A maker of MRI-guided ultrasound systems that destroy diseased tissue with no incisions or radiation. Its TULSA-PRO ablates prostate cancer and tumors from inside the urethra, while Sonalleve tackles uterine fibroids, bone pain, and other conditions. The company grew out of Toronto's Sunnybrook Research Institute in 2008 and later acquired Sonalleve from Philips — a name blending "son" (ultrasound) with "alleviate," fitting for a device that erases tumors with focused sound waves.
Revenue fell 54% sequentially to $2.5M, and cash declined to $38.3M as the company works to avoid a projected debt covenant breach.
fell by more than half from the prior quarter. Revenue was $2.5 million, up 12% from a year ago, but the sequential decline from $5.3 million reflected the lumpy timing of capital equipment sales, while the net loss narrowed to $9.5 million on lower operating expenses. The company ended the quarter with $38.3 million in cash and must resolve a projected debt by the end of the month.
Key takeaways
rose 12.3% to $2.5 million, driven by higher capital equipment sales in the U.S. and overseas, but fell 53.5% sequentially from $5.3 million, illustrating the quarter-to-quarter variability of capital system purchases.
expanded 5.2 percentage points to78.4%, the highest level in the periods shown, reflecting a favorable product mix shift toward higher-margin capital equipment.
The net loss narrowed to $9.5 million from $15.7 million a year ago, aided by a20% decline in SG&A expenses to $14.0 million for the first half on lower sales headcount, reduced travel, and lower insurance premiums.
What changed
The going-concern warning lifted in the prior quarter after a December2025 equity raise remains resolved; management reaffirmed its12-month funding runway statement.
The projected CIBC liquidity by June30,2026, flagged in every filing since Q3 FY2025, has not yet been resolved and remains an immediate risk.
The in internal controls over recognition, flagged in every prior filing, was again absent from disclosure in this10-Q, with no remediation timeline provided.
What to watch
Whether the company secures a waiver or amendment for the CIBC liquidity before the projected June30,2026, breach date, or if the $4.5 million debt is accelerated.
Whether the $2.5 million quarterly level represents a return to pre-Q3 FY2025 run-rate or a temporary low between larger capital orders, and if the growth trajectory can be sustained without additional financing.
The pace of cash consumption relative to the $38.3 million balance, given the quarterly operating cash outflow of $11.3 million and management's12-month funding runway statement.
Section summaries
Management's Discussion and Analysis
Revenue rose 62% in H1 FY2026 to $7.8M driven by higher capital sales, while net loss narrowed 37% to $16.6M on lower SG&A.
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Total grew 62% to $7.8M for H1 FY2026, driven by higher capital equipment sales in the U.S. and overseas; recurring non-capital revenue also increased.
improved to 74% for H1 FY2026 from 72% a year ago, reflecting a favorable product mix shift toward higher-margin capital equipment.
Research and development expenses were flat at $10.9 million for the first half as increased headcount and consulting for product cost reduction were offset by lower clinical trial costs following the completion of CAPTAIN trial enrollment.
Cash and equivalents fell to $38.3 million from $50.3 million at the end of the prior quarter, with $11.3 million used in operations.
Management states that existing cash and product sales are expected to fund operations for at least the next12 months, and there have been no material changes to the risk factors described in the2025 Annual Report.
The sequential decline from $5.3 million to $2.5 million confirms the pattern of lumpy capital sales timing that was flagged as a watch item in the prior quarter.
Any disclosure on remediation of the in internal controls over recognition, which has been flagged in every prior filing but was absent from this10-Q.
expenses fell 20% to $14.0M for H1 FY2026 due to lower sales headcount, reduced travel, lower insurance premiums, and a decline in .
expenses were flat at $10.9M for H1 FY2026 as increased headcount and consulting for product cost reduction were offset by lower clinical trial costs after CAPTAIN trial enrollment completion.
Net loss narrowed 37% to $16.6M for H1 FY2026, aided by a $3.9M swing to a from stronger EUR and USD rates.
Cash stood at $38.3M as of June 30, 2026; management expects existing cash and product sales to fund operations for at least the next 12 months.
From time to time, we may be subject to legal proceedings. We are not currently a party to or aware of any proceedings that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition or results of operations. Regardless…
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From time to time, we may be subject to legal proceedings. We are not currently a party to or aware of any proceedings that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition or results of operations. Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.
Our business is subject to a number of risks, including risks that may prevent us from achieving our business objectives or may adversely affect our business, financial condition, results of operations, cash flows, and prospects. These risks are discussed more fully in the secti…
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Our business is subject to a number of risks, including risks that may prevent us from achieving our business objectives or may adversely affect our business, financial condition, results of operations, cash flows, and prospects. These risks are discussed more fully in the section entitled “Risk Factors” in our Annual Report on Form 10-K filed with the SEC on March 5, 2026 (the “2025 Annual Report”). There have been no material changes to the risk factors described in the 2025 Annual Report.