City, with one-on-one investor meetings scheduled [1][2]

Company Overview - Profound Medical Corp. (NASDAQ: PROF) develops the TULSA-PRO system designed for the ablation of malignant or benign prostate tissue [1] - The TULSA-PRO system is applicable for treating prostate diseases, including cancer and benign prostatic hyperplasia (BPH) [1] Industry Context - The development of advanced medical technologies like the TULSA-PRO system reflects ongoing innovation in the treatment of prostate diseases [1]

Financial Data and Key Metrics Changes - For Q2 2025, the company received total orders of over $3 million and recorded revenue of $2.2 million, with $1.6 million from recurring revenue and $650,000 from one-time capital equipment sales [6][7] - Gross margin in Q2 2025 was 73%, up from 64% in Q2 2024 [6] - Total operating expenses in Q2 2025 were $15.4 million, compared to $9.3 million in Q2 2024 [6] - The net loss for Q2 2025 was $15.7 million, or $0.52 per share, compared to a net loss of $6.9 million, or $0.28 per share, in Q2 2024 [7] Business Line Data and Key Metrics Changes - The company is transitioning from a placement model to a capital model, which is expected to lead to a backend-loaded revenue operation [8][9] - The sales pipeline includes close to 500 prospects, with over 100 leads engaged and 80 qualified leads in the verification, negotiation, and contracting stages [10][11] Market Data and Key Metrics Changes - The U.S. sales team has been streamlined to focus on organizational sales to corporatized hospitals, emphasizing the importance of intangible attributes like grit and perseverance in sales success [12][13] - The company aims to increase the number of active sites in the U.S., with a target of at least 75 by the end of the year [61] Company Strategy and Development Direction - The CAPTAIN trial has been fully recruited, which is expected to drive adoption of the TULSA procedure and influence treatment guidelines [15][16] - The pilot release of the new TULSA AI volume reduction software is anticipated to enhance efficiency in BPH procedures, moving TULSA from a niche to a mainstream treatment option [19][20] - The company is optimistic about the integration of TULSA with new interventional MR technologies, which could enhance its market position [63] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 70% to 75% revenue growth in 2025 compared to 2024, despite short-term revenue shortfalls due to delays in capital sales [8][22] - Positive feedback from physicians regarding the CAPTAIN trial completion is expected to enhance adoption and pipeline growth [36][37] - The company anticipates that as more data is published, it will lead to new guidelines requiring that TULSA be presented as a treatment option alongside traditional methods [23] Other Important Information - The company has approximately $35.2 million in cash as of June 30, 2025 [7] - The initial clinical outcomes from the CAPTAIN trial are expected to be presented at major medical meetings in December [19][94] Q&A Session Summary Question: Can you provide insights on the sales contribution from recurring and capital perspectives? - Management indicated that the revenue mix is expected to shift from recurring to capital revenue as the installed base grows, with a long-term goal of 70% recurring and 30% capital revenue [29][30] Question: What feedback are you receiving from physicians regarding the CAPTAIN trial? - High positive feedback has been received, particularly regarding the completion of the trial, which is seen as a significant achievement in the field [36][37] Question: How does the proposed reimbursement rule for BPH treatments affect TULSA? - The company maintained favorable reimbursement levels compared to other BPH procedures, which positions TULSA advantageously in the market [44][45] Question: What is the current number of active TULSA placements in the U.S.? - There are about 60 active sites, with plans to install three more, aiming for at least 75 by year-end [61] Question: How is the soft launch of the volume reduction module for BPH going? - Initial feedback has been excellent, with procedure times averaging closer to 60 minutes, which is a significant improvement [90][91]

[Profound Medical Announces Second Quarter 2025 Financial Results](index=1&type=section&id=Profound%20Medical%20Announces%20Second%20Quarter%202025%20Financial%20Results) This report details Profound Medical's financial and operational performance for the second quarter of 2025, highlighting key business developments and financial results [Business Highlights](index=1&type=section&id=Business%20Highlights) Profound Medical reported continued growth in TULSA-PRO system utilization and a robust sales pipeline in Q2 2025. Key developments included positive clinical trial data for TULSA, the launch of the TULSA-AI Volume Reduction Module, and strategic partnerships, despite some short-term delays in capital sales [TULSA-PRO System Utilization and Sales Pipeline](index=1&type=section&id=TULSA-PRO%20System%20Utilization%20and%20Sales%20Pipeline) TULSA-PRO procedure volumes increased sequentially, and the sales pipeline expanded with numerous new systems in advanced stages - TULSA-PRO 'same store' procedure volumes increased by **10% sequentially from Q1-2025**[2](index=2&type=chunk) - The TULSA-PRO qualified sales pipeline now includes **80 new systems** in the 'Verify, Negotiate and Contracting' stages[2](index=2&type=chunk) [Patient Demographics and Treatment Intent](index=1&type=section&id=Patient%20Demographics%20and%20Treatment%20Intent) Analysis of TULSA-PRO patient data reveals primary use for prostate cancer, with a significant portion for hybrid treatments and varying cancer grades TULSA-PRO Patient Treatment Breakdown (Q2 2025) | Category | Percentage | | :-------------------------------- | :--------- | | Prostate cancer only | 79% | | Hybrid (cancer & BPH) | 17% | | Salvage | 3% | | BPH only | 1% | TULSA-PRO Patient Cancer Grade Breakdown (Q2 2025) | Cancer Grade | Percentage | | :------------- | :--------- | | GG1 | 4% | | GG2 | 53% | | GG3 | 28% | | GG4 & GG5 | 15% | TULSA-PRO Patient Intention-to-Treat Breakdown (Q2 2025) | Intention-to-Treat | Percentage | | :------------------- | :--------- | | Whole gland | 48% | | Sub-total (> half gland) | 26% | | Hemi-ablations or focal therapy | 26% | [Clinical Data and Research](index=1&type=section&id=Clinical%20Data%20and%20Research) Initial CAPTAIN trial data indicates TULSA's significant perioperative benefits over robotic radical prostatectomy - Initial perioperative data from the CAPTAIN randomized trial showed MRI-guided TULSA provided statistically significant improvement in post-operative experience compared to robotic radical prostatectomy (RP), with **no blood loss, no overnight stay, reduced pain, and faster recovery**[2](index=2&type=chunk) [Product Development and Strategic Partnerships](index=1&type=section&id=Product%20Development%20and%20Strategic%20Partnerships) Profound launched the TULSA-AI Volume Reduction Module and is on track with Siemens Healthineers for a combined prostate solution - The first commercial BPH treatment using the new TULSA-AI Volume Reduction Module was successfully conducted in June 2025, with a full launch expected in **Q4-2025**[2](index=2&type=chunk)[3](index=3&type=chunk) - Profound and Siemens Healthineers remain on track to initiate sales of their combined total prostate solution (TULSA-PRO and Magnetom Free.Max MR scanner) before the end of **2025**[3](index=3&type=chunk) [Corporate Governance and Brand Advocacy](index=1&type=section&id=Corporate%20Governance%20and%20Brand%20Advocacy) Shareholders approved all matters at the AGM, and a former NFL player was appointed Global Ambassador for TULSA-PRO - All matters presented at the Annual General and Special Meeting of Shareholders in May 2025 were approved, and **six nominees** were elected to the board of directors[2](index=2&type=chunk) - Leonard Wheeler, a former NFL player and TULSA procedure recipient, was named Global Ambassador for TULSA-PRO in June 2025 to drive global awareness and advocacy[2](index=2&type=chunk) [CEO Commentary and 2025 Outlook](index=2&type=section&id=CEO%20Commentary%20and%202025%20Outlook) CEO noted short-term capital sales delays in Q2 2025 but reaffirmed the target of 70% to 75% year-over-year revenue growth for 2025 - CEO Arun Menawat noted short-term delays in completing a few TULSA-PRO capital sales in Q2 2025, which would have pushed total revenues over **$3 million**[3](index=3&type=chunk) - The Company continues to target total year-over-year revenue growth in the approximate range of **70% to 75% for 2025**, driven by a growing sales pipeline and strong procedure volume growth[3](index=3&type=chunk) [Summary Second Quarter 2025 Financial Results](index=2&type=section&id=Summary%20Second%20Quarter%202025%20Financial%20Results) Profound Medical's Q2 2025 revenue remained flat year-over-year at $2.2 million, with recurring revenue showing a slight increase. Gross margin improved significantly to 73%, but operating expenses rose substantially due to increased headcount, trial enrollment, and sales force expansion, leading to a higher net loss [Revenue Performance](index=2&type=section&id=Revenue%20Performance) Q2 2025 total revenue remained stable year-over-year at $2.2 million, with recurring non-capital revenue slightly increasing Q2 2025 Revenue Breakdown (USD in thousands) | Category | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------- | :------ | :------ | :----------- | | Recurring - non-capital | $1,561 | $1,460 | +$101 | | Capital equipment | $650 | $773 | -$123 | | **Total Revenue** | **$2,211** | **$2,233** | **-$22** | - Total revenue for Q2 2025 was approximately **$2.2 million**, essentially unchanged from the prior year period[4](index=4&type=chunk) [Gross Margin Analysis](index=2&type=section&id=Gross%20Margin%20Analysis) Gross margin significantly improved to 73% in Q2 2025, driven by enhanced manufacturing efficiency Q2 2025 Gross Margin | Period | Gross Margin | | :----- | :----------- | | Q2 2025 | 73% | | Q2 2024 | 64% | - Gross margin expanded to **73%** in Q2 2025 from **64%** in the prior year period, primarily due to higher manufacturing efficiency rates[5](index=5&type=chunk) [Operating Expenses](index=2&type=section&id=Operating%20Expenses) Operating expenses increased substantially to $15.4 million in Q2 2025 due to higher headcount, trial enrollment, and sales force expansion Q2 2025 Total Operating Expenses (USD in thousands) | Period | Total Operating Expenses | | :----- | :----------------------- | | Q2 2025 | $15,424 | | Q2 2024 | $9,263 | - Total operating expenses increased to approximately **$15.4 million** in Q2 2025 from **$9.3 million** in Q2 2024, driven by increased headcount, CAPTAIN trial enrollment, sales force expansion, commissions, and infrastructure costs[6](index=6&type=chunk) [Net Loss and Per Share Data](index=2&type=section&id=Net%20Loss%20and%20Per%20Share%20Data) Net loss for Q2 2025 significantly widened to $15.7 million, resulting in a higher loss per common share Q2 2025 Net Loss and EPS | Period | Net Loss (USD in thousands) | EPS | | :----- | :-------------------------- | :---- | | Q2 2025 | $15,695 | $0.52 | | Q2 2024 | $6,919 | $0.28 | - Net loss for Q2 2025 was approximately **$15.7 million**, or **$0.52 per common share**, compared to **$6.9 million**, or **$0.28 per common share**, in Q2 2024[7](index=7&type=chunk) [Liquidity and Outstanding Share Capital](index=2&type=section&id=Liquidity%20and%20Outstanding%20Share%20Capital) As of June 30, 2025, Profound Medical held $35.2 million in cash. The number of common shares outstanding increased slightly since the end of 2024 Liquidity and Share Capital | Metric | As of June 30, 2025 | As of August 14, 2025 | | :------------------------ | :------------------ | :-------------------- | | Cash | ~$35.2 million | N/A | | Common Shares Outstanding | 30,053,142 | 30,053,142 | - As of June 30, 2025, Profound had cash of approximately **$35.2 million**[8](index=8&type=chunk) [About Profound Medical Corp.](index=3&type=section&id=About%20Profound%20Medical%20Corp.) Profound Medical is a commercial-stage medical device company specializing in incision-free therapies for diseased tissue ablation. Its primary technologies are TULSA-PRO for prostate diseases and Sonalleve for uterine fibroids and palliative pain [Company Profile](index=3&type=section&id=Company%20Profile) Profound Medical is a commercial-stage medical device company focused on developing and marketing customizable, AI-powered, incision-free tissue ablation therapies - Profound Medical Corp. is a commercial-stage medical device company developing and marketing customizable, AI-powered, incision-free therapies for diseased tissue ablation[1](index=1&type=chunk)[11](index=11&type=chunk) [TULSA-PRO Technology Overview](index=3&type=section&id=TULSA-PRO%20Technology%20Overview) TULSA-PRO is an MRI-guided, robotically-driven transurethral ultrasound system for prostate disease, offering incision- and radiation-free treatment - TULSA-PRO combines real-time MRI, AI-enhanced planning, robotically-driven transurethral ultrasound, and closed-loop temperature feedback control for treating the entire prostate disease spectrum[12](index=12&type=chunk) - The TULSA procedure is incision- and radiation-free, performed in a single session, and aims to preserve urinary continence and sexual function while ablating targeted prostate tissue[12](index=12&type=chunk) - TULSA-PRO is CE marked, Health Canada approved, and 510(k) cleared by the U.S. FDA[12](index=12&type=chunk) [Sonalleve Technology Overview](index=3&type=section&id=Sonalleve%20Technology%20Overview) Sonalleve is a therapeutic platform CE marked for uterine fibroids and palliative pain, with FDA approval for osteoid osteoma and ongoing exploration for other cancers - Sonalleve is a therapeutic platform CE marked for uterine fibroids and palliative pain treatment of bone metastases, and approved in China for uterine fibroids[13](index=13&type=chunk) - Sonalleve also has FDA approval under a Humanitarian Device Exemption for osteoid osteoma and is being explored for non-invasive ablation of abdominal cancers and hyperthermia for cancer therapy[13](index=13&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section outlines the forward-looking nature of certain statements in the release, including expectations for technology efficacy, TULSA-PRO sales, 2025 revenue growth, and commercialization strategy. It cautions that actual results may differ due to various known and unknown risks inherent in the medical device industry and market conditions - Forward-looking statements include expectations regarding the efficacy of Profound's technology, timing of TULSA-PRO system sales, full-year 2025 revenue growth (**70-75%**), and U.S. commercialization strategy[14](index=14&type=chunk) - Such statements are subject to known and unknown risk factors and uncertainties, including those related to the medical device industry, regulatory approvals, reimbursement, economic factors, and competition[14](index=14&type=chunk) [Conference Call Details](index=2&type=section&id=Conference%20Call%20Details) Profound Medical invited interested parties to a conference call on August 14, 2025, at 4:30 pm ET to discuss the Q2 2025 results, with pre-registration required for telephone participation and a live webcast available on the company's website - A conference call was scheduled for **August 14, 2025, at 4:30 pm ET** to discuss the Q2 2025 results[10](index=10&type=chunk) - Participants could pre-register for dial-in or access a live broadcast and archive on Profound's website[10](index=10&type=chunk) [Condensed Consolidated Financial Statements](index=4&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Profound Medical Corp., including the Balance Sheets, Statements of Operations and Comprehensive Loss, and Statements of Cash Flows, providing detailed financial performance and position for Q2 2025 and the six months ended June 30, 2025, compared to prior periods [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheets show a decrease in cash and total shareholders' equity from December 31, 2024, to June 30, 2025 Condensed Consolidated Balance Sheets (USD in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | **Assets** | | | | Cash | $35,195 | $54,912 | | Total current assets | $48,811 | $69,065 | | Total assets | $49,668 | $70,234 | | **Liabilities** | | | | Total current liabilities | $5,724 | $6,565 | | Total liabilities | $10,409 | $9,812 | | **Shareholders' Equity** | | | | Total shareholders' equity | $39,259 | $60,422 | - Cash decreased from **$54.9 million** at December 31, 2024, to **$35.2 million** at June 30, 2025[17](index=17&type=chunk) - Total shareholders' equity decreased from **$60.4 million** at December 31, 2024, to **$39.3 million** at June 30, 2025[17](index=17&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Statements show increased total revenue for the six months ended June 30, 2025, but also a significant rise in net loss Condensed Consolidated Statements of Operations and Comprehensive Loss (USD in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total Revenue | $2,211 | $2,233 | $4,832 | $3,672 | | Gross profit | $1,618 | $1,421 | $3,471 | $2,287 | | Total operating expenses | $15,424 | $9,263 | $28,443 | $18,006 | | Operating loss | $13,806 | $7,842 | $24,972 | $15,719 | | Net loss attributed to shareholders | $15,695 | $6,919 | $26,419 | $13,504 | | Basic and diluted net loss per common share | $0.52 | $0.28 | $0.88 | $0.55 | - For the six months ended June 30, 2025, total revenue increased to **$4.8 million** from **$3.7 million** in the prior year period, while net loss increased to **$26.4 million** from **$13.5 million**[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flow statements indicate a substantial increase in net cash used in operating activities for the six months ended June 30, 2025 Condensed Consolidated Statements of Cash Flows (USD in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(22,027) | $(10,748) | | Net cash provided by (used in) financing activities | $(290) | $19,853 | | Net increase (decrease) in cash and cash equivalents | $(22,317) | $9,105 | | Cash, end of period | $35,195 | $34,079 | - Net cash used in operating activities significantly increased to **$22.0 million** for the six months ended June 30, 2025, compared to **$10.7 million** in the prior year period[19](index=19&type=chunk) - Cash at the end of the period was **$35.2 million**, a decrease from **$54.9 million** at the beginning of the period (December 31, 2024, from balance sheet) but comparable to **$34.1 million** at June 30, 2024[19](index=19&type=chunk)[17](index=17&type=chunk)

Core Insights - Profound Medical Corp. reported its second quarter financial results for 2025, highlighting growth in TULSA-PRO system utilization and a strong sales pipeline, despite experiencing short-term delays in capital sales [1][3]. Business Highlights - Utilization of TULSA-PRO systems increased, with "same store" procedure volumes rising by 10% sequentially from Q1-2025 [2]. - The sales pipeline for TULSA-PRO has expanded to 80 new systems in various stages of the sales process [2]. - Patient demographics treated with TULSA-PRO in Q2-2025 included 79% for prostate cancer, 17% for hybrid conditions, and 3% for salvage therapy [2]. - The company hosted an investor event at the AUA 2025, showcasing positive initial data from the CAPTAIN trial, which indicated TULSA's advantages over robotic radical prostatectomy [2]. - Leonard Wheeler was appointed as Global Ambassador for TULSA-PRO to enhance awareness and advocacy [2]. - The TULSA-AI Volume Reduction Module was successfully launched for BPH treatment, with a full launch expected in Q4-2025 [3]. Financial Performance - Revenue for Q2-2025 was approximately $2.2 million, with $1.6 million from recurring non-capital revenue and $650,000 from capital equipment sales [4]. - Gross margin improved to 73% in Q2-2025, up from 64% in the prior year, attributed to higher manufacturing efficiency [5]. - Total operating expenses rose to approximately $15.4 million, compared to $9.3 million in the previous year, driven by increased headcount and trial enrollment [6]. - The net loss for Q2-2025 was approximately $15.7 million, or $0.52 per share, compared to a loss of $6.9 million, or $0.28 per share, in Q2-2024 [7]. Liquidity and Share Capital - As of June 30, 2025, the company had cash reserves of approximately $35.2 million [8]. - The total number of common shares outstanding was 30,053,142 as of August 14, 2025 [8].

Report Information [Filing Details](index=1&type=section&id=Filing%20Details) Profound Medical Corp. filed its Form 10-Q quarterly report for the period ended June 30, 2025, identifying as a non-accelerated filer and smaller reporting company with 30,053,142 common shares outstanding - Profound Medical Corp. submitted its Form 10-Q quarterly report for the period ended June 30, 2025[2](index=2&type=chunk) Filing Details Status | Metric | Status | | :--- | :--- | | Filing Type | Quarterly Report (Form 10-Q) | | Quarter End Date | June 30, 2025 | | Commission File Number | 001-39032 | | Jurisdiction of Incorporation | Ontario, Canada | | Trading Symbol | PROF | | Registered Exchange | Nasdaq Stock Market LLC | | Accelerated Filer Status | Non-accelerated filer | | Company Size | Smaller reporting company | | Common Shares Outstanding (as of August 14, 2025) | 30,053,142 shares | [Explanatory Note](index=2&type=section&id=Explanatory%20Note) The company, as a "foreign private issuer," is exempt from Form 10-Q filing but voluntarily submitted this report - Profound Medical Corp. qualifies as a "foreign private issuer" and is exempt from filing Form 10-Q quarterly reports under Rules 13a-13 and 15d-13 of the Securities Exchange Act[7](index=7&type=chunk) - The company voluntarily chose to file this quarterly report for the period ended June 30, 2025[7](index=7&type=chunk) PART I. Financial Information [Item 1. Condensed Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) This section presents Profound Medical Corp.'s unaudited condensed consolidated financial statements for the period ended June 30, 2025, including balance sheets, statements of operations and comprehensive loss, shareholders' equity, and cash flows, along with related notes detailing business operations, accounting policies, and changes in assets, liabilities, and equity [Condensed Consolidated Balance Sheets (Unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) As of June 30, 2025, total assets decreased to **$49,668 thousand** from **$70,234 thousand** at December 31, 2024, primarily due to reduced cash and receivables, while total liabilities slightly increased and shareholders' equity significantly declined Condensed Consolidated Balance Sheets Key Data (USD in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change Amount | Change Percentage | | :--- | :--- | :--- | :--- | :--- | | Cash | 35,195 | 54,912 | (19,717) | -35.9% | | Trade and Other Receivables, Net | 4,898 | 7,045 | (2,147) | -30.5% | | Inventory | 8,353 | 5,801 | 2,552 | 44.0% | | Total Current Assets | 48,811 | 69,065 | (20,254) | -29.3% | | Total Assets | 49,668 | 70,234 | (20,566) | -29.3% | | Total Current Liabilities | 5,724 | 6,565 | (841) | -12.8% | | Total Liabilities | 10,409 | 9,812 | 597 | 6.1% | | Shareholders' Equity | 39,259 | 60,422 | (21,163) | -35.0% | [Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss%20(Unaudited)) For the three and six months ended June 30, 2025, the company experienced a significant increase in net loss, driven by higher R&D and SG&A expenses despite some revenue growth and improved gross profit margins Condensed Consolidated Statements of Operations and Comprehensive Loss Key Data (USD in thousands) | Metric | June 30, 2025 (3 months) | June 30, 2024 (3 months) | Change (%) | June 30, 2025 (6 months) | June 30, 2024 (6 months) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 2,211 | 2,233 | -1% | 4,832 | 3,672 | 32% | | Cost of Sales | 593 | 812 | -27% | 1,361 | 1,385 | -2% | | Gross Profit | 1,618 | 1,421 | 14% | 3,471 | 2,287 | 52% | | Research and Development Expenses | 6,098 | 4,205 | 45% | 10,906 | 8,150 | 34% | | Selling, General and Administrative Expenses | 9,326 | 5,058 | 84% | 17,537 | 9,856 | 78% | | Operating Loss | 13,806 | 7,842 | 76% | 24,972 | 15,719 | 59% | | Net Loss | 15,695 | 6,919 | 127% | 26,419 | 13,504 | 96% | | Basic and Diluted Loss Per Share | 0.52 | 0.28 | 86% | 0.88 | 0.55 | 60% | [Condensed Consolidated Statements of Shareholders' Equity (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity%20(Unaudited)) As of June 30, 2025, total shareholders' equity significantly decreased to **$39,259 thousand** from **$60,422 thousand** at December 31, 2024, primarily due to accumulated net losses, despite increases from share-based compensation and accumulated other comprehensive income Shareholders' Equity Changes (USD in thousands) | Metric | December 31, 2024 Balance | March 31, 2025 Balance | June 30, 2025 Balance | | :--- | :--- | :--- | :--- | | Number of Common Shares | 30,039,809 | 30,053,142 | 30,053,142 | | Common Shares Amount | 281,552 | 281,641 | 281,641 | | Additional Paid-in Capital | 21,298 | 22,198 | 23,649 | | Accumulated Other Comprehensive Income (Loss) | 2,742 | 2,845 | 5,558 | | Accumulated Deficit | (245,170) | (255,894) | (271,589) | | Total Shareholders' Equity | 60,422 | 50,790 | 39,259 | **Key Changes (December 31, 2024 to June 30, 2025):** * Net Loss: (10,724) + (15,695) = (26,419) * Share-based Compensation: 989 + 1,451 = 2,440 * Accumulated Translation Adjustment: 103 + 2,713 = 2,816 [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) For the six months ended June 30, 2025, the company reported a net cash outflow of **$22,027 thousand** from operating activities and **$290 thousand** from financing activities, resulting in an ending cash balance of **$35,195 thousand**, a decrease compared to the prior year's period which saw net cash inflow from financing activities Condensed Consolidated Statements of Cash Flows Key Data (USD in thousands) | Metric | June 30, 2025 (6 months) | June 30, 2024 (6 months) | Change Amount | | :--- | :--- | :--- | :--- | | Net Cash from Operating Activities | (22,027) | (10,748) | (11,279) | | Net Cash from Financing Activities | (290) | 19,853 | (20,143) | | Effect of Exchange Rate Changes | 2,600 | (1,239) | 3,839 | | Net Increase (Decrease) in Cash | (22,317) | 9,105 | (31,422) | | Cash, End of Period | 35,195 | 34,079 | 1,116 | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes to the condensed consolidated financial statements, covering the company's business description, liquidity risk, significant accounting policies, composition and changes in various assets, liabilities, and equity, as well as detailed information on revenue, loss per share, and segment reporting [1 Description of business and liquidity risk](index=9&type=section&id=1%20Description%20of%20business%20and%20liquidity%20risk) Profound Medical Corp. is a commercial-stage medical device company focused on developing and selling incision-free treatment systems for ablating diseased tissue, with **$35,195 thousand** in cash as of June 30, 2025, and an anticipated need for additional financing by Q3 2026 - Profound Medical Corp. is a commercial-stage medical device company focused on developing and selling incision-free treatment systems that utilize platform technology for ablating diseased tissue[19](index=19&type=chunk) Cash Balance (USD in thousands) | Date | Cash Balance | | :--- | :--- | | June 30, 2025 | 35,195 | | December 31, 2024 | 54,912 | - The company anticipates that existing cash and product sales will meet operating and capital expenditure needs for the next 12 months, but achieving all future strategic plans by Q3 2026 remains dependent on securing additional financing or executing other strategic alternatives[22](index=22&type=chunk) [2 Summary of significant accounting policies](index=9&type=section&id=2%20Summary%20of%20significant%20accounting%20policies) The company prepares its condensed consolidated financial statements in accordance with US GAAP, utilizing estimates and assumptions, and is currently evaluating the disclosure impact of recent accounting standard updates (ASU 2024-03 and ASU 2025-01) - The company prepares its condensed consolidated financial statements in accordance with US Generally Accepted Accounting Principles (US GAAP) and includes all necessary adjustments[23](index=23&type=chunk)[25](index=25&type=chunk) - The financial statements involve management's estimates and assumptions regarding assets, liabilities, revenue, and expenses, and actual results may differ from these estimates[26](index=26&type=chunk) - The FASB issued ASU 2024-03 and ASU 2025-01, requiring improved expense disclosures in the income statement, and the company is evaluating their impact on disclosures, with the standards effective for fiscal years beginning after December 15, 2026[27](index=27&type=chunk) [3 Trade and other receivables, net](index=11&type=section&id=3%20Trade%20and%20other%20receivables%2C%20net) As of June 30, 2025, trade and other receivables, net, decreased to **$4,898 thousand** from **$7,045 thousand** at December 31, 2024, primarily due to reductions in gross trade receivables and contract assets, while the allowance for expected credit losses increased Trade and Other Receivables, Net (USD in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change Amount | Change Percentage | | :--- | :--- | :--- | :--- | :--- | | Gross Trade Receivables | 4,114 | 5,245 | (1,131) | -21.6% | | Gross Contract Assets | 596 | 1,340 | (744) | -55.5% | | Trade Receivables and Contract Assets | 4,710 | 6,585 | (1,875) | -28.5% | | Allowance for Expected Credit Losses | (531) | (158) | (373) | 236.1% | | Trade Receivables, Net | 4,179 | 6,427 | (2,248) | -35.0% | | Tax Receivables | 557 | 308 | 249 | 80.8% | | Other Receivables | 162 | 310 | (148) | -47.7% | | **Total Trade and Other Receivables, Net** | **4,898** | **7,045** | **(2,147)** | **-30.5%** | Allowance for Expected Credit Losses Changes (USD in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Beginning Balance | 158 | 76 | | Provision for Expected Credit Losses | 373 | 82 | | Ending Balance | 531 | 158 | [4 Inventory](index=12&type=section&id=4%20Inventory) As of June 30, 2025, total inventory increased to **$8,353 thousand** from **$5,801 thousand** at December 31, 2024, primarily driven by growth in finished goods and raw materials, while inventory charged to cost of sales decreased during the reporting period Inventory Composition (USD in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change Amount | Change Percentage | | :--- | :--- | :--- | :--- | :--- | | Finished Goods | 5,621 | 3,837 | 1,784 | 46.5% | | Raw Materials | 2,732 | 1,964 | 768 | 39.1% | | **Total Inventory** | **8,353** | **5,801** | **2,552** | **44.0%** | Inventory Charged to Cost of Sales (USD in thousands) | Period | June 30, 2025 (3 months) | June 30, 2024 (3 months) | June 30, 2025 (6 months) | June 30, 2024 (6 months) | | :--- | :--- | :--- | :--- | :--- | | Inventory Charged to Cost of Sales | 496 | 751 | 1,156 | 1,188 | [5 Property and equipment, net](index=12&type=section&id=5%20Property%20and%20equipment%2C%20net) As of June 30, 2025, property and equipment, net, decreased to **$278 thousand** from **$425 thousand** at December 31, 2024, mainly due to equipment depreciation and sales to customers, with depreciation expense also decreasing during the period Property and Equipment, Net Composition (USD in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change Amount | Change Percentage | | :--- | :--- | :--- | :--- | :--- | | Leasehold Improvements | 542 | 542 | 0 | 0.0% | | Operating Lease Equipment | 1,640 | 2,273 | (633) | -27.9% | | Total | 2,182 | 2,815 | (633) | -22.5% | | Accumulated Depreciation | (1,904) | (2,390) | 486 | -20.3% | | **Property and Equipment, Net** | **278** | **425** | **(147)** | **-34.6%** | Depreciation Expense and Equipment Sales (USD in thousands) | Period | June 30, 2025 (3 months) | June 30, 2024 (3 months) | June 30, 2025 (6 months) | June 30, 2024 (6 months) | | :--- | :--- | :--- | :--- | :--- | | Depreciation Expense | 102 | 184 | 218 | 383 | | Sales of Operating Lease Equipment | 135 | — | 213 | — | [6 Intangible assets](index=12&type=section&id=6%20Intangible%20assets) As of June 30, 2025, net intangible assets decreased to **$175 thousand** from **$261 thousand** at December 31, 2024, primarily comprising an exclusive license agreement and software, with the company holding an exclusive license for MRI-guided transurethral ultrasound therapy technology Intangible Assets Composition (USD in thousands) | Metric | June 30, 2025 (Net) | December 31, 2024 (Net) | Change Amount | Change Percentage | | :--- | :--- | :--- | :--- | :--- | | Exclusive License Agreement | 83 | 89 | (6) | -6.7% | | Software | 92 | 172 | (80) | -46.5% | | **Total Intangible Assets, Net** | **175** | **261** | **(86)** | **-32.9%** | - The company has an exclusive license agreement with Sunnybrook Health Sciences Centre for MRI-guided transurethral ultrasound therapy technology[31](index=31&type=chunk) [7 Accrued expenses and other current liabilities](index=13&type=section&id=7%20Accrued%20expenses%20and%20other%20current%20liabilities) As of June 30, 2025, total accrued expenses and other current liabilities increased to **$3,802 thousand** from **$2,835 thousand** at December 31, 2024, mainly driven by significant growth in accrued employee compensation and clinical trial expenses Accrued Expenses and Other Current Liabilities Composition (USD in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change Amount | Change Percentage | | :--- | :--- | :--- | :--- | :--- | | Accrued Employee Compensation | 2,000 | 706 | 1,294 | 183.3% | | Clinical Trials | 1,293 | 325 | 968 | 297.8% | | Other General Accruals | 509 | 1,804 | (1,295) | -71.8% | | **Total Accrued Expenses and Other Current Liabilities** | **3,802** | **2,835** | **967** | **34.1%** | [8 Long-term debt](index=13&type=section&id=8%20Long-term%20debt) The company entered into an amended and restated credit agreement with CIBC on March 3, 2025, converting existing long-term debt into a new revolving credit facility with financial covenants, and anticipates a potential covenant breach by December 31, 2025, regarding unrestricted cash levels - The company entered into an amended and restated credit agreement with CIBC on March 3, 2025, converting existing long-term debt into a new revolving credit facility maturing on March 3, 2027[33](index=33&type=chunk) - The credit agreement includes financial covenants requiring unrestricted cash to always exceed EBITDA for the most recent nine-month period and 12-month revenue to grow by 15% over the prior year's comparable period[33](index=33&type=chunk) - The company anticipates a breach of one covenant by December 31, 2025, where unrestricted cash will no longer exceed the required liquidity amount, but management believes sufficient unrestricted cash exists to repay all outstanding debt if it becomes due, even without a waiver[34](index=34&type=chunk) Long-term Debt Changes (USD in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Beginning Balance | 4,661 | 7,104 | | Interest Expense | 190 | 600 | | Interest Paid | (139) | (582) | | Foreign Exchange Impact | 40 | (483) | | Repayments | (290) | (1,978) | | **Ending Balance** | **4,462** | **4,661** | | Less: Current Portion | — | 1,737 | | **Long-term Portion** | **4,462** | **2,924** | [9 Share capital](index=14&type=section&id=9%20Share%20capital) The company is authorized to issue an unlimited number of common shares, with **30,053,142 shares** outstanding as of June 30, 2025, totaling **$281,641 thousand**, granting holders full voting rights and entitlements to dividends and assets upon liquidation - The company is authorized to issue an unlimited number of common shares[36](index=36&type=chunk) Common Shares Issued and Outstanding (USD in thousands) | Date | Number of Shares | Amount | | :--- | :--- | :--- | | June 30, 2025 | 30,053,142 | 281,641 | | December 31, 2024 | 30,039,809 | 281,552 | - Common shareholders possess all voting rights, with one vote per share, and are entitled to dividends declared by the Board of Directors and an equal per-share amount of company assets upon liquidation[38](index=38&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk) [10 Share-based payments](index=14&type=section&id=10%20Share-based%20payments) The company's share-based payment activities, including stock options, RSUs, and DSUs, resulted in a significant increase in share-based compensation expense during the reporting period ended June 30, 2025 Stock Option Activity Summary | Metric | December 31, 2024 Balance | Granted | Forfeited/Expired | June 30, 2025 Balance | | :--- | :--- | :--- | :--- | :--- | | Number of Options | 2,291,152 | 54,100 | (197,684) | 2,147,568 | | Weighted Average Exercise Price (C$) | 14.13 | 6.87 | 17.77 | 13.61 | RSUs Activity Summary | Metric | December 31, 2024 Balance | Granted | Vested | Forfeited | June 30, 2025 Balance | | :--- | :--- | :--- | :--- | :--- | :--- | | Number of RSUs | 324,621 | 801,000 | (13,333) | (36,834) | 1,075,454 | | Weighted Average Grant Date Fair Value (C$) | 11.18 | 9.26 | 11.27 | 9.83 | 9.80 | Share-based Compensation Expense (USD in thousands) | Period | June 30, 2025 (3 months) | June 30, 2024 (3 months) | June 30, 2025 (6 months) | June 30, 2024 (6 months) | | :--- | :--- | :--- | :--- | :--- | | Stock Options | 125 | 129 | 758 | 298 | | RSUs | 627 | 528 | 869 | 1,017 | | DSUs | 699 | 111 | 813 | 220 | | **Total Share-based Compensation** | **1,451** | **768** | **2,440** | **1,535** | [11 Revenue](index=16&type=section&id=11%20Revenue) For the three months ended June 30, 2025, total revenue slightly decreased due to lower capital sales, offset by recurring revenue growth, while for the six months, total revenue significantly increased, driven by higher US recurring revenue and international capital sales Revenue by Product and Service Type (USD in thousands) | Period | Recurring Non-Capital Revenue (2025 3 months) | Capital Equipment Revenue (2025 3 months) | Total Revenue (2025 3 months) | Recurring Non-Capital Revenue (2024 3 months) | Capital Equipment Revenue (2024 3 months) | Total Revenue (2024 3 months) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 1,561 | 650 | 2,211 | 1,460 | 773 | 2,233 | | Period | Recurring Non-Capital Revenue (2025 6 months) | Capital Equipment Revenue (2025 6 months) | Total Revenue (2025 6 months) | Recurring Non-Capital Revenue (2024 6 months) | Capital Equipment Revenue (2024 6 months) | Total Revenue (2024 6 months) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 3,362 | 1,470 | 4,832 | 2,899 | 773 | 3,672 | [12 Loss per share](index=17&type=section&id=12%20Loss%20per%20share) For the three and six months ended June 30, 2025, basic and diluted loss per share both increased to **$0.52** and **$0.88**, respectively, with diluted loss per share equaling basic loss per share due to the anti-dilutive effect of share-based awards Basic and Diluted Loss Per Share (USD) | Metric | June 30, 2025 (3 months) | June 30, 2024 (3 months) | June 30, 2025 (6 months) | June 30, 2024 (6 months) | | :--- | :--- | :--- | :--- | :--- | | Net Loss | 15,695 | 6,919 | 26,419 | 13,504 | | Weighted Average Common Shares Outstanding | 30,053,142 | 24,440,444 | 30,055,047 | 24,373,869 | | Basic and Diluted Loss Per Share | 0.52 | 0.28 | 0.88 | 0.55 | - Diluted loss per share is equal to basic loss per share due to the anti-dilutive effect of stock options, RSUs, and DSUs[52](index=52&type=chunk) [13 Segment reporting](index=17&type=section&id=13%20Segment%20reporting) The company operates as a single medical technology segment, with the United States being the primary source of revenue, followed by Canada and Germany, and total assets predominantly located in Canada - The company's operations are classified as a single medical technology segment, focusing on MRI-guided ablation therapy[53](index=53&type=chunk) Revenue by Geographic Area (USD in thousands) | Period | Canada (2025 3 months) | United States (2025 3 months) | Germany (2025 3 months) | Total (2025 3 months) | Canada (2024 3 months) | United States (2024 3 months) | Germany (2024 3 months) | Total (2024 3 months) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Recurring Non-Capital Revenue | 94 | 1,327 | 140 | 1,561 | 99 | 1,101 | 260 | 1,460 | | Capital Equipment Revenue | — | 650 | — | 650 | 773 | — | — | 773 | | **Total Revenue** | **94** | **1,977** | **140** | **2,211** | **872** | **1,101** | **260** | **2,233** | | Period | Canada (2025 6 months) | United States (2025 6 months) | Germany (2025 6 months) | Total (2025 6 months) | Canada (2024 6 months) | United States (2024 6 months) | Germany (2024 6 months) | Total (2024 6 months) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Recurring Non-Capital Revenue | 376 | 2,620 | 366 | 3,362 | 203 | 2,259 | 437 | 2,899 | | Capital Equipment Revenue | 570 | 900 | — | 1,470 | 773 | — | — | 773 | | **Total Revenue** | **946** | **3,520** | **366** | **4,832** | **976** | **2,259** | **437** | **3,672** | Total Assets by Geographic Area (USD in thousands) | Geographic Area | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Canada | 38,180 | 58,743 | | United States | 6,802 | 6,351 | | Germany | 1,502 | 1,661 | | China | 60 | 92 | | Finland | 3,124 | 3,387 | | **Total Assets** | **49,668** | **70,234** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section discusses Profound Medical Corp.'s financial condition and operating results for the period ended June 30, 2025, highlighting its business overview, operational performance, key financial components, liquidity and capital resources, and critical accounting policies [Overview](index=19&type=section&id=Overview) Profound Medical Corp. is a commercial-stage medical device company developing and selling incision-free treatment systems for image-guided tissue ablation, utilizing its TULSA-PRO system for prostate tissue ablation and Sonalleve platform for uterine fibroids and bone metastases, with a hybrid revenue model in the US and capital sales internationally - The company is a commercial-stage medical device company focused on developing and selling incision-free treatment systems for image-guided ablation of diseased tissue[56](index=56&type=chunk) - Its primary product, the TULSA-PRO system, combines real-time MRI, robotically driven transurethral thermal ultrasound, and closed-loop temperature feedback control for prostate tissue ablation, holding CE Mark, Health Canada approval, and FDA 510(k) clearance[56](index=56&type=chunk)[57](index=57&type=chunk) - The Sonalleve platform has CE Mark for uterine fibroids and palliative pain treatment of bone metastases, FDA Humanitarian Device Exemption approval for osteoid osteoma, and approval in China for non-invasive treatment of uterine fibroids[58](index=58&type=chunk) - The company employs a hybrid recurring revenue business model in the United States (one-time equipment, system usage, Genius service, or capital sale plus per-patient fee) and primarily a capital sales model outside North America[59](index=59&type=chunk)[60](index=60&type=chunk)[64](index=64&type=chunk) [Results of Operations](index=21&type=section&id=Results%20of%20Operations) For the three months ended June 30, 2025, revenue slightly decreased by 1%, but gross profit increased by 14% with a 73% gross margin; however, significant increases in R&D and SG&A expenses led to a 127% rise in net loss, while for the six months, revenue grew by 32% and gross profit by 52% with a 72% gross margin, but increased operating expenses and foreign exchange losses resulted in a 96% surge in net loss Results of Operations Summary (USD in thousands) | Metric | June 30, 2025 (3 months) | June 30, 2024 (3 months) | Change (%) | June 30, 2025 (6 months) | June 30, 2024 (6 months) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 2,211 | 2,233 | -1% | 4,832 | 3,672 | 32% | | Cost of Sales | 593 | 812 | -27% | 1,361 | 1,385 | -2% | | Gross Profit | 1,618 | 1,421 | 14% | 3,471 | 2,287 | 52% | | Gross Margin | 73% | 64% | +9pp | 72% | 62% | +10pp | | Research and Development Expenses | 6,098 | 4,205 | 45% | 10,906 | 8,150 | 34% | | Selling, General and Administrative Expenses | 9,326 | 5,058 | 84% | 17,537 | 9,856 | 78% | | Operating Loss | 13,806 | 7,842 | 76% | 24,972 | 15,719 | 59% | | Net Loss | 15,695 | 6,919 | 127% | 26,419 | 13,504 | 96% | | Basic and Diluted Loss Per Share | 0.52 | 0.28 | 86% | 0.88 | 0.55 | 60% | [Key Components of Our Results of Operations](index=23&type=section&id=Key%20Components%20of%20Our%20Results%20of%20Operations) This section analyzes changes in the company's revenue, cost of sales, operating expenses (R&D, SG&A), and finance income/expense, highlighting revenue composition from recurring non-capital and capital equipment sales, improved gross margins due to efficiency, increased operating expenses from commercialization and R&D investments, and decreased net finance income due to lower cash interest [Revenue_MDA](index=23&type=section&id=Revenue_MDA) For the three months ended June 30, 2025, total revenue was **$2,211 thousand**, a 1% year-over-year decrease primarily due to reduced capital sales, partially offset by growth in US recurring revenue, while for the six months, total revenue was **$4,832 thousand**, a 32% year-over-year increase driven by higher US recurring revenue and international capital sales Revenue Composition and Changes (USD in thousands) | Period | Recurring Non-Capital Revenue (2025) | Capital Equipment Revenue (2025) | Total Revenue (2025) | Recurring Non-Capital Revenue (2024) | Capital Equipment Revenue (2024) | Total Revenue (2024) | Total Revenue Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | 3 months | 1,561 | 650 | 2,211 | 1,460 | 773 | 2,233 | -1% | | 6 months | 3,362 | 1,470 | 4,832 | 2,899 | 773 | 3,672 | 32% | - The three-month revenue decrease was primarily driven by reduced capital sales, partially offset by growth in US recurring revenue[65](index=65&type=chunk) - The six-month revenue increase was primarily due to higher US recurring revenue and international capital sales[66](index=66&type=chunk) [Cost of Sales_MDA](index=24&type=section&id=Cost%20of%20Sales_MDA) For the three months ended June 30, 2025, cost of sales decreased by 27% to **$593 thousand**, improving gross margin to 73%, while for the six months, cost of sales decreased by 2% to **$1,361 thousand**, improving gross margin to 72%, with gross profit growth attributed to manufacturing efficiencies and a favorable sales mix of high-margin capital equipment Cost of Sales, Gross Profit, and Gross Margin (USD in thousands) | Period | Cost of Sales (2025) | Gross Profit (2025) | Gross Margin (2025) | Cost of Sales (2024) | Gross Profit (2024) | Gross Margin (2024) | Cost of Sales Change (%) | Gross Profit Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | 3 months | 593 | 1,618 | 73% | 812 | 1,421 | 64% | -27% | 14% | | 6 months | 1,361 | 3,471 | 72% | 1,385 | 2,287 | 62% | -2% | 52% | - The decrease in cost of sales and increase in gross profit are primarily attributable to existing customers purchasing capital equipment (which has higher margins) and improved manufacturing efficiencies[68](index=68&type=chunk)[69](index=69&type=chunk) [Operating Expenses_MDA](index=24&type=section&id=Operating%20Expenses_MDA) Operating expenses, comprising R&D and SG&A, significantly increased during the reporting period due to higher personnel costs, increased clinical trial investments, expanded commercialization activities, and elevated marketing expenses [R&D Expenses](index=24&type=section&id=R%26D%20Expenses) For the three months ended June 30, 2025, R&D expenses increased by 45% to **$6,098 thousand**, primarily due to increased personnel, higher recruitment and treatment activities for the CAPTAIN trial, and rising travel expenses, with the six-month increase of 34% to **$10,906 thousand** also including higher material expenditures for MRI compatibility and cost reduction efforts Research and Development Expenses and Changes (USD in thousands) | Period | 2025 | 2024 | Change Amount | Change Percentage | | :--- | :--- | :--- | :--- | :--- | | 3 months | 6,098 | 4,205 | 1,893 | 45% | | 6 months | 10,906 | 8,150 | 2,756 | 34% | - The increase in R&D expenses is primarily attributable to: * Increased personnel * Higher recruitment and treatment activities for the CAPTAIN trial * Rising travel expenses * Increased material expenditures to improve MRI scanner compatibility, reduce design costs, and enhance efficiency (for the six-month period)[72](index=72&type=chunk)[73](index=73&type=chunk) [SG&A expenses](index=26&type=section&id=SG%26A%20expenses) For the three months ended June 30, 2025, SG&A expenses increased by 84% to **$9,326 thousand**, mainly due to sales team expansion, higher commission payments, and increased travel and infrastructure costs, with the six-month increase of 78% to **$17,537 thousand** also including costs for educational events like Pro-Talk Live Selling, General and Administrative Expenses and Changes (USD in thousands) | Period | 2025 | 2024 | Change Amount | Change Percentage | | :--- | :--- | :--- | :--- | :--- | | 3 months | 9,326 | 5,058 | 4,268 | 84% | | 6 months | 17,537 | 9,856 | 7,681 | 78% | - The increase in selling, general and administrative expenses is primarily attributable to: * Expansion of the sales team * Higher commission payments * Increased travel and infrastructure costs * Costs associated with hosting educational events like Pro-Talk Live (for the six-month period)[77](index=77&type=chunk)[78](index=78&type=chunk) [Net finance (income) expense](index=26&type=section&id=Net%20finance%20(income)%20expense) For the three and six months ended June 30, 2025, net finance (income) expense decreased, primarily due to a reduction in cash interest income Net Finance (Income) Expense and Changes (USD in thousands) | Period | 2025 | 2024 | Change Amount | Change Percentage | | :--- | :--- | :--- | :--- | :--- | | 3 months | (343) | (422) | 79 | -19% | | 6 months | (788) | (884) | 96 | -11% | - The decrease in net finance (income) expense is primarily due to lower cash interest income[80](index=80&type=chunk) [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, the company's cash balance was **$35,195 thousand**, a decrease from December 31, 2024, with existing cash and product sales expected to support operations for the next 12 months, but additional financing will be required by Q3 2026 to achieve all future strategic plans Cash Balance (USD in thousands) | Date | Cash Balance | | :--- | :--- | | June 30, 2025 | 35,195 | | December 31, 2024 | 54,912 | - The company anticipates that existing cash and product sales will meet operating and capital expenditure needs for the next 12 months, but achieving all future strategic plans by Q3 2026 remains dependent on securing additional financing or executing other strategic alternatives[82](index=82&type=chunk) [Use of Proceeds](index=27&type=section&id=Use%20of%20Proceeds) The company detailed the use of proceeds from its 2024 public offering, primarily for commercialization and development of TULSA-PRO and Sonalleve systems, as well as working capital and general corporate purposes, and outlined the terms, financial covenants, and potential default risks of its amended CIBC credit agreement 2024 Public Offering Proceeds Usage (as of June 30, 2025, USD in thousands) | Purpose | Amount Expended | | :--- | :--- | | TULSA-PRO Commercialization | 18,277 | | Sonalleve Development and Commercialization | 6,092 | | Working Capital and General Corporate Purposes | 4,826 | | **Total** | **29,195** | - The company entered into an amended and restated credit agreement with CIBC on March 3, 2025, converting existing long-term debt into a new revolving credit facility up to **$15,000 thousand**, which includes financial covenants[87](index=87&type=chunk) [Cash Flows_MDA](index=27&type=section&id=Cash%20Flows_MDA) For the six months ended June 30, 2025, the company experienced a net cash outflow of **$22,027 thousand** from operating activities, primarily due to net loss and increased expenses from commercialization, and a net cash outflow of **$290 thousand** from financing activities, mainly for long-term debt repayments, while foreign exchange rate changes positively impacted cash by **$2,600 thousand** Cash Flows Summary (USD in thousands) | Metric | June 30, 2025 (6 months) | June 30, 2024 (6 months) | Change Amount | | :--- | :--- | :--- | :--- | | Net Cash from Operating Activities | (22,027) | (10,748) | (11,279) | | Net Cash from Financing Activities | (290) | 19,853 | (20,143) | | Effect of Exchange Rate Changes | 2,600 | (1,239) | 3,839 | | Net Increase (Decrease) in Cash | (19,717) | 7,866 | (27,583) | [Operating Activities](index=29&type=section&id=Operating%20Activities) For the six months ended June 30, 2025, net cash outflow from operating activities was **$22,027 thousand**, primarily driven by a net loss of **$26,419 thousand** and increased expenses related to commercialization and product expansion, including personnel, travel, clinical trial, and marketing costs - Net cash outflow from operating activities for the first half of 2025 was **$22,027 thousand**, primarily due to a net loss of **$26,419 thousand** and increased expenses from commercialization and product expansion[89](index=89&type=chunk) - Increased expenses include personnel, travel, clinical trial costs, and marketing expenses[89](index=89&type=chunk) [Financing Activities](index=29&type=section&id=Financing%20Activities) For the six months ended June 30, 2025, net cash outflow from financing activities was **$290 thousand**, primarily for long-term debt principal repayments, contrasting with a net cash inflow of **$19,853 thousand** in the prior year's comparable period, mainly from common share issuance proceeds - Net cash outflow from financing activities for the first half of 2025 was **$290 thousand**, primarily used for long-term debt principal repayments[91](index=91&type=chunk) - Net cash inflow from financing activities for the first half of 2024 was **$19,853 thousand**, mainly from **$21,079 thousand** in common share issuance proceeds, partially offset by **$1,227 thousand** in long-term debt repayments[91](index=91&type=chunk) [Foreign Exchange on Cash](index=29&type=section&id=Foreign%20Exchange%20on%20Cash) Exchange rate fluctuations impacted the company's foreign currency-denominated cash, resulting in a **$2,600 thousand** increase in cash holdings - Exchange rate fluctuations impacted the company's foreign currency-denominated cash, resulting in a **$2,600 thousand** increase in cash holdings[17](index=17&type=chunk)[88](index=88&type=chunk)[92](index=92&type=chunk) [Funding Requirements](index=29&type=section&id=Funding%20Requirements) The company anticipates existing cash and product sales will cover operations and capital expenditures for the next 12 months, but additional capital may be needed for R&D and operational expansion, with potential funding sources including equity/debt financing, development agreements, or strategic collaborations, and failure to secure such funding could lead to operational adjustments or delays - The company anticipates that existing cash and product sales will meet operating and capital expenditure needs for the next 12 months, but expects increased expenses primarily due to the ongoing commercialization of TULSA-PRO and Sonalleve[93](index=93&type=chunk) - The company may require additional capital to fund research and development activities and any significant operational expansion[95](index=95&type=chunk) - Potential funding sources include equity and/or debt financing, development or marketing agreements, revenue from future commercialization activities, and/or new strategic collaboration agreements[95](index=95&type=chunk) - Failure to obtain additional funding could lead to operational adjustments, delays in clinical trials, hindered product development programs, or an inability to pursue market approvals in a timely manner[95](index=95&type=chunk) [Critical Accounting Policies and Estimates](index=31&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) There have been no significant changes to the company's critical accounting policies since December 31, 2024, with detailed information available in the 2024 annual report - There have been no significant changes to the company's critical accounting policies since December 31, 2024[96](index=96&type=chunk) - For a detailed description of critical accounting policies, refer to Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," in the company's 2024 Annual Report filed on March 7, 2025[96](index=96&type=chunk) [Recent Accounting Pronouncements_MDA](index=31&type=section&id=Recent%20Accounting%20Pronouncements_MDA) For detailed information on recent accounting pronouncements, please refer to Note 2 of the condensed consolidated financial statements in Part I, Item 1 of this quarterly report - For detailed information on recent accounting pronouncements, please refer to Note 2 of the condensed consolidated financial statements in Part I, Item 1 of this quarterly report[97](index=97&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is not applicable - This section is not applicable[98](index=98&type=chunk) [Item 4. Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) This section assesses the effectiveness of the company's disclosure controls and procedures and discloses a material weakness in internal control over financial reporting, along with ongoing remediation efforts [Evaluation of Disclosure Controls and Procedures](index=31&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) As of June 30, 2025, the company's management, including the Chief Executive Officer and Chief Financial Officer, assessed and determined that its disclosure controls and procedures were effective in ensuring timely recording, processing, summarizing, and reporting of required information - As of June 30, 2025, the company's management, including the Chief Executive Officer and Chief Financial Officer, assessed and determined that its disclosure controls and procedures were effective[100](index=100&type=chunk) - Disclosure controls and procedures are designed to ensure that required information is recorded, processed, summarized, and reported within SEC-prescribed timeframes and communicated to management for disclosure decisions[99](index=99&type=chunk) [Changes in Internal Control Over Financial Reporting](index=31&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) For the three months ended June 30, 2025, there were no significant changes in internal control over financial reporting, apart from ongoing remediation activities for a previously identified material weakness in revenue recognition controls as of December 31, 2024, which is expected to be completed in 2025 through financial team expansion and third-party consultant engagement - For the three months ended June 30, 2025, there were no significant changes in internal control over financial reporting, apart from ongoing remediation activities for a previously identified material weakness[101](index=101&type=chunk) - As of December 31, 2024, the company's internal control over financial reporting had a material weakness, specifically that controls over the review of contract terms and customer arrangements for revenue recognition (ASC 606) were not operating effectively, leading to audit adjustments[102](index=102&type=chunk)[104](index=104&type=chunk) - The company is implementing a remediation plan, including expanding its finance team with CPAs possessing US GAAP expertise and engaging third-party consultants to assist in evaluating complex revenue contracts, with completion expected in 2025[105](index=105&type=chunk) PART II. Other Information [Item 1. Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in or aware of any legal proceedings that would have a material adverse effect on its business, financial condition, or results of operations - The company is not currently involved in or aware of any legal proceedings that would have a material adverse effect on its business, financial condition, or results of operations[107](index=107&type=chunk) - Regardless of the outcome, litigation could adversely affect the company due to defense and settlement costs, diversion of management resources, and other factors[107](index=107&type=chunk) [Item 1A. Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the company's risk factors since the disclosure in its 2024 annual report - There have been no material changes to the company's risk factors since the disclosure in its 2024 annual report[108](index=108&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds during this reporting period - There were no unregistered sales of equity securities or use of proceeds during this reporting period[109](index=109&type=chunk) [Item 3. Defaults Upon Senior Securities](index=32&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during this reporting period - There were no defaults upon senior securities during this reporting period[110](index=110&type=chunk) [Item 4. Mine Safety Disclosures](index=32&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) There were no mine safety disclosures during this reporting period - There were no mine safety disclosures during this reporting period[111](index=111&type=chunk) [Item 5. Other Information](index=33&type=section&id=Item%205.%20Other%20Information) This section discloses that no Rule 10b5-1(c) trading plans were adopted, modified, or terminated by the company's directors or officers during the reporting period [Rule 10b5-1 Trading Plans](index=33&type=section&id=Rule%2010b5-1%20Trading%20Plans) For the three months ended June 30, 2025, no contracts, instructions, or written plans intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) for buying or selling securities were adopted, modified, or terminated by the company's directors or officers - For the three months ended June 30, 2025, no contracts, instructions, or written plans intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) for buying or selling securities were adopted, modified, or terminated by the company's directors or officers[112](index=112&type=chunk) [Item 6. Exhibits](index=33&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with this quarterly report, including articles of incorporation, bylaws, and certifications from the Chief Executive Officer and Chief Financial Officer Exhibit List | Exhibit Number | Exhibit Description | Filed with this Report | | :--- | :--- | :--- | | 3.1 | Articles of Incorporation | No | | 3.2 | Amendments | No | | 3.3 | Amalgamated Articles | No | | 3.4 | By-laws | No | | 31.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | Yes | | 31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | Yes | | 32† | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | Yes | | 101.INC | Inline XBRL Instance Document | Yes | | 101.SCH | Inline XBRL Taxonomy Extension Schema Document | Yes | | 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | Yes | | 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | Yes | | 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | Yes | | 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | Yes | | 104 | Cover Page Interactive Data File | Yes | - The certification document for Exhibit 32 is not deemed filed with the Securities and Exchange Commission and shall not be incorporated by reference into any filing by the company under the Securities Act of 1933 or the Securities Exchange Act of 1934[114](index=114&type=chunk) Signatures [Signature Details](index=34&type=section&id=Signatures_Details) This report was duly signed by Arun Menawat, Chief Executive Officer, and Rashed Dewan, Chief Financial Officer, of Profound Medical Corp. on August 14, 2025 - This report was signed by Arun Menawat, Chief Executive Officer, and Rashed Dewan, Chief Financial Officer, of Profound Medical Corp. on August 14, 2025[118](index=118&type=chunk)

Core Viewpoint - Profound Medical Corp. is set to announce its second quarter 2025 financial results on August 14, 2025, and will host a conference call to discuss these results and business developments [1][2]. Company Overview - Profound Medical Corp. is a commercial-stage medical device company focused on developing and marketing customizable, incision-free therapies for the ablation of diseased tissue [3]. Product Offerings - The company is commercializing TULSA-PRO, a technology that integrates real-time MRI, AI-enhanced planning, and robotically-driven transurethral ultrasound for the treatment of prostate diseases. The TULSA procedure is designed to preserve urinary continence and sexual function while effectively targeting prostate tissue [4]. - TULSA is a single-session, incision-free procedure that operates at temperatures of 55-57°C, with no associated bleeding or hospital stay required, allowing for quick recovery [4]. - Profound is also marketing Sonalleve, a therapeutic platform approved for treating uterine fibroids and palliative pain from bone metastases. It has received CE marking and FDA approval under a Humanitarian Device Exemption for specific treatments [5].

Incision-Free Ablative Intervention With Vision TULSA – A real-time imaging guided therapy platform for ablation of prostate tissue malignant or benign Corporate Presentation | May 2025 © 2025 Profound Medical Corp. NASDAQ: PROF, TSX: PRN 1 • FDA cleared in August 2019; first commercial site in January 2020, AI assistant cleared in May 2024 • Using patient cash pay business model installed >50 sites, >3,000 patients treated • New reimbursement codes established by AMA, placed by CMS in urology Level 7, effe ...