EBR Systems, Inc. (Form: 10-K, Received: 03/24/2025 17:29:49)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2024

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from____to

Commission file number: 000-56671

EBR SYSTEMS, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware

(State or Other Jurisdiction of

Incorporation or Organization)

51-1164669

(I.R.S. Employer

Identification No.)

480 Oakmead Parkway

Sunnyvale, CA

(Address of Principal Executive Offices)

94085

(Zip Code)

(408) 720-1906

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act: None

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None.	None.	None.

Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $0.0001 per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No x

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	x	Smaller reporting company	x
		Emerging growth company	x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ¨

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ¨

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b) . ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant was approximately $143 million, based on the closing price per share of the Registrant’s common stock on the Australian Securities Exchange (“ASX”) and the daily exchange rate reported by Oanda for conversion of Australian dollars into U.S. dollars on June 30, 2024.

As of March 15, 2025, the registrant had 372,851,324 shares of common stock, par value $0.0001 per share, including shares underlying all issued and outstanding Chess Depository Interests (“CDIs”), outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the definitive proxy statement for the 2025 Annual Meeting of Stockholders of the Registrant (the “Proxy Statement”), are incorporated by reference into Part III of this Annual Report on Form 10-K. The Proxy Statement will be filed with the U.S. Securities and Exchange Commission within 120 days of the Registrant’s fiscal year ended December 31, 2024.

EBR SYSTEMS, INC.

ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2024

TABLE OF CONTENTS

		Page
Part I

Item 1. Business		3
Item 1A. Risk Factors		17
Item 1B. Unresolved Staff Comments		62
Item 1C. Cybersecurity		62
Item 2. Properties		64
Item 3 Legal Proceedings		64
Item 4. Mine Safety Disclosures		64

Part II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		64
Item 6. [Reserved]		65
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations		66
Item 7A. Quantitative and Qualitative Disclosures about Market Risk		75
Item 8. Financial Statements and Supplementary Data		76
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		101
Item 9A. Controls and Procedures		101
Item 9B. Other Information		101
Item 9C. Disclosure Regarding Foreign Jurisdiction that Prevent Inspections		101

Part III

Item 10. Directors, Executive Officers, and Corporate Governance		102
Item 11. Executive Compensation		102
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		102
Item 13. Certain Relationships and Related Transactions and Director Independence		102
Item 14. Principal Accountant Fees and Services		102

Part IV

Item 15. Exhibits, Financial Statements and Schedule		103
Item 16. Form 10-K Summary		105

Signatures		106

In this report, unless otherwise stated or the context otherwise indicates, the terms “EBR Systems,” “EBR,” “the Company,” “we,” “us,” “our” and similar references refer to EBR Systems, Inc. and its consolidated subsidiaries. The EBR logo, and other trademarks, trade names or service marks of EBR Systems, Inc. appearing in this Annual Report on Form 10-K are the property of EBR Systems, Inc. All other trademarks, trade names and service marks appearing in this Annual Report on Form 10-K are the property of their respective owners. Solely for convenience, the trademarks and trade names in this report may be referred to without the ® and ™ symbols, but such references should not be construed as any indicator that their respective owners will not assert their rights thereto.

Table of Contents

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K (this “Annual Report”) contains forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available to our management. Some of the statements under “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business” and elsewhere in this Annual Report contain forward-looking statements. In some cases, you can identify forward-looking statements by the following words: “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “seek,” “believe,” “estimate,” “predict,” “potential,” “continue,” “contemplate,” “possible” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words.

These statements involve risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. Although we believe that we have a reasonable basis for each forward-looking statement contained in this Annual Report, we caution you that these statements are based on a combination of facts and factors currently known by us as of the date of this Annual Report and our projections of the future, about which we cannot be certain. Forward-looking statements in this Annual Report include, but are not limited to, statements about:

the ability of our clinical trials to demonstrate safety and effectiveness of our WiSE system, our ability to obtain the U.S. Food and Drug Administration (“FDA”) approval of our WiSE system, and the timing of such FDA approval;

the timing of commencement and focus of our ongoing and future studies and clinical trials, and the reporting of data from those clinical trials;

our expectations regarding the results of our clinical studies and research and development programs, including the timing for patient enrollment and the timing and availability of data from such clinical trials;

the size of the market opportunity for our WiSE system, including our estimates of the number of patients who suffer from the diseases we are targeting and the overall size of our target market;

our ability to develop, and advance our WiSE system into, and successfully complete, clinical trials;

developments and projections relating to our competitors and our industry and the success of competing products that are or may become available;

the beneficial characteristics, safety, and effectiveness of our products;

our ability to obtain and maintain regulatory approval of or Conformité Européene (“CE mark”) Certificates of Conformity for our products;

our plans relating to the further development and commercialization of our products, including additional indications we may pursue;

existing regulations and regulatory developments in the United States and other jurisdictions;

our plans and ability to obtain or protect intellectual property rights, including extensions of existing patent terms where available and our ability to avoid infringing the intellectual property rights of others;

our ability to effectively manage our growth, including the need to hire additional personnel and our ability to attract, recruit and retain such personnel, and maintain our culture;

our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;

the performance of our third-party suppliers, contract research organizations (“CROs”) and manufacturers;

our financial performance; and

the period over which we estimate our existing cash will be sufficient to fund our future operating expenses and capital expenditure requirements.

You should refer to the “Item 1A. Risk Factors” section of this Annual Report for a discussion of other important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. As a result of these factors, we cannot assure you that the forward-looking statements in this Annual Report will prove to be accurate. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and existing risks and uncertainties may become more material, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Annual Report.

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In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Annual Report, and although we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted a thorough inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

Part I

Item 1. Business

Overview

EBR Systems, Inc., a Delaware corporation incorporated in 2003, is a U.S. based medical device company that is developing the WiSE CRT System, an implantable cardiac pacing system able to provide stimulation to endocardial heart tissue for the correction of heart rhythm conditions without requiring the use of wires or leads. This implantable, investigational device delivers left-ventricle endocardial pacing for cardiac resynchronization therapy (“CRT”), without the use of wires or leads going into the heart. An investigational device is one that has not been cleared or approved for commercial use by the U.S. Food and Drug Administration (the “FDA”). The left ventricle (“LV”) is a chamber of the heart responsible for pumping blood through the aorta to the rest of the body, such that ‘left-ventricle endocardial’ pacing refers to electrical pacing delivered inside the left ventricle of the heart. Conventional cardiac rhythm management (“CRM”) systems use leads to conduct electricity from an implantable pulse generator (“IPG”) to electrodes that deliver therapeutic electric pulses to heart tissue. While leads are a critical part of most CRM systems, they have long been recognized as a primary shortcoming of these systems and are a leading cause of device failure. Our leadless system is designed to address this shortcoming.

Our proprietary WiSE CRT technology is engineered to benefit patients who have not seen success with conventional CRT or face high complication risks. Conventional CRT has limitations related to the need for lead placement and complication risks of occlusion, infection or concurrent illness. By eliminating lead requirements for left ventricular pacing, WiSE CRT introduces a novel approach to cardiac pacing, with the potential to transform CRT delivery. If approved by the FDA, our system would allow clinicians to provide CRT for patients where a LV lead has failed or is deemed high-risk by their doctor. A patient in whom standard CRT upgrade is not advisable due to known relative contraindication to coronary sinus (“CS”) lead implant would be deemed high-risk by their doctor.

The initial focus of our WiSE CRT technology is to serve as an adjunct to existing implanted cardiac devices, providing CRT to those for whom traditional methods have failed or are not viable. In support of capturing this opportunity, WiSE CRT has been granted a Breakthrough Device Designation (“BDD”) by the FDA, which provides us with greater access to the FDA during the premarket review phase, a prioritized review process, and potentially up to three years of favorable reimbursement coverage in the U.S. following such approval. We completed a pivotal clinical study, SOLVE-CRT (Stimulation of the Left Ventricular Endocardium for Cardiac Resynchronization Therapy) and submitted the final module of our modular pre-market approval (“PMA”) submission on August 28, 2024. For a more comprehensive discussion of the SOLVE-CRT study, see “SOLVE-CRT Clinical Trial” below.

Products

The WiSE CRT System, the Company’s only product candidate, is an implantable cardiac pacing system capable of delivering pacing level energy to the heart without using a lead/ wire. The technology used to achieve this leadless pacing is based on converting ultrasound energy to electrical energy. The system consists of a battery connected to an ultrasound transmitter that is implanted subcutaneously and the electrode implanted in the LV endocardium. The system requires a co-implant (e.g., pacemaker, defibrillator, or CRT) capable of right ventricular (“RV”) pacing. The transmitter senses the RV pacing spike of the co-implant and within approximately five milliseconds emits an ultrasonic pulse to the electrode, which converts the ultrasound energy received to electrical energy at sufficient amplitudes to pace/ stimulate cardiac tissue. The intensity of the ultrasound energy used is very low, even in comparison to levels used for echocardiographic imaging.

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The leadless WiSE Electrode essentially replaces the pacing function of a traditional LV lead. The WiSE CRT System is used in conjunction with a typical, commercially available implanted pacemaker, implantable cardioverter defibrillator (“ICD”), or CRT device with an RV pacing function. Immediately after sensing an RV pacing output from the co-implanted device, the WiSE CRT System triggers an ultrasound pulse targeted at the Electrode to pace the left ventricle. The sequence of sensing, transmitting, receiving, and stimulating the left ventricle is essentially simultaneous with the co-implanted device’s RV pacing output and thus provides biventricular (“BiV”) pacing analogous to CRT pacing devices.

Components of the WiSE CRT System include the Delivery Sheath and Electrode Catheter which delivers the Electrode, the Pulse Generator (Transmitter and Battery), and the Programmer (Figure 1.1).

Figure 1.1 How WiSE CRT System Provides Leadless Cardiac Pacing

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SOLVE-CRT Clinical Trial

The SOLVE-CRT investigational device exemption (“IDE”) study is a prospective, multicenter trial consisting of an initial randomized, double-blind part and a subsequent single-arm part. It was originally designed as a randomized, multinational, double-blind study to enroll 350 patients from up to 45 centers. Patients were enrolled if they received right ventricular (“RV”) pacing from a prior pacing implant and either did not have a fully functioning CRT system because of lead issues (Previously Untreatable [“PU”]), did not respond to CRT therapy (Non-Responders [“NR”]), or were considered high risk for a standard CRT upgrade (High-Risk Upgrade [“HRU”]), which included those with a cardiac pacemaker or intracardiac defibrillator (“ICD”) requiring upgrade to CRT.

The first patient was enrolled in the SOLVE-CRT study in January 2018. Enrollment was severely impacted by the COVID-19 pandemic and was paused in March 2020 after 108 patients were enrolled. At that time, the investigators worked with the FDA to revise the clinical protocol, implementing a single-arm, non-randomized part to complete the study. Central to this strategy was a differentiation of the three original patient groups and the requirements for demonstration of safety and efficacy. For the patients in the PU and HRU groups, CRT was an approved therapy, and the WiSE CRT System could be viewed as an alternate method of providing CRT when conventional CRT was not possible, so a Single-Arm study with pre-specified objective performance goals was appropriate. In contrast, the NR group had suboptimal responses to conventional CRT due to a diverse set of pathophysiologic mechanisms. Thus, there was a different threshold for scientifically acceptable evidence for safety and effectiveness, and this group was excluded from the study continuation.

The modified study was designed to enroll up to 300 patients with a pre-specified interim analysis with early stopping rules after enrolling 183 patients. All 183 patients (PU/HRU/NR) were included in the safety analysis while only the PU and HRU patients (n = 100) were included in the efficacy analysis. The primary safety endpoint was the freedom from device- or procedure-related complications (Type I). The primary efficacy endpoint was the reduction in left ventricular systolic volume (“LVESV”). LVESV is a key marker of advanced heart failure and goes up as the HF progresses. All versions of the study protocol were approved by relevant institutional review boards and the FDA under an IDE application. All patients provided written informed consent.

At the interim analysis, the primary 6-month efficacy endpoint was met with a 16.4% (95% confidence interval [“CI”], 11.7% to 21.0%) reduction in mean LVESV, significantly favorable to the 9.3% performance goal (p = 0.003). The primary 6-month safety endpoint was met with an 80.9% (148/183 participants) (lower boundary of the one-sided 98.8% CI, 73.4%) rate of freedom from device- or procedure-related (Type I) complications, significantly favorable to the 70% performance goal (p < 0.001). Since both the primary efficacy and safety endpoints met the pre-specified stopping rules for interim analysis, the trial was concluded early for success.

Secondary endpoints included an acoustic pacing capture threshold (“APCT”) of < 2.9 mJ achieved in 95.2% of participants and APCT stability achieved in 81.3% of participants, indicating that the WiSE CRT System was capable of delivering CRT in the majority of patients enrolled in the study and that the energy required to deliver CRT remained stable. In addition, 93.1% of participants achieved a mean percent BiV pacing, 46.1% achieved an increase in Left ventricular ejection fraction (“LVEF”) ≥ 5%, and 65.5% achieved an increase of ≥ 5 points in Kansas City Cardiomyopathy Questionnaire.

We are seeking to demonstrate with the SOLVE-CRT study that leadless left ventricular endocardial pacing (“LVEP”) with the novel WiSE CRT System is feasible, safe, and effective for delivering CRT in patients with advanced HF.

Clinical Conclusion

Subject to the review and determination by the FDA, we believe the performance and safety of the WiSE CRT System is supported by results of the SOLVE-CRT pivotal clinical trial, and peer-reviewed clinical literature. The System has a high implant success rate and delivers significant benefit to moderate to severe HF patients, including improved clinical and functional status and reverse remodeling. Further, complication rates observed with the WiSE CRT System are similar to those observed with other approaches to delivering CRT. The risks associated with the use of the System are acceptable when weighed against the potential benefits to the indicated patient populations. This is of particular importance as the patient populations treated in the EBR-sponsored studies have failed or not responded to conventional CRT and have a poor prognosis. Providing clinical benefit to these high-risk patients shows that the WiSE CRT System can meet the identified unmet clinical need for novel approaches to delivering CRT for the treatment of HF.

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Further, we believe the design strategy for the WiSE CRT System results in a leadless device that is 95% smaller by volume compared to commercially available leadless pacemakers, such as Medtronic’s Micra or Abbott’s Aveir. Consequently, subject to approval by the FDA, we believe WiSE CRT will be the only therapy demonstrated in clinical study that can deliver LVEP and potentially broaden the spectrum of patients who could benefit from CRT.

Status of the FDA Review

We submitted the final module of our PMA submission on August 28, 2024. Under standard review, the FDA has 180 days to review the PMA. In January 2025, the FDA completed the manufacturing site Pre-Approval Inspection (“PAI”) with no Form FDA 483 observations. Thus, subject to FDA review and approval, and pre-commercial activities described under “Markets and Distribution” below, we expect to commercially launch the WiSE CRT System in the U.S. in 2025.

Markets and Distribution

If approved by the FDA and other regulatory authorities, we intend to commercially launch WiSE with the focus on driving adoption of WiSE at key, high-volume, luminary sites within the U.S. to be followed by select, high-volume sites in markets outside the U.S. (“OUS”) that we are targeting after evaluating regulatory and reimbursement considerations.

U.S. Strategy

We plan to implement a phased Limited Market Release (“LMR”), with the following phases:

LMR Phase 1: Initial Target Accounts

Launch in target accounts from the SOLVE-CRT (Stimulation of the Left Ventricular Endocardium for Cardiac Resynchronization Therapy) pivotal trial.

Leverage existing relationships with trial sites to streamline patient identification and device implantation.

LMR Phase 2: Expansion and Optimization

Strategically expand our field team to broaden our market presence into additional high-volume sites.

Focus on optimizing the customer training programs and enhancing EBR's business operations.

LMR Phase 3: Increase Implants Per Site

The field team will focus on increasing the number of cases per month per site by improving hospital implant workflows and familiarity with the technology.

Full Market Release

Expand market presence and maximize product adoption.

Utilize refined business operations and continue scaling the field team.

Focus on expanding into additional sites, leveraging the experience and efficiency gained from the LMR.

If approved, we anticipate our average selling price (“ASP”) in the U.S. will be approximately $45,000 per WiSE CRT system. As a result of its breakthrough device designation (“BDD”), our WiSE CRT technology is expected to be eligible for incremental payment coverage in the U.S. for up to three years following potential FDA approval.

OUS Strategy

Our OUS commercial activities will not commence until we obtain regulatory approvals and certification in select, target markets. Regulatory submissions in these markets will not likely commence until sometime after FDA approval, if received. These initial target markets include Australia, the United Kingdom, and the European Union. The timing of launch in each of these OUS markets thus depends on meeting additional regulatory requirements, as well as on securing the appropriate payment coverage for WiSE in each market.

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Competitive Environment

Significant advances in pacing technology have been made in pacing technology have been made over the last 50 years including: multi-chamber pacing, improved rate of responsiveness, devise size reduction, internet-based remote monitoring, and market increases in battery longevity. However, the basic system format of using an implantable pulse generator (“IPG”) connected to one or more leads to stimulate the heart muscle tissue, has remained unchanged over this time.

The most recent advance in the evolution of pacemakers has been the advent of leadless cardiac pacing systems, as most complications associated with pacemakers have been due to leads. To overcome this, leadless pacing systems have been developed in which the IPG and stimulating electrode are combined into a single unit that can be fully implanted inside the heart chamber. Advantages of this approach over lead-based systems include greater efficiency, system simplicity, and ease of implantation. However, these systems also have certain limitation, including the need to retrieve the device in future years due to battery depletion, risk of cardiac perforation and thrombus, and infection risk. Additionally, because of their size and thrombogenicity (tendency to generate and release clots that might cause heart attack or stroke) they cannot be used within the left ventricle.

The three major CRM device companies (Medtronic plc, Boston Scientific, and Abbott) have each developed leadless cardiac pacemakers that can be implanted in the right ventricle, with Abbott having an approved device that can be used in the right atrium. Leadless devices are expected to play an increasingly important role in the future pacemaker market.

Leadless Cardiac Rhythm Management Landscape

Figure 1.2: Current Leadless Pacemakers for Cardiac Pacing*

*CAUTION: The WiSE CRT System is an investigational device. Limited by Federal (US) law to investigational use only.

Opportunity for WiSE

While the leadless pacemakers currently on the market are for bradycardia indication, it is anticipated that the entry of Abbott’s Aveir DR dual chamber device could further increase the adoption of leadless pacemakers.

It has been reported that up to 30% of patients with pacemakers develop pacing induced heart failure within four years. Thus, many of the patients implanted with leadless pacemakers may require an upgrade to CRT at a later date. The WiSE CRT System is the only device able to upgrade these patients to CRT.

A 14-patient clinical study, presented during Asia-Pacific Heart Rhythm Society meeting in 2022, demonstrated that WiSE is able to work in conjunction with Medtronic’s Micra to provide BiV pacing and an entirely leadless option for upgrading these patients. Only WiSE can provide these patients with an entirely leadless upgrade solution.

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Supply of Components

EBR’s WiSE CRT System is comprised of five key components:

an implantable endocardial electrode (Electrode);

a catheter delivery system (used to implant the Electrode);

a transmitter that operates the system (Transmitter);

a battery that powers the Transmitter; and

a programmer (device that programs the WiSE CRT System).

We source components and sub-assemblies for components from external suppliers and contract manufacturers. We require our suppliers and contract manufacturers to be compliant with the relevant quality standards and certifications required to manufacture medical device products such as the WiSE CRT System.

We conduct our own quality assessment and performance testing of components and subassemblies that we receive from our suppliers. We have developed and maintain the software that runs the WiSE CRT System which is uploaded into the transmitter and programmer. We inspect and evaluate the entire system prior to supplying it for use in patients.

To date, production of our WiSE CRT System has been conducted on a small scale due to the low volumes required for clinical and product optimization studies. We believe that our existing suppliers have the capacity and capability to manufacture at volumes sufficient to meet the anticipated initial commercial demand for WiSE. We will likely seek to bring certain manufacturing processes in-house over time as we seek to reduce the cost of production. Many of the components or sub-assemblies used in the WiSE CRT System are custom built but use standard raw materials that can be provided by a variety of suppliers. Certain components within our sensor/transmitter and the receiver/transducer are unique to the WiSE CRT System design and functionality and would require redesign efforts if we need to change vendors arise. For instance, our piezo electric crystal is a single source component purchased from CTS Advanced Materials. We do not currently have a formal master supplier agreement in place with CTS as we generally procure on a purchase order basis. We work closely with our suppliers and have plans and measures in place to help ensure continuity of supply while maintaining high quality and reliability. Generally, we have been able to obtain adequate supplies of such raw materials and components. However, due to the U.S. FDA’s manufacturing requirements and those of other regulatory authorities, we may not be able to quickly establish additional or replacement sources for certain components or materials if we experience a sudden or unexpected reduction or interruption in supply and are unable to develop alternative sources.

Intellectual Property

The generation and protection of intellectual property, including patents, trade secrets, trademarks, proprietary technology, proprietary manufacturing techniques, and know-how, is of critical importance in our field and in biotechnology generally. We rely on a combination of trade secrets, patent filings and other intellectual property protections in an effort to protect our WiSE CRT System as well as related methods of use. We will be able to protect our WiSE CRT System and methods of use from unauthorized use by third parties only to the extent that our technology is effectively and diligently maintained as trade secrets or where applicable, covered by valid and enforceable patents. Our commercial success may also depend on whether we can defend our patents against third-party challenges and on operating without infringing on the intellectual property rights of others.

As of December 31, 2024, our WiSE CRT System and related technologies are covered by an extensive portfolio of patents which includes 63 granted U.S. patents, 55 granted non-U.S. patents, and 17 pending patent applications that cover different aspects of the WiSE CRT System including the technological inventions incorporated in:

leadless cardiac pacing using ultrasound transduction;

the sensor/transmitter;

the receiver/stimulator electrode;

the programmer;

the delivery system; and

mechanisms for detecting the location of the receiver/transducer electrode.

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Our patents provide protection of the technology incorporated in the WiSE CRT System and a subset of these patents have expiry dates between 2025 and 2029. One pertinent patent related to the method of using an isotropic receiver-stimulator expires December 2025. However, other active patents (including patents in the same family) with device claims that provide similar coverage of the isotropic receiver-stimulator concepts and those directed to the overarching system and method are not expiring until 2032. Other patents directed to the technology incorporated in the WiSE CRT System expire 2030 and later. The United States has a mechanism, referred to as a patent term extension (“PTE”), for patent holders to extend the period of protection provided by their patents to compensate for time involved in conducting clinical studies and securing regulatory approval from the FDA. PTE is granted by the United States Patent and Trademark Office (“USPTO”) based on a formula and can extend the term of a patent by a maximum of five years. In view of the current timeline projected by us, PTE is expected to extend the expiry date for one of our key patents by four to five years depending on the timing of the FDA approval process. We will be able to file for PTE when and if the WiSE CRT System has been approved by the FDA.

We continue to conduct research and development activities directed at improving the use and performance of the WiSE CRT System and related technologies. This has resulted in the recent filing of new patent applications and may result in new inventions that potentially could provide opportunities to file additional patent applications. In addition, we have experience over many years with the WiSE CRT System and the underlying technology for providing leadless cardiac stimulation using ultrasound transduction. This has resulted in extensive know-how and trade secrets that are likely to represent significant barriers to any emerging competitors considering the development of a similar product.

Trade Secrets

We also rely on trade secrets, technical know-how and continuing innovation to develop and maintain our competitive position. We seek to protect our proprietary information with respect to our employees and collaborators by obtaining executed agreements requiring protection of our trade secrets and assignment of patents to us. Internal processes around the production of such things as the receiver electrode are complex and require extensive training and fixturing, lending credence to our technical know-how reliance.

Trade secrets are only beneficial if the trade secret can be protected, which in turn requires certain internal record keeping and security measures. Further, third parties are not precluded from practicing such trade secret methods developed on their own because there is no right to prevent others from this innovation. Trade secrets are difficult to protect and enforce and therefore provide us with only limited protection. Trade secrets must be protected within the company. Those employees and former employees with knowledge of our trade secrets must not share them with a third party. It is difficult to ensure that our trade secrets will be kept secret and not shared with a third party, such as a third-party competitor. For this and more comprehensive risks related to our intellectual property, please see “Item 1A. Risk Factors—Risks Related to Intellectual Property.”

Trademarks

We also have applied for and been awarded certain trademarks as shown in the table below. We intend to maintain and protect our trademarks from unauthorized use.

Country	Trademark	Status	Reg. Date	Reg. No
Australia	EBR SYSTEMS	Registered	Dec 20 2021	2212887
Australia	WISE	Registered	Nov 20 2019	1951115
China	EBR SYSTEMS	Registered	Mar 28 2022	59571858
European Union	EBR SYSTEMS	Registered	Feb 22 2022	18564067
European Union	WISE	Registered	Feb 5 2021	18169605
Japan	EBR SYSTEMS	Registered	Jan 24 2022	6503797
Japan	WISE	Registered	Aug 11 2021	6427134
United Kingdom	EBR SYSTEMS	Registered	Dec 24 2021	UK00003698958
United Kingdom	WISE	Registered	Feb 8 2021	UK00003592127
United States of America	EBR SYSTEMS	Registered	Nov 22 2022	6908275
United States of America	WICS	Registered	Oct 6 2009	3692984
United States of America	WICS WIRELESS CARDIAC STIMULATION	Registered	Jan 10 2017	5118101
United States of America	WISE	Registered	Dec 13 2022	6925121
United States of America	WISE	Registered	Sep 19 2023	7169926

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Government Regulation of Medical Devices

We intend to seek regulatory approval and certification for the WiSE CRT System in Australia, UK, and EU after initial commercialization in the U.S., pending FDA approval, and securing adequate reimbursement. We will evaluate the regulatory cost associated with securing CE Mark approval, which would allow it to be sold and used in countries within the E.U. and, potentially although not certainly, the U.K.

United States

Regulation of Medical Devices in the United States

The U.S. Food, Drug and Cosmetic Act (“FDCA”) classifies medical devices into one of three categories based on the risks associated with the device and the level of control necessary to provide reasonable assurance of safety and effectiveness. Class I devices are deemed to be low risk and are subject to the fewest regulatory controls. Class III devices are generally the highest risk devices and are subject to the highest level of regulatory control and premarket approval to provide reasonable assurance of the device’s safety and effectiveness.

Establishments that manufacture and/or distribute devices, including manufacturers, contract manufacturers, sterilizers, repackagers and relabelers, specification developers, reprocessors of single-use devices, remanufacturers, initial importers, manufacturers of accessories and components sold directly to the end user, and U.S. manufacturers of export-only devices, are required to register their establishments with the FDA and provide the FDA a list of the devices that they handle at their facilities.

Pre-market Authorization and Notification

While most Class I and some Class II devices can be marketed without prior FDA authorization, most medical devices can be legally sold within the U.S. only if the FDA has: (i) approved a premarket approval application, or PMA, prior to marketing, generally applicable to Class III devices; or (ii) cleared the device in response to a premarket notification, or 510(k) submission, generally applicable to Class I and II devices. Some devices that have been classified as Class III are regulated pursuant to the 510(k) requirements because the FDA has not yet called for PMAs for these devices. Other less common regulatory pathways to market for certain devices include the de novo classification process, the humanitarian device exception, or a product development protocol.

The 510(k) Clearance Process

Under the 510(k) process, the manufacturer must submit to the FDA a premarket notification, demonstrating that the device is “substantially equivalent” to a legally marketed predicate device.

A predicate device is a legally marketed device that is not subject to premarket approval, i.e., a device that was legally marketed prior to May 28, 1976, often referred to as a preamendment device, and for which a PMA is not required, a device that has been reclassified from Class III to Class II or I, or a device that was previously found substantially equivalent through the 510(k) process. To be “substantially equivalent,” the proposed device must have the same intended use as the predicate device, and either have the same technological characteristics as the predicate device or have different technological characteristics and not raise different questions of safety or effectiveness than the predicate device. Clinical data is sometimes required to support substantial equivalence.

After a 510(k) premarket notification is submitted, the FDA determines whether to accept it for substantive review. If it lacks necessary information for substantive review, the FDA will refuse to accept the 510(k) notification. If it is accepted for filing, the FDA begins a substantive review. By statute, the FDA has a performance goal to complete its review of 95% of 510(k) submissions within 90 days of receipt. As a practical matter, clearance often takes longer, because the FDA can request additional dates and information, which pauses the review clock for up to 180 days, and clearance is never assured. Although many 510(k) premarket notifications are cleared without clinical data, the FDA may require further information, including clinical data, to make a determination regarding substantial equivalence. If the FDA agrees that the device is substantially equivalent, it will grant clearance to commercially market the device.

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If the FDA determines that the device is not “substantially equivalent” to a predicate device, or if the device is automatically classified into Class III, the device sponsor must then fulfill the much more rigorous premarketing requirements of the PMA approval process or seek reclassification of the device through the de novo process. A manufacturer can also submit a petition for direct de novo review if the manufacturer is unable to identify an appropriate predicate device and the new device or new use of the device presents a moderate or low risk.

After a device receives 510(k) clearance, any modification that could significantly affect its safety or effectiveness, or that would constitute a new or major change in its intended use, will require a new 510(k) clearance or, depending on the modification, could require a PMA application or de novo classification. The FDA requires each manufacturer to determine whether the proposed change requires submission of a 510(k) or a PMA in the first instance, but the FDA can review any such decision and disagree with a manufacturer’s determination. Many minor modifications are accomplished by a letter-to-file in which the manufacturer documents the change in an internal letter-to-file. If the FDA disagrees with a manufacturer’s determination regarding whether a new premarket submission is required for the modification of an existing device, the FDA can require the manufacturer to cease marketing and/or recall the modified device until 510(k) clearance or approval of a PMA application is obtained. In addition, in these circumstances, the FDA can impose significant regulatory fines or penalties for failure to submit the requisite PMA application(s).

The PMA Approval Process

Following receipt of a PMA application, the FDA conducts an administrative review to determine whether the application is sufficiently complete to permit a substantive review. If it is not, the agency will refuse to file the PMA. If it is, the FDA will accept the application for filing and begin the review. The FDA, by statute , has a performance goal to review 90% of PMA applications within 180 days, if advisory committee input is not required, and within 320 days, if advisory committee input is required, although the review of an application more often occurs over a significantly longer period of time. During this review period, the FDA may request additional information or clarification of information already provided, and the FDA may issue a major deficiency letter to the applicant, requesting the applicant’s response to deficiencies communicated by the FDA. The FDA considers a PMA or PMA supplement to have been voluntarily withdrawn if an applicant fails to respond to an FDA request for information (i.e., major deficiency letter) within a total of 360 days. Before approving or denying a PMA, an FDA advisory committee may review the PMA at a public meeting and provide the FDA with the committee’s recommendation on whether the FDA should approve the submission, approve it with specific conditions, or not approve it. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.

Prior to approval of a PMA, the FDA may conduct inspections of the clinical trial data and clinical trial sites, as well as inspections of the manufacturing facility and processes. Overall, the FDA review of a PMA application generally takes between one and three years but may take significantly longer. The FDA can delay, limit, or deny approval of a PMA application for many reasons, including:

the device may not be shown safe or effective to the FDA’s satisfaction;

the data from preclinical studies and/or clinical trials may be found unreliable or insufficient to support approval;

the manufacturing process or facilities may not meet applicable requirements; and

changes in FDA approval policies or adoption of new regulations may require requisite data.

If the FDA evaluation of a PMA is favorable, the FDA will issue either an approval letter, or an approvable letter, the latter of which usually contains a number of conditions that must be met in order to secure final approval of the PMA. When and if those conditions have been fulfilled to the satisfaction of the FDA, the agency will issue a PMA approval letter authorizing commercial marketing of the device, subject to the conditions of approval and the limitations established in the approval letter. If the FDA’s evaluation of a PMA application or manufacturing facilities is not favorable, the FDA will deny approval of the PMA or issue a not approvable letter. The FDA also may determine that additional tests or clinical trials are necessary, in which case the PMA approval may be delayed for several months or years while the trials are conducted and data is submitted in an amendment to the PMA, or the PMA is withdrawn and resubmitted when the data are available.

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New PMA applications or PMA supplements are required for modification to the manufacturing process, equipment or facility, quality control procedures, sterilization, packaging, expiration date, labeling, device specifications, ingredients, materials, or design of a device that has been approved through the PMA process. PMA supplements often require submission of the same type of information as an initial PMA application, except that the supplement is limited to information needed to support any changes from the device covered by the approved PMA application and may or may not require as extensive technical or clinical data or the convening of an advisory panel, depending on the nature of the proposed change. In approving a PMA application, as a condition of approval, the FDA may also require some form of post-approval study or post-market surveillance, whereby the applicant conducts a follow-up study or follows certain patient groups for a number of years and makes periodic reports to the FDA on the clinical status of those patients when necessary to protect the public health or to provide additional or longer term safety and effectiveness data for the device. The FDA may also require post-market surveillance for certain devices , such as implants or life-supporting or life- sustaining devices used outside a device user facility. The FDA may also approve a PMA application with other post-approval conditions intended to ensure the safety and effectiveness of the device, such as, among other things, restrictions on labeling, promotion, sale, distribution, and use.

Breakthrough Device Designation (BDD)

FDA grants BDD to those devices that are intended to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the product may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.

The BDD program provides more interactive and timely access to the FDA during the premarket development phase and submission process. This designation includes a prioritized review of regulatory filings and enhanced FDA guidance during the process. It also provides positive implications for incremental hospital payment from the Centers for Medicare and Medicaid Services (“CMS”).

Post-market Requirements

After a device is placed on the market, numerous regulatory requirements apply. These include: Quality System Regulation (“QSR”), labeling regulations, the FDA’s general prohibition against promoting products for unapproved or off-label uses, the Medical Device Reporting (“MDR”) regulation (which requires that manufacturers report to the FDA if their device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if it were to recur), and the Reports of Corrections and Removals regulation (which requires manufacturers to report recalls and field actions to the FDA if initiated to reduce a risk to health posed by the device or to remedy a violation of the FDCA.

The FDA enforces these requirements by inspection and market surveillance. If the FDA finds a violation, it can institute a wide variety of enforcement actions, ranging from a public warning letter to more severe sanctions such as: fines, injunctions, and civil penalties; recall or seizure of products; operating restrictions, partial suspension or total shutdown of production; refusing requests for 510(k) clearance or PMA approval of new products; withdrawing 510(k) clearance or PMA approvals already granted; and criminal prosecution.

OUS

On May 26, 2021, Regulation (EU) 2017/745 on Medical Devices, entered into application, repealing and replacing both Directive 93/42/EEC concerning medical devices, and Directive 90/385/EEC concerning active implantable medical devices. The Regulation and its associated guidance documents and harmonized standards govern, among other things, device design and development, preclinical and clinical or performance testing, premarket conformity assessment, registration and listing, manufacturing, labeling, storage, claims, sales and distribution, export and import and post-market surveillance, vigilance, and market surveillance. Medical devices must comply with the General Safety and Performance Requirements, or GSPRs, set out in Annex I of the Medical Devices Regulation. Compliance with these requirements is a prerequisite to be able to affix the CE mark to devices, without which they cannot be marketed or sold in the European Economic Area (“EEA”). To demonstrate compliance with the GSPRs provided in the MDR and obtain the right to affix the CE mark, medical devices manufacturers must undergo a conformity assessment procedure, which varies according to the type of medical device and its classification. Apart from low risk medical devices (Class I with no measuring function and which are not sterile), in relation to which the manufacturer may issue an EU Declaration of Conformity based on a self-assessment of the conformity of its products with the GSPRs, a conformity assessment procedure requires the intervention of a Notified Body, which is an organization designated by a Competent Authority of an EEA country to conduct conformity assessments. Depending on the relevant conformity assessment procedure, the Notified Body will audit and examine the technical documentation and the quality system for the manufacture, design and final inspection of the medical devices. The Notified Body issues a CE Certificate of Conformity following successful completion of a conformity assessment procedure conducted in relation to the medical device and its manufacturer and their conformity with the GSPRs. This Certificate and the related conformity assessment process entitles the manufacturer to affix the CE mark to its medical devices after having prepared and signed a related EU Declaration of Conformity.

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As a general rule, demonstration of conformity of medical devices and their manufacturers with the GSPRs must be based, among other things, on the evaluation of clinical data supporting the safety and performance of the products during normal conditions of use. Specifically, a manufacturer must demonstrate that the device achieves its intended performance during normal conditions of use and that the known and foreseeable risks, and any adverse events, are minimized and acceptable when weighed against the benefits of its intended performance, and that any claims made about the performance and safety of the device (e.g., product labeling and instructions for use) are supported by suitable evidence. This assessment must be based on clinical data, which can be obtained from (1) clinical studies conducted on the devices being assessed, (2) scientific literature from similar devices whose equivalence with the assessed device can be demonstrated or (3) both clinical studies and scientific literature. The conduct of clinical studies in the EEA is governed by detailed regulatory obligations. These may include the requirement of prior authorization by the Competent Authorities of the country in which the study takes place and the requirement to obtain a positive opinion from a competent Ethics Committee. This process can be expensive and time-consuming. After a device is placed on the market in the EEA, it remains subject to significant regulatory requirements.

The changes to the regulatory system implemented in the EU by the Medical Devices Regulation include stricter requirements for clinical evidence and pre-market assessment of safety and performance, new classifications to indicate risk levels, requirements for third party testing by Notified Bodies, tightened and streamlined quality management system assessment procedures and additional requirements for the quality management system, additional requirements for traceability of products and transparency as well as a refined responsibility of economic operators, and the requirement to provide clinical data in the form of a clinical evaluation report.

The UK has devised a new route to market culminating in a United Kingdom Conformity Assessment (“UKCA”) Mark to replace the CE Mark. Northern Ireland will, however, continue to be covered by the EU regulations governing CE Marks.

For a medical device to be sold and marketed in Australia, it must be included in the Australian Register of Therapeutic Goods (“ARTG”). For an active implantable medical device (“AIMD”)/Class III device, this is a two-stage process. The first stage involves an application to the Therapeutic Goods Administration (“TGA”) for a Declaration of Conformity. The second stage is an application for inclusion on the ARTG.

Other Healthcare Laws

In the United States, we are subject to a number of federal and state healthcare regulatory laws that restrict business practices in the healthcare industry. These laws include, but are not limited to, federal and state anti-kickback laws, false claims laws, data privacy and security laws, and other healthcare fraud and abuse laws, such as transparency laws regarding payments or other items of value provided to healthcare providers.

The Anti-Kickback Statute, which prohibits, among other things, knowingly and willingly soliciting, offering, receiving or paying remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or reward either the referral of an individual, or the purchase, order or recommendation of, items or services for which payment may be made, in whole or in part, under a federal healthcare program, such as the Medicare and Medicaid programs. The term “remuneration” has been broadly interpreted to include anything of value, and the government can establish a violation of the Anti- Kickback Statute without proving that a person or entity had actual knowledge of the law or a specific intent to violate. In addition, the government may assert that a claim, including items or services resulting from a violation of the Anti-Kickback Statute, constitutes a false or fraudulent claim for purposes of the federal civil False Claims Act. The Anti-Kickback Statute is subject to evolving interpretations and has been applied by government enforcement officials to a number of common business arrangements in the medical device industry. There are a number of statutory exceptions and regulatory safe harbors protecting certain business arrangements from prosecution under the Anti- Kickback Statute; however, those exceptions and safe harbors are drawn narrowly, and there may be limited or no exception or safe harbor for many common business activities, such as reimbursement support programs, educational and research grants, or charitable donations. Practices that involve remuneration to those who prescribe, purchase, or recommend medical devices, including discounts, providing items or services for free or engaging such individuals as consultants, advisors, or speakers, may be subject to scrutiny if they do not fit squarely within an exception or safe harbor and would be subject to a facts and circumstances analysis to determine compliance with the Anti-Kickback Statute.

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Federal civil and criminal false claims laws, including the federal civil False Claims Act, and civil monetary penalties laws, which prohibit, among other things, persons or entities from knowingly presenting, or causing to be presented, a false or fraudulent claim for payment of government funds and knowingly making, using or causing to be made or used, a false record or statement to get a false claim paid or to avoid, decrease or conceal an obligation to pay money to the federal government. A claim including items or services resulting from a violation of the Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal civil False Claims Act. Actions under the federal civil False Claims Act may be brought by the government or as a qui tam action by a private individual in the name of the government. These individuals, sometimes known as “relators” or, more commonly, as “whistleblowers,” may share in any amounts paid by the entity to the government in fines or settlement. Many pharmaceutical and medical device manufacturers have been investigated and have reached substantial financial settlements with the federal government under the federal civil False Claims Act for a variety of alleged improper activities, including causing false claims to be submitted as a result of the marketing of their products for unapproved and thus non-reimbursable uses and interactions with prescribers and other customers, including those that may have affected their billing or coding practices and submission of claims to the federal government. Federal civil False Claims Act liability is potentially significant in the healthcare industry because the statute provides for treble damages and mandatory monetary penalties for each false or fraudulent claim or statement. Because of the potential for large monetary exposure, healthcare and medical device companies often resolve allegations without admissions of liability for significant and material amounts to avoid the uncertainty of treble damages and per claim penalties that may be awarded in litigation proceedings.

Health Insurance Portability and Accountability Act (“HIPAA”), which imposes criminal and civil liability for, among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payors, or knowingly and willfully falsifying, concealing or covering up a material fact or making a materially false, fictitious or fraudulent statement or representation, or making or using any false writing or document knowing the same to contain any materially false, fictitious or fraudulent statement or entry in connection with the delivery of or payment for healthcare benefits, items or services;

HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH Act, and their implementing regulations, also impose obligations, including mandatory contractual terms, on covered entities subject to the rule, such as health plans, healthcare clearinghouses and certain healthcare providers, as well as their business associates and their subcontractors that perform certain services for them or on their behalf involving the use or disclosure of individually identifiable health information with respect to safeguarding the privacy, security and transmission of individually identifiable health information;

The federal Physician Payments Sunshine Act, also known as Open Payments, which requires manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program to report annually, with certain exceptions, to the CMS information related to payments or other “transfers of value” made to physicians, (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other healthcare professionals (such as physician assistants and nurse practitioners), and teaching hospitals, and requires applicable manufacturers and group purchasing organizations to report annually to CMS ownership and investment interests held by physicians and their immediate family members; and

Analogous state and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers; state and foreign laws that require medical device companies to comply with the industry’s voluntary compliance guidelines and the applicable compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state and foreign beneficiary inducement laws, which are laws that require medical device manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

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Ensuring that our internal operations and business arrangements with third parties comply with applicable healthcare laws and regulations will likely be costly. It is possible that governmental authorities will conclude that our business practices do not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations. If our operations were found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment, possible exclusion from government funded healthcare programs, contractual damages, reputational harm, diminished profits and future earnings, additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws, and curtailment of our operations, any of which could substantially disrupt our operations. If the physicians or other providers or entities with whom we expect to do business are found not to be in compliance with applicable laws, they may be subject to significant criminal, civil or administrative sanctions, including exclusions from government funded healthcare programs.

Healthcare Reform

In the United States and certain foreign jurisdictions, there have been, and we expect there will continue to be, a number of legislative and regulatory changes to the healthcare system. For example, implementation of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act (collectively, the ACA) substantially changed the way healthcare is financed by both governmental and private insurers in the United States and significantly affected the pharmaceutical industry.

Since its enactment, there have been judicial, administrative, executive, and Congressional legislative challenges and amendments to certain aspects of the ACA. For example, on August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was signed into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025. The IRA also eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and creating a new manufacturer discount program. It is unclear how such challenges and the healthcare reform measures of the Biden administration will impact the ACA.

The current Trump administration is pursuing policies to reduce regulations and expenditures across government including at HHS, the FDA, the Centers for Medicare & Medicaid Services (“CMS”) and related agencies. These actions, presently directed by executive orders or memoranda from the Office of Management and Budget, may propose policy changes that create additional uncertainty for our business. These actions may, for example, include directives to reduce agency workforce, rescinding a Biden administration executive order tasking the Center for Medicare and Medicaid Innovation (“CMMI”) to consider new payment and healthcare models to limit drug spending and eliminating the Biden administration’s executive order that directed HHS to establishing an AI task force and developing a strategic plan. Additionally, in its June 2024 decision in Loper Bright Enterprises v. Raimondo (“Loper Bright”), the U.S. Supreme Court overturned the longstanding Chevron doctrine, under which courts were required to give deference to regulatory agencies’ reasonable interpretations of ambiguous federal statutes. The Loper Bright decision could result in additional legal challenges to current regulations and guidance issued by federal agencies applicable to our operations, including those issued by the FDA. Congress may introduce and ultimately pass health care related legislation that could impact the drug approval process.

Individual states in the United States have also become increasingly active in implementing regulations designed to control pharmaceutical and medical device product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures and, in some cases, mechanisms to encourage importation from other countries and bulk purchasing. In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine which products and supplies will be included in their healthcare programs. Furthermore, there has been increased interest by third-party payors and governmental authorities in reference pricing systems and publication of discounts and list prices.

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Reimbursement

Potential reimbursement pathways vary by target markets.

United States

In the United States, sales of our products will depend substantially on the extent to which the costs of our products will be paid by health maintenance, managed care, pharmacy benefit and similar healthcare management organizations, or reimbursed by government health care programs, private health coverage insurers and other third-party payors. Third-party payors decide which treatments they will cover and establish reimbursement rates for those treatments. Our products are purchased by hospitals and other providers who will then seek reimbursement from third-party payors for the procedures performed using our products. Private payors often, but not always, follow CMS’s decisions regarding coverage and reimbursement under the Medicare program. If sufficient coverage and reimbursement is not available for the procedures using our products, the demand for our products and our revenue will be adversely affected.

Current Procedural Terminology (CPT) codes are utilized to report services provided by physicians and other qualified healthcare professionals. Other providers may also utilize CPT codes to report services, including hospital outpatient departments and ambulatory surgery centers. Currently, there are eight Category III CPT codes that describe the various procedures related to WiSE. We will coordinate with relevant professional physician societies to convert the Category III CPT codes to Category I CPT codes when appropriate. Category I CPT codes are utilized to establish a Medicare national payment level for physician services.

For hospital payment for Medicare patients, WiSE currently maps to existing Medicare Severity Diagnosis Related Groups (MS-DRGs) for hospital inpatient procedures, and Ambulatory Payment Classifications (APCs) for hospital outpatient procedures. It is expected that the vast majority of Medicare patients receiving WiSE will be implanted in the hospital inpatient or outpatient setting.

Additionally, CMS (Medicare) provides an opportunity for select new technologies that meet pre-specified criteria to receive incremental payment in the hospital setting. For hospital inpatient procedures, the New Technology Add-On Payment (NTAP) provides incremental payment to hospitals for 2-3 years in addition to the MS-DRG payment. For hospital outpatient procedures, the Transitional Pass-Through (TPT) provides incremental payment to hospitals for 3 years in addition to the APC payment. Once the NTAP and TPT expire, CMS utilizes the claims data from WiSE CRT procedures to update MS-DRG and APC payment rates based on standard payment policy.

As stated above, the WiSE CRT System has received a BDD from the FDA. CMS has established policies that for technologies with BDD, two of the three qualifying criteria for NTAP are automatically deemed to be met. Thus, the probability of the WiSE CRT System securing NTAP, and incremental payment for 2-3 years is high. For TPT, technologies with BDD are deemed to automatically meet the “substantial clinical improvement” criterion, which significantly increases the probability of securing TPT.

Third-party payors are also increasingly examining the cost effectiveness of products, in addition to their safety and efficacy, when making coverage and payment decisions. Third-party payors have also instituted initiatives to limit the growth of healthcare costs using, for example, price regulation or controls and competitive pricing programs. Some third-party payors also require demonstrated superiority, on the basis of randomized clinical trials, or pre-approval of coverage, for new or innovative devices or procedures before they will reimburse healthcare providers who use such devices or procedures. Additionally, no uniform policy for coverage and reimbursement exists in the United States, and coverage and reimbursement can differ significantly from payor to payor. Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement rates, but also have their own methods and approval process apart from Medicare determinations. Coverage policies and third-party reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained for one or more products for which we or our collaborators receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future. It is uncertain whether our current products or any planned or future products will be viewed as sufficiently cost effective to warrant coverage and adequate reimbursement levels for procedures using such products in any given jurisdiction.

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Jurisdiction of Incorporation

We are incorporated in the State of Delaware, United States of America, and are a registered foreign company in Australia. As a foreign company registered in Australia, we are subject to different reporting and regulatory regimes than Australian companies. As a foreign company registered in Australia, we are not subject to Chapters 6, 6A, 6B and 6C of the Corporations Act 2001 (Cth) of Australia (“Corporations Act”) dealing with the acquisition of shares (including substantial shareholdings and takeovers).

Employees

As of December 31, 2024, we had 89 full-time employees including 79 in research and development and 10 in general and administrative. As of December 31, 2024, we had 79 employees located in the U.S., six in Europe, and four in Australia. None of our employees are represented by a labor union or covered by a collective bargaining agreement. We consider our relations with our employees to be good.

Available Information

Copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements as well as any amendments to those reports, are filed or furnished with the Securities and Exchange Commission (the “SEC”). Such reports and other information filed by the Company with the SEC are available on our website at https://www.ebrsystemsinc.com/ as soon as reasonably practicable after it is electronically filed with the SEC. References to our website address do not constitute incorporation by reference of the information contained on the website, and the information contained on the website is not part of this document. The SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov.

Item 1A. Risk Factors

Summary of Risk Factors

Our business and operations are subject to a number of risks, which you should be aware of prior to deciding to invest in our common stock. Listed below is a summary of these risks, which are discussed more fully immediately following this summary.

Risks Related to Our Business and the Development, Manufacturing and Commercialization of Our Products

If we are unable to obtain regulatory approval and ultimately commercialize our WiSE CRT technology, or experience significant delays in doing so, our business will be materially harmed;

Coverage and adequate reimbursement may not be available for our products or the procedures that utilize our products, which could diminish our sales or affect our ability to sell our products profitably;

We depend upon third-party suppliers, including single-source suppliers, making us vulnerable to supply disruptions and price fluctuations;

The commercial success of our products will depend upon attaining significant market acceptance of these products among hospitals, physicians, patients, and payors;

Adoption of our products depends upon appropriate physician training, and inadequate training may lead to negative patient outcomes, affect adoption of our products and adversely affect our business;

We have limited sales and marketing resources. If we are unable to establish marketing and sales capabilities or enter into agreements with third parties to market and sell our CRT products, we may not be able to effectively market and sell our CRT products or generate product revenue; and

We have limited experience manufacturing our products in commercial quantities, which could harm our business.

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Risks Related to Our Industry

Security breaches, loss of data and other disruptions could compromise sensitive information related to our business or our customers’ patients or prevent us from accessing critical information and expose us to liability, which could adversely affect our business and our reputation;

Litigation and other legal proceedings may adversely affect our business; and

We may face difficulties encountered by many medical technology companies early in their commercialization.

Risks Related to Our Financial Position and Need for Additional Capital

Our existing indebtedness contains restrictions that limit our flexibility in operating our business. In addition, we may be required to make a prepayment or repay our outstanding indebtedness earlier than we expect;

We have a history of net losses, and we expect to continue to incur losses for at least the next several years. We may never generate any revenue from commercial products or become profitable or, if we ever achieve profitability, we may not be able to sustain it;

In order to support our continued operations and the growth of our business, we may seek to raise additional capital, which may not be available to us on acceptable terms, or at all;

The issuance of additional shares of our common stock in connection with financings, acquisitions, investments, and share incentive plans or otherwise will dilute all other stockholders;

Our quarterly and annual results may fluctuate significantly and may not fully reflect the underlying performance of our business;

Our current capital reserves may not be adequate;

We have capitalized pre-launch inventories prior to receiving FDA approval. If either FDA approval or market acceptance post-approval do not occur at all or on a timely basis, we will be required to write-off pre-launch inventories which would materially and adversely affect our business, financial condition and stock price;

Our disclosure requirements applicable to emerging growth companies and smaller reporting companies could make our common stock less attractive to investors; and

Our results may be impacted by changes in foreign currency exchange rates.

Risks Related to Government Regulation

Regulatory compliance is expensive, complex, and uncertain, and a failure to comply could lead to enforcement actions against us and other negative consequences for our business;

Our operations are subject to pervasive and continuing FDA regulatory requirements;

Even if our products are cleared or approved by regulatory authorities, if we or our suppliers fail to comply with ongoing FDA or other foreign regulatory authority requirements, or if we experience unanticipated problems with our products, these products could be subject to restrictions or withdrawal from the market;

Our products may be subject to recalls after receiving FDA or foreign approval or clearance, which could divert managerial and financial resources, harm our reputation, and adversely affect our business;

If we are unable to implement and maintain effective internal control over financial reporting in the future, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock may be negatively affected.

Failure to comply with anti-bribery, anti-corruption, and anti-money laundering laws, including the Foreign Corrupt Practices Act (“FCPA”), as well as export control laws, customs laws, sanctions laws and other laws governing our operations could result in civil or criminal penalties, other remedial measures, and legal expenses; and

The impact of the new E.U. Medical Device Regulation may be costly and disruptive to our business.

Risks Related to Our Intellectual Property

We are dependent on the protection and enforcement of our intellectual property rights;

We may be subject to future third party intellectual property rights disputes;

If we are unable to obtain and maintain patent protection or freedom to operate for any products we develop and for our technology, or if the scope of the patent protection obtained is not sufficiently broad, our competitors could develop and commercialize products and technology similar or identical to ours, and our ability to successfully commercialize any products we may develop, and our technology, may be adversely affected; and

Obtaining and maintaining patient protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

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Risks Related to Our CDIs and Common Stock

Our common stock may never be listed on a major U.S. stock exchange;

The issuance of additional securities in connection with financings, acquisitions, investments, our share incentive plans or otherwise may adversely affect the value of and rights associated with our common stock;

The market price of our CDIs and common stock may be volatile, which could cause the value of our common stock to decline;

The requirements of being an SEC registrant may strain our resources, divert management’s attention and affect our ability to attract and retain qualified Board of Directors (the “Board”) members;

Investors may have difficulty in reselling their shares due to the lack of market or state Blue Sky laws;

The different characteristics of the capital markets in Australia and the United States may negatively affect the trading prices of our CDIs and common stock and may limit our ability to take certain actions typically performed by a U.S. company; and

Our Amended and Restated Certificate of Incorporation provides that the Court of Chancery of the State of Delaware and the federal district courts of the United States of America will be the exclusive forums for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.

Risks Related to Our Business and the Development, Manufacturing and Commercialization of Our Products

If we are unable to complete clinical trials, obtain regulatory approval and ultimately commercialize our WiSE technology, or experience significant delays in doing so, our business will be materially harmed.

Our business is dependent on successful approval and marketing of our WiSE CRT technology that is still under development and subject to FDA approval. While our WiSE CRT System and has been granted Breakthrough Device Designation by the FDA, the premarket review of our WiSE CRT System by the FDA is still subject to final review and approval of our submission of information garnered from our pivotal trial, SOLVE-CRT, which is intended to assess the safety and efficacy of our WiSE technology.

Until FDA approval is received, we do not have regulatory approval to market WiSE in the United States, and we will be unable to generate revenue in the United States. Our business model and growth strategy is dependent on obtaining FDA approval as well as approvals from regulatory bodies in other key jurisdictions, including the Australian market. If FDA approval is not received within the expected timeframe, or not received at all, we will be unable to implement our business model, and our business and financial condition will be harmed.

Furthermore, even if we receive FDA approval, we are not assured of receiving future regulatory approvals for other indications or approval or notified body certification in other jurisdictions and cannot predict with certainty the timelines for such approvals or certifications, or other requirements that may be imposed by regulatory authorities (e.g. further clinical trials or other requirements to prove the safety and effectiveness of its products). In addition, future changes or updates to our products, which affect their safety or efficacy, may require new regulatory approvals or notified body certification in some jurisdictions before we may sell the revised product.

Coverage and adequate reimbursement may not be available for the procedures that utilize our products, which could diminish our sales or affect our ability to sell our products profitably.

In both U.S. and non-U.S. markets, our ability to successfully commercialize and achieve market acceptance of our products depends, in significant part, on the availability of adequate financial coverage and reimbursement from third-party payors, including governmental payors (such as the Medicare and Medicaid programs in the United States), managed care organizations and private health insurers. Third-party payors decide which treatments they will cover and establish reimbursement rates for those treatments. Our products are purchased by hospitals and other providers who will then seek reimbursement from third-party payors for the procedures performed using our products. Reimbursement systems in international markets vary significantly by country and by region within some countries, and reimbursement approvals must be obtained on a country-by-country basis. In certain non-U.S. markets, a product must be approved for reimbursement before it can be approved for sale in that country. Furthermore, many non-U.S. markets have government-managed healthcare systems that control reimbursement for new devices and procedures. In most markets there are private insurance systems as well as government-managed systems.

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We can give no assurance that these third-party payors will provide coverage and adequate reimbursement for procedures using our products, permit hospitals and doctors to offer procedures using our products to patients requiring treatment, or that current reimbursement levels for procedures using our products will continue. If sufficient coverage and reimbursement is not available for the procedures using our products, in either the United States or non-U.S. markets, the demand for our products and our revenue will be adversely affected. Furthermore, although we believe there is potential to improve on the current reimbursement profile for our products in the future, the overall amount of reimbursement available for procedures intended to diagnose and treat complex heart arrhythmias could remain at current levels or decrease in the future. Failure by hospitals and other users of our products to obtain and maintain coverage and adequate reimbursement for the procedures using our products would materially adversely affect our business, financial condition, and results of operations.

Third-party payors are also increasingly examining the cost effectiveness of products, in addition to their safety and efficacy, when making coverage and payment decisions. Third-party payors have also instituted initiatives to limit the growth of healthcare costs using, for example, price regulation or controls and competitive pricing programs. Some third-party payors also require demonstrated superiority, on the basis of randomized clinical trials, or pre-approval of coverage, for new or innovative devices or procedures before they will reimburse healthcare providers who use such devices or procedures. Additionally, no uniform policy for coverage and reimbursement exists in the United States, and coverage and reimbursement can differ significantly from payor to payor. Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement rates but also have their own methods and approval process apart from Medicare determinations. It is uncertain whether our current products or any planned or future products will be viewed as sufficiently cost effective to warrant coverage and adequate reimbursement levels for procedures using such products in any given jurisdiction. Similar inconsistency exists on non-U.S. markets.

We depend upon third-party suppliers, including single-source suppliers, making us vulnerable to supply disruptions and price fluctuations.

Our products include components that are manufactured and supplied by third parties, some of which are single-source suppliers. The products are then assembled, validated, and tested by these third parties or at our headquarters in California. There are inherent risks in relying on third-party suppliers for our product components, especially since any change to the manufacturing process of an approved medical device requires significant documentation and, in many cases, supplemental testing. A disruption at a key supplier could cause a substantial delay in the availability of our products, leading to a potential loss of sales. In general, we do not have long-term supply agreements with our suppliers as we generally order on a purchase order basis. We depend on our suppliers to provide us and our customers with materials in a timely manner that meets our quality, quantity, and cost requirements. These suppliers may encounter problems during manufacturing for a variety of reasons, any of which could delay or impede their ability to meet our demand. Our suppliers may also cease producing the components we purchase from them or otherwise decide to cease doing business with us. Any supply interruption from our suppliers or failure to obtain additional suppliers for any of the components used in our products would limit our ability to manufacture our products and could have a material adverse effect on our business, financial condition, and results of operations.

In addition, for reasons of quality assurance, cost effectiveness, or availability, some of the components needed to manufacture our products are obtained from sole suppliers. For instance, our piezo electric crystal is a single source component purchased from CTS Advanced Materials. We do not currently have a formal master supplier agreement in place with CTS as we generally procure on a purchase order basis. Although we work closely with our suppliers to try to ensure continuity of supply while maintaining high quality and reliability, the supply of these components may, at times, be interrupted or insufficient. In addition, due to the stringent regulations and requirements of the regulatory agencies like the FDA, we may not be able to quickly establish additional or replacement sources. Further, dependence on a sole source for certain key components of our products may allow such sole source suppliers to command increased leverage in negotiating prices and other terms of sale, which could adversely affect our potential future profitability. As a result, we may be left with little choice but to accept such higher prices or other fees for key components in order to ensure continuity of supply. This could affect our potential profitability or if we choose to push back against more onerous terms, could lead to inadequate supply, which could materially affect our business. It could be difficult, costly and time consuming to obtain alternative sources for these components, or to change product designs to make use of alternative components.

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The commercial success of our products will depend upon attaining significant market acceptance of these products among hospitals, physicians, patients, and payors.

Our success will depend, in part, on the acceptance of our products as safe, effective and, with respect to providers, cost-effective. We cannot predict how quickly, if at all, hospitals, physicians, patients, or payors will accept our products or, if accepted, how frequently they will be used. Our products and planned or future products we may develop, or market may never gain broad market acceptance for some or all of our targeted indications. Hospitals, physicians, patients, and payors must believe that our products offer benefits over alternative treatment methods. Our future growth and profitability largely depend on our ability to increase physician awareness of our system and our products and on the willingness of hospitals, physicians, patients, or payors to adopt them. These parties may not adopt our products unless they are able to determine, based on experience, clinical data, medical society recommendations and other analyses, that our products are safe, effective and, with respect to providers, cost- effective, on a stand-alone basis and relative to competitors’ products. Healthcare providers must believe that our products offer benefits over alternative treatment methods. Even if we are able to raise awareness, physicians tend to be slow in changing their medical treatment practices and may be hesitant to select our products for recommendation to their hospitals or patients for a variety of reasons, including:

lack of experience with our products and concerns that we are relatively new to market;

lack or perceived lack of sufficient clinical evidence, including long-term data, supporting safety or clinical benefits; and

time commitment and skill development that may be required to gain familiarity and proficiency with our products.

Physicians play a significant role in determining the course of a patient’s treatment, and, as a result, the type of treatment that will be utilized and provided to a patient. We focus our sales, marketing, and education efforts primarily on cardiac electrophysiologists, and aim to educate referring physicians regarding the patient population that would benefit from our products. However, we cannot assure you that we will achieve broad market acceptance among these practitioners.

We cannot assure you that our products will achieve broad market acceptance among hospitals and physicians. Additionally, even if our products achieve market acceptance, they may not maintain that market acceptance over time if competing products, procedures or technologies are considered safer or more cost-effective or otherwise superior. Any failure of our products to generate sufficient demand or to achieve meaningful market acceptance and penetration will harm our future prospects and have a material adverse effect on our business, financial condition, and results of operations.

Our reputation among our current or potential customers, as well as among electrophysiologists, could also be negatively affected by safety or customer satisfaction issues involving us or our products, including product recalls. Future product recalls or other safety or customer satisfaction issues relating to our reputation could negatively affect our ability to establish or maintain broad adoption of our products, which would harm our future prospects and have a material adverse effect on our business, financial condition, and results of operations.

In most cases, before a hospital can purchase our system for the first time, our system must be approved for use by a hospital’s new product or value analysis committee, or the staff of a hospital or health system. Such approvals could deter or delay the use of our products by physicians. We cannot provide assurance that our efforts to obtain such approvals or generate adoption will be successful or increase the use of our products, and if we are not successful, it could have a material adverse effect on our business, financial condition, and results of operations.

Adoption of our products depends upon appropriate physician training, and inadequate training may lead to negative patient outcomes, affect adoption of our products and adversely affect our business.

The success of our products depends in part on hospitals and physicians’ adherence to appropriate patient selection and proper techniques provided in training sessions conducted by the Company. However, physicians rely on their previous medical training and experience, and we cannot guarantee that all such physicians will have the necessary skills or training to effectively utilize our WiSE CRT System. If physicians use our products in a manner that is inconsistent with their labelled indications, with components that are not compatible with our products or without adhering to or completing the requisite training sessions, their patient outcomes may not be consistent with the outcomes achieved by other physicians or in our clinical trials. This result may negatively impact the perception of patient benefit and safety and limit adoption of our products, which would have a material adverse effect on our business, financial condition, and results of operations.

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We currently have limited sales and marketing resources. In order to successfully launch our CRT products commercially after we receive marketing approval, we will need to, among other things, build marketing, sales, distribution, managerial and other non-technical capabilities or make arrangements with third parties to perform these services, and we may not be successful in doing so. We may elect to build a targeted specialty sales force which will be expensive and time-consuming. Any failure or delay in the development of our internal sales, marketing and distribution capabilities would adversely impact the commercialization of our CRT products. If we choose to partner with third parties that have direct sales forces and established distribution systems, either to augment our own sales force and distribution systems or in lieu of our own sales force and distribution systems. If we are unable to enter into collaborations with third parties for the commercialization of approved products, if any, on acceptable terms or at all, or if any such partner does not devote sufficient resources to the commercialization of our products or otherwise fails in commercialization efforts, we may not be able to successfully commercialize any of our WiSE CRT system that receive regulatory approval. If we are not successful in commercializing our WiSE CRT system, either on our own or through collaborations with one or more third parties, our future revenue will be materially and adversely impacted.

We have limited experience manufacturing our products in commercial quantities, which could harm our business.

Because we have only limited experience in manufacturing our products in commercial quantities, we may encounter production delays or shortfalls. Such production delays or shortfalls may be caused by many factors, including the following:

our intent to expand our manufacturing capacity, as a result of which our production processes may have to change;

key components of our products are provided by a single supplier or limited number of suppliers, and we do not maintain large inventory levels of these components; if we experience a shortage or quality issues in any of these components, we will need to identify and qualify new supply sources, which could increase our expenses and result in manufacturing delays;

a delay in completing validation and verification testing for new controlled environment rooms at our manufacturing facility;

state and federal regulations, including the FDA’s Quality System Regulation (“QSR”) for the manufacture of our products, noncompliance with which could cause an interruption in our manufacturing; and

attraction and retention of qualified employees for our operations in order to significantly increase our manufacturing output.

If we are unable to keep up with demand for our products, our growth could be impaired, and market acceptance for our products could be harmed and physicians may instead elect to use our competitors’ products. Our inability to successfully manufacture our products in sufficient quantities would materially harm our business.

In addition, our manufacturing facility and processes and those of our third-party suppliers must meet stringent quality standards and are subject to unannounced FDA and state regulatory inspections for compliance with the QSR. Developing and maintaining a compliant quality system is time consuming and expensive. Failure to maintain compliance with, or not fully complying with the requirements of the FDA and state regulators, could result in enforcement actions against us or our third-party suppliers, which could include the issuance of warning letters, seizures, prohibitions on product sales, recalls, temporary manufacturing shutdowns, and civil and criminal penalties, any one of which could significantly impact our manufacturing supply and impair our financial results. For example, to maintain Notified Body certification permitting us to affix the CE Mark to our devices in the E.U., the Company’s Notified Body is expected to regularly audit the Company and its suppliers. In 2018, we received a warning notice from the Company’s Notified Body, BSI Group (“BSI”) for non-conformance with manufacturing standards. In 2020, we identified manufacturing process issues with our contract manufacturer of the Transmitter Model 4100, which were subsequently ratified in 2021. Although the process improvements were reviewed and approved by BSI and by the FDA, any failure to comply with the applicable regulatory requirements in the future can result in such enforcement actions noted above and a damaged brand name.

We have limited data and experience regarding the safety and efficacy of its WiSE-CRT system.

Even though the preliminary clinical data from SOLVE-CRT met our primary endpoints and has been submitted in support of the Company’s application for FDA approval, it may not necessarily be predictive of the results of future clinical trials that will need to be conducted to support regulatory approval in other jurisdictions.

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WiSE CRT is a relatively new potential solution for treating heart failure with CRT, so the Company has performed clinical trials only with limited patient populations. The long-term effects of using our WiSE CRT System in a large number of patients have not been studied and the results of short-term clinical use do not necessarily predict long-term clinical benefits or reveal long-term adverse effects. The results of preclinical studies, completed clinical trials, ongoing trials, and future studies of our current, planned, or future technology may not be predictive of the results of later clinical trials, and interim results of a clinical trial do not necessarily predict final results.

The interpretation of data and results from the Company’s clinical trials do not ensure that it will achieve similar results in future clinical trials in other patient populations. In addition, preclinical and clinical data are often susceptible to various interpretations and analyses, and many companies that have believed their products performed satisfactorily in preclinical studies and early clinical trials have nonetheless failed to replicate results in later clinical trials and subsequently failed to obtain marketing approval. Products in later stages of clinical trials may fail to show the desired safety and efficacy despite having progressed through nonclinical studies and earlier clinical trials.

There is no assurance that future trials will meet their endpoints or that regulatory bodies such as the FDA and TGA will agree that our products are sufficiently safe and effective to support regulatory approval.

The sizes of the markets for our current and future products may be smaller than our estimates.

The Company’s estimates of the annual total addressable markets for WiSE CRT are based on internal and third-party estimates, including the number of patients with heart failure requiring Cardiac Resynchronization Therapy and our internally derived average selling price expectations at which we anticipate selling products for but has not been definitively established. While we consider the assumptions and the data underlying our estimates as reasonable, these assumptions and estimates may not be correct and the conditions supporting our assumptions or estimates may change at any time, thereby reducing the predictive accuracy of these underlying factors. As a result, our estimates of the annual total addressable market for our current or future products may prove to be incorrect. If the actual number of patients who would benefit from our products, the price at which we can sell future products, or the annual total addressable market for our products is smaller than we have estimated, it may impair our sales growth and have an adverse impact on our business.

We may not be able to achieve or maintain satisfactory pricing and margins for our products.

Manufacturers of medical devices have a history of price competition, and we can give no assurance that we will be able to achieve satisfactory prices for our products or maintain prices at the levels we have historically achieved. Any decline in the amount that payors reimburse our customers for procedures involving the use of our products could make it difficult for customers to continue using, or to adopt, our products and could create additional pricing pressure for us. If we are forced to lower the price we charge for our products, our revenue and gross margins will decrease, which will adversely affect our ability to invest in and grow our business. If we are unable to maintain our prices, or if our costs increase and we are unable to offset such an increase with an increase in our prices, our margins could erode. We will continue to be subject to significant pricing pressure, which could harm our business, financial condition, and results of operations.

Our customers may not be able to achieve adequate reimbursement for using our products in the United States or in key foreign jurisdictions.

Even if we are able to receive approval from the FDA to market our WiSE CRT System technology, we may not be able to achieve adequate reimbursement for our business to succeed. We expect to derive our revenue in the United States from sales to hospital and medical centers, which typically bill all or a portion of the costs and fees associated with a company’s products to various third-party payors, including Medicare, Medicaid, private commercial insurance companies, health maintenance organizations and other healthcare-related organizations, and then bill patients for any applicable deductibles or co-payments. As a result, access to adequate coverage and reimbursement for our products by third-party payors is essential to the acceptance of our products by its customers.

However, in the United States, there is no uniform policy of coverage and reimbursement for medical device products and services among third-party payors, so coverage and reimbursement can differ significantly from payor to payor, and each coverage decision and level of reimbursement is independent. As a result, third-party reimbursement may not be available or adequate for the Company’s products, and there is no guarantee that the Company will be able to achieve adequate reimbursement for using our products.

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Further, payors continually review new technologies for possible coverage and can, without notice, deny coverage for products and procedures or delay coverage approval until further clinical data is available. As a result, the coverage determination process is often a time-consuming and costly process that may require the Company to provide scientific and clinical support for the use of its products to each payor separately, with no assurance that coverage and adequate reimbursement will be obtained or maintained if obtained. If third-party reimbursement is not available or adequate for the Company’s products, or if there is any decline in the amount that payors are willing to reimburse customers, new customers may not adopt, or may reduce their rate of adoption of, the Company’s products and we could experience additional pricing pressure, any of which could have a material adverse effect on our business, financial condition, and results of operations.

Internationally, reimbursement systems in foreign markets vary significantly by country and by region within some countries, and reimbursement approvals must be obtained on a country-by-country basis. In certain international markets, a product must be approved for reimbursement before it can be approved for sale in that country. Additionally, many international markets have government-managed healthcare systems that control reimbursement for products and procedures. In most markets there are both private insurance systems and government-managed systems. If sufficient levels of coverage and reimbursement are not available for our WiSE CRT System, in either the United States or internationally, particularly in key European Union jurisdictions targeted by us, the demand for our products and its revenues will be adversely affected.

We may not realize the benefits from continued research and development costs.

Developing medical devices and related technologies is expensive and the investment in the development of these product offerings often involves an extended period of time to achieve a return on investment. An important element of our business strategy is to continue to make investments in innovation and related product opportunities. We believe that we must continue to dedicate resources to our innovation efforts to develop or enhance product offerings in order to maintain our competitive position and expand the total addressable market opportunity. We may not, however, receive significant revenues from these investments for several years, or may not realize such benefits at all.

We have limited management resources and must attract and retain skilled staff.

Our long-term growth and performance is dependent on attracting and retaining highly skilled staff. Despite having structured incentive programs, there is a risk that we will be unable to attract and retain the necessary staff to pursue our business model. If Mr. John McCutcheon, our Chief Executive Officer (“CEO”), was to leave EBR, we would lose significant technical and business expertise, and we may not be able to find a suitable replacement. This would affect how efficiently we operate our business, and our future financial performance could be impacted.

Our success depends largely on the continued services of key members of our executive management team and others in key management positions. We do not currently maintain key person life insurance policies on any of our employees. If we lose one or more key employees, we may experience difficulties in competing effectively, developing our technologies, and implementing our business strategy.

In addition, our research and development programs, clinical operations and sales and marketing efforts depend on our ability to attract and retain highly skilled scientists, engineers, and sales professionals. Competition for skilled personnel in our market is intense, and we have from time to time experienced, and we expect to continue to experience difficulty in hiring and retaining employees with appropriate qualifications on acceptable terms, or at all. Many of the companies with which we compete for experienced personnel have greater resources than we do, and any of our employees may terminate their employment with us at any time. If we hire employees from competitors or other companies, their former employers may attempt to assert that these employees or we have breached legal obligations, resulting in a diversion of our time and resources and, potentially, damages. In addition, job candidates and existing employees often consider the value of the stock awards they receive in connection with their employment. If the perceived benefits of our stock awards decline, it may harm our ability to recruit and retain highly skilled employees. If we fail to attract new personnel or fail to retain and motivate our current personnel, our business and future growth prospects will be harmed.

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Defects or failures associated with our products could lead to recalls, safety alerts or litigation, as well as significant costs and negative publicity.

Our business is subject to significant risks associated with manufacture, distribution and use of medical devices that are placed inside the human body, including the risk that patients may be severely injured by or even die from the misuse or malfunction of our products caused by design flaws or manufacturing defects. In addition, component failures, design defects, off-label uses, or inadequate disclosure of product-related information could also result in an unsafe condition or the injury or death of a patient. These problems could lead to a recall or market withdrawal of, or issuance of a safety alert relating to, our products and could result in significant costs, negative publicity, and adverse competitive pressure. Furthermore, the reporting of product defects or voluntary recalls to the FDA or analogous regulatory bodies outside the United States could result in manufacturing audits, inspections and broader recalls or other disruptions to our manufacturing processes. The circumstances giving rise to recalls are unpredictable, and any recalls of existing or future products could have a material adverse effect on our business, financial condition, and results of operations.

During our WiSE CRT Premarket Clinical study, three instances of pericardial effusion were observed associated with the implantation of our system. The study was terminated during March 2012, and procedural changes were enacted to mitigate future risk. The key mitigation was a requirement for real-time echocardiography during the Electrode implant procedure and the mandatory use of fluoroscopy with use of contrast while advancing the delivery catheter. Another key change was the implementation of physician training for Electrode implantation using Electrode Implant Simulator (EIS) prior to the physician implanting any WiSE CRT device in a patient.

During 2020, we notified our SOLVE-CRT study investigators in the US informing them of a transmitter issue resulting in premature battery depletion. Based upon the investigation of the devices in question, the likely failure mode appeared to be a related manufacturing process that led to a conductive breach in the transmitter feedthrough area. Ultimately, the suspect transmitters were replaced. During 2022, similar further failure instances were observed resulting in the same premature battery depletion. Analysis of the impacted devices confirmed that the failure mode was an insulation breach in the transmitter feedthrough. We paused further shipment of the transmitter model for new patient implants effective immediately. The root cause analysis identified manufacturing process and design elements as contributors.

We provide a limited warranty that our products are free of material defects and conform to specifications, and offer to repair, replace, or refund the purchase price of defective products. As a result, we bear the risk of potential warranty claims on our products. In the event that we attempt to recover some, or all of the expenses associated with a warranty claim against us from our suppliers or vendors, we may not be successful in claiming recovery and any recovery from such vendor or supplier may not be adequate.

The medical device industry has historically been subject to extensive litigation over product liability claims. We may be subject to product liability claims if our products cause, or merely appear to have caused, an injury or death, even if due to physician error. In addition, an injury or death that is caused by the activities of our suppliers, such as those that provide us with components and raw materials, or by an aspect of a treatment used in combination with our products, such as a complementary drug or anesthesia, may be the basis for a claim against us by patients, hospitals, physicians or others purchasing or using our products, even if our products were not the actual cause of such injury or death. We may choose to settle any such claims even if we believe that such injuries were not due to the failure of our products. An adverse outcome of any such claim involving one of our products could result in reduced market acceptance and demand for any or all of our products and could harm our reputation or brand and our ability to market our products in the future. In some circumstances, adverse events arising from or associated with the design, manufacture or marketing of our products could result in the suspension or delay of regulatory reviews of our premarket notifications or applications for marketing. Any of the foregoing problems could disrupt our business and have a material adverse effect on our business, financial condition, and results of operations.

Although we carry product liability insurance, including for clinical trials and product marketing, we can give no assurance that such coverage will be available or adequate to satisfy any claims. Product liability insurance is expensive, subject to significant deductibles and exclusions, and may not continue to be available on acceptable terms, if at all. Any product liability claims brought against us, with or without merit, could increase our product liability insurance rates or prevent us from securing continuing coverage, harm our reputation, significantly increase our expenses, and reduce product sales. If we are unable to obtain or maintain insurance at an acceptable cost or on acceptable terms with adequate coverage or otherwise protect against potential product liability claims, we could be exposed to significant liabilities. Product liability claims could cause us to incur significant legal fees and deductibles and claims in excess of our insurance coverage would be paid out of cash reserves, harming our financial condition and operating results. Defending a suit, regardless of its merit or eventual outcome, could be costly, could divert management’s attention from our business and might result in adverse publicity, which could result in reduced acceptance of our products in the market, product recalls or market withdrawals.

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We required to file adverse event reports under Medical Device Reporting, or MDR, regulations with the FDA and analogous regulatory bodies outside the United States, which reports are publicly available on the competent authority’s website. We are required to file MDRs if our products may have caused or contributed to a serious injury or death or malfunctioned in a way that could likely cause or contribute to a serious injury or death if it were to recur. Any such MDR that reports a significant adverse event could result in negative publicity, which could harm our reputation and future sales. See “—Risks Related to Government Regulation—If any of our products cause or contribute to a death or a serious injury or malfunction in certain ways, we will be required to report under applicable medical device reporting regulations, which can result in voluntary corrective actions or agency enforcement actions.”

If we are unable to manage the anticipated growth of our business, our future revenue and operating results may be adversely affected.

We are experiencing substantial growth in our operations, and we expect to experience continued substantial growth in our business. This growth has placed and will continue to place significant demands on our management and our operational infrastructure. Any growth that we experience in the future could require us to expand our sales and marketing personnel and manufacturing operations and general and administrative infrastructure. In addition to the need to scale our organization, future growth will impose significant added responsibilities on management, including the need to identify, recruit, train and integrate additional employees. We cannot assure you that any increases in scale, related improvements and quality assurance will be successfully implemented or that appropriate personnel will be available to facilitate the growth of our business. Rapid expansion in personnel could mean that less experienced people manufacture, market and sell our products, which could result in inefficiencies and unanticipated costs, reduced quality and disruptions to our operations. In addition, rapid and significant growth may strain our administrative and operational infrastructure and could require significant capital expenditures that may divert financial resources from other projects, such as research and development of potential future products. Our ability to manage our business and growth will require us to continue to improve our operational, financial and management controls, and reporting systems and procedures. If we are unable to manage our growth effectively, including by failing to implement necessary procedures, transition to new processes or hire necessary personnel, it may be difficult for us to execute our business strategy, and our business could be adversely affected.

We may not be able to develop, license or acquire new products, enhance the capabilities of our existing products to keep pace with rapidly changing technology and customer requirements or successfully manage the transition to new product offerings, any of which could have a material adverse effect on our business, financial condition, and results of operations.

Our success is influenced by our ability to develop new applications for our technologies in existing and new markets, while improving the performance and cost-effectiveness of our existing products, in each case in ways that address current and anticipated customer requirements. We may develop and commercialize additional products through our research and development program and by licensing or acquiring additional products and technologies from third parties. Such success is dependent upon several factors, including functionality, competitive pricing, ease of use, the safety and efficacy of our products and our ability to identify, select and acquire the rights to products and technologies on terms that are acceptable to us.

The medical device industry is characterized by rapid technological change and innovation. New technologies, techniques or products could emerge that might offer better combinations of price and performance, or better address customer requirements as compared to our current or future products. Competitors, who may have greater financial, marketing and sales resources than we do, may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards, or customer requirements. Any new product we identify for internal development, licensing or acquisition may require additional development efforts prior to commercial sale, including extensive clinical testing and approval or clearance by the FDA and comparable foreign regulatory authorities. Due to the significant lead time and complexity involved in bringing a new product to market, we are required to make a number of assumptions and estimates regarding the commercial feasibility of a new product. These assumptions and estimates may prove incorrect, resulting in our introduction of a product that is not competitive at the time of launch. We anticipate that we will face increased competition in the future as existing companies and competitors develop new or improved products and as new companies enter the market with new technologies. Our ability to mitigate downward pressure on our selling prices will be dependent upon our ability to maintain or increase the value we offer to hospitals, physicians, patients, and payors. All new products are prone to the risks of failure inherent in medical device product development, including the possibility that the product will not be shown to be sufficiently safe and effective for approval or clearance by regulatory authorities. In addition, we cannot assure you that any such products that are approved or cleared will be manufactured or produced economically, successfully commercialized, or widely accepted in the marketplace. The expenses or losses associated with unsuccessful product development or launch activities, or a lack of market acceptance of our new products, could adversely affect our business, financial condition, and results of operations.

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The typical development cycle of new medical device products can be lengthy and complicated and may require complex technology and engineering. Such developments may involve external suppliers and service providers, making the management of development projects complex and subject to risks and uncertainties regarding timing, timely delivery of required components or services and satisfactory technical performance of such components or assembled products. If we do not achieve the required technical specifications or successfully manage new product development processes, or if development work is not performed according to schedule, then such new technologies or products may be adversely impacted, and our business and operating results may be harmed.

The continuing development of our products depends upon it maintaining strong working relationships with physicians.

The research, development, marketing, and sale of our products and potential new and improved products depend upon us maintaining working relationships with physicians. We rely on these professionals to provide us with considerable knowledge and experience regarding the development, marketing, and sale of our products. Physicians assist us in clinical trials, marketing, and as researchers, product consultants and public speakers. Our advisory agreements with physicians can typically be terminated by either party upon notice to the other. If we cannot maintain our strong working relationships with these professionals and continue to receive their advice and input, the development and marketing of our products could suffer, which could have a material adverse effect on our business, financial condition, and results of operations.

At the same time, the medical device industry’s relationship with physicians is under increasing scrutiny by the U.S. Department of Health and Human Services Office of Inspector General (“OIG”), the U.S. Department of Justice (“DOJ”), U.S. state attorneys general, comparable foreign regulatory authorities, and domestic government agencies. Our failure to comply with requirements governing the industry’s relationships with physicians or an investigation into its compliance by the OIG, the DOJ, state attorneys general and/or other government agencies, could have a material adverse effect on our business, financial condition, and results of operations.

Cost-containment efforts of our potential customers, purchasing groups and governmental organizations could have a material adverse effect on future sales and profitability.

Our ability to generate revenue will largely depend on how effectively we can market and sell WiSE to the healthcare industry. Hospitals and healthcare organizations are constantly facing significant budget constraints. The competition for limited capital budgets is intense and the budget allocation process and approvals for spending on medical devices is complex and time consuming.

In an effort to reduce costs, many hospitals in the U.S. have become members of Group Purchasing Organizations (“GPOs”), and Integrated Delivery Networks (“IDNs”). GPOs and IDNs negotiate pricing arrangements with medical device companies and distributors and then offer these negotiated prices to affiliated hospitals and other members. GPOs and IDNs typically award contracts on a category-by-category basis through a competitive bidding process. Bids are generally solicited from multiple providers with the intention of driving down pricing or reducing the number of vendors. Due to the highly competitive nature of the GPO and IDN contracting processes, we may not be able to obtain new, or maintain existing, contract positions with major GPOs and IDNs. Furthermore, the increasing leverage of organized buying groups may reduce market prices for its products, thereby reducing our revenue and margins.

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Our ability to utilize our net operating loss carryforwards may be limited.

As of December 31, 2024, we had U.S. federal and state net operating loss, or NOL, carryforwards of approximately $220.0 million and $217.3 million, respectively. Subject to certain limitations, we may use these NOL carryforwards to offset our taxable income for U.S. federal and state income tax purposes. If not utilized, our U.S. federal NOL carryforwards (and our state NOL carryforwards in conforming states) arising in taxable years beginning before 2018 will begin to expire in 2027. Under current law, U.S. federal NOL carryforwards arising in taxable years beginning after 2017 may be carried forward indefinitely, but their deductibility in any tax year is limited to 80% of our taxable income in such year before the deduction for such NOL carryforwards. Additionally, Section 382 of the Internal Revenue Code of 1986, as amended, may limit the NOL carryforwards we may use in any year for U.S. federal income tax purposes in the event we undergo an “ownership change.” A Section 382 “ownership change” generally occurs if one or more stockholders or groups of stockholders who own at least 5% of a company’s stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period. Similar rules may apply under state tax laws. We have not conducted any study with respect to the impact of Section 382 on our NOL carryforwards. We may have previously undergone an “ownership change.” In addition, any future issuances or sales of our stock, including certain transactions involving our stock that are outside of our control, could result in future “ownership changes.” “Ownership changes” that have occurred in the past or that may occur in the future, could result in the imposition of an annual limit on the amount of pre-ownership change NOL carryforwards and other tax attributes we can use to reduce our taxable income, potentially increasing and accelerating our liability for income taxes, and also potentially causing certain of those tax attributes to expire unused. Any limitation on our ability to use NOL carryforwards could, depending on the extent of such limitation and the NOL carryforwards previously used, result in our retaining less cash after payment of U.S. federal and state income taxes during any year in which we have taxable income, than we would retain if such NOL carryforwards were available as an offset against such income for U.S. federal and state income tax reporting purposes, which could adversely impact operating results.

Uncertainties in the interpretation and application of existing, new and proposed tax laws and regulations could materially affect our tax obligations and effective tax rate.

The tax regimes to which we are subject or under which we operate are unsettled and may be subject to significant change. The issuance of additional guidance related to existing or future tax laws, or changes to tax laws, tax treaties or regulations proposed or implemented by the current or a future U.S. presidential administration, Congress, or taxing authorities in other jurisdictions, including jurisdictions outside of the United States, could materially affect our tax obligations and effective tax rate. To the extent that such changes have a negative impact on us, including as a result of related uncertainty, these changes may adversely impact our business, financial condition, results of operations, and cash flows.

The amount of taxes we pay in different jurisdictions depends on the application of the tax laws of various jurisdictions, including the United States, to our international business activities, the relative amounts of income before taxes in the various jurisdictions in which we operate, new or revised tax laws, or interpretations of tax laws and policies, the outcome of current and future tax audits, examinations or administrative appeals, our ability to realize our deferred tax assets, and our ability to operate our business in a manner consistent with our corporate structure and intercompany arrangements. The taxing authorities of the jurisdictions in which we operate may challenge our methodologies for pricing intercompany transactions pursuant to our intercompany arrangements or disagree with our determinations as to the income and expenses attributable to specific jurisdictions. If such a challenge or disagreement were to occur, and our position was not sustained, we could be required to pay additional taxes, interest, and penalties, which could result in one-time tax charges, higher effective tax rates, reduced cash flows, and lower overall profitability of our operations. Our financial statements could fail to reflect adequate reserves to cover such a contingency. Similarly, a taxing authority could assert that we are subject to tax in a jurisdiction where we believe we have not established a taxable connection, often referred to as a “permanent establishment” under international tax treaties, and such an assertion, if successful, could increase our expected tax liability in one or more jurisdictions.

Risks Related to Our Industry

In the ordinary course of our business, we may collect, store, or otherwise process sensitive data, including procedure-based information and protected health information, insurance information and other potentially personally identifiable information. We also store sensitive intellectual property and other proprietary business information. Although we take measures to protect sensitive data from unauthorized access or disclosure, our information technology, or IT, and infrastructure, and that of other technology partners, are vulnerable to cyber-attacks by hackers or viruses or breached due to employee error, malfeasance, or other disruptions. We rely on IT systems, networks, and services, including internet sites, data hosting and processing facilities and tools, physical security systems and other hardware, software and technical applications and platforms, some of which are managed, hosted, provided and/or used by third parties or their vendors, to assist in conducting our business. Our ability to monitor these third parties’ information security practices is limited, and these third parties may not have adequate information security measures in place. If the third parties with whom we work experience a security incident or other interruption, we could experience adverse consequences. While we may be entitled to damages if the third parties with whom we work fail to satisfy their privacy or security-related obligations to us, any award may be insufficient to cover our damages, or we may be unable to recover such an award. In addition, supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties’ infrastructure in our supply chain or that of the third parties with whom we work have not been compromised.

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A significant breakdown, invasion, corruption, destruction or interruption of critical information technology systems or infrastructure could negatively impact operations. We could also experience a business interruption, theft of confidential information or reputational damage from industrial espionage attacks, malware, ransomware, failures during the process of upgrading or replacing software, databases, or components thereof, power outages, damage or interruption from fires or other natural disasters, hardware failures, telecommunication failures and user errors, or other cyber-attacks or other interruptions, which may compromise our system infrastructure or lead to data leakage, either internally or at our third-party providers. We have been the target of such events in the past and expect them to continue as cybersecurity threats have been rapidly evolving in sophistication and becoming more prevalent in the industry. Although we are investing in protection and monitoring practices of our data and IT to try to reduce these risks and we monitor our systems on an ongoing basis for any current or potential threats, there can be no assurance that our efforts will prevent breakdowns or breaches of our or our third-party providers’ databases or systems that could materially and adversely affect our business, financial condition, and results of operations.

We take steps designed to detect, mitigate, and remediate vulnerabilities in our information systems (such as our hardware and/or software, including that of third parties with whom we work). We may not, however, detect and remediate all such vulnerabilities including on a timely basis. Further, we may experience delays in developing and deploying remedial measures and patches designed to address identified vulnerabilities. Vulnerabilities could be exploited and result in a security incident.

We could be subject to any number of unintentional events that could involve a third party gaining unauthorized access to our systems, which could disrupt our operations, corrupt our data, or result in the release of our confidential or other sensitive information. Such attacks or interruptions could disrupt our operations, including our ability to timely ship and track product orders, project inventory requirements, manage our supply chain and otherwise adequately service our customers or disrupt our customers’ ability to use our products for treatments. In the event we experience significant disruptions, we may be unable to repair our systems in an efficient and timely manner. Accordingly, such events may disrupt or reduce the efficiency of our entire operation and have a material adverse effect on our business, financial condition, and results of operations. To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability, and the further development and commercialization of our products could be delayed or disrupted.

Additionally, remote work has become more common and has increased risks to our information technology systems and data, as more of our employees utilize network connections, computers and devices outside our premises or network, including working at home, while in transit and in public locations. Future or past business transactions (such as acquisitions or integrations) could expose us to additional cybersecurity risks and vulnerabilities, as our systems could be negatively affected by vulnerabilities present in acquired or integrated entities’ systems and technologies. Furthermore, we may discover security issues that were not found during due diligence of such acquired or integrated entities, and it may be difficult to integrate companies into our information technology environment and security program.

Currently, we carry business interruption coverage to mitigate certain potential losses, but this insurance is limited in amount and may not be sufficient in type or amount to cover us against claims related to security breaches, cyber-attacks and other related data and system disruptions. We cannot be certain that such potential losses will not exceed our policy limits, insurance will continue to be available to us on economically reasonable terms, or at all, or any insurer will not deny coverage as to any future claim. In addition, we may be subject to changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements.

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Litigation and other legal proceedings may adversely affect our business.

From time to time, we may become involved in legal proceedings relating to patent and other intellectual property matters, product liability claims, employee claims, tort or contract claims, federal regulatory investigations, securities class action and other legal proceedings or investigations, which could have an adverse impact on our reputation, business and financial condition and divert the attention of our management from the operation of our business. Litigation is inherently unpredictable and can result in excessive or unanticipated verdicts and/or injunctive relief that affect how we operate our business. We could incur judgments or enter into settlements of claims for monetary damages or for agreements to change the way we operate our business, or both. There may be an increase in the scope of these matters or there may be additional lawsuits, claims, proceedings, or investigations in the future, which could have a material adverse effect on our business, financial condition, and results of operations. Adverse publicity about regulatory or legal action against us could damage our reputation and brand image, undermine our customers’ confidence, and reduce long-term demand for our products, even if the regulatory or legal action is unfounded or not material to our operations.

We may face difficulties encountered by many medical technology companies early in their commercialization.

Our company is currently at the pre-commercialization phase. We intend to move into the initial commercial phase if we receive FDA approval of our WiSE CRT System. As is common with companies at the pre-commercialization stage, we have incurred net losses since its inception, have never been profitable and can give no assurance that we will be profitable or cash-flow positive in the future. In assessing our business prospects, you should consider the various risks encountered by companies early in their commercialization, particularly companies that develop and sell medical devices. These risks include our ability to:

transition into a commercialization-stage company, and implement and execute its business strategy;

increase awareness of its brand and market acceptance of its products;

obtain future regulatory registrations and market approvals;

manage expanding operations; and

respond effectively to competitive pressures and developments.

Clinical trials may be delayed, suspended, or terminated for many reasons, which will increase our expenses and delay the time it takes to develop our current or new products or seek new indications.

We may experience delays in our ongoing or future preclinical studies or clinical trials, and we do not know whether future preclinical studies or clinical trials will begin on time, need to be redesigned, enroll an adequate number of patients on time or be completed on schedule, if at all. The commencement and completion of clinical trials for current or future products or indications may be delayed, suspended, or terminated as a result of many factors, including:

the FDA or comparable foreign regulatory authorities other regulators disagreeing as to the design, protocol, or implementation of our clinical trials;

the delay or refusal of regulators or institutional review boards, or IRBs, or Ethics Committees to authorize us or issue a positive opinion permitting us to commence a clinical trial at a prospective trial site;

changes in regulatory requirements, policies, and guidelines;

delays or failure to reach agreement on acceptable terms with prospective clinical research organizations (“CROs”), and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;

delays in patient enrollment and variability in the number and types of patients available for clinical trials;

the inability to enroll a sufficient number of patients in trials to observe statistically significant treatment effects in the trial;

having clinical sites deviate from the trial protocol or dropping out of a trial;

negative or inconclusive results from ongoing preclinical studies or clinical trials, which may require us to conduct additional preclinical studies or clinical trials or to abandon projects that we expect to be promising;

patient deaths during a clinical trial, even though their death may not be related to the products that are part of the clinical trial;

patient adverse events;

device malfunctions occur with unexpected frequency or potential adverse consequences;

regulators or IRBs or Ethics Committees requiring that we or our investigators suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements or safety concerns, among others;

lower than anticipated retention rates of patients and volunteers in clinical trials;

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our CROs or clinical trial sites failing to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all, deviating from the protocol or dropping out of a trial;

delays relating to adding new clinical trial sites;

difficulty in maintaining contact with patients after treatment, resulting in incomplete data;

the quality of the products falling below acceptable standards;

the inability to manufacture sufficient quantities of our products to commence or complete clinical trials; and

exceeding budgeted costs due to difficulty in accurately predicting costs associated with clinical trials.

We could also encounter delays if a clinical trial is suspended or terminated by us, by the IRBs or the Ethics Committees of institutions at which such trials are being conducted, by the Data Safety Monitoring Board for such trial or by the FDA or comparable foreign regulatory authorities. Such authorities may suspend or terminate a clinical trial due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements, including the FDA’s current Good Clinical Practice (“GCP”), regulations, or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate safety and effectiveness, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.

In addition, we may encounter delays if the FDA or a comparable foreign regulatory authority concludes that our financial relationships with investigators result in a perceived or actual conflict of interest that may have affected the interpretation of a trial, the integrity of the data generated at the applicable clinical trial site or the utility of the clinical trial itself. Principal investigators for our clinical trials may serve as scientific advisors or consultants to us from time to time and receive cash compensation and/or stock-based compensation in connection with such services. If these relationships and any related compensation to or ownership interest by the clinical investigator carrying out the trial result in perceived or actual conflicts of interest, or if the FDA or a comparable foreign regulatory authority concludes that the financial relationship may have affected interpretation of the trial, the integrity of the data generated at the applicable clinical trial site may be questioned and the utility of the clinical trial itself may be jeopardized, which could result in a delay or rejection by the FDA or a comparable foreign regulatory authority. Any such delay or rejection could prevent us from commercializing any of our products currently in development.

If we experience delays in the commencement or completion of any clinical trial of our products, or if any of our clinical trials are terminated, the commercial prospects of our products may be harmed, and our ability to generate revenue from sales may be delayed or materially diminished.

Consolidation in the medical device industry could have an adverse effect on our revenue and results of operations.

Many medical device companies are consolidating to create new companies with greater market power. As the medical device industry consolidates, competition to provide goods and services to industry participants will become more intense. These industry participants may try to use their market power to negotiate price concessions or reductions for the Company’s products. If we reduce our prices because of consolidation in the medical device industry, its future revenue will decrease, which could have a material adverse effect on our business, financial condition, and results of operations.

New or competing technologies or products could emerge which may adversely affect future sales of our products and may cause our products to become obsolete.

We expect to generate the vast majority of our revenue going forward from the sale of our WiSE CRT System, if approved by the FDA. The medical device industry is competitive, subject to rapid change and significantly affected by new product introductions. Although we believe that there are currently no products or technologies that are commercially comparable to the WiSE CRT System, there are a number of other products and devices on the market which are commonly used to perform conventional CRT procedures. If competitors develop new products (which could include devices or drugs) or technologies that offer better combinations of price and performance than we can offer for the treatment of certain types of heart failure, our products or future products may become obsolete or not competitive, which would have a significant negative effect on our business and financial position.

We are subject to stringent privacy laws, rules, regulations, information security and privacy policies, contractual obligations, and other obligations governing the use, processing and cross-border transfer of personal information.

We receive, generate, store, and otherwise process sensitive information, such as health information, insurance information and other potentially personally identifiable information.

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We may be subject to a variety of local, state, national and foreign laws, directives, and regulations that apply to the collection, use, retention, protection, disclosure, transfer and other processing of personal data in the different jurisdictions in which we operate, including comprehensive regulatory systems in the U.S. and the European Union. For example, California enacted the California Consumer Privacy Act, or CCPA, which creates individual privacy rights for California consumers and increases the privacy and security obligations of entities handling certain personal data. Other U.S. states have enacted or are considering comprehensive privacy laws. The CCPA and other comprehensive U.S. state privacy laws exempt some data processed in the context of clinical trials, but these developments may be subject to varying interpretations by courts and government agencies, creating complex compliance issues for us and data we receive, use and share, potentially exposing us to additional expense, adverse publicity, and liability. Legal requirements relating to the collection, storage, handling, and transfer of personal information and personal data continue to evolve and may result in ever-increasing public scrutiny and escalating levels of enforcement, sanctions, and increased costs of compliance.

The collection and use of personal data in the European Union are governed by the European Union’s General Data Protection Regulation, or GDPR. The GDPR imposes stringent requirements for controllers and processors of personal data, including, for example, more robust disclosures to individuals and a strengthened individual data rights regime, shortened timelines for data breach notifications, limitations on retention of information, increased requirements pertaining to special categories of data, such as health data, and additional obligations when we contract with third-party processors in connection with the processing of the personal data.

If we or our vendors fail to comply with the GDPR and the applicable national data protection laws of the European Union member states, or if regulators assert, we have failed to comply with these laws, it may lead to regulatory enforcement actions, which can result in monetary penalties of up to €20,000,000 or up to 4% of the total worldwide annual turnover of the preceding financial year, whichever is higher, and other administrative penalties. Other jurisdictions outside the European Union are similarly introducing or enhancing privacy and data security laws, rules, and regulations, which could increase our compliance costs, and the risks associated with non-compliance.

In addition, we may be unable to transfer personal data from Europe and other jurisdictions to the United States or other countries due to data localization requirements or limitations on cross-border data flows. Although there are various mechanisms that may be used in some cases to lawfully transfer personal data to the United States or other countries, these mechanisms are subject to legal challenges and may not be available to us. An inability or material limitation on our ability to transfer personal data to the United States or other countries could materially impact our business operations.

We are also bound by contractual obligations related to data privacy and security, and our efforts to comply with such obligations may not be successful. For example, certain privacy laws, such as the GDPR and the CCPA, require our customers to impose specific contractual restrictions on their service providers.

We publish privacy policies, marketing materials and other statements, such as compliance with certain certifications or self-regulatory principles, regarding data privacy and security. If these policies, materials or statements are found to be deficient, lacking in transparency, deceptive, unfair, or misrepresentative of our practices, we [may] be subject to investigation, enforcement actions by regulators or other adverse consequences.

Compliance with U.S. or foreign data protection laws, regulations, and other obligations could cause us to incur substantial costs or require us to change our business practices and compliance procedures in a manner adverse to our business. Penalties for violations of these laws vary. Moreover, complying with these various laws could require us to take on more onerous obligations in our contracts, restrict our ability to collect, use and disclose data, or in some cases, impact our ability to operate in certain jurisdictions. In addition, we rely on third-party vendors to collect, process and store data on our behalf and we cannot guarantee that such vendors are in compliance with all applicable data protection laws and regulations. Our or our vendors’ failure to comply with U.S. or foreign data protection laws, regulations, or other obligations could result in government enforcement actions (which could include civil or criminal penalties), private litigation (including class demands), mass arbitration demands, additional reporting requirements and/or oversight, bans or restrictions on processing personal data, orders to destroy or not use personal data, imprisonment of company officials and/or adverse publicity and could negatively affect our operating results and business. Claims that we have violated individuals’ privacy rights, failed to comply with data protection laws, or breached our contractual obligations, even if we are not found liable, could be expensive and time consuming to defend, could result in adverse publicity and could have a material adverse effect on our business, financial condition, and results of operations.

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We may be subject to securities litigation, which is expensive and could divert management attention.

The market price of our common stock may be volatile and, in the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business.

Regulatory registrations or market approvals may be withdrawn, or regulatory requirements may change.

The manufacture, testing, labelling, sale, and marketing of medical devices are subject to extensive regulation in the U.S., Europe, Australia, and other countries. We are pursuing the required regulatory approvals to place our key products on the market in the U.S. and potentially other markets. However, regulatory registrations or market approval of products can subsequently be withdrawn for a variety of reasons, including failure to comply with manufacturing regulatory requirements by the Company or any third-party contractors engaged by us to manufacture our products. Regulators have the power to ban products sold by us as well as to require the recall, repair, replacement, or refund of such products. Further, regulators may change their approval policies or impose additional regulatory requirements on the Company that could increase its compliance costs, restrict its ability to maintain its current regulatory registrations or market approvals, prevent or delay approval of future products under development or impact its ability to modify its currently cleared products. We cannot guarantee that we will successfully maintain the registrations and approvals we currently have or obtain the additional registrations and approvals that we are seeking or may receive in the future, or that we will successfully obtain the registrations and approvals required for future products.

Risks Related to Our Financial Position and Need for Additional Capital

In June 2022, we entered into a loan and security agreement with Runway Growth Finance Corp. for term a loan facility in an aggregate principal amount up to $50 million. The loan agreement provides three term loan tranches. On June 30, 2022, we drew down $20 million under tranche 1. On June 30, 2023, we drew down an additional $20 million under tranche 2. The loan agreement contains various covenants that limit our ability to engage in specified types of transactions. These covenants limit our ability to, among other things:

incur or assume certain debt;

merge or consolidate or acquire all or substantially all of the capital stock or property of another entity;

enter into any transaction or series of related transactions that would be deemed to result in a change in control of us under the terms of the agreement;

change the nature of our business;

change our organizational structure or type;

license, transfer, or dispose of certain assets;

grant certain types of liens on our assets;

make certain investments;

pay cash dividends; and

enter into material transactions with affiliates.

The restrictive covenants in the Loan Agreement could prevent us from pursuing business opportunities that we or our stockholders may consider beneficial.

A breach of any of these covenants could result in an event of default under the loan agreement. An event of default will also occur if, among other things, a material adverse effect in our business, operations, or condition occurs, which could potentially include a material impairment of the prospect of our repayment of any portion of the amounts we owe under the loan agreement. In the case of a continuing event of default under the loan agreement, the lender could elect to declare all amounts outstanding to be immediately due and payable, proceed against the collateral in which we granted the lender a security interest under the loan agreement, or otherwise exercise the rights of a secured creditor. Amounts outstanding under the loan agreement are secured by substantially all of our existing and future assets, excluding intellectual property, but includes all proceeds from the sale of intellectual property.

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The additional $10 million tranche under the loan agreement was only available after receipt of approval from the FDA for the WiSE CRT System and prior to June 30, 2024. Since we were unable to satisfy this condition, we were not able to draw down the remaining tranche of financing and may not be able to obtain alternative financing on commercially reasonable terms or at all, which could adversely impact our business.

We may not have enough available cash or be able to raise additional funds on satisfactory terms, if at all, through equity or debt financing to repay or refinance our indebtedness at the time any such repayment is required. In such an event, we may be required to delay, limit, reduce, or terminate our product development or commercialization efforts. Our business, financial condition, and results of operations could be materially adversely affected as a result.

We have incurred net losses since our inception in 2003. For the years ended December 31, 2024 and 2023, we had a net loss of $40.8 million and $35.0 million, respectively, and we expect to continue to incur additional net losses for at least the next several years. As a result of these losses, as of December 31, 2024 and 2023, we had an accumulated deficit of $353.5 million and $312.7 million, respectively. Our losses and accumulated deficit have primarily been due to the significant investments we have made in research and development and clinical trials designed to provide clinical evidence of the safety and efficacy of our products and in support appropriate regulatory submissions. We have not yet demonstrated an ability to successfully complete pivotal clinical trials, obtain regulatory approvals, manufacture a commercial scale product, or arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful product commercialization.

We expect to continue to incur significant sales and marketing, research and development, regulatory and other expenses as we expand our marketing efforts to establish adoption of our products upon the commencement of commercialization efforts, expand existing relationships with our customers, obtain regulatory clearances or approvals for our planned or future products, conduct clinical trials on our existing and planned or future products and develop new products or add new features to our existing products. In addition, as a public company, we will incur significant legal, accounting, and other expenses that we did not incur as a private company. Accordingly, we expect to continue to incur operating losses and net losses for at least the next several years, and we cannot assure you that we will achieve profitability in the future or that, if we do become profitable, we will sustain profitability. Our failure to achieve and sustain profitability in the future would make it more difficult to finance our business and accomplish our strategic objectives, which would have a material adverse effect on our business, financial condition, and results of operations.

In order to support our continued operations and the growth of our business, we may seek to raise additional capital, which may not be available to us on acceptable terms, or at all.

We expect capital expenditures and operating expenses to increase over the next several years as we continue to operate our business and expand our infrastructure, commercial operations and research and development activities. Our primary uses of capital are, and we expect will continue to be, investment in our commercial organization and related expenses, clinical research and development services, laboratory and related supplies, legal and other regulatory expenses, general administrative costs and working capital. In addition, we may in the future seek to acquire or invest in additional businesses, products, or technologies that we believe could complement or expand our portfolio, enhance our technical capabilities, or otherwise offer growth opportunities. For further information regarding our recent strategic transactions, see the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.”

Because of these and other factors, we expect to continue to incur substantial net losses and negative cash flows from operations for at least the next several years. Our future liquidity and capital funding requirements will depend on numerous factors, including:

our revenue growth;

our research and development efforts;

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our sales and marketing activities;

our success in leveraging strategic partnerships or strategic transactions in the future;

our ability to raise additional funds to finance our operations;

the outcome, costs, and timing of any clinical trial results for our current or future products;

the emergence and effect of competing or complementary products;

the availability and amount of reimbursement for procedures using our products;

our ability to maintain, expand and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with the licensing, filing, prosecution, defense and enforcement of any patents or other intellectual property rights;

our ability to retain our current employees and the need and ability to hire additional management and sales, scientific and medical personnel;

the terms and timing of any collaborative, licensing, or other arrangements that we have or may establish;

debt service requirements;

the extent to which we acquire or invest in businesses, products, or technologies; and

the impact adverse worldwide economic conditions.

If we determine to raise additional funds, we may do so through equity or debt financings, which may not be available to us on the timing needed or on terms that we deem to be favorable. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of common stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making acquisitions or capital expenditures, or declaring dividends. If we are unable to maintain sufficient financial resources, our business, financial condition, and results of operations will be materially and adversely affected, including potentially requiring us to delay, limit, reduce or terminate certain of our product discovery and development activities or future commercialization efforts.

Moreover, in the event that we enter into collaborations or licensing arrangements to raise capital, we may be required to accept unfavorable terms. These agreements may require that we relinquish or license to a third party on unfavorable terms our rights to products or technologies we otherwise would seek to develop or commercialize ourselves or reserve certain opportunities for future potential arrangements when we might be able to achieve more favorable terms.

The issuance of additional shares of our common stock in connection with financings, acquisitions, investments, our share incentive plans or otherwise will dilute all other stockholders.

Our current stockholders do not have preemptive rights to any shares that we issue in the future. Under our Certificate of Incorporation, we have authority to issue a total of 610,000,000 shares. Of the total shares authorized, 600,000,000 are classified as shares of common stock and 10,000,000 are classified as shares of preferred stock. Subject to compliance with applicable rules and regulations, we may issue common stock or securities convertible into common stock from time to time in connection with financing, acquisition, investment, our equity incentive plans or otherwise. Any such issuance could result in substantial dilution to our existing stockholders and cause the market price of our common stock to decline, which will negatively impact the value of a stockholder’s investment, especially if we sell these securities at prices less than the price paid for shares.

Our quarterly and annual results may fluctuate significantly and may not fully reflect the underlying performance of our business.

Our quarterly and annual results of operations, including potential future revenue, profitability or losses, and cash flow, may vary significantly in the future, and period-to-period comparisons of our operating results may not be meaningful. Accordingly, the results of any one quarter or other period should not be relied upon as an indication of future performance. Our quarterly and annual financial results may fluctuate as a result of a variety of factors, many of which are outside our control and, as a result, may not fully reflect the underlying performance of our business. Factors that may cause fluctuations in our quarterly and annual results include, without limitation:

the level of demand for our products, which may vary significantly from period to period;

expenditures that we may incur to acquire, develop, or commercialize additional products and technologies;

the timing and cost of clinical trials, including obtaining regulatory approvals or clearances for planned or future products;

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the rate at which we grow our sales force and the speed at which newly hired salespeople become effective, and the cost and level of investment therein;

the degree of competition in our industry and any change in the competitive landscape of our industry, including consolidation among our competitors or future partners;

coverage and reimbursement policies with respect to the procedures using our products and potential future products that compete with our products;

the timing and success or failure of clinical trials for our current or planned products or any future products we develop or competing products;

the timing of customer orders or medical procedures, the number of available selling days in a particular period, which can be impacted by a number of factors, such as holidays or days of severe inclement weather in a particular geography, the mix of products sold and the geographic mix of where products are sold;

the timing and cost of, and level of investment in, research, development, regulatory approval, and commercialization activities relating to our products, which may change from time to time;

the cost of manufacturing our products, which may vary depending on the quantity of production and the terms of our agreements with third-party suppliers and manufacturers;

natural disasters, or outbreaks of disease or public health crises;

the timing and nature of any future acquisitions or strategic partnerships; and

future accounting pronouncements or changes in our accounting policies.

Because our quarterly and annual results may fluctuate, period-to-period comparisons may not be the best indication of the underlying results of our business and should only be relied upon as one factor in determining how our business is performing.

In addition, this variability and unpredictability could result in our failing to meet the expectations of industry or financial analysts or investors for any period. If our revenue or operating results fall below the expectations of analysts or investors or below any forecasts we may provide to the market, it may result in a decrease in the price of our common stock.

Our current capital reserves may not be adequate.

We may seek additional funding through a combination of equity offerings, debt financings, collaborations and/or licensing arrangements. Additional funding may not be available to us on acceptable terms, or at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, current stakeholders’ interest will be diluted, and the terms may include liquidation or other preferences that adversely affect the rights of existing stakeholders. The incurrence of indebtedness and/or the issuance of certain equity securities could result in fixed payment obligations and could also result in certain additional restrictive covenants, such as limitations on our ability to incur debt and/or issue additional equity, limitations on our ability to acquire or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. In addition, the issuance of additional equity securities by us, or the possibility of such issuance, may cause the market price of our stock to decline. In the event that we enter into collaborations and/or licensing arrangements in order to raise capital, we may be required to accept unfavorable terms, including relinquishing or licensing to a third party on unfavorable terms our rights to our CTR products or our WiSE CRT system that we otherwise would seek to develop or commercialize ourselves or potentially reserve for future potential arrangements when we might be able to achieve more favorable terms. If we require additional funding and are unable to raise these funds, our business could be adversely impacted.

We have capitalized pre-launch inventories prior to receiving FDA approval. If either FDA approval or market acceptance post-approval do not occur at all or on a timely basis, we will be required to write-off pre-launch inventories which could materially and adversely affect our business, financial condition and stock price.

We capitalize costs associated with certain product candidates prior to regulatory approval and product launch (“pre-launch inventories”) when it is reasonably certain that the pre-launch inventories will be saleable, based on management’s judgment of future commercial use and net realizable value. The determination to capitalize is based on the particular facts and circumstances and based on the judgment of our management relating to the potential FDA approval. We could be required to expense previously capitalized costs related to pre-launch inventories upon a change in such judgment, due to a denial or delay of approval by regulatory bodies, a delay in commercialization, or other potential risk factors. Pre-launch inventories consist of costs of raw materials and components related to our WiSE CRT System, which have been capitalized prior to the date that we anticipate that WiSE CRT System may receive FDA approval. If FDA approval does not occur or will be significantly delayed, we will be required to write-off pre-launch inventories and such amounts could be material. In addition, market acceptance of our WiSE CRT System could fall short of our expectations, as a result of the introduction of a competing product, as a result of physicians’, patients’, or payors’ unwillingness to adopt our WiSE CRT System. If any of these risks were to materialize, or if the launch of our WiSE CRT System is significantly postponed, the salability of our pre-launch inventories would be adversely affected and may require write-off of the carrying value of our pre-launch inventories in amounts that could have a material adverse effect on our results of operations and financial condition.

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We expect to be an emerging growth company, and a smaller reporting company should we choose to list on a US exchange, and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies and smaller reporting companies could make our common stock less attractive to investors.

We are an “emerging growth company,” as defined in the JOBS Act, and, for as long as we continue to be an emerging growth company, we may choose to take advantage of exemptions from various reporting requirements applicable to other public companies but not to emerging growth companies, including:

not being required to have our independent registered public accounting firm audit our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act;

reduced disclosure obligations regarding executive compensation in our periodic reports and annual report on Form 10-K; and

exemptions from the requirements of holding non-binding advisory votes on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Our status as an emerging growth company will end as soon as any of the following takes place:

the last day of the fiscal year in which we have more than $1.235 billion in annual revenue;

the date we qualify as a “large accelerated filer,” with at least $700 million of equity securities held by non-affiliates;

the date on which we have issued, in any three-year period, more than $1.0 billion in non-convertible debt securities; or

the last day of the fiscal year ending following the fifth anniversary of the date of our first sale of our common stock pursuant to an effective registration statement under the Securities Act.

We cannot predict if investors will find our common stock less attractive if we choose to rely on any of the exemptions afforded emerging growth companies. If some investors find our common stock less attractive because we rely on any of these exemptions, there may be a less active trading market for our common stock and the market price of our common stock may be more volatile.

Under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have elected to avail ourselves of this provision of the JOBS Act. As a result, we will not be subject to new or revised accounting standards at the same time as other public companies that are not emerging growth companies. Therefore, our consolidated financial statements may not be comparable to those of companies that comply with new or revised accounting pronouncements as of public company effective dates.

We are also a “smaller reporting company” as defined in the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as our voting and non-voting common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100.0 million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.

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Our results may be impacted by changes in foreign currency exchange rates.

Our reporting currency is the U.S. dollar, and our expenses are generally denominated in the currencies in which our operations are located, which is primarily in the United States, Australia, and Europe. If our operations in countries outside of the United States grow, our results of operations and cash flows will be subject to fluctuations due to changes in foreign currency exchange rates, which could harm our business in the future. For example, if the value of the U.S. dollar increases relative to foreign currencies, in the absence of a corresponding change in local currency prices, our revenue could be adversely affected as we convert revenue from local currencies to U.S. dollars. In addition, because we conduct business in currencies other than U.S. dollars, but report our results of operations in U.S. dollars, we also face remeasurement exposure to fluctuations in currency exchange rates, which could hinder our ability to predict our future results and earnings and could impact our results of operations. We do not currently maintain a program to hedge exposures to non-U.S. dollar currencies. If we are unable to address these risks effectively, it could have a material adverse effect on our business, financial condition, and results of operations.

Risks Related to Government Regulation

Regulatory compliance is expensive, complex, and uncertain, and a failure to comply could lead to enforcement actions against us and other negative consequences for our business.

Our current products are subject to extensive regulation by the FDA in the United States, and certain other non-U.S. regulatory agencies and supervision by our Notified Body in the European Union. Complying with these regulations is costly, time-consuming, complex, and uncertain. Government regulations specific to medical devices are wide- ranging and include, among other things, oversight of:

product design, development, manufacture (including suppliers) and testing;

laboratory, preclinical and clinical trials;

product safety and effectiveness;

product labeling;

product storage and shipping;

record keeping;

premarket clearance or approval;

marketing, advertising, and promotion;

product sales, distribution, and use of device;

product modifications;

product recalls, repairs, replacements, or refunds;

product tracking;

reports of corrections, removals, enhancements, recalls and field corrective actions;

post-market surveillance and reporting of deaths or serious injuries and certain malfunctions; and

product import and export

Before a new medical device or service, or a new intended use for an existing product or service, can be marketed in the United States, a company must first submit and receive either 510(k) clearance or PMA from the FDA, unless an exemption applies. In the 510(k) clearance process, before a device may be marketed, the FDA must determine that a proposed device is substantially equivalent to a legally marketed predicate device, which includes a device that has been previously cleared through the 510(k) process, a device that was legally marketed prior to May 28, 1976 (pre-amendments device), a device that was originally on the U.S. market pursuant to an approved PMA and later down-classified, or a 510(k)-exempt device. To be substantially equivalent, the proposed device must have the same intended use as the predicate device, and either have the same technological characteristics as the predicate device or have different technological characteristics and not raise different questions of safety or effectiveness than the predicate device. Clinical data are sometimes required to support substantial equivalence. In the process of obtaining PMA approval, the FDA must determine that a proposed device is safe and effective for its intended use based, in part, on extensive data, including, but not limited to, technical, preclinical, clinical trial, manufacturing and labeling data. The PMA process is typically required for devices that are deemed to pose the greatest risk, such as life-sustaining, life-supporting or implantable devices.

Either the 510(k) or PMA process can be expensive, lengthy, and unpredictable. We may not be able to obtain any necessary clearances or approval or may be unduly delayed in doing so, which will negatively affect our business, financial condition, and results of operations. Furthermore, even if we are granted regulatory clearances or approvals, they may include significant limitations on the indicated uses for the product, which may limit the market for the product. Although we have obtained 510(k) clearance to market our products, our clearance can be revoked if safety or efficacy problems develop.

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Further, all of our potential products and improvements of our current products will be subject to extensive regulation and will likely require permission from regulatory agencies and ethics boards to conduct clinical trials and clearance or approval from the FDA and non-U.S. regulatory agencies prior to commercial sale and distribution. Failure to comply with applicable U.S. requirements regarding, for example, promoting, manufacturing, or labeling our products, may subject us to a variety of administrative or judicial actions and sanctions, such as Form 483 observations, warning letters, untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties, and criminal prosecution. The FDA can also refuse to clear or approve pending applications. Equivalent rules and powers apply outside the U.S.

Any enforcement action by the FDA and other comparable non-U.S. regulatory agencies could have a material adverse effect on our business, financial condition, and results of operations. Our failure to comply with applicable regulatory requirements could result in enforcement action by the FDA or state or comparable foreign regulatory authorities agencies, which may include any of the following actions:

untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties;

unanticipated expenditures to address or defend such actions;

customer notifications for repair, replacement, or refunds;

recall, detention or seizure of our products;

operating restrictions or partial suspension or total shutdown of production;

refusing or delaying our requests for 510(k) clearance or PMA approval of new products or modified products;

operating restrictions;

withdrawing 510(k) clearances or PMA approvals that have already been granted;

refusal to grant export approval for our products; or

criminal prosecution.

If any of these events were to occur, it would have a material and adverse effect on our business, financial condition, and results of operations.

The FDA and the Federal Trade Commission (“FTC”), also regulates the advertising and promotion of our products to ensure that the claims we make are consistent with our regulatory clearances and approvals, that there are adequate and reasonable data to substantiate the claims and that our promotional labeling and advertising is neither false nor misleading in any respect. If the FDA or FTC determines that any of our advertising or promotional claims are misleading, not substantiated or not permissible, we may be subject to enforcement actions, including warning letters, and we may be required to revise our promotional claims and make other corrections or restitutions. Equivalent rules and powers apply outside the U.S.

Our operations are subject to pervasive and continuing FDA regulatory requirements.

Medical devices regulated by the FDA are subject to “general controls” which include: registration with the FDA; listing commercially distributed products with the FDA; complying with current good manufacturing practice (“cGMP”) under quality management system regulation (“QSR”); filing reports with the FDA of and keeping records relative to certain types of adverse events associated with devices under the medical device reporting regulation; assuring that device labeling complies with device labeling requirements; reporting certain device field removals and corrections to the FDA; and obtaining premarket notification 510(k) clearance for devices prior to marketing. Some devices known as “510(k)-exempt” devices can be marketed without prior marketing-clearance or approval from the FDA. In addition to the “general controls,” some Class II medical devices are also subject to “special controls,” including adherence to a particular guidance document and compliance with the performance standard. Instead of obtaining 510(k) clearance, most Class III devices are subject to PMA. As a company, we do not have prior experience in obtaining PMA approval.

The medical device industry is now experiencing greater scrutiny and regulation by federal, state, and comparable foreign regulatory authorities. Companies in our industry are subject to more frequent and more intensive reviews and investigations, often involving marketing, business practices and product quality management. Such reviews and investigations may result in civil and criminal proceedings; the imposition of substantial fines and penalties; the receipt of warning letters, untitled letters, demands for recalls or the seizure of our products; the requirement to enter into corporate integrity agreements, stipulated judgments or other administrative remedies; and could result in our incurring substantial unanticipated costs and the diversion of key personnel and management’s attention from their regular duties, any of which may have a material and adverse effect on our business, financial condition and results of operations, and may result in greater and continuing governmental scrutiny of our business in the future.

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Additionally, federal, state, and foreign governments and entities have enacted laws and issued regulations and other standards requiring increased visibility and transparency of our interactions with healthcare providers. For example, Open Payments requires us to annually report to the Centers for Medicare & Medicaid Services(“CMS”), payments, and other transfers of value to all U.S. physicians and U.S. teaching hospitals, with the reported information made publicly available on a searchable website. Failure to comply with these legal and regulatory requirements could impact our business, and we have had and will continue to spend substantial time and financial resources to develop and implement enhanced structures, policies, systems, and processes to comply with these legal and regulatory requirements, which may also impact our business, and which could have a material adverse effect on our business, financial condition, and results of operations. Equivalent transparency obligations and related powers and penalties exist outside the U.S.

Any product that we market will be subject to continued regulatory review, oversight and periodic inspections by the FDA and other domestic and foreign regulatory bodies. Such oversight will cover, among other things, the product’s design and manufacturing processes, our quality system and compliance with reporting requirements, our compliance with post-approval clinical data requirements, and our promotional activities related to our products.

Even if regulatory clearance or approval of a product is granted, such clearance or approval may be subject to limitations on the intended uses for which the product may be marketed and reduce our potential to successfully commercialize the product and generate revenue from the product. If the FDA determines that our promotional materials, labeling, training or other marketing or educational activities constitute promotion of an unapproved use, it could request that we cease or modify our training or promotional materials or subject us to regulatory enforcement actions. It is also possible that other federal, state or foreign enforcement authorities might take action if they consider our training or other promotional materials to constitute promotion of an unapproved use, which could result in significant fines or penalties under other statutory authorities, such as laws prohibiting false claims for reimbursement.

In addition, we may be required to conduct costly post-market testing and surveillance to monitor the safety or effectiveness of our products. Later discovery of previously unknown problems with our products, including unanticipated adverse events or adverse events of unanticipated severity or frequency, manufacturing problems, or failure to comply with regulatory requirements such as QSR or QMSR, may result in, among other things, changes to labeling, restrictions on such products or manufacturing processes, product corrections, removal of the products from the market, voluntary or mandatory recalls, a requirement to repair, replace or refund the cost of any medical device we manufacture or distribute, fines, withdrawal of regulatory clearance or approvals, delays in or refusals of new 510(k)s, de novo requests or PMA applications, untitled letters, warning letters, refusal to grant export certificates for our products, product seizures, injunctions or the imposition of civil or criminal penalties which would adversely affect our business, operating results and prospects.

The FDA and comparable foreign regulatory authorities have the authority to require the recall of our products because of any failure to comply with applicable laws and regulations, or defects in design or manufacture. A government mandated or voluntary product recall by us could occur because of, for example, component failures, device malfunctions or other adverse events, such as serious injuries or deaths, or quality- related issues, such as manufacturing errors or design or labeling defects. Any future recalls of our products could divert managerial and financial resources, harm our reputation, and adversely affect our business.

If we initiate a correction or removal for one of our devices to reduce a risk to health posed by the device, we would be required to submit a publicly available Correction and Removal report to the FDA and, in many cases, similar reports to other regulatory agencies, including comparable foreign regulatory authorities. This report could be classified by the FDA as a device recall which could lead to increased scrutiny by the FDA, other comparable foreign regulatory authorities and our customers regarding the quality and safety of our devices. Furthermore, the submission of these reports has been and could be used by competitors against us in competitive situations and cause customers to delay purchase decisions or cancel orders and would harm our reputation.

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In addition, we are subject to medical device reporting regulations that require us to report to the FDA or comparable foreign regulatory authorities if one of our products may have caused or contributed to a death or serious injury or if we become aware that it has malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction recurred. Failures to properly identify reportable events or to file timely reports, as well as failure to address each of the observations to the satisfaction of the FDA or a comparable foreign regulatory authority, can subject us to sanctions and penalties, including warning letters and recalls. Physicians, hospitals, and other healthcare providers may make similar reports to regulatory authorities. Any such reports may trigger an investigation by the FDA or comparable foreign regulatory authorities, which could divert managerial and financial resources, harm our reputation, and have a material adverse effect on our business, financial condition, and results of operations.

As a public company, we are required to maintain internal controls over financial reporting and to report any material weaknesses in such internal controls. In addition, beginning with our second annual report on Form 10-K, we expect we will be required to furnish annual management assessments of the effectiveness of our internal control over financial reporting. However, while we remain an emerging growth company, we will not be required to include a report by our independent registered public accounting firm addressing these assessments pursuant to Section 404 of the Sarbanes-Oxley Act. These reporting and other obligations may place significant demands on management, and administrative and operational resources, including accounting systems and resources.

The process of designing, implementing and testing the internal control over financial reporting required to comply with this obligation is time consuming, costly and complicated. If we identify material weaknesses in our internal control over financial reporting, if we are unable to comply with the applicable requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner or to assert that our internal control over financial reporting is effective, or, when applicable, if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be negatively affected, and we could become subject to investigations by the stock exchange on which our securities are then listed, the SEC, or other regulatory authorities, which could require additional financial and management resources.

Failure to comply with anti-bribery, anti-corruption, and anti-money laundering laws, including the FCPA, as well as export control laws, customs laws, sanctions laws and other laws governing our operations could result in civil or criminal penalties, other remedial measures, and legal expenses.

As we grow our international presence, we are increasingly exposed to anti-corruption, trade and economic sanctions and other restrictions imposed by the United States, the European Union and other governments and organizations. The FCPA generally prohibits companies and their employees and third-party intermediaries from offering, promising, giving, or authorizing the provision of anything of value, either directly or indirectly, to a non-U.S. government official in order to influence official action or otherwise obtain or retain business. In addition, the U.K. Bribery Act prohibits both domestic and international bribery, as well as bribery across both private and public sectors. We may have direct or indirect interactions with officials and employees of government agencies or government-affiliated hospitals, universities, and other organizations. Violations of the FCPA, U.K. Bribery Act and anti-corruption laws could result in fines, criminal sanctions against us, our officers or our employees and prohibitions on the conduct of our business. Violations would also negatively affect our business and reputation, financial condition, and results of operations.

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In addition, our solutions may be subject to U.S. and foreign export controls, trade sanctions and import laws and regulations. Governmental regulation of the import or export of our solutions, or our failure to obtain any required import or export authorization for our solutions, when applicable, could harm our international sales and adversely affect our revenue. Compliance with applicable regulatory requirements regarding the export of our solutions may create delays in the introduction of our solutions in international markets or, in some cases, prevent the export of our solutions to some countries altogether. Furthermore, U.S. export control laws and economic sanctions prohibit the shipment of certain products and services to countries, governments, and persons targeted by U.S. sanctions. If we fail to comply with export and import regulations and such economic sanctions, penalties could be imposed, including fines and/or denial of certain export privileges. Moreover, any new export or import restrictions, new legislation or shifting approaches in the enforcement or scope of existing regulations, or in the countries, persons or products targeted by such regulations, could result in decreased use of our solutions by, or in our decreased ability to export our solutions to, existing or potential customers with international operations. Any decreased use of our solutions or limitation on our ability to export or sell access to our solutions would likely adversely affect our business.

We have implemented policies and procedures designed to ensure compliance by us and our directors, officers, employees, representatives, consultants, and agents with the FCPA, the U.K. Bribery Act, export control and economic sanctions laws, and other anti-corruption, anti-money-laundering and anti-terrorism laws, and regulations. We cannot assure you, however, that our policies and procedures are or will be sufficient or that directors, officers, employees, representatives, consultants, and agents have not engaged and will not engage in prohibited conduct for which we may be held responsible. Violations of the FCPA, the U.K. Bribery Act, export control and economic sanctions laws, or other anti-corruption, anti-money laundering and anti-terrorism laws or regulations may result in severe criminal or civil sanctions, and we may be subject to other liabilities, which could have a material adverse effect on our business, financial condition, and results of operations.

The impact of the E.U. Medical Device Regulation may be costly and disruptive to our business.

The changes to the regulatory system implemented in the EU by the MDR include stricter requirements for clinical evidence and pre-market assessment of safety and performance, new classifications to indicate risk levels, requirements for third-party testing by Notified Bodies, additional requirements for the quality management system, traceability of products and transparency as well a refined responsibility of economic operators. We are also required to provide clinical data in the form of a clinical evaluation report. Fulfilment of the obligations imposed by the MDR may cause us to incur substantial costs. We may be unable to fulfil these obligations, or our Notified Body, where applicable, may consider that we have not adequately demonstrated compliance with our related obligations to merit a CE Certificate of Conformity on the basis of the MDR or continued certification under the MDR. Following the withdrawal of the United Kingdom from the European Union on January 31, 2020, commonly referred to as Brexit, an EU-UK Trade and Cooperation Agreement, or TCA, was concluded. As a result of this Agreement, Northern Ireland will continue to follow many aspects of the European Union regulatory rules, particularly in relation to trade in goods, and including the Medical Devices Regulation. In light of the fact that the CE Marking process is set out in EU law, which no longer applies in the United Kingdom, the United Kingdom has devised a new route to market culminating in a UKCA Mark to replace the CE Mark. Northern Ireland will, however, continue to be covered by the regulations governing CE Marks. The UK government also plans to introduce new legislation governing medical devices to apply from 1 July 2025. We cannot be sure that the regulations in Northern Ireland will continue to follow that in the EU. Neither can we be sure that future United Kingdom legislation governing medical devices will not diverge substantially from that applicable in the EU, preventing us relying on data and materials developed as part of conformity assessment in the EU to support application for a UKCA in the United Kingdom.

Legislative or regulatory reforms may make it more difficult and costly for us to obtain regulatory clearance or approval of our planned or future products and to manufacture, market and distribute our products after clearance or approval is obtained.

From time to time, legislation is drafted and introduced in Congress that could significantly change the statutory provisions governing the regulatory approval, manufacture and marketing of regulated products or the reimbursement thereof. In addition, FDA regulations and guidance are often revised or reinterpreted by the FDA in ways that may significantly affect our business and our products. For example, the FDA issued a final rule in February 2024 replacing the QSR with the Quality Management System Regulation (“QMSR”), which incorporates by reference the quality management system requirements of ISO 13485:2016. The FDA has stated that the standards contained in ISO 13485:2016 are substantially similar to those set forth in the existing QSR. This final rule does not go into effect until February 2026. Any new regulations or revisions or reinterpretations of existing regulations may impose additional costs or lengthen review times of future products. FDA regulations and guidance are often revised or reinterpreted by the agency in ways that may significantly affect our business and our products. It is impossible to predict whether legislative changes will be enacted, or FDA regulations, guidance or interpretations changed, and what the impact of such changes, if any, may be.

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Compliance with the Medical Device Regulation and its associated guidance documents and harmonized standards is a prerequisite to be able to affix the CE mark to devices, without which they cannot be marketed or sold in the EEA. The changes to the existing regulatory system implemented in the EU by the Regulation include stricter requirements for clinical evidence and pre-market assessment of safety and performance, new classifications to indicate risk levels, requirements for third party testing by Notified Bodies, tightened and streamlined quality management system assessment procedures and additional requirements for the quality management system, additional requirements for traceability of products and transparency as well a refined responsibility of economic operators. We are also required to provide clinical data in the form of a clinical evaluation report. Fulfilment of the obligations imposed by this may cause us to incur substantial costs. We may be unable to fulfil these obligations for medical devices we intend to place on the EU market, or our Notified Body, where they are involved, may consider that we have not adequately demonstrated compliance with our related obligations to merit a CE Certificate of Conformity on the basis of the Medical Device Regulation. We must obtain the appropriate CE Certificate(s) of Conformity in accordance with the Medical Device Regulation to continue to place our products on the EU market, or other countries that relate their medical device regulations to a CE mark, once we can no longer benefit from the transitional provisions of the Medical Device Regulation. The modifications of the Medical Device Regulation may have an effect on the way we conduct our business in the EEA. Additional regulatory changes may negatively affect our business, financial condition, and results of operations.

Any change in the laws or regulations that govern the clearance and approval processes relating to our current, planned, and future products could make it more difficult and costly to obtain clearance or approval for new products or to produce, market and distribute existing products. Significant delays in receiving clearance or approval or the failure to receive clearance or approval for our new products would have an adverse effect on our ability to expand our business.

If we fail to comply with U.S. federal and state fraud and abuse and other healthcare laws and regulations, including those relating to kickbacks and false claims for reimbursement, we could face substantial penalties, and our business operations and financial condition could be adversely affected.

Healthcare providers and third-party payors play a primary role in the distribution, recommendation, ordering and purchasing of any medical device for which we have or obtain marketing clearance or approval. Through our arrangements with principal investigators, healthcare professionals and customers, we are exposed to broadly applicable anti-fraud and abuse, anti-kickback, false claims and other healthcare laws and regulations that may constrain our business, our arrangements, and relationships with customers, and how we market, sell, and distribute our marketed medical devices. We have a compliance program, code of business conduct and ethics and associated policies and procedures, but it is not always possible to identify and deter misconduct by our employees and other third parties, and the precautions we take to detect and prevent noncompliance may not be effective in protecting us from governmental investigations for failure to comply with applicable fraud and abuse or other healthcare laws and regulations.

In the United States, we are subject to various state and federal anti-fraud and abuse laws, including, without limitation, the federal healthcare Anti-Kickback Statute and federal civil False Claims Act, federal data privacy and security laws and federal transparency laws related to payments and/or other transfers of value made to physicians and other healthcare professionals and teaching hospitals. There are similar laws in other countries. Our relationships and our distributors’ relationships with physicians, other health care professionals and hospitals are subject to scrutiny under these laws.

Healthcare fraud and abuse laws and related regulations are complex, and even minor irregularities can potentially give rise to claims that a statute or prohibition has been violated. The laws that may affect our ability to operate include:

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HIPAA, which imposes criminal and civil liability for, among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payors, or knowingly and willfully falsifying, concealing or covering up a material fact or making a materially false, fictitious or fraudulent statement or representation, or making or using any false writing or document knowing the same to contain any materially false, fictitious or fraudulent statement or entry in connection with the delivery of or payment for healthcare benefits, items or services;

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Analogous state and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers; state and foreign laws that require medical device companies to comply with the industry’s voluntary compliance guidelines and the applicable compliance guidance promulgated by the government or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state and foreign beneficiary inducement laws, which are laws that require medical device manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

State and federal regulatory and enforcement agencies continue to actively investigate violations of healthcare laws and regulations, and the U.S. Congress continues to strengthen the arsenal of enforcement tools. Most recently, the Bipartisan Budget Act of 2018, or BBA, increased the criminal and civil penalties that can be imposed for violating certain federal health care laws, including the Anti-Kickback Statute. Enforcement agencies also continue to pursue novel theories of liability under these laws. Government agencies have continued regulatory scrutiny and enforcement activity with respect to manufacturer reimbursement support activities and patient support programs, including bringing criminal charges or civil enforcement actions under the Anti-Kickback Statute, federal civil False Claims Act and HIPAA’s healthcare fraud and privacy provisions.

Because of the breadth of these laws and the narrowness of the statutory exceptions and regulatory safe harbors available under such laws, it is possible that some of our business activities, including certain sales and marketing practices, and financial arrangements with physicians, other healthcare providers and other customers, could be subject to challenge under one or more such laws. If an arrangement were deemed to violate the Anti- Kickback Statute, it may also subject us to violations under other fraud and abuse laws such as the federal civil False Claims Act and civil monetary penalties laws. Moreover, such arrangements could be found to violate comparable state fraud and abuse laws.

Achieving and sustaining compliance with applicable federal and state anti-fraud and abuse laws may prove costly. If we or our employees are found to have violated any of the above laws, we may be subjected to substantial criminal, civil and administrative penalties, including imprisonment, exclusion from participation in federal healthcare programs, such as Medicare and Medicaid, and significant fines, monetary penalties, forfeiture, disgorgement and damages, contractual damages, reputational harm, administrative burdens, diminished profits and future earnings and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our financial results. Any action or investigation against us for the violation of these healthcare fraud and abuse laws, even if successfully defended, could result in significant legal expenses, and could divert our management’s attention from the operation of our business. Companies settling federal civil False Claims Act, Anti-Kickback Statute or civil monetary penalties law cases also may be required to enter into a Corporate Integrity Agreement with the OIG in order to avoid exclusion from participation (i.e., loss of coverage for their products) in federal healthcare programs such as Medicare and Medicaid. Corporate Integrity Agreements typically impose substantial costs on companies to ensure compliance. Defending against any such actions can be costly, time-consuming and may require significant personnel resources, and may have a material adverse effect on our business, financial condition, and results of operations.

Healthcare reform initiatives and other administrative and legislative proposals may adversely affect our business, financial condition, results of operations and cash flows in our key markets.

In the United States and certain foreign jurisdictions, there have been, and we expect there will continue to be, a number of legislative and regulatory changes to the healthcare system. For example, implementation of the ACA substantially changed the way healthcare is financed by both governmental and private insurers in the United States and significantly affected the pharmaceutical industry. The ACA, among other things, increased the minimum level of Medicaid rebates payable by manufacturers of brand name drugs; required collection of rebates for drugs paid by Medicaid managed care organizations; required manufacturers to participate in a coverage gap discount program, under which they must agree to offer point-of-sale discounts (increased to 70 percent, effective as of January 1, 2019) off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D; imposed a non-deductible annual fee on pharmaceutical manufacturers or importers who sell certain “branded prescription drugs” to specified federal government programs, implemented a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted, or injected expanded the types of entities eligible for the 340B drug discount program; expanded eligibility criteria for Medicaid programs; created a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research; and established a Center for Medicare Innovation at CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending.

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Since its enactment, there have been judicial, administrative, executive, and Congressional legislative challenges to certain aspects of the ACA. For example, on June 17, 2021, the U.S. Supreme Court dismissed a challenge on procedural grounds that argued the ACA is unconstitutional in its entirety because the “individual mandate” was repealed by Congress. Further, prior to the U.S. Supreme Court ruling, on January 28, 2021, President Biden issued an executive order to initiate a special enrollment period for purposes of obtaining health insurance coverage through the ACA marketplace. The executive order also instructed certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, including among others, reexamining Medicaid demonstration projects and waiver programs that include work requirements, and policies that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the ACA. In addition, on August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (“IRA”) into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025. The IRA also eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and creating a new manufacturer discount program. It is unclear how such challenges and the healthcare reform measures of the Biden administration will impact the ACA.

Other legislative changes have been proposed and adopted since the ACA was enacted, including aggregate reductions of Medicare payments to providers of 2% per fiscal year pursuant to the Budget Control Act of 2011 which went into effect on April 1, 2013, and due to subsequent legislative amendments, will remain in effect until 2032, unless additional Congressional action is taken. In addition, on January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law which, among other things, further reduced Medicare payments to several types of providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. Congress is considering additional health reform measures.

Individual states in the United States have also become increasingly active in implementing regulations designed to control pharmaceutical and device product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures and, in some cases, mechanisms to encourage importation from other countries and bulk purchasing. In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine which products and supplies will be included in their healthcare programs. Furthermore, there has been increased interest by third-party payors and governmental authorities in reference pricing systems and publication of discounts and list prices.

We expect additional state and federal healthcare reform measures to be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services. Further, the expansion in any government’s regulation of the healthcare industry may result in decreased profits to EBR and reduced medical procedure volumes, all of which may adversely affect the Company’s business and financial position.

Our global operations expose us to numerous and sometimes conflicting legal and regulatory requirements, and violation of these requirements could harm our business.

We are subject to numerous, and sometimes conflicting, legal regimes in the countries in which we operate, including on matters as diverse as health and safety standards, marketing and promotional activities, anticorruption, import/export controls, content requirements, trade restrictions, tariffs, taxation, sanctions, immigration, internal and disclosure control obligations, securities regulation, anti-competition, data privacy and labor relations. This includes emerging markets where legal systems may be less developed or familiar to us. We strive to abide by and maintain compliance with these laws and regulations. Compliance with diverse legal requirements is costly, time-consuming and requires significant resources. Violations of one or more of these regulations in the conduct of our business could result in significant fines, criminal sanctions against us or our officers, prohibitions on doing business and damage to our reputation. Violations of these regulations in connection with the performance of our obligations to our customers also could result in liability for significant monetary damages, fines and/or criminal prosecution, unfavorable publicity and other reputational damage, restrictions on our ability to process information and allegations by our customers or distributors that we have not performed our contractual obligations. Due to the varying degrees of development of the legal systems of the countries in which we operate, local laws might be insufficient to protect our rights.

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Our international operations could be affected by changes in laws, trade regulations, labor and employment regulations, and procedures and actions affecting approval, products and solutions, pricing, reimbursement and marketing of our products and solutions, as well as by inter-governmental disputes. Any of these changes could adversely affect our business. The imposition of new laws or regulations, including potential trade barriers, may increase our operating costs, impose restrictions on our operations or require us to spend additional funds to gain compliance with the new rules, if possible, which could have an adverse impact on our financial condition and results of operations.

Modifications to our products may require new regulatory clearances, CE Marks or other premarket approvals or may require us to recall or cease marketing our products and services until clearances or approvals are obtained.

Any modification to a 510(k)-cleared device that could significantly affect its safety or effectiveness, including significant changes to a device’s design, materials, chemical composition, energy source, or manufacturing process, or that would constitute a major change in its intended use, may require a new 510(k) clearance, a de novo classification, or possibly a PMA. Modifications to our products that were implemented without obtaining clearance or approval and for which FDA subsequently concludes that clearance or approval was required, may require us to recall or cease marketing the modified devices until clearance or approval is obtained. The FDA requires device manufacturers to initially make and document a determination of whether or not a modification requires a new approval, supplement, or clearance. To do that, a manufacturer must determine if a change/modification to labeling of the device is a “major” change to the intended use statement (previously cleared by the FDA) or if a physical change/modification to the device itself “could significantly affect safety or effectiveness.” If the labeling change is major and/or the physical change significantly affects safety and effectiveness, the manufacturer must file for an additional 510(k) clearance, de novo classification, or PMA for those changes before the modified device can be lawfully marketed. If the Company concludes in its own self-determination that the changes do not meet either of the thresholds of “major “or “significantly affects,” it may simply document those changes by way of an internal letter-to-file as part of the manufacturer’s quality system recording keeping. However, the FDA can review a manufacturer’s decision and may disagree. The FDA will normally review a decision made by a manufacturer in a letter-to-file during a routine plant inspection, which FDA targets to conduct every two years for high-risk (Class III) device manufacturers and certain low and moderate risk (Class I and II) device manufacturers. In such a review the FDA may determine that a new clearance or approval was required before the device was put into commercial distribution.

If any of our products cause or contribute to a death or a serious injury or malfunction in certain ways, we will be required to report under applicable medical device reporting regulations, which can result in voluntary corrective actions or agency enforcement actions.

Under FDA MDR regulations, medical device manufacturers are required to report to the FDA information that a device has or may have caused or contributed to a death or serious injury or has malfunctioned in a way that would likely cause or contribute to death or serious injury if the malfunction of the device or one of our similar devices were to recur. If we fail to report events required to be reported to the FDA within the required timeframes, or at all, the FDA could take enforcement action and impose sanctions against us. Any such adverse event involving our products also could result in future voluntary corrective actions, such as recalls or customer notifications, or agency action, such as inspection or enforcement action. Any corrective action, whether voluntary or involuntary, as well as defending ourselves in a lawsuit, would require our time and capital, distract management from operating our business and may harm our reputation and have a material adverse effect on our business, financial condition, and results of operations. Comparable foreign regulatory authorities have equivalent rules and powers exist outside the U.S.

Our employees, independent contractors, consultants, strategic partners, distributors, and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.

We are exposed to the risk that our employees, independent contractors, consultants, strategic partners, distributors, and vendors may engage in fraudulent or illegal activity. Misconduct by these parties could include intentional, reckless and/or negligent conduct or disclosure of unauthorized activities to us that violates: (i) the laws of the FDA and other comparable foreign regulatory authorities, including those laws requiring the reporting of true, complete and accurate information to such regulators; (ii) manufacturing standards; (iii) healthcare fraud and abuse laws in the United States and similar foreign fraudulent misconduct laws; or (iv) laws that require the true, complete and accurate reporting of financial information or data. These laws may impact, among other things, future sales, marketing, and education programs. In particular, the promotion, sales and marketing of healthcare items and services, as well as certain business arrangements in the healthcare industry, are subject to extensive laws designed to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, structuring and commissions, certain customer incentive programs and other business arrangements generally. Activities subject to these laws also involve the improper use of information obtained in the course of patient recruitment for clinical trials.

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We have adopted a code of business conduct and ethics, but it is not always possible to identify and deter misconduct by our employees and other third parties, and the precautions we take to detect and prevent these activities may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. If any such actions are instituted against us and we are not successful in defending ourselves or asserting our rights, those actions could result in the imposition of significant fines or other sanctions, including the imposition of civil, criminal and administrative penalties, damages, monetary fines, disgorgement, individual imprisonment, additional integrity reporting and oversight obligations, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings and curtailment of operations, any of which could adversely affect our ability to operate our business and our results of operations. Whether or not we are successful in defending against any such actions or investigations, we could incur substantial costs, including legal fees, and divert the attention of management in defending ourselves against any of these claims or investigations, which could have a material adverse effect on our business, financial condition, and results of operations.

Compliance with environmental laws and regulations could be expensive, and failure to comply with these laws and regulations could subject us to significant liability.

Our research and development and manufacturing operations involve the use of hazardous substances and are subject to a variety of federal, state, local and foreign environmental laws and regulations relating to the storage, use, discharge, disposal, remediation of, and human exposure to, hazardous substances and the sale, labeling, collection, recycling, treatment, and disposal of products containing hazardous substances. Liability under environmental laws and regulations can be joint and several and without regard to fault or negligence. Compliance with environmental laws and regulations may be expensive and noncompliance could result in substantial liabilities, fines and penalties, personal injury and third-party property damage claims and substantial investigation and remediation costs. Environmental laws and regulations could become more stringent over time, imposing greater compliance costs, and increasing risks and penalties associated with violations. We cannot assure you that violations of these laws and regulations will not occur in the future or have not occurred in the past as a result of human error, accidents, equipment failure or other causes. The expense associated with environmental regulation and remediation could harm our financial condition and results of operations.

Any barriers or delays to us obtaining future regulatory approvals would limit the size of the market opportunity for WiSE CRT.

Our business model depends on hospitals and clinics in markets where we obtain the required regulatory approvals adopting our WiSE CRT System for the treatment of heart failure with CRT. We enrolled patients at 43 sites in the U.S. as part of the SOLVE-CRT clinical trial. However, there can be no guarantee that all or any of these sites will adopt WiSE CRT if FDA approval is granted. Even if a site does adopt the WiSE CRT System, the site may not adopt WiSE CRT at the levels required to support our business model and growth strategy. If our technology for CRT procedures is not increasingly adopted or favored by hospitals, clinics, and physicians, our ability to achieve our growth strategy and generate revenue will be significantly impaired.

We could be adversely affected by violations of the FCPA and similar worldwide anti-bribery laws and any investigation.

The FCPA and similar worldwide anti-bribery laws prohibit companies and their intermediaries from corruptly providing any benefits to government officials for the purpose of obtaining or retaining business. Due to the significant role government entities play in the administration and regulation of many foreign healthcare markets, the Company may be exposed to heightened FCPA, and similar risks arising from its efforts to promote and sell its products and to seek regulatory approval of and reimbursement for its products in such countries. In the future, the Company also may operate in parts of the world that have experienced governmental corruption to some degree. We cannot assure investors that our internal control policies and procedures will protect us from improper acts committed by our employees or agents. Violations of these laws, or allegations of such violations, could significantly disrupt our business and have a material adverse effect on our business, brand, financial condition, and results of operations.

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If our facilities become damaged or inoperable, or if we are required to vacate a facility, we may be unable to manufacture our products or we may experience delays in production or an increase in costs, which could adversely affect our results of operations.

We currently maintain our research and development, manufacturing and administrative operations in a building located in Sunnyvale, California, and we do not have redundant facilities. Should our building be significantly damaged or destroyed by natural or man-made disasters, such as earthquakes, fires (both of which are prevalent in California) or other events, it could take months to relocate or rebuild, during which time our employees may seek other positions, our research, development, and manufacturing would cease or be delayed, and our products may be unavailable. Because of the time required to authorize manufacturing in a new facility under federal, state, and non-U.S. regulatory requirements, we may not be able to resume production on a timely basis even if we are able to replace production capacity. While we maintain property and business interruption insurance, such insurance has limits and would not cover all damages, including losses caused by earthquakes or losses we may suffer due to our products being replaced by competitors’ products. The inability to perform our research, development, and manufacturing activities if our facilities become inoperable, combined with our limited inventory of materials and components and manufactured products, may cause physicians to discontinue using our products or harm our reputation, and we may be unable to re-establish relationships with such physicians in the future. Consequently, a catastrophic event at our current facility or any future facilities could have a material adverse effect on our business, financial condition, and results of operations.

The current lease for our manufacturing facility expires at the end of December 2026. In January 2025, we entered into a new lease agreement to lease our new corporate headquarters, laboratory and manufacturing facility until December 31, 2036. Relocating our manufacturing facility involves significant expense in connection with the movement and installation of key manufacturing equipment and any necessary recertification with regulatory bodies, and we cannot assure you that such a move would not delay or otherwise adversely affect our manufacturing activities or operating results. If our manufacturing capabilities were impaired by our move, we may not be able to manufacture and ship our products in a timely manner, which would adversely impact our business.

Risks Related to Our Intellectual Property

We are dependent on the protection and enforcement of our intellectual property rights.

The protection of the intellectual property relied upon by EBR is critical to its business and commercial success. Our patent portfolio comprises 63 issued U.S. patents and 55 corresponding granted foreign patents. In addition, as of December 31, 2024, we have 17 pending patent applications worldwide. Though a patent may be issued, there can be no assurance that the patent is valid and enforceable. However, it should be noted in the U.S., a patent granted by the U.S. Patent and Trademark Office is presumed to be valid in court proceedings. In addition, there can be no assurance that any of the Company’s pending patent applications will result in the issuance of a patent, or that the scope of protection provided by any patent that is granted will be identical to the scope of the application as originally filed. There is a risk that the Company’s competitors may be able to compete with EBR by designing around the claims of EBR's patents, or by otherwise using products and techniques that are outside the scope of EBR's patents.

We may be subject to future third party intellectual property rights disputes.

We do not believe that our activities infringe on any third party’s intellectual property rights. However, in the future the Company may be subjected to infringement claims or litigation arising out of patents and pending applications of third parties. Intellectual property authorities may also re-examine the patentability of licensed or owned patents. The defense and prosecution of intellectual property claims can be costly and time consuming to pursue, and their outcome is uncertain. If we are determined to have infringed the rights of third parties, we could be prevented from selling some of our products, which would have a significant negative effect on our business and financial position. We have not budgeted for potential legal costs of intellectual property claims and significant legal costs would have a negative effect on our financial position.

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Our success depends in large part on our ability to obtain and maintain patent and other intellectual property protection in the United States and other countries with respect to our products and technology we develop.

We seek to protect our position by filing patent applications in the United States and abroad related to our technologies and products that are important to our business. We also rely on a combination of contractual provisions, confidentiality procedures and copyright, trademark, trade secret and other intellectual property rights to protect the proprietary aspects of our brands, technologies, and data. These legal measures afford only limited protection, and competitors or others may gain access to or use our intellectual property and proprietary information. Our success will depend, in part, on obtaining and maintaining patents, preserving our trade secrets, maintaining the security of our data and know-how and obtaining other intellectual property rights.

We may not be able to obtain and maintain intellectual property or other proprietary rights necessary to our business or in a form that provides us with a competitive advantage. For example, our trade secrets, data and know-how could be subject to unauthorized use, misappropriation or disclosure to unauthorized parties, despite our efforts to enter into confidentiality agreements with our employees, consultants, contractors, clients and other vendors who have access to such information and could otherwise become known or be independently discovered by third parties. In addition, the patent prosecution process is expensive, time-consuming, and complex, and we may not be able to file, prosecute, maintain, enforce or license all necessary or desirable patent applications at a reasonable cost, in a timely manner, or in all jurisdictions where protection may be commercially advantageous, or we may not be able to protect our intellectual property at all. Despite our efforts to protect our intellectual property, unauthorized parties may be able to obtain and use information that we regard as proprietary. It is also possible that we will fail to identify patentable aspects of our research and development output in time to obtain patent protection. Although we enter into non-disclosure and confidentiality agreements with parties who have access to confidential or patentable aspects of our research and development output, such as our employees, consultants, contractors, collaborators, vendors and other third parties, any of these parties may breach the agreements and disclose such output before a patent application is filed, thereby jeopardizing our ability to seek patent protection. In addition, publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all. Therefore, we cannot be certain that we were the first to make the inventions claimed in our owned or any licensed patents or pending patent applications, or that we were the first to file for patent protection of such inventions.

The patent position of medical device companies generally is highly uncertain, involves complex legal and factual questions, and has been the subject of much litigation in recent years. Changes in either the patent laws or their interpretation in the United States and other countries may diminish our ability to protect our inventions, obtain, maintain, and enforce our intellectual property rights and, more generally, could affect the value of our intellectual property or narrow the scope of our owned and licensed patents. With respect to both in-licensed and owned intellectual property, we cannot predict whether the patent applications we and our licensors are currently pursuing will issue as patents in any particular jurisdiction or whether the claims of any issued patents will provide sufficient protection from competitors. As a result, the issuance, scope, validity, enforceability, and commercial value of our patent rights are highly uncertain.

Moreover, the coverage claimed in a patent application can be significantly reduced before a patent is issued, and its scope can be reinterpreted after issuance. Even if patent applications we license or own currently or in the future issue as patents, they may not issue in a form that will provide us with any meaningful protection, prevent competitors or other third parties from competing with us, or otherwise provide us with any competitive advantage. Any patents that we hold may be challenged, narrowed, or invalidated by third parties. Additionally, our competitors or other third parties may be able to circumvent our patents by developing similar or alternative technologies or products in a non-infringing manner. Third parties may also have blocking patents that could prevent us from marketing our own products and practicing our own technology. Alternatively, third parties may seek approval to market their own products similar to or otherwise competitive with our products. In these circumstances, we may need to defend and/or assert our patents, including by filing lawsuits alleging patent infringement. In any of these types of proceedings, a court or agency with jurisdiction may find our patents invalid, unenforceable, or not infringed, in which case, our competitors and other third parties may then be able to market products and use manufacturing and analytical processes that are substantially similar to ours. Even if we have valid and enforceable patents, these patents still may not provide protection against competing products or processes sufficient to achieve our business objectives.

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Given that patent applications are confidential for a period of time after filing, we cannot be certain that we were the first to file any patent application related to our products. Competitors may also contest our patents, if issued, by showing the patent examiner that the invention was not original, was not novel or was obvious. In litigation, a competitor could claim that our patents, if issued, are not valid for a number of reasons. If a court agrees, we will lose our rights to those challenged patents.

In addition, given the amount of time required for the development, testing and regulatory review of new products, patents protecting such products might expire before or shortly after such products are commercialized. As a result, our intellectual property may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours. Moreover, some of our owned and in-licensed patents and patent applications may in the future be co-owned with third parties. If we are unable to obtain an exclusive license to any such third-party co-owners’ interest in such patents or patent applications, such co-owners may be able to license their rights to other third parties, including our competitors, and our competitors could market competing products and technology. In addition, we may need the cooperation of any such co-owners of our patents in order to enforce such patents against third parties, and such cooperation may not be provided to us.

Our other intellectual property, including our trademarks, could also be challenged, invalidated, infringed and circumvented by third parties, and our trademarks could also be diluted, declared generic or found to be infringing on other marks, in which case we could be forced to re-brand our products, resulting in loss of brand recognition and requiring us to devote resources to advertising and marketing new brands, and suffer other competitive harm. Third parties may also adopt trademarks similar to ours, which could harm our brand identity and lead to market confusion.

We may in the future also be subject to claims by our former employees, consultants or contractors asserting an ownership right in our patents or patent applications, as a result of the work they performed on our behalf. Although we generally require all of our employees, consultants, contractors and any other partners or collaborators who have access to our proprietary know-how, information or technology to assign or grant similar rights to their inventions to us, we cannot be certain that we have executed such agreements with all parties who may have contributed to our intellectual property, nor can we be certain that our agreements with such parties will be upheld in the face of a potential challenge, or that they will not be breached, for which we may not have an adequate remedy.

Failure to obtain and maintain patents, trademarks, and other intellectual property rights necessary to our business and failure to protect, monitor and control the use of our intellectual property rights could negatively impact our ability to compete and cause us to incur significant expenses. The intellectual property laws and other statutory and contractual arrangements in the United States and other jurisdictions we depend upon may not provide sufficient protection in the future to prevent the infringement, use, violation or misappropriation of our patents, trademarks, data, technology, and other intellectual property, and may not provide an adequate remedy if our intellectual property rights are infringed, misappropriated, or otherwise violated. Any of the foregoing could have a material adverse effect on our competitive position, business, financial conditions, results of operations and prospects.

Furthermore, our owned patents may be subject to a reservation of rights by one or more third parties. For example, this could arise if the research resulting in certain of our owned or in-licensed patent rights and technology was funded in part by the U.S. government. As a result, the government may have certain rights, or march-in rights, to such patent rights and technology. When new technologies are developed with government funding, the government generally obtains certain rights in any resulting patents, including a non-exclusive license authorizing the government to use the invention for non-commercial purposes. These rights may permit the government to disclose our confidential information to third parties and to exercise march-in rights to use or allow third parties to use our licensed technology. The government can exercise its march-in rights if it determines that action is necessary because we fail to achieve practical application of the government- funded technology, because action is necessary to alleviate health or safety needs, to meet requirements of federal regulations, or to give preference to U.S. industry. In addition, our rights in such inventions may be subject to certain requirements to manufacture products embodying such inventions in the United States. Any exercise by the government of such rights could harm our competitive position, business, financial condition, results of operations and prospects.

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Obtaining and maintaining patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

The USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process. In addition, periodic maintenance fees, renewal fees, annuity fees and various other government fees on issued patents and patent applications will be due to the USPTO and foreign patent agencies over the lifetime of our owned or licensed patents and applications. In certain circumstances, we rely on our licensing partners to pay these fees due to U.S. and non-U.S. patent agencies. While an unintentional lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. Non-compliance events that could result in abandonment or lapse of a patent or patent application include, but are not limited to, failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents. If we fail to maintain the patents and patent applications covering our products, we may not be able to stop a competitor from marketing products that are the same as or similar to our products, which could have a material adverse effect on our business, financial condition, and results of operations.

We may become a party to intellectual property litigation or administrative proceedings that could be costly and could interfere with our ability to sell and market our products.

The medical device industry has been characterized by extensive litigation regarding patents, trademarks, trade secrets and other intellectual property rights, and companies in the industry have used intellectual property litigation to gain a competitive advantage. It is possible that U.S. and foreign patents and pending patent applications or trademarks controlled by third parties may be alleged to cover our products, or that we may be accused of misappropriating third parties’ trade secrets. Additionally, our products include components that we purchase from vendors and may include design components that are outside of our direct control. Our competitors, many of which have substantially greater resources and have made substantial investments in patent portfolios, trade secrets, trademarks, and competing technologies, may have applied for or obtained, or may in the future apply for or obtain, patents or trademarks that will prevent, limit or otherwise interfere with our ability to make, use, sell and/or export our products or to use product names. Because patent applications can take years to issue and are often afforded confidentiality for some period of time, there may currently be pending applications, unknown to us, that later result in issued patents that could cover one or more of our products. Moreover, in recent years, individuals and groups that are non-practicing entities, commonly referred to as “patent trolls,” have purchased patents and other intellectual property assets for the purpose of making claims of infringement in order to extract settlements. From time to time, we may receive threatening letters, notices or “invitations to license,” or may be the subject of claims that our products and business operations infringe or violate the intellectual property rights of others. The defense of these matters can be time consuming, costly to defend in litigation, divert management’s attention and resources, damage our reputation, and brand and cause us to incur significant expenses or make substantial payments. Vendors from whom we purchase hardware or software may not indemnify us in the event that such hardware or software is accused of infringing a third party’s patent or trademark or of misappropriating a third party’s trade secret, or any indemnification granted by such vendors may not be sufficient to address any liability and costs we incur as a result of such claims. Additionally, we may be obligated to indemnify our customers or business partners in connection with litigation and to obtain licenses or refund subscription fees, which could further exhaust our resources.

Even if we believe a third party’s intellectual property claims are without merit, there is no assurance that a court would find in our favor, including on questions of infringement, validity, enforceability, or priority of patents. The strength of our defenses will depend on the patents asserted, the interpretation of these patents, and our ability to invalidate the asserted patents. A court of competent jurisdiction could hold that these third-party patents are valid, enforceable, and infringed, which could materially and adversely affect our ability to commercialize any products or technology we may develop, and any other products or technologies covered by the asserted third-party patents. In order to successfully challenge the validity of any such U.S. patent in federal court, we would need to overcome a presumption of validity. As this burden is a high one requiring us to present clear and convincing evidence as to the invalidity of any such U.S. patent claim, there is no assurance that a court of competent jurisdiction would invalidate the claims of any such U.S. patent. Conversely, the patent owner need only prove infringement by a preponderance of the evidence, which is a lower burden of proof.

Further, if patents, trademarks, or trade secrets are successfully asserted against us, this may harm our business and result in injunctions preventing us from developing, manufacturing, or selling our products, or result in obligations to pay license fees, damages, attorney fees and court costs, which could be significant. In addition, if we are found to willfully infringe on third-party patents or trademarks or to have misappropriated trade secrets, we could be required to pay treble damages in addition to other penalties.

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Although patent, trademark, trade secret and other intellectual property disputes in the medical device area have often been settled through licensing or similar arrangements, costs associated with such arrangements may be substantial and could include ongoing royalties. We may be unable to obtain necessary licenses on satisfactory terms, if at all. In addition, if any license we obtain is non-exclusive, we may not be able to prevent our competitors and other third parties from using the intellectual property or technology covered by such license to compete with us. If we do not obtain the necessary licenses, we may not be able to redesign our products to avoid infringement. Any of these events could materially and adversely affect our business, financial condition, and results of operations.

Similarly, interference or derivation proceedings provoked by third parties or brought by the U.S. Patent and Trademark Office, or USPTO, may be necessary to determine priority with respect to our patents, patent applications, trademarks, or trademark applications. We may also become involved in other proceedings, such as reexamination, inter partes review, derivation, or opposition proceedings before the USPTO or other jurisdictional body relating to our intellectual property rights or the intellectual property rights of others. Adverse determinations in a judicial or administrative proceeding or failure to obtain necessary licenses could prevent us from manufacturing our products or using product names, which would have a significant adverse impact on our business, financial condition, and results of operations.

Additionally, we may file lawsuits or initiate other proceedings to protect or enforce our patents or other intellectual property rights, which could be expensive, time consuming and unsuccessful. Competitors may infringe our issued patents or other intellectual property, which we may not always be able to detect. To counter infringement or unauthorized use, we may be required to file infringement claims, which can be expensive and time-consuming. Any claims we assert against perceived infringers could provoke these parties to assert counterclaims against us alleging that we infringe their intellectual property or alleging that our intellectual property is invalid or unenforceable. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness, or non-enablement. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the USPTO, or made a misleading statement, during prosecution. Third parties may raise challenges to the validity of certain of our owned or in-licensed patent claims before administrative bodies in the United States or abroad, even outside the context of litigation. Such mechanisms include re-examination, post-grant review, inter partes review, interference proceedings, derivation proceedings and equivalent proceedings in foreign jurisdictions (e.g., opposition proceedings). In any such lawsuit or other proceedings, a court or other administrative body may decide that a patent of ours is invalid or unenforceable, in whole or in part, construe the patent’s claims narrowly or refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question.

The outcome following legal assertions of invalidity and unenforceability is unpredictable. If a third party were to prevail on a legal assertion of invalidity or unenforceability, we would lose at least part, and perhaps all, of the patent protection on our products or products that we may develop. If our patents are found to be valid and infringed, a court may refuse to grant injunctive relief against the infringer and instead grant us monetary damages and/or ongoing royalties. Such monetary compensation may be insufficient to adequately offset the damage to our business caused by the infringer’s competition in the market. An adverse result in any litigation or other proceeding could put one or more of our patents at risk of being invalidated or interpreted narrowly. Any of these events could materially and adversely affect our business, financial condition, and results of operations.

Even if resolved in our favor, litigation or other proceedings relating to intellectual property claims may cause us to incur significant expenses and could distract our personnel from their normal responsibilities. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments, and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock. Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for development activities or any future sales, marketing, or distribution activities. We may not have sufficient financial or other resources to conduct such litigation or proceedings adequately. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their greater financial resources and more mature and developed intellectual property portfolios. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential or sensitive information could be compromised by disclosure in the event of litigation. Uncertainties resulting from the initiation and continuation of patent and other intellectual property litigation or other proceedings could have a material adverse effect on our business, financial condition, and results of operations.

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We may not be successful in obtaining necessary rights to any products we may develop through acquisitions and in-licenses.

We may need to obtain or otherwise acquire or in-license any intellectual property rights from third parties that we identify as necessary for our products. It is possible that we may be unable to obtain any additional licenses or acquire such intellectual property rights at a reasonable cost or on reasonable terms, if at all. The licensing or acquisition of third-party intellectual property rights is a competitive area, and several more established companies may pursue strategies to license or acquire third-party intellectual property rights that we may consider attractive or necessary. These established companies may have a competitive advantage over us due to their size, capital resources and greater clinical development and commercialization capabilities. In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us. We also may be unable to license or acquire third-party intellectual property rights on terms that would allow us to make an appropriate return on our investment or at all. In that event, we may be required to expend significant time and resources to redesign our technology, products, or the methods for manufacturing them or to develop or license replacement technology, all of which may not be feasible on a technical or commercial basis. If we are unable to do so, we may be unable to develop or commercialize the affected products, which could materially and adversely affect our business, financial condition, and results of operations.

If we are unable to protect the confidentiality of our other proprietary information, our business and competitive position may be harmed.

In addition to patent protection, we also rely on other proprietary rights, including protection of trade secrets, and other proprietary information that is not patentable or that we elect not to patent. However, trade secrets can be difficult to protect, and some courts are less willing or unwilling to protect trade secrets. To maintain the confidentiality of our trade secrets and proprietary information, we rely heavily on confidentiality provisions that we have in contracts with our employees, consultants, contractors, collaborators, and others upon the commencement of their relationship with us. We cannot guarantee that we have entered into such agreements with each party that may have or have had access to our trade secrets or proprietary technology and processes. We may not be able to prevent the unauthorized disclosure or use of our technical knowledge or other trade secrets by such third parties, despite the existence generally of these confidentiality restrictions. These contracts may not provide meaningful protection for our trade secrets, know-how or other proprietary information in the event of any unauthorized use, misappropriation or disclosure of such trade secrets, know-how or other proprietary information. There can be no assurance that such third parties will not breach their agreements with us, that we will have adequate remedies for any breach, or that our trade secrets will not otherwise become known or independently developed by competitors. Despite the protections we do place on our intellectual property or other proprietary rights, monitoring unauthorized use and disclosure of our intellectual property is difficult, and we do not know whether the steps we have taken to protect our intellectual property, or other proprietary rights will be adequate. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive, and time-consuming, and the outcome is unpredictable. The laws of many foreign countries will not protect our intellectual property or other proprietary rights to the same extent as the laws of the United States. Consequently, we may be unable to prevent our proprietary technology from being exploited in the United States and abroad, which could affect our ability to expand in domestic and international markets or require costly efforts to protect our technology.

To the extent our intellectual property or other proprietary information protection is incomplete, we are exposed to a greater risk of direct competition. A third party could, without authorization, copy or otherwise obtain and use our products or technology, or develop similar technology. Our competitors could purchase our products and attempt to replicate some or all of the competitive advantages we derive from our development efforts or design around our protected technology. Our failure to secure, protect and enforce our intellectual property rights could substantially harm the value of our products, brand, and business. The theft or unauthorized use or publication of our trade secrets and other confidential business information could reduce the differentiation of our products and harm our business, the value of our investment in development or business acquisitions could be reduced and third parties might make claims against us related to losses of their confidential or proprietary information.

Further, it is possible that others will independently develop the same or similar technology or otherwise obtain access to our unpatented technology, and in such cases, we could not assert any trade secret rights against such parties. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our trade secret rights and related confidentiality and nondisclosure provisions. If we fail to obtain or maintain trade secret protection, or if our competitors obtain our trade secrets or independently develop technology similar to ours or competing technologies, our competitive market position could be materially and adversely affected. In addition, some courts are less willing or unwilling to protect trade secrets, and agreement terms that address non-competition are difficult to enforce in many jurisdictions and might not be enforceable in certain cases.

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We also seek to preserve the integrity and confidentiality of our data and other confidential information by maintaining physical security of our premises and physical and electronic security of our information technology systems. While we have confidence in these individuals, organizations and systems, agreements or security measures may be breached and detecting the disclosure or misappropriation of confidential information and enforcing a claim that a party illegally disclosed or misappropriated confidential information is difficult, expensive, and time-consuming, and the outcome is unpredictable. Further, we may not be able to obtain adequate remedies for any breach. Any of the foregoing could materially and adversely affect our business, financial condition, and results of operations.

We may not be able to protect our intellectual property rights throughout the world.

A company may attempt to commercialize competing products utilizing our proprietary design, trademarks, or trade names in foreign countries where we do not have any patents or patent applications and where legal recourse may be limited or unavailable. This may have a significant commercial impact on any potential foreign business operations.

Filing, prosecuting, and defending patents or trademarks on our current and future products in all countries throughout the world would be prohibitively expensive. The requirements for patentability and trademarking may differ in certain countries, particularly developing countries. The laws of some foreign countries do not protect intellectual property rights to the same extent as laws in the United States. Consequently, we may not be able to prevent third parties from utilizing our inventions and trademarks in all countries outside the United States. Competitors may use our technologies or trademarks in jurisdictions where we have not obtained patent or trademark protection to develop or market their own products and, further, may export otherwise infringing products to territories where we have patent and trademark protection but enforcement on infringing activities is inadequate. These products may compete with our products, and our patents, trademarks or other intellectual property rights may not be effective or sufficient to prevent them from competing.

Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trademarks, and other intellectual property protection, which could make it difficult for us to stop the infringement of our patents and trademarks or marketing of competing products in violation of our intellectual property rights generally. Proceedings to enforce our intellectual property rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents and trademarks at risk of being invalidated or interpreted narrowly and our patent or trademark applications at risk, and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful. In addition, many countries, including India, China, and certain countries in Europe, have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In addition, many countries limit the enforceability of patents against government agencies or government contractors. In those countries, we may have limited remedies if our patents are infringed or if we are compelled to grant a license to our patents to a third party, which could materially diminish the value of those patents. This could limit our potential revenue opportunities. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we own or license. Finally, our ability to protect and enforce our intellectual property rights may be adversely affected by unforeseen changes in foreign intellectual property laws.

We may be subject to claims that we or our employees, consultants or contractors have wrongfully used, disclosed, or otherwise misappropriated the intellectual property of a third party, including trade secrets or know-how, or are in breach of non-competition or non-solicitation agreements with our competitors or claims asserting an ownership interest in intellectual property we regard as our own.

Many of our employees, consultants and contractors were previously employed at or engaged by other medical device, biotechnology, or pharmaceutical companies, including our competitors or potential competitors. Some of these employees, consultants and contractors may have executed proprietary rights, non-disclosure and non-competition agreements in connection with such previous employment. Although we try to ensure that our employees, consultants and contractors do not use the intellectual property, proprietary information, know-how or trade secrets of others in their work for us, we may be subject to claims that we or these individuals have, inadvertently or otherwise, used, disclosed or otherwise misappropriated intellectual property, including trade secrets or other proprietary information, of their former employers or our competitors or potential competitors. Additionally, we may be subject to claims from third parties challenging our ownership interest in intellectual property we regard as our own, based on claims that our employees, consultants, or contractors have breached an obligation to assign inventions to another employer, to a former employer, or to another person or entity.

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Litigation may be necessary to defend against such claims, and it may be necessary, or we may desire to enter into a license to settle any such claim; however, there can be no assurance that we would be able to obtain a license on commercially reasonable terms, if at all. If our defense to those claims fails, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. For example, a court could prohibit us from using technologies or features that are essential to our products, if such technologies or features are found to incorporate or be derived from the trade secrets or other proprietary information of the former employers. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management.

An inability to incorporate technologies or features that are important or essential to our products could have a material adverse effect on our business, financial condition, and results of operations, and may prevent us from selling our products. Any litigation or the threat thereof may adversely affect our ability to hire employees or contract with independent sales representatives. A loss of key personnel or their work product could hamper or prevent our ability to commercialize our products, which could have an adverse effect on our business, financial condition, and results of operations.

We may be subject to claims challenging the inventorship of our patents and other intellectual property.

We or our licensors may be subject to claims that former consultants, contractors or other third parties have an interest in our owned or in-licensed patents, trade secrets or other intellectual property as an inventor or co-inventor. While it is our policy to require our employees, consultants and contractors who may be involved in the conception or development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who, in fact, conceives or develops intellectual property that we regard as our own. The assignment of intellectual property rights may not be self-executing, or the assignment agreements may be breached, and we may be forced to bring claims against third parties, or defend claims that they may bring against us, to determine the ownership of what we regard as our intellectual property. If we or our licensors fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, intellectual property that is important to our products. Any such events could have a material adverse effect on our business, financial condition, and results of operations.

Changes in patent law could diminish the value of patents in general, thereby impairing our ability to protect our existing and future products.

Recent patent reform legislation could increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of issued patents. In 2011, the Leahy-Smith America Invents Act, or Leahy-Smith Act, was signed into law. The Leahy-Smith Act includes a number of significant changes to U.S. patent law. These include provisions that affect the way patent applications are prosecuted and also may affect patent litigation. These also include provisions that switched the United States from a “first-to-invent” system to a “first-inventor-to-file” system, allow third-party submission of prior art to the USPTO during patent prosecution and set forth additional procedures to attack the validity of a patent by the USPTO administered post grant proceedings, including post-grant review, inter partes review and derivation proceedings. Under a first- inventor-to-file system, assuming the other requirements for patentability are met, the first inventor to file a patent application generally will be entitled to the patent on an invention regardless of whether another inventor had made the invention earlier. The USPTO recently developed new regulations and procedures to govern administration of the Leahy-Smith Act, and many of the substantive changes to patent law associated with the Leahy-Smith Act, and in particular, the first to file provisions, became effective in 2013. Accordingly, it is not clear what, if any, impact the Leahy-Smith Act will have on the operation of our business. The Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business, financial condition, and results of operations.

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In addition, patent reform legislation may pass in the future that could lead to additional uncertainties and increased costs surrounding the prosecution, enforcement and defense of our patents and applications. Furthermore, the U.S. Supreme Court and the U.S. Court of Appeals for the Federal Circuit have made, and will likely continue to make, changes in how the patent laws of the United States are interpreted. Similarly, foreign courts have made, and will likely continue to make, changes in how the patent laws in their respective jurisdictions are interpreted. We cannot predict future changes in the interpretation of patent laws or changes to patent laws that might be enacted into law by U.S. and foreign legislative bodies. Those changes may materially affect our patents or patent applications and our ability to obtain additional patent protection in the future.

If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets and our business may be adversely affected.

We rely on trademarks, service marks, trade names and brand names to distinguish our products from the products of our competitors and have registered or applied to register these trademarks. Our registered or unregistered trademarks, service marks, trade names and brand names may be challenged, infringed, diluted, circumvented, or declared generic or determined to be infringing on other marks. Additionally, we cannot assure you that our trademark applications will be approved. During trademark registration proceedings, we may receive rejections. Although we are given an opportunity to respond to those rejections, we may be unable to overcome such rejections. In addition, in proceedings before the USPTO and comparable agencies in many foreign jurisdictions, third parties are given an opportunity to oppose pending trademark applications and to seek to cancel registered trademarks. Opposition or cancellation proceedings may be filed against our trademarks, and our trademarks may not survive such proceedings. In the event that our trademarks are successfully challenged, we could be forced to rebrand our products, which could result in loss of brand recognition and could require us to devote resources towards advertising and marketing new brands. At times, competitors may adopt trade names or trademarks similar to ours, thereby impeding our ability to build brand identity and possibly leading to market confusion. Certain of our current or future trademarks may become so well known by the public that their use becomes generic, and they lose trademark protection. Over the long term, if we are unable to establish name recognition based on our trademarks and trade names, then we may not be able to compete effectively and our business, financial condition and results of operations may be adversely affected.

Risks Related to Our CDIs and Common Stock

Our common stock may never be listed on a major U.S. stock exchange.

While we may seek the listing of our common stock on a U.S. securities exchange at some time in the future, we cannot ensure when, if ever we will do so, that we will be able to satisfy such listing standards or that our common stock will be accepted for listing on any such exchange. Should we fail to satisfy the initial listing standards of such exchange, or our common stock is otherwise rejected for listing, the trading price of our common stock could suffer, the trading market for our common stock may be less liquid, and our common stock price may be subject to increased volatility.

Our current stockholders do not have preemptive rights to any Shares that we issue in the future. Under our Amended and Restated Certificate of Incorporation, our board of directors has the authority to issue a total of 610,000,000 shares. Of the total shares authorized, 600,000,000 are classified as shares of common stock and 10,000,000 are classified as shares of preferred stock. The board of directors is authorized to issue the preferred stock, subject to limitations prescribed by applicable law, rules and regulations and the provisions of our Amended and Restated Certificate of Incorporation, as shares of preferred stock in series, to establish from time to time the number of shares to be included in each such series and to fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations or restrictions thereof. The powers, preferences and rights of these series of preferred stock may (i) be senior to or on parity with our common stock, which may reduce its value, and (ii) adversely affect the rights of the holders of the common stock. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, delay, defer, discourage, or prevent a change in control of EBR and may adversely affect the market price of our common stock and the rights of the holders of common stock. Subject to compliance with applicable rules and regulations, the board of directors may also issue common stock or other securities convertible into common stock from time to time in connection with financing, acquisition, investment, our equity incentive plans or otherwise. Any such issuance could result in substantial dilution to our existing stockholders and cause the market price of our common stock to decline, which will negatively impact the value of a stockholder’s investment, especially if we sell these securities at prices less than the price paid for shares.

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The market price of our CDIs and common stock may be volatile, which could cause the value of our common stock to decline.

The trading price of our CDIs on the Australian Securities Exchange (“ASX”) has been volatile and may continue to be subject to fluctuations. In addition, the trading volume in our CDIs and common stock if a market develops may fluctuate and cause significant price variations to occur. Securities markets worldwide experience significant price and volume fluctuations as a result of a variety of factors, many of which are beyond our control but may nonetheless decrease the market price of our CDIs and common stock if a market develops, regardless of our actual operating performance, including:

public reaction to our press releases, announcements and filings with the SEC and ASX;

our operating and financial performance;

changes in market valuations of similar companies;

departures of key personnel;

commencement of or involvement in litigation;

changes in economic and political conditions, financial markets, and/or the technology industry;

interest rate fluctuations;

changes in accounting standards, policies, guidance, interpretations, or principles;

actions by our security holders;

the failure of securities analysts to cover our common stock and/or changes in their recommendations and estimates of our financial performance;

Future sales of our common stock or CDIs;

trading prices and trading volumes of our CDIs on the ASX; and

the other factors described in these “Risk Factors”.

The stock market has in the past experienced extreme price and volume fluctuations, and following periods of such volatility in the overall market and the market price of a company’s securities, securities class action litigation has often been instituted against these companies. Such litigation, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources.

Additionally, our securities may in the future trade on more than one stock exchange and this may result in price variations between the markets and volatility in our stock price. Our CDIs are currently listed on the ASX, and we may list our common stock on a U.S. securities exchange in the future. Trading in our common stock and CDIs therefore may take place in different currencies (U.S. dollars on the U.S. securities exchange and Australian dollars on the ASX), and at different times (resulting from different time zones, different trading days and different public holidays in the United States and Australia). The trading prices of our CDIs and our common stock on two markets may differ as a result of these, or other, factors. Any decrease in the price of our CDIs or common stock on either market could cause a decrease in the trading prices of our CDIs or our common stock on the other market. In addition, investors may seek to profit by exploiting the difference, if any, between the price of our CDIs on the ASX and the price of shares of our common stock on a U.S. securities exchange. Such arbitrage activities could cause our stock price in the market with the higher value to decrease to the price set by the market with the lower value and could also lead to significant volatility in the price of our common stock or CDIs.

The requirements of being an SEC registrant may strain our resources, divert management’s attention and affect our ability to attract and retain qualified board members.

As an SEC registrant, we are subject to the reporting and corporate governance requirements of the Exchange Act. Compliance with these rules and regulations will increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources, particularly after we are no longer an “emerging growth company” as defined in the JOBS Act. Among other things, the Exchange Act requires that we file annual, quarterly and current reports with respect to our business and results of operations and maintain effective disclosure controls and procedures and internal control over financial reporting. In order to improve our disclosure controls and procedures and internal control over financial reporting to meet this standard, significant resources and management oversight may be required. As a result, management’s attention may be diverted from other business concerns, which could harm our business, financial condition, results of operations and prospects. Although we have already hired additional personnel to help comply with these requirements, we may need to further expand our legal and finance departments in the future, which will increase our costs and expenses.

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In addition, changing laws, regulations and standards relating to corporate governance and public disclosure may create uncertainty for SEC registrants, increasing legal and financial compliance costs and making some activities more time-consuming. These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expense and a diversion of management’s time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies, regulatory authorities may initiate legal proceedings against us, and our business and prospects may be harmed. As a result of disclosure of information in the filings required of an SEC registrant, our business and financial condition will become more visible, which may result in threatened or actual litigation. If such claims are successful, our business, financial condition, results of operations and prospects could be materially harmed, and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and materially harm our business, financial condition, results of operations and prospects.

We also expect that being a SEC registrant and these new rules and regulations will make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified executive officers and members of our board of directors, particularly to serve on our audit committee and compensation committee.

Investors may have difficulty in reselling their shares due to the lack of market or state Blue Sky laws.

Our common stock is not currently traded on any U.S. securities exchange. No market may ever develop for our common stock, or if developed, may not be sustained in the future. The holders of our shares of common stock and persons who desire to purchase them in any trading market that might develop in the future should be aware that there might be significant state law restrictions upon the ability of investors to resell our shares. Accordingly, even if we are successful in having the shares available for trading on the over-the-counter markets, investors should consider any secondary market for our common shares to be a limited one.

We are subject to ASX listing and associated Australian regulatory requirements and may in the future determine to concurrently list our shares on a U.S. securities exchange as well, which will have its own listing and regulatory requirements. Such exchanges will have different trading hours, trading characteristics (including trading volume and liquidity), trading and listing rules, and investor bases (including different levels of retail and institutional participation). As a result of these differences, the trading prices of our CDIs and our common stock may not be the same, even allowing for currency differences. Fluctuations in the price of our common stock due to circumstances unusual to the U.S. capital markets could materially and adversely affect the price of the CDIs, or vice versa. Certain events having significant negative impact specifically on the Australian capital markets may result in a decline in the trading price of our CDIs notwithstanding that such event may not impact the trading prices of securities listed in Australia generally or to the same extent, or vice versa.

In addition, the listing and regulatory requirements of the ASX may limit our ability to take certain actions typically performed by a U.S. company. For example, the ASX Listing Rules limit the amount of equity securities that a listed company can issue without the approval of its stockholders over any 12-month period to 15% of the outstanding share capital on issue at the start of the period, unless an exception applies. Failure to obtain this approval may make it more difficult for us to issue equity securities in the future at a time and at a price that we deem appropriate. ASX rules also require stockholder approval for the granting of options and restricted stock units to our directors, even when the underlying equity incentive plan has already been approved. This creates a risk that, if stockholders do not approve the grants, our directors will not receive their expected amount of equity compensation. This may make it more difficult for us to attract and retain directors, which could have a material adverse effect on our business, results of operations, financial condition, and prospects.

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Further, the ASX Listing Rules prohibit us from buying back CDIs on-market at a price which is more than 5% above the volume weighted average market price of our CDIs, calculated over the last five days on which sales of CDIs were recorded before the day on which the purchase under the buy-back was made, which, as a result, may make it more difficult to repurchase our CDIs on-market. In addition, should we wish to undertake an on-market buy-back, the ASX may impose further requirements on us as if we were subject to share buy-back provisions of the Corporations Act 2001 (Cth) of Australia (“Corporations Act”), which may include the need to obtain stockholder approval to do so.

Finally, the ASX Listing Rules prohibit the issuance of equity securities by a company without stockholder approval during the three-month period after it learns that a person is making, or proposes to make, a takeover for its securities, unless an exception applies. As a result, if a hostile takeover bid is made in respect of our CDIs or common stock, the ASX Listing Rules may limit our ability to issue equity securities, either as a countermeasure to the takeover bid or to fund operations.

If securities and industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.

The trading market for our CDIs on the ASX may be influenced by the research and reports that industry or securities analysts publish about us or our business. If one or more of the analysts currently covering our securities ceases coverage, the trading price for our CDIs on the ASX could be negatively impacted. If any of the analysts who cover us issue an adverse or misleading opinion regarding us, our business model, our intellectual property or our CDI performance, or if our results of operations fail to meet the expectations of analysts, the price of our CDIs would likely decline. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our CDI price or trading volume to decline.

Our principal stockholders could collectively exert control over us and may not make decisions that are in the best interests of all stockholders.

As of December 31, 2024, our principal stockholders beneficially owned a significant percentage of our voting stock. If these significant stockholders were to act together, they would be able to exert a significant degree of influence over our management and affairs and over matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions. Accordingly, there is a risk that these stockholders, although unrelated to each other, may make collective decisions that do not accord with, or are not in the best interests of, other stockholders and CDI holders. For example, the principal stockholders could, through their concentration of ownership, delay or prevent a change of control, even if a change of control is in the best interests of our other stockholders and CDI holders.

Provisions of our Amended and Restated Certificate of Incorporation, our Amended and Restated Bylaws and Delaware law could make an acquisition of us more difficult and may prevent attempts by stockholders to replace or remove current members of the Board.

Certain provisions of Delaware law, our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws could discourage, delay or prevent a change of control or deter tender offers for our common stock that stockholders and CDI holders may consider favorable, including transactions in which CDI holders might otherwise receive a premium for their CDIs.

Our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws contain provisions that could delay or prevent a change in control of our company. These provisions could also make it more difficult for stockholders to elect directors and take other corporate actions, including effecting changes in our management. These provisions include:

providing for a classified board of directors with staggered, three-year terms, which could delay the ability of stockholders to change the membership of a majority of our board of directors;

not providing for cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates;

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authorizing our board of directors to issue, without stockholder approval, preferred stock rights senior to those of common stock, which could be used to significantly dilute the ownership of a hostile acquiror;

prohibiting stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders;

requiring the affirmative vote of holders of at least 66 2/3% of the voting power of all of the then outstanding shares of voting stock, voting as a single class, to amend provisions of our certificate of incorporation relating to the management of our business, our board of directors, stockholder action by written consent, advance notification of stockholder nominations and proposals, forum selection and the liability of our directors, or to amend our bylaws, which may inhibit the ability of stockholders or an acquiror to effect such amendments to facilitate changes in management or an unsolicited takeover attempt;

requiring special meetings of stockholders may only be called by our chairperson of the board, if any, our chief executive officer, our president or a majority of our board of directors, which could delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; and

requiring advance notification of stockholder nominations and proposals, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror’s own slate of directors or otherwise attempting to obtain control of us.

The anti-takeover provisions of Delaware law and provisions in our organizational documents may prevent our stockholders from receiving the benefit from any premium to the market price of our common stock offered by a bidder in a takeover context. Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our common stock if they are viewed as discouraging takeover attempts in the future.

The costs and management time involved in complying with Delaware laws, Australian laws and U.S. reporting requirements are likely to be significant.

As a Delaware company with an ASX listing and a registration as a foreign company in Australia, we need to ensure continuous compliance with Delaware law and relevant Australian laws and regulations, including the ASX Listing Rules and certain provisions of the Corporations Act. To the extent of any inconsistency between Delaware law and Australian law and regulations, we may need to make changes to our business operations, structure or policies to resolve such inconsistency. If we are required to make such changes, this is likely to result in interruptions to our operations, additional demands on key employees and extra costs.

Our Amended and Restated Certificate of Incorporation provides that the Court of Chancery of the State of Delaware and any appellate court therefrom are the exclusive forums for the following types of actions or proceedings under Delaware statutory or common law:

any derivative claim or cause of action brought on our behalf;

any claim or cause of action for breach of a fiduciary duty owed by any of our current or former directors, officers or other employees to us or our stockholders;

any claim or cause of action asserting a claim against us or any of our current or former directors, officers, or other employees, arising under the Delaware General Corporation Law, our Amended and Restated Certificate of Incorporation, or our Amended and Restated Bylaws

any claim or cause of action seeking to interpret, apply, enforce or determine the validity of our Amended and Restated Certificate of Incorporation or Amended and Restated Bylaws;

any claim or cause of action as to which Delaware General Corporation Law confers jurisdiction on the Court of Chancery of the State of Delaware; and

any claim or cause of action against us or any of our current or former directors, officers, or other employees, that is governed by the internal-affairs doctrine or otherwise related to the Company’s internal affairs.

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This provision would not apply to suits brought to enforce a duty or liability created by the Exchange Act. Furthermore, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all such Securities Act actions. Accordingly, both state and federal courts have jurisdiction to entertain such claims. To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our Amended and Restated Certificate of Incorporation further provides that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act. While the Delaware courts have determined that such choice of forum provisions are facially valid and several state trial courts have enforced such provisions and required that suits asserting Securities Act claims be filed in federal court, there is no guarantee that courts of appeal will affirm the enforceability of such provisions and a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions. In such an instance, we would expect to vigorously assert the validity and enforceability of the exclusive forum provisions of Amended and Restated Certificate of Incorporation. This may require significant additional costs associated with resolving such actions in other jurisdictions and there can be no assurance that the provisions will be enforced by a court in those other jurisdictions. If a court were to find either exclusive forum provision in Amended and Restated Certificate of Incorporation to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with litigating Securities Act claims in state court, or both state and federal court, which could seriously harm our business, financial condition, results of operations, and prospects.

These exclusive forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage lawsuits against us and our directors, officers and other employees. If a court were to find either exclusive-forum provision in our Amended and Restated Certificate of Incorporation to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with resolving the dispute in other jurisdictions, all of which could seriously harm our business.

Item 1B. Unresolved Staff Comments

Not applicable.

Item 1C. Cybersecurity

Cybersecurity Risk Management and Strategy

We have developed, implemented, and maintain various information security processes designed to identify, assess, and manage material risks from cybersecurity threats to our critical computer networks, third-party hosted services, communication systems, hardware and software, and our critical data, including intellectual property, confidential information that is proprietary, strategic, or competitive in nature (“Information Systems and Data”).

Our third-party service providers help identify, assess, and manage the Company’s cybersecurity threats and risks. Our cybersecurity function identifies and assesses risks from cybersecurity threats by monitoring and evaluating our threat environment using various methods, including, for example: manual tools, automated tools, subscribing to reports and services that identify cybersecurity threats, analyzing reports of threats and threat actors, conducting scans of the threat environment, evaluating threats reported to us, and use of external intelligence feeds.

Our cybersecurity risk management program is integrated into our overall enterprise risk management program, for example by sharing common methodologies, reporting channels, and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas.

Depending on the environment, we implement and maintain various technical, physical, and organizational measures, processes, standards, and policies designed to manage and mitigate material cybersecurity risks, including, for example:

risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment;

a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents;

monitoring of our systems in real-time to identify, contain, and report exposures as appropriate;

cybersecurity awareness training for our employees, incident response personnel, and senior management;

a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents;

incident detection and response measures;

a vulnerability management policy;

business continuity plans;

implementation of security standards/certifications;

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encryption of data;

network security controls;

data segregation;

access controls;

physical security;

asset management, tracking and disposal;

a vendor risk management program;

penetration testing; and

cybersecurity insurance.

We use third-party service providers from time to time to assess, test, or otherwise assist with aspects of our management of material risks from cybersecurity threats, including, for example: threat intelligence service providers, cybersecurity consultants, cybersecurity software providers, and managed cybersecurity service providers.

We also use third-party service providers to perform a variety of functions throughout our business, such as hosting companies. We have a third-party risk management process for service providers, suppliers, and vendors, which includes conducting audits. Depending on the nature of the services provided, the sensitivity of the Information Systems and Data at issue, and the identity of the provider, our vendor management process may involve different levels of assessment designed to help identify cybersecurity risks associated with a provider and impose contractual obligations related to cybersecurity on the provider.

For a description of the risks from cybersecurity threats that may materially affect the Company and how they may do so, see our risk factors under Part 1. Item 1A. Risk Factors in this Annual Report on Form 10-K, including “Security breaches, loss of data and other disruptions could compromise sensitive information related to our business or our customers’ patients or prevent us from accessing critical information and expose us to liability, which could adversely affect our business and our reputation.”

Cybersecurity Governance

Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the audit and risk committee oversight of cybersecurity and other information technology risks. The audit and risk committee oversees management’s implementation of our cybersecurity risk management program. Pursuant to its charter, the audit committee’s oversight of the integrity of our information technology systems and cybersecurity risks includes the review and assessment, with management, of the adequacy of controls and security for our Information Systems and Data, as well as our contingency plans in the event of a breakdown or security breach affecting our information technology systems.

Our cybersecurity risk assessment and management processes are implemented and maintained by certain members of our management and third-party service providers. These individuals are responsible for helping to integrate cybersecurity risk considerations into the Company’s overall risk management strategy and communicating key priorities to relevant personnel. Additionally, they are responsible for approving budgets, helping prepare for cybersecurity incidents, approving cybersecurity processes, and reviewing security assessments and other security-related reports.

Our cybersecurity incident response plan is designed to escalate certain cybersecurity incidents to members of management depending on the circumstances, including our Chief Executive Officer and Chief Financial Officer. These individuals work with the Company’s incident response team to help the Company mitigate and remediate cybersecurity incidents of which they are notified. The Company’s incident response plan includes reporting to the audit and risk committee on certain cybersecurity risks, including any material cybersecurity incidents, as well as certain incidents with lesser impact potential.

The audit and risk committee reports to the full Board regarding its activities, including those related to cybersecurity. In addition, management may from time to time directly provide the full Board with briefings on our cyber risk management.

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Item 2. Properties

We lease a single office and laboratory facilities for our business and operations located at 480 Oakmead Parkway in Sunnyvale, California, where we occupy approximately 15,237 square feet of office space under a lease until December 31, 2026, at a rate of $50,000 per month. In January 2025, we entered into a new lease agreement to lease our new corporate headquarters, laboratory and manufacturing facility at 4600 Patrick Henry Drive in Santa Clara, California, where we will occupy approximately 51,136 square feet under a lease until December 31, 2036. We believe that our current facilities are adequate to meet our current needs and that, should it be needed, suitable additional or alternative space will be available to accommodate our operations.

Item 3. Legal Proceedings

From time to time, we may become involved in litigation or other legal proceedings. We are not currently a party to any litigation or legal proceedings that, in the opinion of our management, are likely to have a material adverse effect on our business. Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.

Item 4. Mine Safety Disclosures

Not applicable.

Part II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information for Common Stock

Our securities began trading on the Australian Securities Exchange on November 24, 2021, under the symbol “EBR”. Prior to such time there was no public market for our securities. There is no principal market in the U.S. for our CDIs or shares of our common stock.

Holders of our Common Stock

As of March 15, 2025, we had 372,851,324 shares of common stock outstanding, held of record by 25 stockholders. The holders included CHESS Depositary Nominees Pty Limited (“CDN”), which held 372,261,472 shares of our common stock. CDN, a subsidiary of ASX Limited, acts as our Australian depositary nominee and issues depository interests, in the form of CDIs, to the CDI holders; of which there were approximately 3,999 registered owners of our CDIs on March 15, 2025, a substantial majority of whom are non-U.S. holders. There were no shares of preferred stock outstanding.

Dividend Policy

Subject to preferences that may be applicable to any then outstanding preferred stock, holders of our common stock are entitled to receive dividends as may be declared from time to time by our Board of Directors out of legally available funds. However, we have never paid cash dividends on any of our capital stock, and we currently intend to retain our future earnings, if any, to fund the development and growth of our business. We do not intend to pay cash dividends to holders of our common stock in the foreseeable future.

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Equity Compensation Plan Information

The following table provides information about the common stock that may be issued upon the exercise of options, warrants and rights under all our existing equity compensation plans as of December 31, 2024:

Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)			Weighted-average exercise price of outstanding options, warrants and rights ⁽¹⁾ (b)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders		41,918,671	⁽²⁾	$	0.38		15,394,349	⁽³⁾
Equity compensation plans not approved by security holders		—			—		—
Total		41,918,671		$	0.38		15,394,349

(1)	The weighted-average exercise price is calculated based solely on the exercise prices of the outstanding stock options and warrants.

(2)	Includes 19,055,904 stock options issued under the 2013 Stock Plan, 22,153,134 issued under the 2021 Stock Plan, and 709,633 issued outside the 2021 Stock Plan.

(3)	Represents shares available for issuance under the 2021 Stock Plan.

Recent Sales of Unregistered Securities

During the year ended December 31, 2024, we have issued the following securities that were not registered under the Securities Act:

On September 25, 2024, we issued 55,856,325 shares of common stock, in connection with an institutional placement and the institutional component of a 1-for-20 pro-rata accelerated non-renounceable entitlement offer (“Entitlement Offer”) on the ASX, at a purchase price of $0.56 per share. We raised approximately $29.4 million, net of issuance costs of approximately $1.9 million. Bell Potter Securities Limited, Morgans Corporate Limited, and E&P Capital Pty Limited were the joint lead managers and book runners for the Entitlement Offer. Wilsons Corporate finance Limited was also acting as a joint lead manager. The Entitlement Offer was fully underwritten by Bell Potter Securities Limited.

On October 16, 2024, we issued 5,075,733 shares of common stock, in connection with the retail component of a 1-for-20 pro-rata non-renounceable entitlement offer on the ASX, at a purchase price of $0.54 per share. We raised approximately $2.6 million, net of issuance costs of approximately $0.2 million. Bell Potter Securities Limited, Morgans Corporate Limited, and E&P Capital Pty Limited were the joint lead managers and book runners for the Entitlement Offer. Wilsons Corporate finance Limited was also acting as a joint lead manager. The Entitlement Offer was fully underwritten by Bell Potter Securities Limited

The offers, sales, and issuances of the securities described in paragraphs 1 and 2 above were deemed to be exempt from registration under the Securities Act in reliance on Section 4(2) of the Securities Act or Regulation D promulgated thereunder as transactions by an issuer not involving a public offering or Regulation S as an offering made outside the United States. The recipients of securities in each of these transactions deemed to be exempt in reliance on Section 4(a)(2) of the Securities Act or Regulation D acquired the securities for investment only and not with a view to or for sale in connection with any distribution thereof. Each of the recipients of securities in these transactions was an accredited or sophisticated person and had adequate access, through employment, business or other relationships, to information about us. Appropriate legends or notices were affixed to the securities issued in reliance on Regulation S to ensure compliance with Regulation S restrictions.

Purchases of Equity Securities by the Issuer and Affiliate Purchases

None.

Item 6. [Reserved]

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of financial condition and results of operations (MD&A) should be read in conjunction with our consolidated financial statements, related notes and other financial information appearing elsewhere in this Annual Report on Form 10-K. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed in the forward-looking statements as a result of a variety of factors, including but not limited to those discussed in “Risk Factors” and “Forward-Looking Statements” in this Annual Report on Form 10-K.

Executive Overview

EBR is a U.S. based medical device company that is developing the WiSE CRT System, an implantable cardiac pacing system able to provide stimulation to endocardial heart tissue for the correction of heart rhythm conditions without requiring the use of leads. That implantable investigational device is part of a cardiac CRT, potentially offering endocardial heart tissue stimulation without the complications associated with traditional lead-based systems. CRM systems use leads to conduct electricity from an IPG to electrodes that deliver therapeutic electric pulses to heart tissue. While leads are a critical part of most CRM systems, they have long been recognized as a primary shortcoming of these systems and are a leading cause of device failure.

Financial Overview

Since inception, we have incurred significant net losses and expect to continue to incur net losses for the foreseeable future. Since our inception, our operations have been financed primarily by net proceeds from the sale of our CDIs, common stock, convertible preferred stock, and indebtedness. As of December 31, 2024, we had $66.0 million in cash, cash equivalents, and marketable securities and an accumulated deficit of $353.5 million.

On September 25, 2024, we issued 55,856,325 shares of common stock, in connection with an institutional placement and the institutional component of a 1-for-20 pro-rata accelerated non-renounceable entitlement offer on the ASX, at a purchase price of $0.56 per share. We raised approximately $29.4 million, net of issuance costs of approximately $1.9 million. On October 16, 2024, we issued 5,075,733 shares of common stock, in connection with the retail component of a 1-for-20 pro-rata non-renounceable entitlement offer on the ASX, at a purchase price of $0.54 per share. We raised approximately $2.6 million, net of issuance costs of approximately $0.2 million.

Factors Affecting Our Business

There are a number of factors that have impacted, and we believe will continue to impact, our results of operations and growth. These factors include:

Regulatory approvals/clearances. Our business strategy depends on the successful FDA submission and obtaining approval by the FDA of our WiSE CRT System on a timely basis.

Market acceptance. If our WiSE System is approved, the growth of our business depends on our ability to gain wide acceptance of our WiSE CRT System by continuing to make physicians and other hospital staff aware of the benefits of WiSE CRT to generate increased demand and frequency of use and thus increase sales to our hospital customers. Our ability to grow our business will also depend on our ability to expand our customer base in existing or new target markets.

Sales force size and effectiveness. If our WiSE CRT System is approved, the rate at which we grow our sales force and the speed at which newly hired salespeople become effective can impact our revenue growth or our costs incurred in anticipation of such growth. We intend to make significant investments in our sales and marketing organization by increasing the number of U.S. sales representatives and expanding our international marketing programs to help facilitate further adoption among existing hospital accounts as well as broaden awareness of our products to new hospital accounts.

Reimbursement. The level of reimbursement from third-party payors for procedures performed using our products could have a substantial impact on the prices we are able to charge for our products and how widely our products are accepted. The level at which reimbursement is set for procedures using our products, and any increase in reimbursement for procedures using our products, will depend substantially on our ability to generate clinical evidence, to gain advocacy in the respective physician societies and to work with the Centers for Medicare & Medicaid Services and payors.

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Clinical results. Publications of clinical results by us, our competitors and other third parties can have a significant influence on whether, and the degree to which, our products are used by physicians and the procedures and treatments those physicians choose to administer for a given condition.

While these factors may present significant opportunities for us, they also pose significant risks and challenges that we must address.

Components of our Consolidated Results of Operations

Operating Expenses

Research and Development Expenses

Research and development expenses primarily consist of personnel-related expenses, including salaries, bonuses, fringe benefits and other compensation-related costs, including stock-based compensation expense, for employees engaged in research and development functions. Research and development expenses also include costs of conducting our ongoing clinical studies, such as expenses associated with our clinical research organization, or CRO, who provides project management and other services related to our SOLVE-CRT study, outside service fees paid to third party consultants and contractors related to our product candidate engineering, quality assurance and regulatory approval, as well as contract manufacturing of our product candidate and allocated facility costs.

We expense research and development costs as incurred. Non-refundable advance payments that we make for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses and other long-term assets, which are expensed as the related goods are delivered or the services are performed, or when it is no longer expected that the goods will be delivered, or the services rendered.

The successful development of product candidates is subject to numerous risks and uncertainties. For a discussion of certain risks related to the development of product candidates and costs of clinical trials, see “Item 1A. Risk Factors” herein.

We anticipate that our research and development expenses will increase significantly in the future as we:

hire and retain additional personnel, including research, clinical, development, manufacturing, quality control, quality assurance and regulatory personnel;

conduct additional clinical studies beyond our current SOLVE-CRT study;

continue to advance the research and development of our WiSE CRT system;

develop, establish, and validate our commercial-scale current good manufacturing practice (“cGMP”).

General and Administrative Expenses

General and administrative expenses primarily consist of personnel-related costs, including salaries, bonuses, fringe benefits and other compensation-related costs, including stock-based compensation expense, for our personnel and external contractors involved in our executive, finance, legal and other administrative functions as well as our commercial function, who is involved in market access related activities. General and administrative expenses also include costs incurred for outside services associated with such functions, including costs associated with obtaining and maintaining our patent portfolio and professional fees for accounting, auditing, tax, legal services, and other consulting expenses.

We anticipate that our general and administrative expenses will increase significantly in the future as we:

hire and retain additional general and administrative personnel to support the expected growth in our research and development activities and the preclinical and clinical development of our product candidates;

continue to expand our commercial and administrative function to support the growth of our WiSE CRT commercialization;

incur additional commercialization expenses prior to any regulatory approval of our product candidates;

pursue payor coverage and reimbursement for our current and future product candidates;

maintain, expand, and protect our intellectual property portfolio; and

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incur increased expenses associated with operating as a U.S. publicly reporting company, including increased costs of accounting, audit, legal, regulatory, and tax-related services, and director and officer insurance premiums.

Other Income (Expenses), net

Interest expense

Interest expense primarily consists of cash and non-cash interest related to our notes payable. See “Loan and Security Agreements” section below for more details about our debt agreements.

Interest income

Interest income consists of interest income, including accretion of discounts, generated from our cash, cash equivalent, and marketable securities.

Other income

Other income includes reimbursements of clinical trial expenses as well as refundable tax incentives from the Australian Taxation Office.

Gain/ (loss) on foreign currency

Gains and losses arising from the settlement and remeasurement of monetary assets and liabilities denominated in currencies other than a subsidiary’s functional currency.

Critical Accounting Estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). The preparation of consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience, known trends and events, and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities and recorded amounts of expenses that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.

While our significant accounting policies are described in more detail in Note 2 to our consolidated financial statements appearing elsewhere in this Form 10-K, we believe the following accounting policies used in the preparation of our consolidated financial statements require the most significant judgments and estimates. Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our audited consolidated financial condition and results of operations.

Pre-launch inventory

We capitalized pre-launch inventory costs associated with its products prior to regulatory approval when, based on management judgement, future commercialization was considered probable and future economic benefit was expected to be realized. We assess the regulatory approval process and where the product stands in relation to that approval process including any known constraints or impediments to approval. Pre-launch inventory costs associated with products that have not yet received regulatory approval are capitalized if there is probable future commercial use and future economic benefit. If future commercial use and future economic benefit are not considered probable, then costs associated with pre-launch inventory that has not yet received regulatory approval are expensed as research and development expense during the period the costs are incurred. The determination to capitalize pre-launch inventory is based on the specific facts and circumstances relating to the product.

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Capitalization of pre-launch inventory began during the year ended December 31, 2024 when we determined that: (i) positive clinical trial results had been obtained, as evidenced by meeting both the primary efficacy and safety endpoints at the interim analysis, which supported our belief that regulatory approval is probable; (ii) uncertainties regarding regulatory approval had been significantly reduced, as evidenced by our submission of all modules of the pre-market approval application and ongoing communication with the regulatory bodies; and (iii) it is probable that these capitalized costs will provide future economic benefit, in excess of capitalized costs, as evidenced by the lack of alternative therapies for our target market and the anticipated average selling price of the WiSE CRT System.

Once we capitalize pre-launch inventory for a product candidate that is not yet approved, we monitor, on a quarterly basis, the status of this candidate within the regulatory approval process. We could be required to expense previously capitalized costs related to pre-launch inventory upon a change in management’s judgment of future commercial use and net realizable value, due to a denial or delay of approval by regulatory bodies, a delay in the timeline for commercialization or other potential factors. On a quarterly basis, the Company evaluates all inventory, including capitalized pre-launch inventory for which regulatory approval has not yet been obtained, to determine if any lower of cost or net realizable value adjustment is required. As it relates to pre-launch inventory, we consider several factors including expected timing of FDA approval, projected sales volume and estimated selling price.

Clinical trial accrual

The clinical trial accrual involves identifying services that third parties, contracted by us, have performed and estimating the associated cost incurred for these services which remain uninvoiced as of the balance sheet date. In addition, the clinical trial accrual involves the measurement of milestone achievements achieved by the patients participating in the clinical trial and the associated costs which have not been invoiced as of the balance sheet date. Our objective is to reflect the appropriate clinical trial expenses in our consolidated financial statements by matching the appropriate expenses with the period in which services are provided. We account for these expenses according to the progress of the trial as measured by patient progression and the timing of various aspects of the trial. Our clinical trial accrual is dependent, in part, upon the receipt of timely and accurate reporting from the third parties. We estimate our liability using our judgment based upon the facts and circumstances known at the time. During the course of a clinical trial, we adjust our clinical expense recognition if actual results differ from our estimates.

Stock-Based compensation

We measure all stock options and other stock-based awards based on their fair value on the date of the grant. Those awards typically have a graded vesting schedule and compensation expense for awards with only service conditions are recognized on a straight-line basis over the requisite service period, which is generally the vesting period of the respective award. Forfeitures are accounted for as they occur.

We use the Black-Scholes option pricing model, which incorporates assumptions and estimates, to measure the fair value of its option awards on the date of grant of each stock option award.

We determined the assumptions for the Black-Scholes option-pricing model as discussed below. Each of these inputs is subjective and generally requires significant judgment to determine.

Fair Value of Our Common Stock. Our stock is publicly traded on the ASX, and therefore we use the closing market price on the day before the option grant.

Expected Term. The expected term represents the period that the stock-based awards are expected to be outstanding. As we do not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term, the expected term of stock options granted has been determined using the simplified method, which is the average of the midpoints between the vesting date and the contractual term for all vesting tranches.

Risk-Free Interest Rate. The risk-free interest rate is based on the rate of the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award.

Expected Volatility. The expected volatility was derived from the combination of the average historical stock volatilities of several public companies within our industry that we consider to be comparable to our business, and our stock price, as quoted on the ASX.

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Dividend Rate. The expected dividend is zero as we have not paid and do not anticipate paying any dividends in the foreseeable future.

If any of the assumptions used in the Black-Scholes model change significantly, stock-based compensation for future awards may differ materially compared with the awards granted previously.

Income Taxes

We are subject to income taxes in the United States and multiple foreign jurisdictions. Our effective tax rates differ from the United States federal statutory rate, primarily due to changes in our valuation allowance, stock-based compensation expense, state and foreign tax benefit, federal research and development tax credits and other adjustments. Our effective tax rate was 0.01% for each of the years ended December 31, 2024 and 2023. The calculation of our provision for income taxes involves the use of estimates, assumptions and judgments while taking into account current tax laws, our interpretation of current tax laws and possible outcomes of future tax audits. We review our tax positions quarterly and adjust the balances as new information becomes available.

Significant management judgement is required in assessing our ability to realize any future benefit from our net deferred tax assets. Due to our history of net losses, the difficulty in predicting future results, the length of statutory carryforward periods, and tax planning alternatives, we believe that we cannot rely on projections of future taxable income to realize most of our deferred tax assets. Accordingly, we have established a full valuation allowance against our United States federal and states net deferred tax assets. We intend to maintain this valuation allowance until sufficient positive evidence exists to support its reversal. Our income tax expense recorded in the future will be reduced to the extent that sufficient positive evidence materializes to support a reversal, or decrease in, our valuation allowance.

We recognize tax benefits from uncertain tax positions only if it is more likely than not (more than 50%) that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. We file annual income tax returns in multiple taxing jurisdictions around the world and a number of years may elapse before an uncertain tax position is audited by the relevant tax authorities and finally resolved. We have established reserves to address potential exposures related to tax positions that could be challenged by tax authorities. While it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position and we can provide no assurance that the final tax outcome of these matters will not be materially different, we believe that we have adequately reserved for our uncertain tax positions.

Our future effective tax rates could be adversely affected if actual earnings are different than our estimates, by changes in the valuation of our deferred tax assets or liabilities, outcomes resulting from income tax examinations, or by changes or interpretations in tax laws, regulations or accounting principles.

Recent Accounting Pronouncements

See the section titled “Summary of Significant Accounting Policies—Recently issued accounting pronouncements” in Note 2 to our financial statements included in this Annual Report on Form 10-K for information on recent accounting pronouncements and the expected impact on our financial statements.

Non- GAAP Financial Measures

Adjusted earnings before interest, income taxes, depreciation and amortization (“EBITDA”), a non-GAAP measure used by management to assess operating performance, is defined as net loss, excluding interest expense, net, depreciation and amortization, stock-based compensation, and expenses associated with our Form 10 filling. Adjusted EBITDA is intended as a supplemental measure of our performance and provides useful information to management and investors regarding our operating results. Adjusted net loss per common share is defined as Adjusted EBITDA divided by the weighted-average number of shares outstanding.

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We present Adjusted EBITDA in this filing because we believe it assists investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our ongoing operating performance. Period-to-period comparison of Adjusted EBITDA helps our management identify additional trends in our company’s financial results that may not be shown solely by period-to-period comparison of net loss. In addition, we believe that providing Adjusted EBITDA, together with a reconciliation of Adjusted EBITDA to net loss, helps investors make comparisons between our company and other companies that may have different capital structures, different capitalized asset values, different forms of employee compensation and different strategic nonrecurring projects. Adjusted EBITDA has its limitations as an analytical tool because of the excluded items, and you should not consider it in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. Some of these limitations include:

Adjusted EBITDA does not reflect interest expense and interest income because these items are not directly attributable to the performance of our business operations and may vary over time due to a variety of financing transactions that we have entered into or may enter into in the future.

Adjusted EBITDA does not reflect certain non-cash items, including depreciation and amortization, and stock-based compensation expense. We believe that excluding the effect of these expenses from Adjusted EBITDA assists management and investors in making period-to-period comparisons in our company’s operating performance because the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business operations.

Adjusted EBITDA does not reflect the impact of certain cash charges resulting from matters we do not find indicative of our ongoing operations, such as costs associated with our filing of Form 10-12G.

A reconciliation between net loss and adjusted EBITDA, and net loss per common share and adjusted net loss per common share are presented below:

	Year Ended December 31,
(in thousands, except per share amounts)	2024			2023
Reconciliation of net loss to Non-GAAP Adjusted EBITDA:
Net loss	$	(40,798	)	$	(35,037	)
Interest expense, net		2,849			1,202
Depreciation and amortization		587			752
Stock-based compensation ^(a)		1,742			1,306
Expenses associated with Form 10 filling ^(b)		1,398			-
Adjusted EBITDA	$	(34,222	)	$	(31,777	)
Weighted-average number of shares outstanding:
Basic and diluted		324,995			288,875
Net loss per common share:	$	(0.13	)	$	(0.12	)
Adjusted net loss per common share:	$	(0.11	)	$	(0.11	)

^(a) Represents non-cash expense associated with our share-based payments.

^(b)Represents nonrecurring expenses associated with our Form 10 filing in 2024.

Results of Operations

The following discussion analyzes our operating results for the year ended December 31, 2024, and compares those results to results for the year ended December 31, 2023.

Comparison of the Years Ended December 31, 2024 and 2023

We recorded a net loss of $40.8 million in 2024, an increase of $5.8 million, or 16.4%, from 2023. The increased loss in 2024 was primarily due to an increase in general and administrative expenses and interest expense in 2024, as discussed below. We expect to continue reporting losses until such time as we obtain FDA approval, commercialize our WiSE CRT System, and are able to generate revenue and gross margin sufficient to offset our operating expenses.

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The following table summarizes our operating results for 2024 and 2023:

	Year Ended December 31,						Change
(in thousands)	2024			2023			Amount			%
Operating expenses:
Research and development	$	27,065		$	27,146		$	(81	)		(0.3	%)
General and administrative		11,254			7,403			3,851			52.0	%
Total operating expenses		38,319			34,549			3,770			10.9	%
Total other (expense), net		(2,478	)		(486	)		(1,992	)		409.9	%
Loss before income tax		(40,797	)		(35,035	)		(5,762	)		16.4	%
Income tax expense		(2	)		(2	)		-			-
Net loss	$	(40,799	)	$	(35,037	)	$	(5,762	)		16.4	%

Operating Expenses

Research and Development

The following table presents our total research and development expenses by category:

	Year Ended December 31,				Change
(in thousands)	2024		2023		Amount			%
Research and development expenses:
R&D personnel expense	$	17,770	$	14,278	$	3,492			24.5	%
Clinical expenses		2,023		3,384		(1,361	)		(40.2	%)
Quality assurance		272		127		145			114.2	%
Contract manufacturing, materials & components		5,340		7,853		(2,513	)		(32.0	%)
Facility allocation & depreciation		1,660		1,504		156			10.4	%
Total research and development expense	$	27,065	$	27,146	$	(81	)		(0.3	%)

Research and development expenses decreased by $0.1 million, or 0.3%, during the year ended December 31, 2024, as compared to the year ended December 31, 2023. The decrease was primarily due to a $2.5 million decrease in contract manufacturing, materials and components, resulting from a decrease in professional services related to the development testing of the WiSE CRT System, as well as capitalization of certain inventory purchases. Clinical trial related expenses decreased by $1.4 million, primarily due to completing enrollment in the SOLVE-CRT Study in July 2022. This decrease was offset by a $3.5 million increase in personnel-related expenses, including salaries, bonuses, and certain fringe benefits as a result of the expansion of our workforce to support the ongoing development of the WiSE CRT System.

General and Administrative Expenses

General and administrative expenses increased by $3.9 million, or 52.0%, during the year ended December 31, 2024, as compared to the year ended December 31, 2023. Professional fees increased by $2.4 million, primarily resulting from higher audit, legal, regulatory, and tax-related services in connection with preparation for our filing of a registration statement on Form 10. Personnel-related expenses, including salaries, bonuses and certain fringe benefits increased by $1.1 million as a result of the expansion of our workforce to support our business needs. Corporate expenses increased by $0.4 million, which resulted from an increase in expenses related to investor relations, insurance premiums, and computer supplies and software as a result of the expansion of our workforce.

Other Expense, net

Other expense, net increased by $2.0 million during the year ended December 31, 2024, as compared to the year ended December 31, 2023. The change was caused by increased interest expense, decreased interest income, and decreased refundable tax incentives in 2024 as compared to 2023. Interest expense increased by $1.5 million, which resulted from an additional $20.0 million in borrowings on June 30, 2023. Refundable tax incentives decreased by $0.4 million in 2024, compared to 2023, which included two years of refundable tax incentives due to the timing of tax filings. During the year ended December 31, 2024, we earned interest income, including the accretion of discounts, from investment in marketable securities of $3.2 million, a decrease of $0.1 million as compared to the year ended December 31, 2023.

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Liquidity and Capital Resources

We believe that we maintain a level of liquidity sufficient to allow us to meet our financial obligations as they become due for the next twelve months. We manage our cash and capital structure to maximize shareholder return, maintain our financial condition and maintain flexibility for future strategic initiatives. We continuously assess our working capital needs, debt and leverage levels, debt maturity schedule, capital expenditure requirements and future investments. As of December 31, 2024 and 2023, we had approximately $66.0 million and $73.4 million, respectively, in cash, cash equivalents, and marketable securities. In the long-term, our ability to support our working capital and capital expenditure requirements will depend on many factors, including:

the cost, timing and results of our clinical trials and regulatory reviews;

the cost of our research and development activities for new and modified products;

the cost and timing of establishing sales, marketing and distribution capabilities;

the terms and timing of other collaborative, licensing and other arrangements that may establish including any contract manufacturing arrangements;

the timing, receipt and amount of sales from our current and potential products;

the degree of success we experience in commercializing our products;

the emergence of competing or complementary technologies;

the impact of global business, political and macroeconomic conditions, including inflation, rising interest rates, uncertainty with respect to the federal budget, instability in the global banking system, volatile market conditions, supply chain disruptions, cybersecurity events, and global events, including regional conflicts around the world;

the cost of preparing, filing, prosecuting, maintaining, defending and enforcing any patent claims and other intellectual property rights; and

the extent to which we acquire or invest in businesses, products or technologies, although we currently have no commitments or agreements relating to any of these types of transactions.

To the extent that current and anticipated future sources of liquidity are insufficient to fund our future business activities and cash and other requirements, we may be required to seek additional equity or debt financing. The sale of additional equity would result in additional dilution to our stockholders. The incurrence of additional debt financing would result in debt service obligations and the instruments governing such debt could provide for operating and financing covenants that would restrict our operations. In the event that additional financing is required from outside sources, there is a possibility we may not be able to raise it on terms acceptable to us or at all. Further, the current macroeconomic environment may make it difficult for us to raise capital on terms favorable to us or at all. If we are unable to raise additional capital when desired, our business, operating results, and financial condition could be adversely affected.

Loan and Security Agreements

On June 30, 2022, we entered into a loan and security agreement with Runway Growth Finance Corp. The debt is secured against substantially all of our assets, except for intellectual property, but includes all proceeds from the sale of intellectual property. The loan agreement provides three term loan tranches. We received the initial draw of $20,000,000 in June 2022. We received positive interim analysis data, sufficient to proceed with the clinical trial and premarket approval submission to the U.S. Food and Drug Administration, which allowed us to draw the second tranche of $20,000,000 in June 2023. The final tranche provided $10,000,000 from the date of approval from the FDA for the WiSE CRT System and ended on June 30, 2024. We did not receive FDA approval by June 30, 2024, and therefore did not meet the draw requirements of the third and final tranche.

Interest on the term loan accrues on the principal amount outstanding at a floating per annum rate equal to the greater of the rate of interest noted in The Wall Street Journal Money Rates section, as the “Prime Rate” or 4.00% plus a margin of 4.9% and is payable monthly in arrears and shall be computed on the basis of a 360-day year for the actual number of days elapsed. We are required to make interest only payments from July 2022 to May 2027. The note payable has a maturity date of June 15, 2027, at which time any unpaid interest, outstanding principal balance, and a final payment of 4.5% of the original principal amount borrowed shall be due in full. If we repay the loan prior to maturity, we will be required to pay a prepayment fee of 0.5% - 1% of the outstanding principal balance. We are also required to pay a 3% success fee of the funded principal amount of the term loan at the time of a liquidity event, as defined in the loan and security agreement. The success fee is enforceable within 10 years from the execution date of the agreement.

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As of December 31, 2024 and 2023, the outstanding principal balance was $41,800,000, which included the principal borrowings under tranche one and tranche two, as well as the final payment of 4.5% of the principal borrowings to date.

We are subject to customary financial and reporting covenants under the loan and security agreement. As of December 31, 2024 and 2023, we were in compliance with all debt covenants.

Recent Financings

On June 28, 2023, we issued 27,472,527 CDIs in connection with the first tranche of an institutional placement on the ASX, and on July 10, 2023, we issued 5,494,506 CDIs in connection with the second and final tranche of the institutional placement. On July 25, 2023, we issued 2,921,307 shares of common stock in connection with a Security Purchase Plan (“SPP”). We raised a total of approximately $20.6 million, net of issuance costs of approximately $1.0 million. Of this amount, $18.9 million were net cash proceeds from the institutional placement, and $1.7 million were cash proceeds from the SPP.

On September 25, 2024, we issued 55,856,325 CDIs in connection with an institutional placement and the institutional component of a 1-for-20 pro-rata accelerated non-renounceable entitlement offer on the ASX. We raised approximately $29.4 million, net of issuance costs of approximately $1.9 million. On October 16, 2024, we issued 5,075,733 CDIs in connection with the retail component of a fully underwritten 1-for-20 pro-rata non-renounceable entitlement offer. We raised approximately $2.6 million, net of issuance costs of approximately $0.2 million.

Contractual Obligations and Commitments

As of December 31, 2024, we had $1.1 million in operating lease liabilities for our corporate headquarters and laboratory space, located in Sunnyvale, California. In January 2025, we entered into a new lease agreement to lease our new corporate headquarters. See Note 6, “Leases”, in the notes to consolidated financial statements for additional information regarding leased properties.

As of December 31, 2024, the outstanding principal balance under our loan and security agreement described above was $41,800,000, which included the principal borrowings under tranche one and tranche two, as well as the final payment of 4.5% of the principal borrowings to date.

In addition, we have entered into an equipment purchase agreement for the purchase of certain software. As of December 31, 2024, the outstanding principal balance was $37,286. Additionally, we enter into contracts in the normal course of business with third-party contract organizations for clinical trials, manufacturing and other services and products for operating purposes. In certain instances, our purchase agreements allow us to cancel, reschedule, or adjust our purchase requirements based on our business needs prior to firm orders being placed. Consequently, only a portion of our purchase commitments are firm and noncancelable. As of December 31, 2024, our obligation under such arrangements was approximately $14.4 million.

Working Capital

December 31, 2024, Compared to December 31, 2023

As of December 31, 2024, we had working capital of $56.1 million, comprised of current assets of $64.5 million and current liabilities of $8.3 million. Current assets, consisting of cash and cash equivalents, marketable securities, pre-launch inventory, prepaid expenses, non-trade receivables and other current assets, decreased by $9.9 million as of December 31, 2024, compared to December 31, 2023. Current liabilities, consisting primarily of accounts payable, accrued liabilities, operating lease liability, the current portion of notes payable and interest payable, increased by approximately $1.9 million as of December 31, 2024, compared to December 31, 2023. The proceeds from borrowings under tranche 2 of the loan and security agreement, as well as the sale of common stock in 2023, contributed to the increase in cash, cash equivalents, and marketable securities during 2023, resulting in an increase in working capital as of December 31, 2023.

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Cash Flows

December 31, 2024, Compared to December 31, 2023

The following table summarizes our cash flows for the years ended December 31, 2024 and 2023:

	Year Ended December 31,
(in thousands)	2024			2023
Net cash used in operating activities	$	(41,230	)	$	(32,698	)
Net cash provided by (used in) investing activities		1,113			(8,641	)
Net cash provided by financing activities		32,484			40,466
Effect of exchange rate change on cash		(28	)		(5	)
Net change in cash and cash equivalents	$	(7,661	)	$	(878	)

Operating Activities

Net cash used in operating activities during the year ended December 31, 2024, was $41.2 million, compared to $32.7 million during the year ended December 31, 2023, representing an increase in use of $8.5 million. This increase was primarily attributed to an increase in net loss of $5.8 million, a decrease in cash from changes in working capital of $2.8 million, offset by a $0.1 increase in non-cash adjustments.

The increase in net loss of $5.8 million primarily resulted from increases in personnel costs due to the expansion of our workforce, increases in professional fees due to the preparation for the Form 10 filing, and increase other expense mainly driven by interest expense, as further described under “Results of Operations” above.

The decrease in changes from working capital activities primarily consisted of $2.8 million use of cash for pre-launch inventory purchases during the year ended December 31, 2024, a $0.8 million decrease in prepaids expenses due to decreased vendor prepayment requirements for research and development materials and professional services, a $0.3 million decrease in non-trade receivables due to the timing of collections, a $0.2 million decrease in other assets due to additional receipt of refundable tax incentives from the Australian Taxation Office in 2023, and a $0.1 million decrease in interest payable. These decreases were partially offset by a $1.4 million increase in accounts payable due to the timing of invoice payments.

Non-cash items primarily consisted of increases in share-based compensation of $0.4 million due to new options issuance to new hires and existing employees, offset by a decrease in accretion of discount on marketable securities of $0.3 million driven by fluctuating interest rates and maturity term.

Investing Activities

Net cash provided by investing activities during the year ended December 31, 2024, was $1.1 million, compared to $8.6 million used in investing activities during the year ended December 31, 2023, representing a decrease in cash used of $9.7 million. The decrease was attributable to a $11.9 million decrease in the purchase of marketable securities and a $0.1 million decrease in the purchase of property and equipment. These decreases were offset by a $2.3 million increase in the maturities and sales of marketable securities during the year ended December 31, 2024, as compared to the year ended December 31, 2023.

Financing Activities

Net cash provided by financing activities during the year ended December 31, 2024, was $32.5 million, compared to $40.5 million during the year ended December 31, 2023, representing a decrease of $8.0 million. This decrease is primarily attributed to the $19.7 million borrowing, net of issuance cost, under tranche 2 of the loan and security that took place during the year ended December 31, 2023. This decrease was partially offset by a $11.3 million increase in proceeds from a capital raise, net of issuance cost, during the year ended December 31, 2024, as well as by a $0.4 million increase in proceeds from exercise of stock options.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information specified under this item.

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Item 8. Financial Statements and Supplementary Data

Index to Consolidated Financial Statements		Page
Report of Independent Registered Public Accounting Firm (Deloitte & Touche LLP; Tempe AZ; PCAOB ID #34)		77
Consolidated Balance Sheets		78
Consolidated Statements of Operations		79
Consolidated Statements of Comprehensive Loss		80
Consolidated Statements of Stockholders' Equity		81
Consolidated Statements of Cash Flows		82
Notes to the Consolidated Financial Statements		83

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Report of Independent Registered Public Accounting Firm

To the stockholders and the Board of Directors of EBR Systems, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of EBR Systems, Inc. and subsidiaries (the "Company") as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive loss, stockholders' equity, and cash flows, for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Deloitte & Touche LLP

Tempe, Arizona

March 24, 2025

We have served as the Company's auditor since 2022.

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EBR SYSTEMS, INC.

Consolidated Balance Sheets


	December 31,
	2024			2023
ASSETS
Current assets
Cash and cash equivalents	$	6,917,546		$	14,578,752
Marketable securities		53,746,411			57,736,274
Non-trade receivables and unbilled reimbursements, net		441,439			230,734
Pre-launch inventory		1,391,008			-
Prepaid expenses		1,693,560			1,446,634
Other current assets		276,419			382,522
Total current assets		64,466,383			74,374,916
Property and equipment, net		794,959			1,088,771
Right of use operating lease asset		929,243			1,719,590
Marketable securities		5,303,950			1,125,554
Pre-launch inventory, noncurrent		1,451,532			-
Other assets		613,427			589,646
TOTAL ASSETS	$	73,559,494		$	78,898,477
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	3,247,453		$	1,856,134
Accrued expenses and other liabilities		4,295,841			4,095,347
Interest payable		224,889			224,309
Operating lease liability		522,525			250,876
Current portion of notes payable		37,286			21,496
Total current liabilities		8,327,994			6,448,162
Other liabilities		37,617			76,946
Operating lease liability		574,777			1,670,230
Notes payable, net		40,263,605			39,646,687
Total liabilities		49,203,993			47,842,025
Commitments and contingencies (Note 15)
STOCKHOLDERS' EQUITY
Common stock, $0.0001 par value; 600,000,000 shares authorized, 371,076,200 and 307,020,758 shares issued and outstanding at December 31, 2024 and 2023, respectively		37,108			30,703
Additional paid-in capital		376,902,576			342,721,880
Accumulated deficit		(353,457,680	)		(312,659,408	)
Accumulated other comprehensive income		873,497			963,277
Total stockholders' equity		24,355,501			31,056,452
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	73,559,494		$	78,898,477

These financial statements should be read in connection with the notes to consolidated financial statements.

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EBR SYSTEMS, INC.

Consolidated Statements of Operations


	Year Ended December 31,
	2024			2023
Operating expenses
Research and development	$	27,065,427		$	27,146,026
General and administrative		11,253,601			7,402,921
Total operating expenses		38,319,028			34,548,947
Loss from operations		(38,319,028	)		(34,548,947	)
Other (expense) income
Interest expense		(6,029,668	)		(4,483,731	)
Interest income		3,180,984			3,281,440
Other income		360,996			718,959
Gain (loss) on foreign currency		9,979			(2,984	)
Total other (expense), net		(2,477,709	)		(486,316	)
Loss before income tax		(40,796,737	)		(35,035,263	)
Income tax benefit (expense)		(1,535	)		(1,625	)
Net loss	$	(40,798,272	)	$	(35,036,888	)

Net loss per share attributable to common stockholders:
Basic and diluted	$	(0.13	)	$	(0.12	)
Weighted-average number of common shares outstanding:
Basic and diluted		324,995,419			288,875,373

These financial statements should be read in connection with the notes to consolidated financial statements.

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EBR SYSTEMS, INC.

Consolidated Statements of Comprehensive Loss


	Year Ended December 31,
	2024			2023
Net loss	$	(40,798,272	)	$	(35,036,888	)
Other comprehensive (loss) income
Change in unrealized (loss) income on marketable securities		(45,310	)		171,135
Foreign currency translation adjustments		(44,470	)		(2,698	)
Total other comprehensive (loss) income		(89,780	)		168,437
Comprehensive loss	$	(40,888,052	)	$	(34,868,451	)

These financial statements should be read in connection with the notes to consolidated financial statements.

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EBR SYSTEMS, INC.

Consolidated Statement of Changes in Stockholders’ Equity


										Total
										Other			Total
	Common Stock				Additional		Accumulated			Comprehensive			Stockholders’
	Shares		Par Value		Paid-in Capital		Deficit			Income			Equity
Balance at December 31, 2022		270,752,201	$	27,077	$	320,749,696	$	(277,622,520	)	$	794,840		$	43,949,093
Exercise of stock options		380,217		38		54,834		-			-			54,872
Stock-based compensation		-		-		1,305,811		-			-			1,305,811
Issuance of common stock, net of issuance costs		35,888,340		3,588		20,611,539		-			-			20,615,127
Net loss		-		-		-		(35,036,888	)		-			(35,036,888	)
Other comprehensive income		-		-		-		-			168,437			168,437
Balance at December 31, 2023		307,020,758		30,703		342,721,880		(312,659,408	)		963,277			31,056,452
Exercise of stock options		3,123,384		312		485,721		-			-			486,033
Stock-based compensation		-		-		1,742,279		-			-			1,742,279
Issuance of common stock, net of issuance costs		60,932,058		6,093		31,952,696		-			-			31,958,789
Net loss		-		-		-		(40,798,272	)		-			(40,798,272	)
Other comprehensive loss		-		-		-		-			(89,780	)		(89,780	)
Balance at December 31, 2024		371,076,200	$	37,108	$	376,902,576	$	(353,457,680	)	$	873,497		$	24,355,501

These financial statements should be read in connection with the notes to consolidated financial statements.

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EBR SYSTEMS, INC.

Consolidated Statements of Cash Flows


	Year Ended December 31,
	2024			2023
Cash flows from operating activities:
Net loss	$	(40,798,272	)	$	(35,036,888	)
Adjustment to reconcile net loss to cash used in operating activities:
Depreciation and amortization		587,485			752,257
Amortization of deferred loan costs and discount on notes payable		616,918			476,037
Lease amortization		379,550			413,517
Stock-based compensation		1,742,279			1,305,811
Allowance for credit losses		4,520			40,485
Accretion of discount on marketable securities		(1,620,509	)		(1,344,781	)
Changes in operating assets and liabilities:
Non-trade receivables and unbilled reimbursements		(214,842	)		86,837
Pre-launch inventory		(2,842,540	)		-
Prepaid expenses		(247,712	)		556,143
Other assets		57,253			206,424
Accounts payable		1,347,741			(86,347	)
Accrued expenses and other liabilities		170,736			215,483
Interest payable		580			126,294
Operating lease liability		(413,007	)		(408,786	)
Net cash used in operating activities		(41,229,820	)		(32,697,514	)
Cash flows from investing activities:
Purchase of property and equipment		(273,437	)		(354,054	)
Purchase of marketable securities		(65,515,010	)		(77,461,260	)
Maturities of marketable securities		65,776,000			67,400,000
Sales of marketable securities		1,125,676			1,774,324
Net cash provided by (used in) investing activities		1,113,229			(8,640,990	)
Cash flows from financing activities:
Repayment of notes payable		(44,743	)		-
Proceeds from notes payable		82,029			20,000,000
Payments of deferred loan costs		-			(204,075	)
Proceeds from common stock offering		34,021,550			21,615,076
Payment of common stock offering costs		(2,060,823	)		(999,949	)
Proceeds from exercise of stock options		486,033			54,872
Net cash provided by financing activities		32,484,046			40,465,924
Effect of exchange rate change on cash		(28,661	)		(5,006	)
Net change in cash and cash equivalents		(7,661,206	)		(877,586	)
Cash and cash equivalents, beginning of the period		14,578,752			15,456,338
Cash and cash equivalents, end of the period	$	6,917,546		$	14,578,752

Supplemental disclosure of cash flow information
Cash paid for interest expense	$	5,412,170		$	3,881,400
Cash paid for income taxes	$	1,625		$	775

Supplemental disclosure of non-cash investing and financing activities:
Remeasurement of lease liabilities	$	410,797		$	-
Purchases of property and equipment not yet paid	$	47,868		$	-
Accrued common stock offering costs	$	1,938		$	-
Purchases of property and equipment with note payable	$	82,029		$	-

These financial statements should be read in connection with the notes to consolidated financial statements.

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EBR SYSTEMS, INC.

Notes to the Consolidated Financial Statements

Note 1 - Business and organization

Business overview

EBR Systems, Inc. and subsidiaries (collectively, “EBR”, “we”, “our” or the “Company”) is a United States based medical device company that is developing the WiSE CRT System, an implantable cardiac pacing system able to provide stimulation to endocardial heart tissue for the correction of heart rhythm conditions without requiring the use of leads. This implantable, investigational device delivers left-ventricle endocardial pacing for cardiac resynchronization therapy (“CRT”), without the use of wires or leads going into the heart. WiSE CRT System is currently undergoing the premarket review by the FDA which is intended to assess the safety and efficacy of the system.

The Company completed its initial public offering of CDIs (“CHESS Depositary Interests”) and began trading on the Australian Securities Exchange (“ASX”) on November 24, 2021, under the symbol “EBR”.

The Company operates wholly owned foreign subsidiary entities in Australia, EBR Systems (AUST) Pty Ltd (“EBR-AU”), and the United Kingdom, EBR Systems (UK) Limited (“EBR-UK”), which establish clinical trials in Australia and the United Kingdom, respectively, and work on intellectual property development. EBR-AU was incorporated on February 23, 2017, and EBR-UK was incorporated on July 31, 2015.

Note 2 - Summary of significant accounting policies

Basis of presentation

These consolidated financial statements include the accounts of EBR Systems, Inc. and its subsidiaries, and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Company has eliminated all intercompany transactions and balances during consolidation.

Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates, judgments, and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. Significant estimates and assumptions made by management include the fair value of stock-based awards issued, capitalized pre-launch inventory, clinical trial accrual, and the valuation allowance on deferred taxes.

Fair Value Measurements

The Company measures certain assets and liabilities at fair value, which is defined as the price that would be received from the sale of an asset or paid to transfer a liability on the measurement date in an orderly transaction between market participants in the principal or most advantageous market for the asset or liability. The fair value measurement guidance establishes a fair value hierarchy which requires the Company to maximize the use of observable inputs when measuring fair value. The following levels of inputs may be used to measure fair value:

Level 1: Valuation techniques in which all significant inputs are unadjusted quoted prices from active markets for assets or liabilities that are identical to the assets or liabilities being measured.

Level 2: Valuation techniques in which significant inputs include quoted prices from active markets for assets or liabilities that are similar to the assets or liabilities being measured and/or quoted prices for assets or liabilities that are identical or similar to the assets or liabilities being measured from markets that are not active. Also, model-derived valuations in which all significant inputs are observable in active markets are Level 2 valuation techniques.

Level 3: Valuation techniques in which one or more significant inputs are unobservable. Such inputs reflect our estimate of assumptions that market participants would use to price an asset or liability.

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EBR SYSTEMS, INC.

Notes to the Consolidated Financial Statements

Foreign currency translation

The functional currencies of our foreign subsidiaries are their local currencies. Accordingly, the Company translates the foreign currency financial statements into US Dollars using the reporting period-end or average exchange rates. Assets and liabilities of these subsidiaries were translated at exchange rates as of the balance sheet dates. Expenses are translated at average rates in effect for the periods presented. The cumulative translation adjustment is included in the accumulated other comprehensive income within stockholders’ equity. Gains and losses arising from the settlement and remeasurement of monetary assets and liabilities denominated in currencies other than a subsidiary’s functional currency are included in “gain (loss) on foreign currency” in the period in which they occur.

Employee benefits

The Company maintains an employee retirement/savings plan (the “Retirement Plan”) that permits participants to make tax-deferred contributions by salary reductions pursuant to Section 401(k) of the Internal Revenue Code. The Company may make discretionary contributions. For the years ended December 31, 2024 and 2023, the Company did not make any contributions.

Cash and cash equivalents

Cash and cash equivalents consist of cash and highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash. Cash equivalents are reported at fair value.

Marketable securities

Marketable securities, all of which are available-for-sale, consist of U.S. treasury bonds, U.S. government notes, and corporate debt securities. Marketable securities are carried at fair value, with unrealized gains and losses reported as accumulated other comprehensive income, except for losses from impairments which are determined to be other than temporary. For the years ended December 31, 2024 and 2023, there were no losses from impairments. Realized gains and losses and declines in value judged to be other-than-temporary are included in the determination of net loss and are included in other income and expense. Interest and dividends on available-for-sale securities are included in other income and expense. See Note 3, “Cash, cash equivalents, and marketable securities” for additional disclosure on marketable securities.

Liquidity

The accompanying financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. For the years ended December 31, 2024 and 2023, the Company incurred a net loss of $40,798,272 and $35,036,888, respectively. During the years ended December 31, 2024 and 2023, the Company had negative cash flows from operations of $41,229,820 and $32,697,514, respectively. The Company has incurred operating losses and negative cash flows from operations since inception and anticipates such conditions to continue in the foreseeable future. As of December 31, 2024, the Company had working capital of $56,138,389 and accumulated deficit of $353,457,680. The Company continues to face risks similar to those of other companies of similar size in its industry, including, but not limited the need for successful commercialization of products, the need for additional capital, or financing, to fund operating losses, protection of proprietary technology, and dependence on key individuals. The Company has funded its operations through the issuance of common stock and debt instruments, as further discussed in Note 7, “Notes payable” and Note 9, “Common stock” below.

Concentration of credit risk

Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. The Company’s cash and cash equivalents are primarily held at U.S. financial institutions that management believes are of high credit quality. Such deposits exceed federally insured limits.

Non-trade receivables and unbilled reimbursements

Non-trade receivables are recorded for amounts due to the Company related to reimbursements of clinical trials expenses based upon contracted terms, and the sale of materials to contract manufacturers. Unbilled reimbursements represent amounts for services that have been rendered but for which reimbursements have not been billed. See Note 5, “Consolidated balance sheet components” for additional information on non-trade receivables and unbilled reimbursements.

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EBR SYSTEMS, INC.

Notes to the Consolidated Financial Statements

Pre-launch inventory

Inventory costs associated with products that have not yet received regulatory approval are capitalized if there is probable future commercial use and future economic benefit. If future commercial use and future economic benefit are not considered probable, then costs associated with pre-launch inventory that has not yet received regulatory approval are expensed as research and development expense during the period the costs are incurred. The determination to capitalize is based on the particular facts and circumstances relating to the product. Capitalization of such pre-launch inventory begins when the Company determines that (i) positive clinical trial results have been obtained in order to support regulatory approval is probable; (ii) uncertainties regarding regulatory approval have been significantly reduced; and (iii) it is probable that these capitalized costs will provide future economic benefit, in excess of capitalized costs.

As of December 31, 2024 and 2023, the Company capitalized $2,842,540 and $0 of pre-launch inventory costs, respectively. At December 31, 2024, the Company had $1,391,008 and $1,451,532 of capitalized pre-launch inventory recorded in current and noncurrent assets, respectively, based on the Company’s forecasted utilization within the next year from the balance sheet date. Pre-launch inventory, consisting of raw materials, is recorded at the lower of cost (determined using the first-in, first-out method) and net realizable value. The Company could be required to write down previously capitalized costs related to pre-launch inventories upon a change in facts and circumstances, including among other potential factors, a denial or significant delay of approval by regulatory bodies, a delay in commercialization, or other adverse factors.

Property and equipment

Property and equipment is carried at acquisition cost less accumulated depreciation. The cost of normal, recurring, or periodic repairs and maintenance activities related to property and equipment are expensed as incurred.

Depreciation is computed using the straight-line method based on the estimated useful lives of the related assets. The estimated useful lives by asset classification are generally as follows:

Schedule of estimated useful lives
Equipment		3 - 8 years
Computer software		3 years
Leasehold improvements		Lesser of 15 years or the remainder of the lease

Long-lived assets, such as property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group be tested for potential impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that carrying value exceeds fair value. Fair value is determined using various valuation techniques, including discounted cash flow models, quoted market values, and third-party independent appraisals, depending on the nature of the asset. For the years ended December 31, 2024 and 2023, the Company did not recognize any impairment charges associated with long-lived assets.

Leases

At the inception of a contract, the Company determines whether the contract is or contains a lease based on all relevant facts and circumstances. Leases with a term greater than twelve months are recognized on the balance sheet date as right of use (“ROU”) operating lease assets and current and non-current lease liabilities, as applicable. The Company has elected not to recognize leases on the balance sheet, with terms of twelve months or less. The Company includes lease option extensions in the assessment of the lease arrangement when it is reasonably certain the option will be exercised.

Lease liabilities and the corresponding right of use operating lease assets are recorded based on the present value of lease payments to be made over the lease term. The discount rate used to calculate the present value is the rate implicit in the lease, or if not readily determinable, the Company’s incremental borrowing rate. The Company’s incremental borrowing rate is the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term, an amount equal to the lease payments in a similar economic environment. Certain adjustments to the right of use operating lease asset may be required for items such as initial direct costs or incentives received. Lease payments on operating leases are recognized on a straight-line basis over the expected term of the lease. Lease payments on financing leases are recognized using the effective interest method. See Note 6, “Leases” for additional disclosure on leases.

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EBR SYSTEMS, INC.

Notes to the Consolidated Financial Statements

For all asset classes of its leases, the Company has elected to account for the lease and non-lease components together for existing classes of underlying assets.

Revenue Recognition

To date the Company’s sole product is in the late stages of development and has not been approved for sale by the FDA, as such no revenue has been recorded from the sale of products. Once the Company receives FDA approval, revenue from product sales will be recognized upon the transfer of control, which is generally upon shipment or delivery, depending on the delivery terms set forth in the customer contract. Provisions for discounts, rebates, and sales incentives to customers, and returns and other adjustments will be provided for in the period the related sale is recorded.

Research and development

Research and development costs are expensed when incurred. Research and development costs include operating expenses for the Company’s engineering and product management functions supporting research, new development, and related product enhancement. Additionally, costs incurred in connection with preclinical development, clinical testing, as well as costs associated with the regulatory and FDA approval process are also included as a component of research and development expense.

General and administrative

General and administrative includes operating expenses incurred in our executive, finance, legal, marketing and other administrative functions.

Stock-based compensation

The Company recognizes stock-based compensation expense related to employees over the requisite service period based on the grant-date fair value of the awards. The fair value of options granted is estimated using the Black-Scholes option valuation model. The Company recognizes the grant-date fair value of an award as compensation expense on a straight-line basis over the requisite service period, which typically corresponds to the vesting period for the award. The Company elects to account for forfeitures as they occur and, upon forfeiture of an award prior to vesting, the Company reverses any previously recognized compensation expense related to that award. See Note 11, “Stock-based compensation” for additional details.

Interest Income

The Company earned interest income, including accretion of discount, from investments in marketable securities of $3,180,984 and $3,281,440 for the years ended December 31, 2024 and 2023, respectively.

Other Income

The Company periodically receives reimbursements of clinical trial expenses, which are recorded as other income in the accompanying consolidated statements of operations. Additionally, other income includes refundable tax incentives from the Australian Taxation Office. Components of Other Income were as follows for the years ended December 31, 2024 and 2023:

Schedule of components of other income
	2024		2023
Clinical trial reimbursements	$	10,462	$	57
Research and development tax incentive		350,534		718,902
Total other income	$	360,996	$	718,959

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EBR SYSTEMS, INC.

Notes to the Consolidated Financial Statements

Income taxes

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities reflect the tax effects of net operating losses, tax credits, and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. These are determined using enacted tax rates in effect for the year in which such temporary differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period that includes the enactment date.

The Company records deferred tax assets to the extent the Company believes these assets will more likely than not be realized. In making such a determination, we consider all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial operations. When we establish or reduce the valuation allowance against our deferred tax assets, our provision for income taxes will increase or decrease, respectively, in the period that determination to change the valuation allowance is made.

We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the financial statements on a particular tax position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. The amount of unrecognized tax benefits is adjusted as appropriate for changes in facts and circumstances, such as significant amendments to existing tax law, new regulations or interpretations by the taxing authorities, new information obtained during a tax examination, or resolution of an examination. We recognize both accrued interest and penalties, where appropriate, related to unrecognized tax benefits in the provision for income taxes.

Earnings per share

Basic income or loss per share is determined by dividing net income or loss by the weighted average common shares outstanding during the period. Diluted income or loss per share is determined by dividing net income by diluted weighted average shares outstanding during the period. Diluted weighted average shares reflect the dilutive effect, if any, of potential common shares. To the extent their effect is dilutive, employee equity awards and other commitments to be settled in common stock are included in the calculation of diluted income or loss per share based on the treasury stock method. Potential common shares are excluded from the calculation of dilutive weighted average shares outstanding if their effect would be anti-dilutive at the balance sheet date based on a treasury stock method or due to a net loss.

Recently issued accounting pronouncements

In December 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures”. The ASU focuses on income tax disclosures around effective tax rates and cash income taxes paid. ASU 2023-09 is effective for public filers for fiscal years beginning after December 15, 2024. The Company believes the adoption of ASU 2023-09 will not have a material impact on the Company’s consolidated financial statements and related disclosures.

In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures. This ASU improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. In addition, the ASU enhances interim disclosure requirements, clarifies circumstances in which an entity can disclose multiple segment measures of profit or loss, provides new segment disclosure requirements for entities with a single reportable segment, and other disclosure requirements. The Company adopted ASU 2023-07 in the year ended December 31, 2024. Refer to Note 14 for enhanced disclosures associated with the adoption of this ASU.

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EBR SYSTEMS, INC.

Notes to the Consolidated Financial Statements

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The amendments in ASU 2024-03 address investor requests for more detailed expense information and require additional disaggregated disclosures in the notes to financial statements for certain categories of expenses that are included on the face of the income statement. This guidance is effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. In January 2025, the FASB issued an update 2025-01 “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date”, which revises the effective date of ASU 2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact of this standard on its disclosures.

Note 3 – Cash, cash equivalents, and marketable securities

Cash, cash equivalents, and marketable securities consisted of the following at December 31, 2024 and 2023:

Schedule of cash and cash equivalents
	2024		2023
Cash and cash equivalents:
Cash	$	3,210,556	$	975,310
Money market funds		3,706,990		11,615,762
US Treasury securities		-		1,987,680
Total cash and cash equivalents	$	6,917,546	$	14,578,752
Marketable securities, short-term:
Asset backed securities	$	2,002,957	$	-
Commercial paper		1,156,709		21,113,569
Corporate bonds		23,951,700		14,836,424
US Government Agency bonds		-		2,794,510
US Treasury securities		26,635,045		18,991,771
Total marketable securities, short-term	$	53,746,411	$	57,736,274
Marketable securities, long-term:
Asset backed securities	$	2,305,317	$	1,125,554
Corporate bonds		2,386,774		-
US Treasury securities		611,859		-
Total marketable securities, long-term	$	5,303,950	$	1,125,554
Total cash, cash equivalents, and marketable securities	$	65,967,907	$	73,440,580

During the year ended December 31, 2024, marketable securities were sold or matured for proceeds of $66,901,676 with no gain or loss realized. During the year ended December 31, 2023, marketable securities were sold or matured for proceeds of $69,174,324 with a realized gain of $276. See Note 4, “Fair value measurements” for additional information regarding the fair value of cash equivalents and marketable securities.

The following tables summarizes the unrealized gains and losses related to the Company’s available-for-sale marketable securities, by major security type, as of December 31, 2024 and 2023:

Schedule of unrealized gains and losses
	As of December 31, 2024
	Amortized Cost		Unrealized Gains		Unrealized (losses)			Fair Value
Marketable securities
Asset backed securities	$	4,304,662	$	3,612	$	-		$	4,308,274
Commercial paper		1,161,157		-		(4,448	)		1,156,709
Corporate bonds		26,341,019		19,868		(22,413	)		26,338,474
US Treasury securities		27,235,916		26,291		(15,303	)		27,246,904
Total marketable securities	$	59,042,754	$	49,771	$	(42,164	)	$	59,050,361

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EBR SYSTEMS, INC.

Notes to the Consolidated Financial Statements

	As of December 31, 2023
	Amortized Cost		Unrealized Gains		Unrealized (losses)			Fair Value
Marketable securities
Asset backed securities	$	1,126,999	$	-	$	(1,445	)	$	1,125,554
Commercial paper		21,101,403		17,445		(5,279	)		21,113,569
Corporate bonds		14,811,749		25,601		(926	)		14,836,424
US Government Agency bonds		2,796,078		1,297		(2,865	)		2,794,510
US Treasury securities		18,972,928		18,843		-			18,991,771
Total marketable securities	$	58,809,157	$	63,186	$	(10,515	)	$	58,861,828

The following table shows the unrealized losses and fair values for those marketable securities that were in an unrealized loss position as of December 31, 2024 and 2023, aggregated by major security type and the length of time the marketable securities have been in a continuous loss position:

Schedule of marketable securities
	As of December 31, 2024
	In Loss Position for Less Than 12 Months					In Loss Position for 12 Months or Greater				Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Commercial paper	$	1,156,709	$	(4,448	)	$	-	$	-	$	1,156,709	$	(4,448	)
Corporate Bonds		13,839,116		(22,413	)		-		-		13,839,116		(22,413	)
US Treasury Securities		14,094,715		(15,303	)		-		-		14,094,715		(15,303	)
Total	$	29,090,540	$	(42,164	)	$	-	$	-	$	29,090,540	$	(42,164	)

	As of December 31, 2023
	In Loss Position for Less Than 12 Months					In Loss Position for 12 Months or Greater					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Asset backed securities	$	-	$	-		$	1,125,554	$	(1,445	)	$	1,125,554	$	(1,445	)
Commercial paper		9,439,882		(5,279	)		-		-			9,439,882		(5,279	)
Corporate bonds		2,285,253		(926	)		-		-			2,285,253		(926	)
US Government Agency bonds		1,506,668		(2,865	)		-		-			1,506,668		(2,865	)
Total	$	13,231,803	$	(9,070	)	$	1,125,554	$	(1,445	)	$	14,357,357	$	(10,515	)

The contractual maturities of the Company’s marketable securities as of December 31, 2024, were as follows:

Schedule of contractual maturities
	Fair Value
One year or less	$	53,746,411
One year to two years		2,998,632
Two years to three years		2,305,318
Total	$	59,050,361

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EBR SYSTEMS, INC.

Notes to the Consolidated Financial Statements

Note 4 – Fair value measurement

Management’s assessment of the significance of a particular input to the fair value measurement requires judgement and may affect the valuation of financial assets and liabilities and their placement within the fair value hierarchy, as discussed in Note 2, “Summary of significant accounting policies”. At December 31, 2024 and 2023, the fair value measurement of the Company’s financial assets measured on a recurring basis were as follows:


	Fair Values as of December 31, 2024
	Level 1		Level 2		Level 3		Total
Cash equivalents
Money market funds	$	3,706,990	$	-	$	-	$	3,706,990
Marketable securities
Asset backed securities		-		4,308,274		-		4,308,274
Commercial paper		-		1,156,709		-		1,156,709
Corporate bonds		-		26,338,474		-		26,338,474
US Treasury securities		-		27,246,904		-		27,246,904
Total	$	3,706,990	$	59,050,361	$	-	$	62,757,351

	Fair Values as of December 31, 2023
	Level 1		Level 2		Level 3		Total
Cash equivalents
Money market funds	$	11,615,762	$	-	$	-	$	11,615,762
US Treasury securities		1,987,680		-		-		1,987,680
Marketable securities
Asset backed securities		-		1,125,554		-		1,125,554
Commercial paper		-		21,113,569		-		21,113,569
Corporate bonds		-		14,836,424		-		14,836,424
US Government Agency bonds		-		2,794,510		-		2,794,510
US Treasury securities		-		18,991,771		-		18,991,771
Total	$	13,603,442	$	58,861,828	$	-	$	72,465,270

In the Company’s consolidated balance sheets, the carrying values of non-trade receivables, other assets, accounts payable and accrued expenses approximated their fair values due to the nature and relatively short maturities. The fair value of debt approximates its carrying value as it is variable rate debt or has relatively short maturities.

Note 5 –Consolidated balance sheet components

Non-trade receivables and unbilled reimbursements, net

Non-trade receivables and unbilled reimbursements include reimbursement of clinical trial expenses incurred, and the sale of materials to contract manufacturers. Non-trade receivables and unbilled reimbursements consisted of the following as of December 31, 2024 and 2023:

Schedule of non trade receivables
	2024		2023
Non-trade receivables	$	433,051	$	237,128
Unbilled reimbursements		8,388		135,772
Non-trade receivables and unbilled services		441,439		372,900
Less: allowance for credit losses		-		(142,166	)
Non-trade receivables and unbilled services, net	$	441,439	$	230,734

During the year ended December 31, 2024 and 2023, the allowance for credit losses totaled $4,520 and $40,485, respectively.

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EBR SYSTEMS, INC.

Notes to the Consolidated Financial Statements

Property and equipment, net

Property and equipment consisted of the following as of December 31, 2024 and 2023:

Schedule of property and equipment, net
	2024			2023
Equipment	$	3,433,881		$	3,159,822
Computer software		574,780			574,780
Leasehold improvements		513,727			499,148
Total property and equipment		4,522,388			4,233,750
Less accumulated depreciation and amortization		(3,727,429	)		(3,144,979	)
Total property and equipment, net	$	794,959		$	1,088,771

Depreciation and amortization expense on property and equipment was $587,485 and $752,257 for the years ended December 31, 2024 and 2023, respectively. There were no impairments recorded during the year ended December 31, 2024 and 2023.

Accrued expenses and other liabilities

Accrued expenses and other liabilities consisted of the following at December 31, 2024 and 2023:


	2024		2023
Accrued compensation and related liabilities	$	3,116,301	$	2,324,040
Accrued development expenses		482,417		875,501
Accrued warranty reserve		692,404		826,924
Accrued other expenses		4,719		68,882
Accrued expenses and other liabilities	$	4,295,841	$	4,095,347

See Note 15, “Commitments and contingencies” for additional disclosure on accrued warranty reserves.

Note 6 – Leases

The Company has an operating lease for its corporate headquarters and laboratory space, located in Sunnyvale, California. The initial lease expired June 30, 2024, with an option to extend the lease an additional sixty-months, which was used in the calculation of the right of use operating lease asset and operating lease liability. The Company held no other lease agreements at December 31, 2024. In January 2024, the Company signed an addendum to the operating lease, extending the expiration of the lease through June 30, 2025, and adjusting the monthly rent from $35,606 per month to $50,000 per month. The January 2024 lease remeasurement resulted in a $1,169,822 reduction in the right of use operating lease asset and corresponding reduction to operating lease liability. In March 2024, the Company signed an additional addendum to the operating lease, extending the expiration of the lease through December 31, 2025. The March 2024 lease remeasurement resulted in a $261,012 increase in the right of use operating lease asset and corresponding increase in operating lease liability. In July 2024, the Company signed an additional addendum to the operating lease, extending the expiration of the lease through December 31, 2026. The July 2024 lease remeasurement resulted in a $498,013 increase in the right of use operating lease asset and corresponding increase in operating lease liability.

In January 2025, the Company executed a lease that had not yet commenced for its new corporate headquarters, laboratory and manufacturing facility in Santa Clara, California. The lease payments begin on the later of: (i) June 1, 2025; or (ii) the date the tenant improvements are deemed complete, which is expected to be January 2026. The monthly base rent payment is $52,000 in year one; $80,340 in year two; $110,334 in year three; $145,282 in year four; and increasing 3% annually thereafter. The lease provides for a term of 132 months and includes an option to extend the lease for an additional five years.

Amounts reported in the consolidated balance sheets for operating leases in which the Company is the lessee as of December 31, 2024 and 2023, were as follows:

Schedule of operating leases
	2024		2023
Right of use operating lease asset	$	929,243	$	1,719,590
Lease liability, current		522,525		250,876
Lease liability, noncurrent		574,777		1,670,230
Remaining lease term		2.00 years		5.50 years
Discount rate		10.00%		10.00%

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EBR SYSTEMS, INC.

Notes to the Consolidated Financial Statements

The following table presents the components of lease costs in our statements of operations for the years ended December 31, 2024 and 2023:

Schedule of lease costs
	2024		2023
Operating lease costs	$	473,956	$	413,517
Variable lease costs		123,528		122,664
Short-term lease costs		15,861		-
Total lease expense	$	613,345	$	536,181

Future lease payments for non-cancellable operating leases as of December 31, 2024, were as follows:


Years Ended December 31,
2025		600,000
2026		600,000
Total undiscounted lease payments		1,200,000
Less: effects of discounting		(102,698	)
Total operating lease liabilities	$	1,097,302

Note 7 - Notes payable

At December 31, 2024 and 2023, notes payable consisted of the following:

Schedule of notes payable
	2024			2023
Notes payable, current
Current portion of notes payable	$	37,286		$	21,496
Notes payable, non-current
Long-term portion of notes payable		41,800,000			41,800,000
Less: unamortized deferred loan costs		(523,291	)		(734,579	)
Less: unamortized discount		(1,013,104	)		(1,418,734	)
Notes payable, non-current, net	$	40,263,605		$	39,646,687
Total notes payable, net	$	40,300,891		$	39,668,183

The following table presents information regarding the Company’s notes payable principal repayment obligations as of December 31, 2024:

Schedule of maturities notes payable
Years Ended December 31,
2025	$	37,286
2026		-
2027		41,800,000
Total minimum payments	$	41,837,286

Runway Growth Finance Corp

On June 30, 2022, the Company entered into a loan and security agreement with Runway Growth Finance Corp. The debt is secured against substantially all assets of the Company, except for the Company’s intellectual property but includes all proceeds from the sale of intellectual property. The loan agreement provides three term loan tranches. The Company received the initial draw of $20,000,000 in June 2022. The Company received positive interim analysis data, sufficient to proceed with the clinical trial and premarket approval submission to the U.S. Food and Drug Administration, which allowed the Company to draw the second tranche of $20,000,000 in June 2023. As of December 31, 2024 and 2023, the outstanding principal balance was $41,800,000 and $41,800,000, respectively. The final tranche provides $10,000,000 and the draw period commences on the date the Company has received approval from the FDA for the WiSE CRT System and ended on June 30, 2024. The Company did not receive FDA approval by June 30, 2024, and therefore did not meet the draw requirements of the third and final tranche.

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EBR SYSTEMS, INC.

Notes to the Consolidated Financial Statements

Interest on the term loan accrues on the principal amount outstanding at a floating per annum rate equal to the greater of the rate of interest noted in The Wall Street Journal Money Rates section, as the “Prime Rate” or 4.00% plus a margin of 4.9% and is payable monthly in arrears and shall be computed on the basis of a 360-day year for the actual number of days elapsed. The Company is required to make interest only payments from July 2022 to May 2027. The note payable has a maturity date of June 15, 2027, at which time any unpaid interest, outstanding principal balance, and a final payment of 4.5% of the original principal amount borrowed shall be due in full. If the Company repays the loan prior to maturity, the Company will be required to pay a prepayment fee of 0.5% - 1% of the outstanding principal balance. The Company is also required to pay a 3% success fee of the funded principal amount of the term loan at the time of a liquidity event, as defined in the loan and security agreement. The success fee is enforceable within 10 years from the execution date of the agreement.

The Company has accounted for the final payment of $1,800,000 as a discount of the note that will be amortized over the life of the loan using the effective interest method. Amortization of the discount was $405,630 and $291,573 during the year ended December 31, 2024 and 2023, respectively. This amount was recorded as additional interest expense in the accompanying consolidated statements of operations. As of December 31, 2024 and 2023, the note has been shown net of unamortized discounts of $1,013,104 and $1,418,734, respectively.

The Company incurred loan costs of $998,393, which are being amortized over the life of the loan using the effective interest method. Amortization of loan costs was $211,288 and $184,464 for the years ended December 31, 2024 and 2023. As of December 31, 2024 and 2023, the note has been shown net of unamortized loan costs of $523,291 and $734,579, respectively.

The Company is subject to customary financial and reporting covenants under the loan and security agreement. As of December 31, 2024 and 2023, the Company was in compliance with all debt covenants.

Bank of America Leasing & Capital, LLC

In May 2021, the Company entered into an equipment purchase agreement for the purchase of certain software totaling $128,974. The purchase agreement requires 30 equal payments of $4,299 beginning December 1, 2021, through May 1, 2024. At December 31, 2024 and 2023, the outstanding principal balance was $0 and $21,496, respectively, and was included in the current portion of notes payable in the consolidated balance sheets.

In March 2024, the Company entered into an equipment purchase agreement for the purchase of software totaling $82,029. The purchase agreement requires 11 equal payments of $7,457 beginning July 1, 2024, through May 1, 2025. As of December 31, 2024, the outstanding principal balance was $37,286 and was included in the current portion of notes payable in the consolidated balance sheets.

Note 8 – Convertible preferred stock

As of December 31, 2024 and 2023, 10,000,000 shares of convertible preferred stock were authorized, of which no shares were issued or outstanding.

Note 9 – Common stock

Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders. Common stockholders are entitled to receive dividends, as may be declared by the Company’s board of directors. As of December 31, 2024 and 2023, no dividends have been declared.

As of December 31, 2024 and 2023, 600,000,000 shares were authorized, of which 371,076,200 shares and 307,020,758 shares, respectively, were outstanding.

The Company completed its initial public offering and began trading on the Australian Securities Exchange (“ASX”) on November 24, 2021, under the symbol “EBR”. The ASX uses an electronic system called CHESS for the clearance and settlement of trades on the ASX. The State of Delaware does not recognize the CHESS system of holding securities or electronic transfers of legal title to shares. To enable companies to have their securities cleared and settled electronically through CHESS, CHESS depository instruments called CDIs are issued. CDIs are units of beneficial ownership in shares and are traded in a manner similar to shares of Australian companies listed on the ASX. The legal title to the shares are held by a depository, CDN, which is a wholly owned subsidiary of the ASX, and is an approved general participant of ASX Settlement.

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EBR SYSTEMS, INC.

Notes to the Consolidated Financial Statements

In June 2023, the Company completed an offering of 27,472,527 CDIs representing the same number of common stock at $0.91 Australian dollars per share, for proceeds of $15,604,896, net of $895,314 of related offering costs. In July 2023, the Company issued an additional 8,415,813 CDIs representing the same number of common stock at $0.91 Australian dollars per share, for proceeds of $5,010,231, net of $104,634 of related offering costs.

In September 2024, the Company completed a fully underwritten institutional placement, and the institutional component of a 1-for-20 pro-rata accelerated non-renounceable entitlement issuance of 55,856,325 CDIs representing the same number of common stock at $0.82 Australian dollars per share, for proceeds of $29,407,263, net of $1,852,729 of related issuance costs.

In September 2024, the Company announced the retail component of the fully underwritten 1-for-20 pro-rata non-renounceable entitlement offer of 5,075,733 CDIs representing the same number of common stock at $0.82 Australian dollars per share. On October 16, 2024, the Company issued 5,075,733 CDIs and received proceeds of $2,551,526, net of $210,032 of related issuance costs.

Additionally, the Company has reserved the following shares of common stock for issuance as of December 31, 2024:

Schedule of common stock
Conversion of Common Stock warrants			19,789,379
2013 Equity Incentive Plan			19,055,904
2021 Equity Incentive Plan			37,547,483
Outside of 2021 Equity Incentive Plan			709,633
Total shares of Common stock reserved for issuance			77,102,399

Note 10 – Warrants

Equity classified common stock warrants

The Company has issued the following warrants to purchase shares of its common stock, which are outstanding as of December 31, 2024 and 2023. These warrants are exercisable at any time at the option of the holder until their expiration date.

Schedule of warrants
	Number of Shares		Weighted average exercise price		Weighted average remaining contractual term
Balance at January 1, 2023		19,789,379	$	0.57		7.28
Issued		-		-		-
Expired		-		-		-
Balance at December 31, 2023		19,789,379		0.57		6.28
Issued		-		-		-
Expired/forfeited		-		-		-
Balance at December 31, 2024		19,789,379	$	0.57		5.28

Note 11 – Stock-based compensation

The Company and its stockholders adopted an equity incentive plan (the “2013 Plan”) in 2013, which reserved shares of the Company’s common stock for the granting of incentive and nonqualified stock options to employees, directors, and consultants. On October 14, 2021, the Company replaced the 2013 Plan with the 2021 Plan, as the 2013 Plan was expiring. Under the 2021 Plan, 37,547,483 shares of common stock are reserved. The Company may grant options to purchase common stock, stock appreciation rights, restricted stock awards and other forms of stock-based compensation. Stock options generally vest over four years and expire no later than 10 years from the date of grant. The Board of Directors has the authority to select the employees to whom options are granted and determine the terms of each option, including: i) the number of shares of common stock subject to the option; ii) when the option becomes exercisable; iii) the option exercise price, which must be at least 100% of the fair market value of the common stock as of the date of grant; and iv) the duration of the option, which may not exceed 10 years.

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EBR SYSTEMS, INC.

Notes to the Consolidated Financial Statements

As of December 31, 2024, options to purchase a total of 22,153,134 shares of common stock remained outstanding and 15,394,349 shares remain available for grant under the 2021 Plan, and 709,633 remained outstanding outside of the 2021 Plan. As of December 31, 2024, options to purchase a total of 19,055,904 shares of common stock remained outstanding under the 2013 Plan. As of December 31, 2024, no shares of common stock remain available for grant under the 2013 Plan.

Stock option activity for the year ended December 31, 2024, was as follows:

Schedule of stock option activity
	Shares			Weighted Average Exercise Price		Weighted- Average Remaining Contractual Life (in years)
Outstanding at January 1, 2024		38,214,582		$	0.31		7.09
Granted		10,004,948			0.63
Cancelled		(3,177,475	)		0.50
Exercised		(3,123,384	)		0.16
Outstanding at December 31, 2024		41,918,671		$	0.38		6.88

Vested and expected to vest at December 31, 2024		41,918,671		$	0.38		6.88
Exercisable at December 31, 2024		26,879,873		$	0.27		5.74

The fair value of the options granted to employees is estimated on the grant date using the Black-Scholes option valuation model. This valuation model for stock-based compensation expense requires the Company to make assumptions and judgments about the variables used in the calculation, including the expected term (weighted-average period of time that the options granted are expected to be outstanding), the volatility of the Company’s common stock, an assumed risk-free interest rate and expected dividends. The Company uses the simplified calculation of expected life and volatility is based on an average of the historical volatilities of the common stock of several publicly traded entities with characteristics similar to those of the Company. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option. The Company uses the straight-line method for expense attribution. The weighted-average grant-date fair values of stock options granted during the year ended December 31, 2024 and 2023, was $0.42 per share and $0.37 per share, respectively.

The following assumptions were used to calculate the grant-date fair value of employee stock options granted during the year ended December 31, 2024 and 2023:

Schedule of assumptions used
		2024	2023
Expected term (in years)		7.00	7.00
Expected volatility	63.98% - 67.34%		68.03% - 72.08%
Expected dividend yield		0.00%	0.00%
Risk-free interest rate		3.67% - 4.71%	3.38% - 4.44%

The following table presents classification of stock-based compensation expense within the accompanying consolidated statements of operations for the years ended December 31, 2024 and 2023:


	2024		2023
Research and development	$	849,740	$	674,088
General and administrative		892,539		631,723
Total	$	1,742,279	$	1,305,811

At December 31, 2024, there was $5,714,799 of unamortized stock-based compensation cost, respectively, related to unvested stock options which is expected to be recognized over a weighted average period of 3.11 years.

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EBR SYSTEMS, INC.

Notes to the Consolidated Financial Statements

Note 12 – Income taxes

The Company recorded income tax expense of $1,535 and $1,625 for the years ended December 31, 2024 and 2023. The Company has historically incurred operating losses and maintains a full valuation allowance against its net deferred tax assets.

The components of income (loss) before income taxes are as follows:


	2024			2023
Domestic	$	(40,257,704	)	$	(34,789,313	)
Foreign		(539,033	)		(245,950	)
Total	$	(40,796,737	)	$	(35,035,263	)

The components of the provision (benefit) for income taxes are as follows:


	2024		2023
Current income tax expense:
Federal	$	-	$	-
State		1,535		1,625
Foreign		-		-
Total current income tax expense	$	1,535	$	1,625

Deferred income tax expense:
Federal	$	-	$	-
State		-		-
Foreign		-		-
Total deferred tax expense	$	-	$	-

Net deferred tax assets	$	1,535	$	1,625

The Company’s effective tax rate of 0.01% for each of the years ended December 31, 2024 and 2023 differs from the statutory U.S. federal rate as follows:


	2024			2023

Statutory tax rate	$	(8,567,315	)	$	(7,321,441	)
R&D credit generation		(298,158	)		(344,374	)
State and foreign tax benefit		(3,594,350	)		(3,773,101	)
Other non-deductible expenses		290,513			651,633
Change in valuation allowance		12,170,845			10,788,908
Effective tax rate	$	1,535		$	1,625

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EBR SYSTEMS, INC.

Notes to the Consolidated Financial Statements

The tax effects of temporary differences that give rise to significant components of the deferred tax assets are as follows:

Schedule of deferred tax assets
	2024			2023
Deferred tax assets:
Net operating loss	$	67,009,000		$	57,255,000
Other accruals		1,058,000			870,000
Stock based compensation		693,000			457,000
Credit carryforwards		3,054,000			2,473,000
Intangible assets		10,709,000			12,343,000
Research & development capitalization		7,820,000			4,816,000
Fixed assets		80,000			39,000
Total deferred tax assets		90,423,000			78,253,000
Deferred tax liability
Fixed assets		-			-
Total deferred tax liability		-			-

Net deferred tax asset before valuation allowance		90,423,000			78,253,000
Valuation allowance		(90,423,000	)		(78,253,000	)
Net deferred tax assets	$	-		$	-

As of December 31, 2024, the Company recorded the portion of its deferred tax assets that were determined to meet the more likely than not threshold. Significant judgment is required in determining the Company’s provision for income taxes, recording valuation allowances against deferred tax assets and evaluating the Company’s uncertain tax positions. Due to net losses since inception and the uncertainty of realizing the deferred tax assets, the Company has a full valuation allowance against its net deferred tax assets. To the extent that the Company generates positive income and expects, with reasonable certainty, to continue to generate positive income, the Company may release all, or a portion of, the valuation allowance in a future period. This release would result in the recognition of all, or a portion of, the Company’s deferred tax assets, resulting in a decrease to income tax expense for the period such release is made. As of December 31, 2024, the Company’s valuation allowance was $90,423,000, which increased by $12,170,000 for the year ended December 31, 2024.

On August 16, 2022, the United States enacted the Inflation Reduction Act (IRA), which introduces, among other items, an excise tax that would impose a 1% surcharge on stock repurchases, net of stock issuances which began in 2023. The IRA also introduced a 15% book minimum tax on Companies with average adjusted financial statement earnings that exceed $1 billion. As the Company's average adjusted financial statement earnings do not exceed this threshhold, the Company is not an "Applicable Corporation". These provisions do not impact the Company based on the current financial positions.

The Company does not meet the Pillar II consolidated annual revenue threshold of EUR 750 million and as such is not expected to be subject to any Pillar II top up taxes.

Net operating loss (“NOL”) carryforwards and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service (“IRS”) and may become subject to annual limitation due to ownership changes that have occurred previously or that could occur in the future under Section 382 of the Internal Revenue Code, as amended and similar state provisions. These ownership changes may limit the amount of carryforwards that can be utilized annually to offset future taxable income. In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of certain shareholders or public groups in the stock of a corporation by more than 50% over a three-year period. The Company has not conducted a study to assess whether a change of control has occurred or whether there have been multiple changes of control since inception due to the significant complexity and cost associated with such a study. If the Company has experienced a change of control, as defined by Section 382, at any time since inception, utilization of the net operating loss carryforwards or research and development tax credit carryforwards would be subject to an annual limitation under Section 382, which is determined by first multiplying the value of the Company’s stock at the time of the ownership change by the applicable long-term tax-exempt rate, and then could be subject to additional adjustments, as required. Any limitation may result in expiration of a portion of the net operating loss carryforwards or research and development tax credit carryforwards before utilization. Further, until a study is completed, and any limitation is known, no amounts are being presented as an uncertain tax position.

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EBR SYSTEMS, INC.

Notes to the Consolidated Financial Statements

As of December 31, 2024, the Company had federal NOL carryforwards of $219,902,011 available to reduce taxable income, of which $45,622,855 expire beginning 2027 and $174,279,156 do not expire. As of December 31, 2024, the Company had state NOL carryforwards of 217,271,254 available to reduce future state taxable income of which $214,379,681 expire beginning 2028 and $2,891,573 do not expire.

As of December 31, 2024, the Company had federal and state research and development credit carryforwards of $2,236,314 and $2,126,254, respectively. The federal research and development credit carryforwards expire beginning in 2035 and the state credit carryforwards do not expire.

The Company files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities throughout the world. Due to NOL carryforwards not being utilized, all periods are open to potential examinations.

The Company’s policy is to classify interest and penalties related to unrecognized tax benefits, if and when required, as a component of interest expense, in the accompanying consolidated statements of operations. The Company had not recorded any interest or penalties for the years ended December 31, 2024 and 2023.

As of December 31, 2024, the Company’s uncertain tax positions totaled $1,308,770, which are netted against the underlying deferred tax assets. The entire balance in uncertain tax positions would cause a decrease in the effective income tax rate upon recognition.

The following is a roll-forward of the Company’s liability related to uncertain tax positions as of December 31, 2024 and 2023:

Schedule of uncertain tax positions
	2024		2023

Balance as of January 1	$	1,059,676	$	1,012,850
Increase for current period tax positions		249,094		287,704
Decrease for release of FIN 48 reserves		-		(240,878	)
Balance as of December 31	$	1,308,770	$	1,059,676

Note 13 – Net loss per share

The following tables sets forth the computation of basic and diluted net loss per share attributable to common stockholders at December 31, 2024 and 2023:


	2024			2023
Numerator – basic & diluted:
Net loss attributable to common stockholders, basic and diluted	$	(40,798,272	)	$	(35,036,888	)
Denominator:
Weighted-average number of shares outstanding, basic and diluted		324,995,419			288,875,373

Net loss per share attributable to common stockholders, basic and diluted	$	(0.13	)	$	(0.12	)

The following potentially dilutive shares were not included in the calculation of diluted shares outstanding for the periods presented as the effect would have been anti-dilutive at December 31, 2024 and 2023:

Schedule of anti-dilutive shares
	2024		2023

Outstanding warrants		19,789,379		19,789,379
Outstanding stock options		41,918,671		38,214,582
Total dilutive shares		61,708,050		58,003,961

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EBR SYSTEMS, INC.

Notes to the Consolidated Financial Statements

Note 14 - Segment information

An operating segment is defined as a component of an entity for which discrete financial information is available that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s Chief Executive Officer is the CODM. The CODM reviews financial information on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. The Company is currently in the pre-revenue development stage and its primary activity is the development of its leadless cardiac pacing system, WiSE CRT. Thus, the total Company’s consolidated results represent only the results of the WiSE CRT Segment. The Company currently conducts its operations primarily in the United States. Operations in countries outside of the U.S. are limited to Australia and Europe and are not significant. Business activity conducted in the U.S and in our international locations are similar in nature and economic characteristics and are consolidated for reporting purposes. As such, management has determined that the Company operates as one operating and reportable segment that is currently focused exclusively on the advancement of the Company’s WiSE CRT System.

The Company’s operating expenses and net loss are the primary measures of the segment’s performance used by the Company’s CODM. The segment is in the pre-revenue operating stage, and therefore the CODM primarily focuses on research and development expenses, general and administrative expenses, and the net loss as the primary measure of the segment’s performance used by the Company’s CODM. In addition to the segment’s expenses that are presented on the consolidated statement of operations, the information about the segment’s expenses is disaggregated into significant expenses, which are not separately presented on the Company’s consolidated statement of operations, as included below.

The table below reports information about the segment loss for the years ended December 31, 2024 and 2023.

Schedule of segment information
	2024			2023
Research and development expenses
Personnel-related expenses	$	17,769,916		$	14,278,125
Clinical expenses		2,022,952			3,383,567
Quality assurance and regulatory approval expense		272,128			126,522
Contract manufacturing, materials and components		5,340,641			7,854,132
Facility-related and other expenses		1,659,790			1,503,680
Total research and development expenses		27,065,427			27,146,026
General and administrative expenses
Personnel-related expenses		4,634,579			3,515,789
Professional services expenses		4,219,946			1,805,484
Corporate Expense		1,967,149			1,543,021
Facility-related and other expenses		431,927			538,627
Total general and administrative expense		11,253,601			7,402,921
Loss from operations		(38,319,028	)		(34,548,947	)
Other (expense) income
Interest expense		(6,029,668	)		(4,483,731	)
Interest income		3,180,984			3,281,440
Other Income, net ^(a)		370,975			715,975
Total other (expense), net		(2,477,709	)		(486,316	)
Income tax (expense)		(1,535	)		(1,625	)
Consolidated Net Loss	$	(40,798,272	)	$	(35,036,888	)

^(a)

Other Income (Expense) includes gain/(loss) on foreign currency, reimbursements of clinical trial expenses as well as refundable tax incentives from the Australian Taxation Office

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EBR SYSTEMS, INC.

Notes to the Consolidated Financial Statements

Note 15 – Commitments and contingencies

Purchase commitments

The Company purchases raw materials, manufacturing equipment, and various services from a variety of vendors. During the normal course of business, in order to manage manufacturing lead times and help ensure an adequate supply of certain items, we enter into agreements with suppliers that either allow us to procure goods and services when we choose or that establish purchase requirements over the term of the agreement. In certain instances, our purchase agreements allow us to cancel, reschedule, or adjust our purchase requirements based on our business needs prior to firm orders being placed. Consequently, only a portion of our purchase commitments are firm and noncancelable. As of December 31, 2024, the Company’s obligations under such arrangements were approximately $14,404,767.

Contingencies

The Company is party to various legal proceedings from time to time. A liability is accrued when a loss is both probable and can be reasonably estimated. Management believes that the probability of a material loss with respect to any currently pending legal proceeding is remote. However, litigation is inherently uncertain, and it is not possible to definitively predict the ultimate disposition of any of these proceedings. The Company does not believe that there are any pending legal proceedings or other loss contingencies that will, either individually or in the aggregate, have a material adverse impact on the Company’s consolidated financial statements.

Accrued warranty reserves

The Company accrues for the estimated cost of product warranties based on historical experience at the time a patient enrolls in the clinical trial. Adjustments to initial obligations for warranties are made as changes to the obligations become reasonably estimable. Accrued warranty reserves are included in accrued expenses and other liabilities in the accompanying consolidated balance sheets.

Changes in accrued warranty reserves were as follows for the years ended December 31, 2024 and 2023:

Schedule of accrued warranty reserves
	Year Ended December 31,
	2024			2023
Beginning of period	$	826,924		$	734,400
Warranty reserve accrued during the period		-			280,808
Settlement of warranty claims		(134,520	)		(188,284	)
End of period	$	692,404		$	826,924

Note 16 – Related party transactions

On September 25, 2024, the Company issued 55,856,325 shares of common stock at a price to the public of $0.56 per share in connection with an institutional placement and the institutional component of a 1-for-20 pro-rata accelerated non-renounceable entitlement offer on the ASX. Host-Plus, a beneficial owner of more than 5% of our common stock, participated in the institutional placement and purchased 7,868,138 CDIs for the aggregate purchase price of $4,403,403.

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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15(e) and 15(d)-15(e) under the Exchange Act as of the end of the period covered by this Annual Report on Form 10-K. Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including the Chief Executive Officer and the Chief Financial Officer, to allow timely decisions regarding required disclosures. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of December 31, 2024.

Management's Report on Internal Control over Financial Reporting

This annual report does not include a report of management's assessment regarding internal control over financial reporting or an attestation report of our independent registered public accounting firm due to a transition period established by the rules of SEC for newly public companies.

Attestation report of the registered public accounting firm.

This annual report does not include an attestation report of the Company’s registered public accounting firm due to the established rules of the Securities and Exchange Commission.

Changes in Internal Control over Financial Reporting

There were no changes to our internal control over financial reporting that occurred during the quarter ended December 31, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Controls and Procedures

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and implemented, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues within a company are detected. The inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple errors or mistakes. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected.

Item 9B. Other Information

None.

Item 9C. Disclosure Regarding Foreign Jurisdiction that Prevent Inspections

Not applicable.

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Part III

Item 10. Directors, Executive Officers, and Corporate Governance

The information required by this item will be contained in the Company’s Proxy Statement for its 2025 Annual Stockholder Meeting, to be filed with the SEC within 120 days after December 31, 2024 (the “2025 Proxy Statement”), under the headings “Proposal 1 — Election of Directors” and “Executive Officers” and is incorporated herein by reference.

Code of Business Conduct and Ethics

We have adopted a code of conduct and ethics that applies to our directors, officers, and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. If we make any substantive amendments to the code of conduct or grant any waiver from a provision of the code of conduct to any executive officer or director, we will promptly disclose the nature of the amendment or waiver on our website. The full text of our code of conduct is on the investor relations portion of our website at ebrsystemsinc.com/investor-center. The inclusion of our website address in this Annual Report on Form 10-K does not include or incorporate by reference into this Annual Report on Form 10-K the information on or accessible through our website.

Securities Trading Policy

We have adopted a Securities Trading Policy which governs the purchase, sale and/or any other dispositions of our securities by the Company and its directors, officers and employees and is reasonably designed to promote compliance with insider trading laws, rules and regulations and applicable exchange listing standards. A copy of our Securities Trading Policy is filed as Exhibit 19.1 to this Annual Report on Form 10-K.

Item 11. Executive Compensation

The information required by this item will be contained in the Company’s 2025 Proxy Statement, under the heading “Executive Compensation,” and is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this item will be contained in the Company’s 2025 Proxy Statement, under the heading “Security Ownership of Certain Beneficial Owners and Management,” and is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions and Director Independence

The information required by this item will be contained in the Company’s 2025 Proxy Statement, under the heading “Transactions with Related Persons and Indemnification,” and is incorporated herein by reference.

Item 14. Principal Accountant Fees and Services

The information required by this item will be contained in the Company’s 2025 Proxy, under the heading - Principal Accountant Fees and Services,” and is incorporated herein by reference.

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Part IV

Item 15. Exhibits, Financial Statements and Schedule

The following documents are filed as part of this Annual Report on Form 10-K:

Financial Statements. Our consolidated financial statements are listed in the “Index to Consolidated Financial Statements” under Part II, Item 8 of this Annual Report on Form 10-K.

Financial Statement Schedules. The financial statement schedules have been omitted as they are either not applicable or the required information is otherwise included.

Exhibits. The exhibits required to be filed as part of this report are listed in the Exhibit List attached hereto and are incorporated herein by reference.

		Filed Herewith	Incorporated by Reference
Number	Description	Filed Herewith	Schedule/Form	File No.	Exhibit	Filing Date
3.1*	Amended and Restated Certificate of Incorporation of EBR Systems, Inc.		10-12G	000-56671	3.1	11/21/2024

3.2*	Amended and Restated Bylaws of EBR Systems, Inc.		8-K	000-56671	3.1	03/20/2025

4.2*	Amended and Restated Investors’ Rights Agreement dated October 13, 2021, between the EBR Systems, Inc. and the parties thereto.		10-12G	000-56671	4.2	11/21/2024

4.3*	Form of Warrant to Purchase Stock issued on March 25, 2020		10-12G	000-56671	4.3	11/21/2024

4.4*	Warrant to Purchase Stock, dated October 30, 2017, between the Company and M.H. Carnegie Co. Pty Ltd		10-12G	000-56671	4.4	11/21/2024

4.5*	Form of Warrant to Purchase Stock issued between August 16, 2019, and October 4, 2021		10-12G	000-56671	4.5	11/21/2024

4.6*	Form of Warrant to Purchase Stock issued between October 6, 2015, and February 28, 2018.		10-12G	000-56671	4.6	11/21/2024

4.7	Description of Capital Stock	X

10.1*†	Loan and security Agreement, dated June 28, 2022, between the Company and Runway Growth Finance Corp.		10-12G	000-56671	10.1	11/21/2024

10.2	First Amendment to Loan and Security Agreement, dated March 21, 2025, between the Company and Runway Growth Finance Corp.	X

10.3*†

Standard Industrial/Commercial Multi-Tenant Lease, dated March 30, 2017, between the Company and 480 Oakmead Properties, LLC (the “Oakmead Lease”)

10-12G

000-56671

10.2

11/21/2024


10.4*†		Addendum “B” to the Oakmead Lease, dated January 2024, between the Company and 480 Oakmead Properties, LLC.		10-12G	000-56671	10.3	11/21/2024

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10.5*†	Addendum “C” to the Oakmead Lease, dated March 2024, between the Company and 480 Oakmead Properties, LLC.		10-12G	000-56671	10.4	11/21/2024

10.6*†	Addendum “D” to the Oakmead Lease, dated July 2024, between the Company and 480 Oakmead Properties, LLC.		10-12G	000-56671	10.5	11/21/2024

10.7	Lease Agreement, dated January 17, 2025, between the Company and Drawbridge 4600 Patrick Henry, LLC	X

10.8*+	Offer Letter entered into between the Company and John McCutcheon, dated May 29, 2019		10-12G	000-56671	10.6	11/21/2024

10.9*+	Offer Letter entered into between the Company and Allan Will, dated August 21, 2019		10-12G	000-56671	10.7	11/21/2024

10.10*+	Offer Letter entered into between the Company and Gary Doherty, dated August 29, 2023		10-12G	000-56671	10.8	11/21/2024

10.11*+	Offer Letter entered into between the Company and Michael Hendricksen, dated October 27, 2021		10-12G	000-56671	10.9	11/21/2024

10.12*+	Form of Severance and Change of Control Agreement entered into between the Company and each of its executive officers#		10-12G	000-56671	10.10	11/21/2024

10.13*+	2021 Equity Incentive Plan, as amended#		10-12G	000-56671	10.11	11/21/2024

10.14*+	Form of Stock Option Grant Notice and Stock Option Agreement under the 2021 Equity Incentive Plan (Australian Grants)#		10-12G	000-56671	10.12	11/21/2024

10.15*+	Form of Stock Option Grant Notice and Stock Option Agreement under the 2021 Equity Incentive Plan (United Kingdom Grants)#		10-12G	000-56671	10.13	11/21/2024

10.16*+	Australian Sub-Plan under the 2021 Equity Incentive Plan#		10-12G	000-56671	10.14	11/21/2024

10.17*+	United Kingdom Sub-Plan under the 2021 Equity Incentive Plan#		10-12G	000-56671	10.15	11/21/2024

10.18*+	2013 Equity Incentive Plan, as amended		10-12G	000-56671	10.16	11/21/2024

10.19*+	Form of Stock Option Grant Notice and Stock Option Amendment under the 2013 Equity Incentive Plan		10-12G	000-56671	10.17	11/21/2024

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10.20*+	Form of Indemnification Agreement entered into between the Company and each of its directors and executive officers		10-12G	000-56671	10.19	11/21/2024

19.1	Securities Trading Policy	X

21.1*	List of Subsidiaries		10-12G	000-56671	21.1	11/20/2024

23.1	Consent of Deloitte and Touche, LLP, an Independent Registered Public Accounting Firm	X

24.1	Power of Attorney (included on the signature page to this report)	X

31.1	Chief Executive Officer Certification Pursuant to Rule 13a-14(a) of the Exchange Act.	X

31.2	Chief Financial Officer Certification Pursuant to Rule 13a-14(a) of the Exchange Act.	X

32.1	Chief Executive Officer and Chief Financial Officer Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	X

101.INS	Inline XBRL Instance Document - the instance document does not appear in the interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Filed previously.

+ Indicates a management contract or compensatory plan, contract or arrangement.

† Certain exhibits and schedules to this exhibit have been omitted in accordance with Item 601(a)(5) of Regulation S-K. The registrant hereby agrees to furnish supplementally a copy of any omitted exhibit or schedule to the SEC upon its request.

§ Portions of this exhibit have been redacted in accordance with Regulation S-K Item 601(b)(10)(iv).

Item 16. Form 10-K Summary

None

105

Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

EBR SYSTEMS, INC.

By:

/s/John McCutcheon

Name:

John McCutcheon

Title:

Chief Executive Officer

(Principal Executive Officer)

By:

/s/Gary Doherty

Name:

Gary Doherty

Title:

Chief Financial Officer

(Principal Financial Officer and Principal Accounting Officer)

Date: March 24, 2025

POWER OF ATTORNEY

Each person whose individual signature appears below hereby authorizes and appoints John McCutcheon and Gary Doherty, and each of them, with full power of substitution and resubstitution and full power to act without the other, as his or her true and lawful attorney-in-fact and agent to act in his or her name, place and stead and to execute in the name and on behalf of each person, individually and in each capacity stated below, and to file any and all amendments to this report on Form 10-K, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing, ratifying and confirming all that said attorneys-in-fact and agents or any of them or their or his substitute or substitutes may lawfully do or cause to be done by virtue thereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated.

Name	Title	Date

/s/ John McCutcheon	Chief Executive Officer and Director (Principal Executive Officer)	March 24, 2025
John McCutcheon

/s/ Gary Doherty	Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)	March 24, 2025
Gary Doherty

/s/ Allan Will	Executive Chairman of the Board	March 24, 2025
Allan Will

/s/ Karen Drexler	Director	March 24, 2025
Karen Drexler

/s/ Bronwyn Evans, Ph.D., A.M.	Director	March 24, 2025
Bronwyn Evans, Ph.D., A.M.

/s/ Trevor Moody	Director	March 24, 2025
Trevor Moody

/s/ Christopher Nave, Ph.D.	Director	March 24, 2025
Christopher Nave, Ph.D.

/s/ David Steinhaus, M.D.	Director	March 24, 2025
David Steinhaus, M.D.

106

Exhibit 4.7

DESCRIPTION OF CAPITAL STOCK

The following description summarizes the terms of our capital stock. This summary does not purport to be complete and is qualified in its entirety by the provisions of our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws, copies of which have been filed as exhibits to our Annual Report on Form 10-K to which this exhibit is attached.

General

Our authorized capital stock consists of 600,000,000 shares of common stock, par value $0.0001 per share, and 10,000,000 shares of preferred stock, par value $0.0001 per share. We have no shares of preferred stock outstanding.

Common Stock

Shares of our common stock are the only security of the Company registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended, or the Exchange Act.

Voting Rights

Each holder of common stock is entitled to one vote for each share on all matters submitted to a vote of the stockholders, including the election of directors. Our stockholders do not have cumulative voting rights in the election of directors. For all matters submitted to a vote of the stockholders, the affirmative vote of a majority of the shares represented at the meeting and entitled to vote on the subject matter will be required to take such actions, including the election of directors.

Dividends

Liquidation

In the event of our liquidation, dissolution or winding up, holders of our common stock will be entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of all of our debts and other liabilities, subject to the satisfaction of any liquidation preference granted to the holders of any then outstanding shares of preferred stock.

Rights, Preferences, and Privileges

Holders of our common stock have no preemptive, conversion or subscription rights, and there are no redemption or sinking fund provisions applicable to our common stock. The rights, preferences, and privileges of the holders of our common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of our preferred stock that we may designate and issue in the future.

Fully Paid and Nonassessable

All of our outstanding shares of common stock are fully paid and nonassessable.

Registration Rights

The holders of our securities are entitled to certain registration rights, including ‘piggyback’ registration rights, which allow them to include their shares of the Company if we propose to register any of our securities under the Securities Act; and Form S-3 registration rights, which means that, subject to certain qualifications, those stockholders may require us to file a Form S-3 registration statement to have their shares registered, provided that we are qualified to do so.

CDIs

In order for our shares of common stock in the form of CDIs to trade electronically on the ASX, we participate in the electronic transfer system known as the Clearing House Electronic Subregister System, or CHESS, operated by ASX Settlement Pty Limited, or ASX Settlement. ASX Settlement provides settlement services for ASX markets to assist participants and issuers to understand the operation of the rules and procedures governing settlement facilities. The ASX Settlement Operating Rules form part of the overall listing and market rules which we are required to comply with as an entity listed on ASX.

CHESS is an electronic system which manages the settlement of transactions executed on ASX and facilitates the paperless transfer of legal title to ASX quoted securities. CHESS cannot be used directly for the transfer of securities of companies domiciled in certain jurisdictions outside of Australia, such as the United States. Accordingly, to enable our shares of common stock to be cleared and settled electronically through CHESS, we have issued and will continue to issue depositary interests called CDIs.

CDIs confer the on the CDI holder the beneficial ownership in the shares of common stock, with one CDI representing an interest in one share. The legal title to such shares is held by CHESS Depositary Nominees Pty Limited (CDN), a subsidiary of ASX Limited, which acts as our Australian depositary nominee and issues the CDIs. CDI holders receive all direct economic and other benefits of the underlying shares of common stock.

A holder of CDIs who does not wish to have their trades settled in CDIs may request that their CDIs be converted into shares of common stock, in which case legal title to the shares of common stock will be transferred to the holder of CDIs.

There are a number of differences between holding CDIs and shares of common stock. The major differences are that:

•

CDI holders do not have legal title in the underlying shares of common stock to which the CDIs relate (the legal title is held by CDN as summarized above); and

•

CDI holders are not able to vote personally as shareholders at a meeting of EBR Systems. Instead, CDI holders are provided with a voting instruction form which enables them to instruct CDN in relation to the exercise of voting rights. Alternatively, CDI holders may instruct CDN to appoint themselves or another person as CDN’s proxy with respect to the shares underlying their CDIs for the purpose of voting at shareholder meetings.

Preferred Stock

Our board of directors is authorized, subject to limitations prescribed by Delaware law and the ASX Listing Rules, to issue up to 10,000,000 shares of preferred stock in one or more series, to establish from time to time the number of shares to be included in each series and to fix the designation, powers, preferences, and rights of the shares of each series and any of its qualifications, limitations, or restrictions. Our board of directors can also increase or decrease the number of shares of any series, but not below the number of shares of that series then outstanding, without any further vote or action by the company’s stockholders unless required by the ASX Listing Rules. Our board of directors may, subject to the ASX Listing Rules, authorize the issuance of preferred stock with certain rights that could adversely affect the rights of the holders of the common stock. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring, discouraging, or preventing a change in control of EBR and may adversely affect the market price of our common stock and the rights of the holders of common stock.

Anti-Takeover Provisions

Our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws, as amended, include a number of provisions that may deter or impede hostile takeovers or changes of control or management. These provisions include:

Issuance of undesignated preferred stock. Our board of directors has the authority, without further action by the stockholders (unless required by the ASX Listing Rules), to issue up to 10,000,000 shares of undesignated preferred stock with rights and preferences, including voting rights, designated from time to time by our board of directors (subject to such rights and preferences in accordance with the ASX Listing Rules.) The existence of authorized but unissued shares of preferred stock enables our board of directors to make it more difficult or to discourage an attempt to obtain control of us by means of a merger, tender offer, proxy contest or otherwise.

Board of directors vacancies. Our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws authorize only our board of directors to fill vacant directorships. In addition, the number of directors constituting our board of directors may be set only by resolution adopted by a majority vote of our entire board of directors. These provisions prevent a stockholder from increasing the size of our board of directors and gaining control of our board of directors by filling the resulting vacancies with its own nominees.

Stockholder action; special meetings of stockholders. Our Amended and Restated Certificate of Incorporation provides that our stockholders may not take action by written consent but may only take action at annual or special meetings of our stockholders. Stockholders will not be permitted to cumulate their votes for the election of directors unless required by applicable law. Our Amended and Restated Certificate of Incorporation further provides that only the chairman of our board of directors, chief executive officer or a majority of our board of directors may call special meetings of our stockholders.

Advance notice requirements for stockholder proposals and director nominations. Our Amended and Restated Bylaws provide advance notice procedures for stockholders seeking to bring business before our annual meeting of stockholders, or to nominate candidates for election as directors at our annual meeting of stockholders. Our Amended and Restated Bylaws also specify certain requirements as to the form and content of a stockholder’s notice. These provisions may make it more difficult for our stockholders to bring matters before our annual meeting of stockholders or to nominate directors at annual meetings of stockholders.

We designed these provisions to enhance the likelihood of continued stability in the composition of our board of directors and its policies, to discourage certain types of transactions that may involve an actual or threatened acquisition of us, and to reduce our vulnerability to an unsolicited acquisition proposal. We also designed these provisions to discourage certain tactics that may be used in proxy fights. However, these provisions could have the effect of discouraging others from making tender offers for our shares and, as a consequence, they may also reduce fluctuations in the market price of our shares that could result from actual or rumored takeover attempts.

Section 203 of the Delaware General Corporation Law

We are subject to Section 203 of the Delaware General Corporation Law (“DGCL”), which prohibits a Delaware corporation from engaging in a business combination with any interested stockholder for a period of three years following the date the person became an interested stockholder, with the following exceptions:

•

prior to such time the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;

•

upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned (i) by persons who are directors and also officers and (ii) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or

•

at or subsequent to such time the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock which is not owned by the interested stockholder.

•

In general, Section 203 of the DGCL defines business combination to include the following:

•

any merger or consolidation involving the corporation and the interested stockholder;

•

any sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested stockholder;

•

subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder;

•

any transaction involving the corporation that has the effect of increasing the proportionate share of the stock or any class or series of the corporation beneficially owned by the interested stockholder; and

•

the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges, or other financial benefits by or through the corporation.

In general, Section 203 of the DGCL defines an “interested stockholder” as an entity or person who, together with the entity’s or person’s affiliates and associates, beneficially owns, or is an affiliate of the corporation and within three years prior to the time of determination of interested stockholder status did own, 15% or more of the outstanding voting stock of the corporation. A Delaware corporation may “opt out” of these provisions with an express provision in its certificate of incorporation. We have not opted out of these provisions, which may as a result, discourage or prevent mergers or other takeover or change of control attempts of us.

Choice of Forum

Our Amended and Restated Certificate of Incorporation provides that the Court of Chancery of the State of Delaware will be the exclusive forum for the following types of actions or proceedings under Delaware statutory or common law: (1) any derivative action or proceeding brought on our behalf; (2) any action or proceeding asserting a claim of breach of a fiduciary duty by any of our stockholders, directors, officers, employees or agents to us or our stockholders; (3) any action or proceeding asserting a claim against us arising pursuant to any provision of the General Corporation Law of the State of Delaware or our Amended and Restated Certificate of Incorporation or Amended and Restated Bylaws or (4) any action or proceeding asserting a claim governed by the internal affairs doctrine. The exclusive forum provision does not apply to any actions brought to enforce a duty or liability created by the Securities Act, the Exchange Act or any other claim for which the U.S. federal courts have exclusive jurisdiction.

The provisions of Delaware law, our Amended and Restated Certificate of Incorporation, and our Amended and Restated Bylaws could have the effect of discouraging others from attempting hostile takeovers and, as a consequence, they may also inhibit temporary fluctuations in the market price of our common stock that often result from actual or rumored hostile takeover attempts. These provisions may also have the effect of preventing changes in the composition of our Board and management. It is possible that these provisions could make it more difficult to accomplish transactions that stockholders may otherwise deem to be in their best interests.

Listing

Our common stock is currently listed on the Australian Securities Exchange, under the symbol “EBR”.

Exhibit 10.2

FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT

This First Amendment to Loan and Security Agreement (as amended, restated, supplemented or otherwise modified from time to time, this “Amendment”) is entered into as of March 21, 2025, by and among EBR SYSTEMS, INC., a Delaware corporation (“Borrower Representative”), and each other Person party to the Loan Agreement (as defined below) as a borrower from time to time (individually and collectively, jointly and severally, “Borrower”), the lenders from time to time party to the Loan Agreement (collectively, “Lenders”, and each, a “Lender”), and RUNWAY GROWTH FINANCE CORP., as administrative agent and collateral agent for Lenders (in such capacity, “Agent”).

RECITALS

Borrower, Agent and the Lenders are parties to that certain Loan and Security Agreement dated as of June 30, 2022 (as amended, restated, supplemented or otherwise modified from time to time, the “Loan Agreement”). The parties desire to amend the Loan Agreement in accordance with the terms of this Amendment.

NOW, THEREFORE, the parties agree as follows:

1. Clause (h) of the definition of “Permitted Liens” on Exhibit A of the Loan Agreement hereby is amended and restated in its entirety to read as follows:

“(h) deposits or pledges of cash to secure bids, tenders, contracts (other than contracts for the payment of money), leases, surety and appeal bonds and other obligations of a like nature (i) arising in the Ordinary Course of Business, in an aggregate amount not exceeding One Hundred Thousand Dollars ($100,000.00) at any time, or (ii) in connection with Borrower’s leased location at 4600 Patrick Henry Drive, Santa Clara, California 95054;”

2. No course of dealing on the part of Agent or the Lenders or their officers, nor any failure or delay in the exercise of any right by Agent or any Lender, shall operate as a waiver thereof, and any single or partial exercise of any such right shall not preclude any later exercise of any such right. Agent’s or any Lender’s failure at any time to require strict performance by Borrower of any provision shall not affect any right of Agent or any Lender thereafter to demand strict compliance and performance. Any suspension or waiver of a right must be in writing signed by an officer of Agent.

3. Unless otherwise defined, all initially capitalized terms in this Amendment shall be as defined in the Loan Agreement. The Loan Agreement, as amended hereby, shall be and remain in full force and effect in accordance with its respective terms and hereby is ratified and confirmed in all respects. Except as expressly set forth herein, the execution, delivery, and performance of this Amendment shall not operate as a waiver of, or as an amendment of, any right, power, or remedy of Agent or any Lender under the Loan Agreement, as in effect prior to the date hereof.

4. To induce Agent and Lenders to enter into this Amendment, Borrower hereby makes the following representations and warranties to Agent and Lenders:

Immediately after giving effect to this Amendment (a) the representations and warranties contained in the Loan Documents are true, accurate and complete in all material respects as of the date hereof (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct as of such date), and (b) no Event of Default has occurred and is continuing;

Borrower has the power and due authority to execute and deliver this Amendment and to perform its obligations under the Loan Agreement, as amended by this Amendment;

-1-

The organizational documents of Borrower delivered to Agent on the Effective Date, and updated pursuant to subsequent deliveries by the Borrower to the Agent, remain true, accurate and complete and have not been amended, supplemented or restated and are and continue to be in full force and effect;

The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not and will not contravene (i) any law or regulation binding on or affecting Borrower, (ii) any contractual restriction with a Person binding on Borrower, (iii) any order, judgment or decree of any court or other governmental or public body or authority, or subdivision thereof, binding on Borrower, or (iv) the organizational documents of Borrower;

The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by this Amendment, do not require any order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by any governmental or public body or authority, or subdivision thereof, binding on Borrower, except as already has been obtained or made; and

This Amendment has been duly executed and delivered by Borrower and is the binding obligation of Borrower, enforceable against Borrower in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar laws of general application and equitable principles relating to or affecting creditors’ rights.

5. As a condition to the effectiveness of this Amendment, Agent shall have received, in form and substance satisfactory to Agent, the following:

(a) this Amendment, duly executed by Borrower;

(b) a Consent to Removal of Personal Property, duly executed by Landlord (as defined therein) and acknowledged by Borrower;

(c) an amendment fee in the amount of Fifteen Thousand Dollars ($15,000), which may be debited from any of Borrower's accounts;

(d) all reasonable Lender Expenses incurred through the date of this Amendment, which may be debited from any of Borrower's accounts; and

(e) such other documents, and completion of such other matters, as Agent may reasonably deem necessary or appropriate.

6. This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument.

[Balance of Page Intentionally Left Blank]

-2-

IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first date above written.

	BORROWER:

	EBR SYSTEMS, INC.

	By:	/s/ Gary Doherty
	Name:	Gary Doherty
	Title:	Chief Financial Officer

	AGENT:

	RUNWAY GROWTH FINANCE CORP., as administrative and collateral agent

	By:	/s/ Thomas B. Raterman
	Name:	Thomas B. Raterman
	Title:	Chief Financial Officer, Chief Operating Officer

Exhibit 10.7

LEASE

BY AND BETWEEN

Drawbridge 4600 Patrick Henry, LLC,
a Delaware limited liability company

as Landlord

and

EBR Systems, Inc.,

a Delaware corporation

as Tenant

January 17, 2025

TABLE OF CONTENTS

ARTICLE 1 REFERENCE			1

	1.1	References	l

ARTICLE 2 LEASED PREMISES, TERM AND POSSESSION			4

	2.1	Demise Of Leased Premises	4
	2.2	Right To Use Outside Areas	4
	2.3	Lease Commencement Date And Lease Term	4
	2.4	Delivery Of Possession; Early Access Period	5
	2.5	Performance Of Tenant Improvements; Acceptance Of Possession	6
	2.6	Surrender Of Possession	6
	2.7	Accessibility	7

ARTICLE 3 RENT, LATE CHARGES AND SECURITYDEPOSITS			7

	3.1	Base Monthly Rent	7
	3.2	Additional Rent	8
	3.3	Year-End Adjustments	8
	3.4	Late Charge, And Interest On Rent In Default	9
	3.5	Payment Of Rent.	9
	3.6	Prepaid Rent.	9
	3.7	Security Deposit.	10

ARTICLE 4 USE OF LEASED PREMISES AND OUTSIDE AREA			12

	4.1	Permitted Use	12
	4.2	General Limitations On Use	12
	4.3	Noise And Emissions	12
	4.4	Trash Disposal	12
	4.5	Parking	13
	4.6	Signs	13
	4.7	Compliance With Laws And Restrictions	14
	4.8	Compliance With Insurance Requirements	14
	4.9	Landlord's Right To Enter	14
	4.10	Use Of Outside Areas	15
	4.11	Environmental Protection	15
	4.12	Rules And Regulations	17
	4.13	Reservations	17

ARTICLE 5 REPAIRS, MAINTENANCE, SERVICES AND UTILITIES			18

	5.1	Repair And Maintenance	18
	5.2	Utilities	20
	5.3	Security	20
	5.4	Energy And Resource Consumption	20
	5.5	Limitation Of Landlord's Liability	21

ARTICLE 6 ALTERATIONS AND IMPROVEMENTS			22

	6.1	By Tenant.	22
	6.2	Ownership Of improvements	23
	6.3	Alterations Required By Law	23
	6.4	Liens	24

ARTICLE 7 ASSIGNMENT AND SUBLETTING BY TENANT			24

	7.1	By Tenant.	24
	7.2	Merger, Reorganization, or Sale of Assets	25
	7.3	Landlord's Election; Deemed Consent	26
	7.4	Conditions To Landlord's Consent	27
	7.5	Assignment Consideration And Excess Rentals Defined	28
	7.6	Payments	28
	7.7	Good Faith	28
	7.8	Effect Of Landlord's Consent	28
	7.9	Permitted Occupants	30

ARTICLE 8 LIMITATION ON LANDLORD'S LIABILITY AND INDEMNITY			31

	8.1	Limitation On Landlord's Liability And Release	31
	8.2	Tenant's Indemnification Of Landlord	31
	8.3	Landlord's Indemnification of Tenant	31

ARTICLE 9 INSURANCE			32

	9.1	Tenant's Insurance	32
	9.2	Landlord's Insurance	33
	9.3	Mutual Waiver Of Subrogation	34

ARTICLE 10 DAMAGE TO LEASED PREMISES			34

	10.1	Landlord's Duty To Restore	34
	10.2	Insurance Proceeds	34
	10.3	Landlord's Right To Terminate	35
	10.4	Tenant's Right To Terminate	35
	10.5	Tenant's Waiver	35
	10.6	Abatement Of Rent	36

ARTICLE 11 CONDEMNATION			36

	11.1	Tenant's Right To Terminate	36
	11.2	Landlord's Right To Terminate	36
	11.3	Restoration	36
	11.4	Temporary Taking	36
	11.5	Division Of Condemnation Award	36
	11.6	Abatement Of Rent	37
	11.7	Taking Defined	37

ARTICLE 12 DEFAULT AND REMEDIES			37

	12.1	Events Of Tenant's Default	37
	12.2	Landlord's Remedies	38
	12.3	Landlord's Default And Tenant's Remedies	40
	12.4	Limitation Of Tenant's Recourse	40
	12.5	Tenant's Waiver	41

ARTICLE 13 GENERAL PROVISIONS			41

	13.1	Taxes On Tenant's Property	41
	13.2	Holding Over	42
	13.3	Subordination To Mortgages	43
	13.4	Tenant's Attornment Upon Foreclosure	43
	13.5	Mortgagee Protection	43
	13.6	Estoppel Certificate	44
	13.7	Tenant's Financial Information	44
	13.8	Transfer By Landlord	44
	13.9	Force Majeure	45
	13.10	Notices	45
	13.11	Attorneys' Fees and Costs	46
	13.12	Definitions	47
	13.13	General Waivers	50
	13.14	Miscellaneous	51
	13.15	Patriot Act Compliance	51
	13.16	Reservation of Property Data	52
	13.17	Sustainability	52

ARTICLE 14 LEGAL AUTHORITY, BROKERS AND ENTIRE AGREEMENT			53

	14.1	Legal Authority	53
	14.2	Brokerage Commissions	53
	14.3	Entire Agreement	53
	14.4	Landlord's Representations	53

ARTICLE 15 OPTION TO EXTEND			54

	15.1	Option to Extend	54
	15.2	Fair Market Rent	55
	15.3	Tenant's Election	55
	15.4	Rent Arbitration	55

ARTICLE 16 TELECOMMUNICATIONS SERVICE			57

	16.1	Telecommunications Service	57

ARTICLE 17 PARKING SUBLEASE			57

	17.1	Parking Sublease	57

LEASE

THIS LEASE, dated January 17, 2025 for reference purposes only, is made by and between DRAWBRIDGE 4600 PATRICK HENRY, LLC, a Delaware limited liability company ("Landlord") and EBR SYSTEMS, INC., a Delaware corporation ("Tenant"), to be effective and binding upon the parties as of the date the last of the designated signatories to this Lease shall have executed this Lease (the "Effective Date").

ARTICLE 1
REFERENCE

1.1 References. All references in this Lease (subject to any further clarifications contained in this Lease) to the following terms shall have the following meaning or refer to the respective address, person, date, time period, amount, percentage, calendar year or fiscal year as below set forth:

Tenant's Representative:	Gary Doherty

Phone Number and Email:	Gary.doherty@ebrsystemsinc.com

Landlord's Representative:	Michael Embree, Managing Director and Senior Vice President

Phone Number and Email:	(415) 391-4440; membree@drawbridgerealty.com

Lease Expiration Date:	The last day of the one hundred thirty-second (132nd) full calendar month following the Lease Commencement Date (defined in Paragraph 2.3 below), unless earlier terminated by Landlord or Tenant in accordance with the terms of this Lease, or extended by Tenant pursuant to Article 15.

Option to Extend:	One (1) option to extend for a term of five (5) years.

First Month's Prepaid Rent:	$89,329.28, consisting of one (1) month of Base Monthly Rent at the rate applicable to the first full calendar month of the Lease Term, plus one (1) month's estimated Additional Rent in the amount of $37,329.28.

Tenant's Security Deposit:	$2,603,567.53, in the form of a Letter of Credit (as defined below), and subject to reduction in accordance with Paragraph 3.7 below.

Late Charge Amount:	Five Percent (5%) of the Delinquent Amount

Tenant's Required Liability Coverage:	$10,000,000 Combined Single Limit

Tenant's Broker:	Newmark (Greg Tippin, Tracey Solari and Skylar Smith)

Landlord's Broker:	Cushman & Wakefield (Walt Stephenson and Jeff Cushman)

Property:	That certain real property situated in the City of Santa Clara, County of Santa Clara, State of California, as presently improved with one (1) building, which real property is shown on the Site Plan attached hereto as Exhibit A, and is commonly known as or otherwise described as follows: 4600 Patrick Henry Drive, Santa Clara, California. Landlord reserves the right to adjust the boundaries of the Property at any time, provided that any such adjustment shall not reduce the number of parking spaces to which Tenant has the right to park as provided in this Lease, nor unreasonably impair ingress or egress to or from the Property or the Leased Premises. The Property does not include the Sublease Premises (as defined in the Parking Sublease). The Property consists of the Building and the Outside Areas.

Building:	That certain building on the Property commonly known as 4600 Patrick Henry Drive, Santa Clara, California (the "Building"), which Building is shown outlined on Exhibit A hereto.

Outside Areas:	The "Outside Areas" shall mean all areas within the Property which are located outside the Building, such as pedestrian walkways, parking areas, loading docks, circulation roads and ways, parking structures and surface parking areas, landscaped areas, open areas and enclosed trash disposal areas.

Parking:	Tenant shall be entitled to the exclusive use of the three (3) electric vehicle charging stations on the Property and all of the parking spaces located in the parking area of the Outside Areas. Parking is provided to Tenant by Landlord without additional charge for the entire Lease Term, including any extensions thereof.

HVAC:	Heating, ventilating, and/or air conditioning.

Leased Premises:	The entire Building, including stairwells, connecting walkways, and atriums, consisting of approximately 51,136 rentable square feet, which rentable square footage has been determined utilizing Landlord's method of measurement, which has been explained to Tenant, and, for purposes of this Lease, the Leased Premises is agreed to contain said number of rentable square feet. The Building and the Leased Premises are not subject to re-measurement unless, pursuant to a written amendment to this Lease, space is subtracted therefrom or additional space is added thereto. Recognizing that both Landlord and Tenant have agreed to the foregoing rentable square footage number and have agreed that there will be no re-measurement except as expressly provided above, Landlord has given Tenant the opportunity to measure the Building and the Leased Premises and has encouraged Tenant to do so, and Tenant hereby confirms that it has elected, in its sole discretion and without reliance on any representation by Landlord or its agents or any brokers, not to measure the Building or the Leased Premises.

		/s/ GD
		Initials

Tenant's Expense Share:	The term "Tenant's Expense Share" shall mean the percentage obtained by dividing the rentable square footage of the Leased Premises at the time of calculation by the rentable square footage of the Building at the time of calculation. Such percentage is currently 100%. In the event that any portion of the Property is sold by Landlord, or the rentable square footage of the Leased Premises or the Property is otherwise changed, Tenant's Expense Share shall be recalculated to equal the percentage described in the first sentence of this paragraph, so that the aggregate Tenant's Expense Share of all tenants of the Property shall equal l 00%.

Standard Interest Rate:	The term "Standard Interest Rate" shall mean the greater of(a) five percent (5%), or (b) the sum of that rate quoted by Wells Fargo Bank, N.A., from time to time as its prime rate, plus two percent (2%), but in no event more than the maximum rate of interest not prohibited or made usurious.

Default Interest Rate:	The term "Default Interest Rate" shall mean the Standard Interest Rate, plus three percent (3%), but in no event more than the maximum rate of interest not prohibited or made usurious.

Base Monthly Rent:

The term "Base Monthly Rent" shall mean the following:

	Period	Base Monthly Rent
	*	**
	Months 1-12	$52,000.00
	Months 13-24	$80,340.00
	Months 25-36	$110,333.60
	Months 37-48	$145,281.99
	Months 49-60	$149,640.45
	Months 61-72	$154,129.66
	Months 73-84	$158,753.55
	Months 85-96	$163,516.16
	Months 97-108	$168,421.64
	Months 109-120	$173,474.29
	Months 121-132	$178,678.52

	*Stub Period as defined in Paragraph 3.1 below.

	**$1,677.42 per day if Stub Period occurs in a 31-day month; $1,733.33 per day if Stub Period occurs in a 30- day month; $1,857.14 per day if Stub Period occurs in a 28-day month.

Permitted Use:	General office, ancillary research and development, medical device manufacturing, storage and distribution purposes, and uses ancillary thereto, to the extent each such use is in compliance with all Laws and Restrictions.

Exhibits:	The term "Exhibits" shall mean the Exhibits of this Lease which are described as follows:

	Exhibit A - Site Plan showing the Property and the Building in which the Leased Premises are located.

	Exhibit B -Form of Lease Commencement Date Certificate

	Exhibit C - Work Letter

	Exhibit D - Form of Subordination, Nondisturbance and Attornment Agreement

	Exhibit E -Form of Tenant Estoppel Certificate

	Exhibit F - Form of Letter of Credit Exhibit G- Form of Parking Sublease Exhibit H - Permitted Hazardous Materials

ARTICLE 2

LEASED PREMISES, TERM AND POSSESSION

2.1 Demise Of Leased Premises. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord for Tenant's own use in the conduct of Tenant's business and not for purposes of speculating in real estate, for the Lease Term and upon the terms and subject to the conditions of this Lease, the Leased Premises. Tenant's lease of the Leased Premises, together with the appurtenant right to use the Outside Areas as described in Article 1 above and Paragraphs 2.2 and 4.10 below, shall be conditioned upon and be subject to the continuing compliance by Tenant with (i) all the terms and conditions of this Lease, (ii) all Laws and Restrictions governing the use or occupancy of the Leased Premises and the Property, (iii) all easements and other matters now of public record respecting the use of the Leased Premises and the Property, and (iv) all reasonable rules and regulations from time to time established by Landlord and provided to Tenant in writing. Tenant shall have access to and use of the Leased Premises 24 hours per day, 7 days per week, subject to casualty, condemnation and reasonable access restrictions necessitated by Landlord's repair and maintenance obligations hereunder.

2.2 Right To Use Outside Areas. As an appurtenant right to Tenant's right to the use and occupancy of the Leased Premises, Tenant shall have the right to access, use and occupy the Outside Areas in conjunction with its use of the Leased Premises, including outside storage of Tenant's property and materials in compliance with all applicable Laws and Restrictions and the other terms and conditions of this Lease. Tenant's right to so use the Outside Areas shall be subject to the limitations on such use as set forth in Article 1 and shall terminate concurrently with any termination of this Lease. Subject to casualty, condemnation and Landlord's repair and maintenance obligations under this Lease, Tenant shall have sole and exclusive access, use and occupancy of the Outside Areas.

2.3 Lease Commencement Date And Lease Term. The terms and provisions of this Lease shall be effective as of the Effective Date of this Lease. The term of this Lease shall begin, and the Lease Commencement Date shall be deemed to have occurred, on the later of (i) June 1, 2025, or (ii) the date that the Tenant Improvements (as defined in Paragraph 1 of the Work Letter) are deemed complete in accordance with Paragraph 4 of the Work Letter (subject to extension by any Force Majeure or Landlord Delays (hereinafter defined)), but notwithstanding clauses (i) and (ii) above, in no event later than 365 days after the Effective Date of this Lease (such date hereinafter referred to as the "Lease Commencement Date"). Promptly upon request by the other party after the Lease Commencement Date has occurred, Landlord and Tenant agree to execute and deliver a Lease Commencement Date Certificate in the form of Exhibit B attached hereto. The term of this Lease shall in all events end on the Lease Expiration Date (as set forth in Article 1) unless this Lease is sooner terminated or extended as hereinafter provided. The Lease Term shall be that period of time commencing on the Lease Commencement Date and ending on the Lease Expiration Date (the "Lease Term").

2.4 Delivery Of Possession; Early Access Period. Landlord shall deliver possession of the Leased Premises to Tenant on the Delivery Date (as defined below) with the base Building, structural portions of the Building (including the roof) and all plumbing, sewer, drainage, electrical, fire protection, elevator, escalator, life safety, security systems and equipment, HVAC systems, and all other mechanical, electrical and communications systems and equipment, in each case of the base Building and in existence as of the Effective Date of this Lease (collectively, the "Base Building Systems"), in good working condition and repair, in compliance with all applicable Laws in all material respects, and the power facilities to the base Building in existence as of the Effective Date of this Lease shall allow electrical capacity of at least 2,500 amps at 480v (collectively, the "Delivery Condition"); provided that, if Tenant commences the Tenant Improvements or any other modifications, alterations and/or improvements in compliance with this Lease prior to the Delivery Date, and any component of the Delivery Condition was satisfied prior to the Delivery Date but is no longer satisfied as a result of such Tenant Improvements and/or such modifications, alterations and/or improvements, such components of the Delivery Condition shall continue to be deemed satisfied for purposes of the Delivery Condition. For purposes hereof, the "Delivery Date" shall mean the date that Landlord delivers possession of the Leased Premises to Tenant vacant, broom clean, free of personal property that does not belong to Tenant or any of the Tenant Parties, and in the Delivery Condition. Landlord and Tenant hereby acknowledge and agree that the Delivery Date is the Effective Date of this Lease; provided that, Landlord actually delivers exclusive possession of the Leased Premises to Tenant in the Delivery Condition as required by the first sentence of this Paragraph 2.4. Landlord warrants that the Base Building Systems (exclusive of any portion of the Base Building Systems that would have been in good working condition and repair as of the Lease Commencement Date but for the Tenant Improvements or any other modifications, alterations and/or improvements performed by or on behalf of Tenant in compliance with this Lease) shall be in good working order and condition for the 365-day period immediately succeeding the Lease Commencement Date (the "Warranty Period"). DURING THE WARRANTY PERIOD, LANDLORD AT ITS SOLE COST AND EXPENSE SHALL MAKE OR CAUSE TO BE MADE ANY REPAIRS OR REPLACEMENTS TO THE BASE BUILDING SYSTEMS (OR APPLICABLE PORTION THEREOF) WHICH ARE REPORTED IN WRITING BY TENANT TO LANDLORD PRIOR TO THE EXPIRATION OF THEWARRANTY PERIOD, EXCEPT TO THE EXTENT SUCH REPAIRS OR REPLACEMENTS ARE OCCASIONED BY THE NEGLIGENCE OR WILLFUL ACT OF TENANT OR ANY OF THE TENANT PARTIES, OR AS A RESULT OF ANY BREACH BY TENANT OF ANY OF TENANT'S COVENANTS OR AGREEMENTS UNDER THIS LEASE. Upon receipt of such notice, Landlord shall, at its own cost and expense, commence and complete the necessary repairs or replacements within a reasonable time, but no later than thirty (30) days following Landlord's receipt of the notice, unless a longer period is required due to the nature of the repair or replacement, provided Landlord shall commence such repair or replacement within said thirty (30) day period and diligently pursue the same to completion. Tenant shall cooperate with Landlord in gaining access to the Leased Premises, and Landlord shall perform repairs in a manner that minimizes, to the extent reasonably practicable, disruption to Tenant's use and occupancy of the Leased Premises. In the event Landlord fails to complete the required repairs or replacements within the prescribed time period set forth above, Tenant shall have the right to pursue remedies as set forth in this Lease, including, but not limited to, the self-help rights set forth in Paragraph 5.l(b)(ii).

Landlord shall permit Tenant and the Tenant Parties (as defined below) access to the Leased Premises for a period of forty-five (45) business days prior to the Lease Commencement Date (the "Early Access Period"), to prepare the Leased Premises for Tenant's occupancy, including the procurement and installation of furniture, trade fixtures, telephones, computers, and other business equipment; provided that, Tenant and the Tenant Parties shall use only those service corridors and service entrances designated by Landlord for ingress and egress of personnel, and the delivery and removal of equipment and material through or across any Outside Areas shall not interfere with other tenants of the Property, and shall be during hours reasonably determined by Landlord. Additionally, such access is conditioned upon Tenant and the Tenant Parties working in harmony and not unreasonably interfering with or delaying Landlord or any person or entity doing work in the Building. Tenant shall coordinate and schedule its access to the Leased Premises for labor and materials delivery with Landlord. Any such access by Tenant during the Early Access Period shall be upon all of the terms and conditions of this Lease (other than the payment of Base Monthly Rent and Property Operating Expenses) and shall be at Tenant's sole risk, and Landlord shall not be responsible for any injury to persons or damage to property resulting from such early access by Tenant. Prior to such early access by Tenant, Tenant shall provide Landlord with a certificate of insurance evidencing the existence of all insurance Tenant is required to carry pursuant to this Lease. Notwithstanding the foregoing or anything in this Lease to the contrary, as Additional Rent, Tenant shall be responsible for the payment of any utilities used by Tenant or the Tenant Parties during the Early Access Period.

2.5 Performance Of Tenant Improvements; Acceptance Of Possession. Tenant shall, pursuant to the Work Letter attached hereto as Exhibit C and made a part hereof, have the right to perform the work and make the installations in the Leased Premises substantially as set forth in Paragraph 1 of the Work Letter (such work and installations hereinafter referred to as the "Tenant Improvements"), including any work not described therein but reasonably necessary or as a logical evolution thereto, so long as any such work does not otherwise require Landlord's consent under the Work Letter (or, if such work requires Landlord's consent as aforesaid, Tenant obtains such consent). It is agreed that by accepting possession of the Leased Premises, Tenant formally accepts same and acknowledges that the Leased Premises are in the condition called for hereunder, subject to Paragraph 2.4.

2.6 Surrender Of Possession. Immediately prior to the expiration or upon the sooner termination of this Lease, Tenant shall remove all of Tenant's signs from the exterior of the Building and shall remove all of Tenant's equipment, trade fixtures, furniture, supplies, wall decorations and other personal property from within the Leased Premises, the Building and the Outside Areas, and shall vacate and surrender the Leased Premises, the Building, the Outside Areas and the Property to Landlord in the same condition, broom clean, as existed as of the Lease Commencement Date, reasonable wear and tear, casualty and condemnation excepted. Tenant shall repair all damage to the Leased Premises, the exterior of the Building and the Outside Areas caused by Tenant's removal of Tenant's property. Tenant shall patch and refinish, to Landlord's reasonable satisfaction, all penetrations made by Tenant or any of the Tenant Parties to the floor, walls or ceiling of the Leased Premises, whether such penetrations were made with Landlord's approval or not. Tenant shall repair or replace all stained or damaged ceiling tiles, wall coverings and floor coverings to the reasonable satisfaction of Landlord, to the extent such staining or damage was caused by Tenant or any of the Tenant Parties. Tenant shall repair all damage caused by Tenant or any of the Tenant Parties to the exterior surface of the Building and the paved surfaces of the Outside Areas and, where necessary, replace or resurface same; provided, the foregoing obligation of Tenant excludes any ordinary wear and tear to such areas. Additionally, to the extent that Landlord shall have notified Tenant in writing at the time required under Paragraph 6.1, Tenant shall, upon the expiration or sooner termination of this Lease, remove any Required Removables (hereinafter defined) and repair all damage caused by such removal. Notwithstanding the foregoing, under no circumstance shall Tenant be required to remove or restore (or pay for any removal or restoration of) the Tenant Improvements or Permitted Alterations (as defined below); further, Tenant shall not have the right to remove the Tenant Improvements (other than any trade fixtures, personal property or removable machinery that is not otherwise required under the terms of this Lease to become the property of Landlord upon the expiration or earlier termination of this Lease). If the Leased Premises, the Building, the Outside Areas and the Property are not surrendered to Landlord in the condition required by this Lease at the expiration or sooner termination of this Lease, Landlord may, at Tenant's expense, so remove Tenant's signs, property and/or improvements not so removed and make such repairs and replacements not so made or hire, at Tenant's expense, independent contractors to perform such work. Tenant shall be liable to Landlord for all reasonable out-of-pocket costs actually incurred by Landlord in returning the Leased Premises, the Building and the Outside Areas to the required condition, together with interest on such costs from the date paid by Landlord at the Default Interest Rate until paid. Tenant shall pay to Landlord the amount of all costs so incurred plus such interest thereon within thirty (30) days of Landlord's billing Tenant for same, which shall be accompanied by documentation supporting the same. Notwithstanding the foregoing, Landlord may consent (in its sole and absolute discretion, which consent may be withheld for any reason or no reason) to accept a cash payment from Tenant in lieu of Tenant completing all or any portion of the work required pursuant to this paragraph, such consent to be in a written notice specifying the work from which Tenant shall be excused. Tenant shall indemnify Landlord against loss or liability resulting from delay by Tenant in surrendering the Leased Premises, including, without limitation, any claims made by any succeeding Tenant or any losses to Landlord with respect to lost opportunities to lease to succeeding tenants.

2.7 Accessibility. In accordance with California Civil Code Section 1938, Landlord hereby informs Tenant that as of the Effective Date of this Lease, the Leased Premises has not been inspected by a Certified Access Specialist (as defined in California Civil Code Section 55.52(3)) ("CASp"). California Civil Code Section 1938(e) provides:

"A Certified Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicable construction-related accessibility standards under state law. Although state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of the lessee or tenant, if requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the premises."

Accordingly, Landlord and Tenant hereby mutually agree that if Tenant desires to obtain a CASp inspection, (i) the CASp inspection shall be at Tenant's sole cost and expense, (ii) the inspection shall be performed by a CASp that is then currently certified in California and has been reasonably approved by Landlord, (iii) the CASp inspection shall take place during regular business hours with at least five (5) business day's prior written notice to Landlord, and if at any time Tenant is not the sole tenant of the Building, shall not materially disrupt any of the other tenants within the Building, (iv) Tenant shall promptly provide Landlord with a copy of the final report prepared in connection with the CASp inspection (the "CASp Report"), and (v) Tenant shall be solely responsible for promptly making any repairs or modifications necessary to correct violations of construction-related accessibility standards that are noted in the CASp Report, except to the extent such correction obligations are required of Landlord under this Lease (the "Required Modifications") and shall defend with competent counsel, indemnify and hold Landlord harmless from any claims, damages or liability resulting from Tenant's failure to make such Required Modifications. The Required Modifications shall not proceed until Landlord has approved in writing: (y) Tenant's contractor, and (z) complete and detailed plans and specifications for the Required Modifications. The Required Modifications shall be performed in a good and workmanlike manner in compliance with all of the terms of this Lease, including without limitation, Article 6 hereof. At Landlord's sole discretion, Landlord may elect to complete the Required Modifications. If Landlord elects to complete the Required Modifications, Landlord may forward invoices and bills for the expenses of the Required Modifications to Tenant, and Tenant shall, as Additional Rent, pay such invoices or bills and deliver satisfactory evidence of such payment to Landlord within thirty (30) days after Tenant's receipt of such invoices and bills.

Tenant hereby acknowledges and agrees that the CASp Report is to be kept strictly confidential, except as necessary for Tenant to complete Required Modifications and correct violations of construction related accessibility standards as noted in the CASp Report. Accordingly, except as provided above or as may be required by law or court order, Tenant shall not release, publish or otherwise distribute (and shall not authorize or permit any other person or entity to release, publish or otherwise distribute) any information contained in the CASp Report, except as may be reasonably necessary in connection with Tenant's enforcement of rights under this Lease. Tenant's obligations hereunder shall survive the expiration or sooner termination of this Lease.

ARTICLE 3

RENT, LATE CHARGES AND SECURITY DEPOSITS

3.1 Base Monthly Rent. Commencing on the Lease Commencement Date and continuing throughout the Lease Term, Tenant shall pay to Landlord, without prior demand therefor, in advance on the first day of each calendar month, cash or other immediately available good funds in the amount set forth as Base Monthly Rent in Article 1. If for any reason the Lease Commencement Date occurs pursuant to the terms of this Lease on a day other than the first day of a calendar month, the period commencing on the Lease Commencement Date and ending on the last day of the calendar month in which the Lease Commencement Date occurs shall be an initial "Stub Period" which shall be added to the Lease Term, and Tenant shall pay all Rent and other charges with respect to such Stub Period (on a prorated basis) at the same rate applicable to the first (1st) full calendar month of the Lease Term.

3.2 Additional Rent. Commencing on the Lease Commencement Date and continuing throughout the Lease Term, in addition to the Base Monthly Rent and to the extent not required by Landlord to be contracted for and paid directly by Tenant, Tenant shall pay to Landlord as additional rent (the "Additional Rent"), cash or other immediately available good funds in the following amounts:

(a) An amount equal to all Property Operating Expenses (as defined in Article 13) incurred or to be incurred by Landlord. Payment shall be made by the following method: Landlord shall deliver to Tenant Landlord's reasonable estimate of Property Operating Expenses, which it anticipates will be paid or incurred for the ensuing calendar or fiscal year, as Landlord may determine, and Tenant shall pay to Landlord an amount equal to the estimated amount of such Property Operating Expenses for such year in equal monthly installments during such year with the installments of Base Monthly Rent. Landlord reserves the right to revise such estimate from time to time.

(b) Landlord's share of the consideration received by Tenant upon certain assignments and sublettings as required by Article 7.

(d) Any other fees, costs, charges or reimbursements due Landlord from Tenant pursuant to the terms of this Lease.

3.3 Year-End Adjustments. Landlord shall furnish to Tenant within four (4) months following the end of the applicable calendar year, as the case may be, a statement setting forth (i) the amount of such expenses actually paid or incurred during the just ended calendar or fiscal year, as appropriate, and (ii) the amount that Tenant has paid to Landlord for credit against such expenses for such period. If Tenant shall have paid more than its obligation for such expenses for the stated period, Landlord shall, at its election, either (i) credit the amount of such overpayment toward the next ensuing payment or payments of Additional Rent that would otherwise be due or (ii) refund in cash to Tenant the amount of such overpayment within thirty (30) days of such statement. If such year-end statement shall show that Tenant did not pay its obligation for such expenses in full, then Tenant shall pay to Landlord the amount of such underpayment within thirty (30) days from Landlord's billing of same to Tenant.

Tenant may, at Tenant's sole cost and expense (except as provided below in this paragraph), cause an audit of Landlord's books and records to determine the accuracy of Landlord's billings for Property Operating Expenses under this Lease, provided Tenant completes (and delivers to Landlord the written results of) such audit within sixty (60) days after Tenant's receipt of the year-end statement described above setting forth the annual reconciliation of the Property Operating Expenses and provided further that the person or entity performing such audit is an unaffiliated, third party certified public accounting firm and is not compensated on any type of contingent basis. If such audit reveals that the actual Property Operating Expenses for any given year were less than the amount that Tenant paid for Property Operating Expenses for any such year, then unless Landlord contests such audit results as provided below, Landlord shall credit the excess to Tenant's next payment of Additional Rent (or, if the Lease Term has expired or terminated, remit such excess to Tenant within thirty (30) days after such determination). If such audit reveals that the actual Property Operating Expenses for any given year were more than the amount that Tenant paid for Property Operating Expenses for any such year, Tenant shall pay such amount to Landlord within thirty (30) days after completion of the audit. Landlord shall have the right to contest the results of Tenant's audit and thereafter have an audit performed ("Landlord's Audit") by an unaffiliated, third party certified public accounting firm, which is not compensated on any type of contingent basis, selected by Landlord and acceptable to Tenant in Tenant's reasonable discretion. In such case, the results of Landlord's Audit shall be binding and conclusive on Landlord and Tenant, and any resulting overpayment or underpayment shall be handled as provided above. Landlord and Tenant shall each pay for its own audit. However, if it is determined as a result of the foregoing that the sums charged to Tenant in respect of Property Operating Expenses for any year (a) exceeded the actual Property Operating Expenses for such year by more than five percent (5%) in the aggregate, then, in addition to amounts payable by Landlord as provided above, Landlord shall reimburse Tenant for the out-of-pocket cost of Tenant's audit (not to exceed $7,500), or (b) were equal to or less than the actual Property Operating Expenses for such year, Tenant shall reimburse Landlord for the out-of-pocket cost of Landlord's Audit, if any (not to exceed $7,500).

The provisions of this Paragraph 3.3 shall survive the expiration or sooner termination of this Lease.

3.4 Late Charge, And Interest On Rent In Default. Tenant acknowledges that the late payment by Tenant of any monthly installment of Base Monthly Rent or any Additional Rent will cause Landlord to incur certain costs and expenses not contemplated under this Lease, the exact amounts of which are extremely difficult or impractical to fix. Such costs and expenses will include without limitation, administration and collection costs and processing and accounting expenses. Therefore, if any installment of Base Monthly Rent is not received by Landlord from Tenant within five (5) business days after the same becomes due, such overdue amount shall incur a late charge in an amount equal to the amount set forth in Article 1 as the "Late Charge Amount,"; provided, however, with regard to the first two (2) failures to timely pay in any consecutive twelve (12) month period, Landlord will waive such late charge to the extent Tenant cures such failure to pay within five (5) business days following Tenant's receipt of written notice from Landlord that the same was not received when due. Landlord and Tenant agree that this late charge represents a reasonable estimate of such costs and expenses and is fair compensation to Landlord for the anticipated loss Landlord would suffer by reason of Tenant's failure to make timely payment. In no event shall this provision for a late charge be deemed to grant to Tenant a grace period or extension of time within which to pay any rental installment or prevent Landlord from exercising any right or remedy available to Landlord upon Tenant's failure to pay each rental installment due under this Lease when due, including the right to terminate this Lease. If any rent remains delinquent for a period in excess of five (5) business days following written notice that the same was not paid when due, then, in addition to such late charge, Tenant shall pay to Landlord interest on any rent that is not so paid from said fifth (5^th) business day at the Default Interest Rate until paid.

3.5 Payment Of Rent. Except as specifically provided otherwise in this Lease, all rent shall be paid in lawful money of the United States, without any abatement, reduction or offset for any reason whatsoever, to Landlord at such address as Landlord may designate from time to time by ACH debit from Tenant's designated bank account. Tenant's obligation to pay Base Monthly Rent and all Additional Rent shall be appropriately prorated at the commencement and expiration of the Lease Term. The failure by Tenant to pay any Additional Rent as required pursuant to this Lease when due shall be treated the same as a failure by Tenant to pay Base Monthly Rent when due, and Landlord shall have the same rights and remedies against Tenant as Landlord would have had Tenant failed to pay the Base Monthly Rent when due.

3.6 Prepaid Rent. Tenant shall, upon execution of this Lease, pay to Landlord the amount set forth in Article 1 as "First Month's Prepaid Rent" as prepayment of rent for credit against the first installment of Base Monthly Rent and Additional Rent due hereunder.

3.7 Security Deposit.

(a) Tenant shall deposit concurrently with Tenant's execution of this Lease, with Landlord the amount set forth in Article 1, in the form of a Letter of Credit (hereinafter defined). The Letter of Credit, is sometimes referred to herein as the "Security Deposit," and is security for the performance by Tenant of the terms of this Lease to be performed by Tenant, and not as prepayment of rent. Tenant hereby grants to Landlord a security interest in the Security Deposit, including but not limited to replenishments thereof. Landlord may apply such portion or portions of the Security Deposit as are reasonably necessary for the following purposes: (i) to remedy any default by Tenant in the payment of Base Monthly Rent or Additional Rent or a late charge or interest on defaulted rent, or any other monetary payment obligation of Tenant under this Lease (beyond applicable notice and cure periods); (ii) to repair damage to the Leased Premises, the Building or the Outside Areas caused by Tenant in violation of this Lease; (iii) to clean and restore and repair the Leased Premises, the Building or the Outside Areas following their surrender to Landlord if not surrendered in the condition required pursuant to the provisions of Article 2 and such condition requiring cleaning, restoration or repair is the responsibility of Tenant under the terms of this Lease, (iv) to remedy any other default of Tenant (beyond applicable notice and cure periods) including, without limitation, paying in full on Tenant's behalf any sums claimed by materialmen or contractors of Tenant to be owing to them by Tenant for work done or improvements made at Tenant's request to the Leased Premises, and (v) to cover any other expense, loss or damage which Landlord may at any time suffer due to Tenant's default under this Lease (beyond applicable notice and cure periods). In this regard, Tenant hereby waives any restriction on the uses to which the Security Deposit may be applied as contained in Section 1950.7(c) of the California Civil Code and/or any successor statute. In the event the Security Deposit or any portion thereof is so used, Tenant shall pay to Landlord, within ten (10) business days after written demand therefore, an amount in cash sufficient to restore the Security Deposit to the full original sum. Landlord shall not be deemed a trustee of the Security Deposit. Landlord may use the Security Deposit in Landlord's ordinary business and shall not be required to segregate it from Landlord's general accounts. Tenant shall not be entitled to any interest on the Security Deposit. If Landlord transfers the Building or the Property during the Lease Term, Landlord shall transfer the Security Deposit to any subsequent owner in conformity with the provisions of Section 1950.7 of the California Civil Code and/or any successor statute, in which event the transferring landlord shall be released from all liability for the return of the Security Deposit. Tenant specifically grants to Landlord (and Tenant hereby waives the provisions of California Civil Code Section 1950.7 to the contrary) a period of sixty (60) days following a surrender of the Leased Premises by Tenant to Landlord within which to inspect the Leased Premises, make required restorations and repairs, receive and verify workmen's billings therefor, cure any other defaults (beyond applicable notice and cure periods) of Tenant under this Lease, deduct any damages, and prepare a final accounting with respect to the Security Deposit. In no event shall the Security Deposit or any portion thereof, be considered prepaid rent.

(b) The Letter of Credit shall comply with the following terms:

Tenant shall provide Landlord, and maintain in full force and effect throughout the Lease Term and until the date that is ninety (90) days after the then-current Lease Expiration Date or earlier termination of this Lease, a clean, unconditional, transferable, fully cash-collateralized letter of credit (the "Letter of Credit") issued by First-Citizens Bank & Trust Company or another issuer reasonably satisfactory to Landlord (each, an "Issuer"), on the form attached hereto as Exhibit F or such other form reasonably acceptable to Landlord, in the applicable amount of the Security Deposit. Upon notice to Tenant, Landlord may require the Letter of Credit to be re-issued by a different Issuer at any time during the Lease Term if Landlord reasonably believes that the Issuer of the Letter of Credit is or may soon become insolvent or is or may soon be placed into receivership by the Federal Deposit Insurance Corporation or any other governmental or quasi-governmental institution, in which event Tenant shall deliver to Landlord a substitute Letter of Credit from an Issuer reasonably satisfactory to Landlord and otherwise conforming to the requirements set forth in this Paragraph 3.7 within thirty (30) days following Tenant's receipt of Landlord's notice therefor; provided, however, Landlord shall return the existing Letter of Credit to the existing Issuer promptly following receipt of the substitute Letter of Credit. As used herein with respect to the Issuer of the Letter of Credit, "insolvent" shall mean the determination of insolvency as made by such Issuer's primary bank regulator. No fees applicable to the Letter of Credit shall be charged to Landlord. The Letter of Credit shall have an expiration period of one (1) year but shall automatically renew by its terms unless affirmatively cancelled by either Issuer or Tenant, in which case Issuer must provide Landlord at least thirty (30) days' prior written notice of such expiration or cancellation. If Tenant fails to renew or replace the Letter of Credit as required under this Lease at least thirty (30) days before its stated expiration date, Landlord may draw upon the entire amount of the Letter of Credit.

Landlord may draw upon the Letter of Credit in whole or in part and hold and apply the proceeds in the same manner and for the same purposes as the cash Security Deposit described in Paragraph 3.7(a). Tenant shall not seek to enjoin, prevent, or otherwise interfere with Landlord's draw under the Letter of Credit. In the event of a draw of the Letter of Credit by Landlord in violation of the terms of this Lease, the parties shall cooperate to allow Tenant to post a replacement Letter of Credit simultaneously with the return to Tenant of the wrongfully drawn sums, and Landlord shall, upon written request of the Issuer, confirm in writing to the Issuer of the Letter of Credit that Landlord's draw was erroneous.

Upon the commencement of the thirty-seventh (37th) full calendar month of the Lease Term, provided that (i) Tenant is not then in default (and has never been in default beyond any applicable notice and cure periods), and (ii) Tenant demonstrates to the reasonable satisfaction of Landlord that it has a cash balance of at least $50,000,000.00 on its balance sheet as of such Reduction Date (clauses (i) and (ii) hereafter collectively referred to as the "Reduction Conditions"), the amount of the Security Deposit may be reduced by Tenant by an amount equal to $650,891.88. Upon the commencement of the forty-ninth (49th) full calendar month of the Lease Term, provided that the Reduction Conditions are satisfied as of such Reduction Date, the amount of the Security Deposit may be reduced by Tenant by an amount equal to $650,891.88. Upon the commencement of the sixty-first (61st) full calendar month of the Lease Term, provided that the Reduction Conditions are satisfied as of such Reduction Date, the amount of the Security Deposit may be reduced by Tenant by an amount equal to $650,891.88. Upon the commencement of the seventy-third (73rd) full calendar month of the Lease Term, provided that the Reduction Conditions are satisfied as of such Reduction Date, the amount of the Security Deposit may be reduced by Tenant by an amount equal to $218,876.28. In no event shall the amount of the Security Deposit be reduced below $432,015.60. As used herein, "Reduction Date" means the commencement of each of the thirty-seventh (37th), forty-ninth (49th), sixty-first (61st) and seventy-third (73rd) full calendar month of the Lease Term, as applicable.

Notwithstanding the foregoing, if the Issuer has not issued the Letter of Credit by the Effective Date of this Lease despite Tenant's commercially reasonable efforts, then Tenant shall have the right, in lieu of delivering the Letter of Credit to Landlord on the Effective Date of this Lease, to deliver to Landlord cash in an amount equal to the Security Deposit (the "Cash Deposit"), to be held and applied in accordance with the terms of Paragraph 3.7(a) hereof as if the Cash Deposit were the Letter of Credit; provided, however, that Tenant shall furnish to Landlord the Letter of Credit on or prior to the date (the "L/C Deadline") that is sixty (60) days after the Effective Date of this Lease, time being of the essence. Tenant agrees that the Cash Deposit shall not bear interest and need not be held in a separate account. If on the Effective Date of this Lease, Tenant shall deliver to Landlord the Cash Deposit in lieu of the Letter of Credit, then within five (5) business days after Landlord's receipt of the Letter of Credit, Landlord shall return the Cash Deposit to Tenant (less any amounts utilized by Landlord in accordance with Paragraph 3.7(a) hereof).

ARTICLE 4

USE OF LEASED PREMISES AND OUTSIDE AREA

4.1 Permitted Use. Tenant shall be entitled to use the Leased Premises solely for the "Permitted Use" as set forth in Article 1 and for no other purpose whatsoever. Tenant shall have the right to vacate the Leased Premises at any time during the Lease Term, provided Tenant maintains the Leased Premises in the same condition as if fully occupied and as otherwise required by the terms of this Lease. Tenant shall have the right to use the Outside Areas in conjunction with its Permitted Use of the Leased Premises solely for the purposes for which they were designed and intended and for no other purposes whatsoever.

4.2 General Limitations On Use. Tenant shall not do or knowingly permit anything to be done in or about the Leased Premises, the Building, the Outside Areas or the Property, which does or could (i) jeopardize the structural integrity of the Building or (ii) cause damage to any part of the Leased Premises, the Building, the Outside Areas or the Property. Tenant shall not operate any equipment within the Leased Premises which does or could (A) injure, vibrate or shake the Leased Premises or the Building, (B) damage, overload or impair the efficient operation of any electrical, plumbing, or HVAC systems within or servicing the Leased Premises or the Building, or (C) damage or impair the efficient operation of the sprinkler system (if any) within or servicing the Leased Premises or the Building. Tenant shall not install any equipment or antennas on or make any penetrations of the exterior walls or roof of the Building without complying with the terms of the Work Letter or Paragraph 6.1, as applicable. Tenant shall not affix any equipment to or make any penetrations or cuts in the floor, ceiling, walls or roof of the Leased Premises without complying with the terms of the Work Letter or Paragraph 6.1, as applicable. Tenant shall not place any loads upon the floors, walls, ceiling or roof systems which could endanger the structural integrity of the Building or damage its floors, foundations or supporting structural components. Tenant shall not place any explosive, flammable or harmful fluids or other waste materials in the drainage systems of the Leased Premises, the Building, the Outside Areas or the Property. Tenant shall not drain or discharge any fluids in the landscaped areas or across the paved areas of the Property. Tenant shall not use any of the Outside Areas for the storage of its materials, supplies, inventory or equipment and all such materials, supplies, inventory or equipment shall at all times be stored within the Leased Premises.

Tenant shall not commit nor permit to be committed by any of its employees, agents, vendors, invitees, guests, permittees, assignees, sublessees, or contractors (the "Tenant Parties"), any waste in or about the Leased Premises, the Building, the Outside Areas or the Property.

4.3 Noise And Emissions. All noise generated by Tenant in its use of the Leased Premises shall be confined or muffled so that it does not interfere with the businesses of or annoy the occupants and/or users of adjacent properties. All dust, fumes, odors and other emissions generated by Tenant's use of the Leased Premises shall be sufficiently dissipated in accordance with sound environmental practice and exhausted from the Leased Premises in such a manner so as not to interfere with the businesses of or annoy the occupants and/or users of adjacent properties, or cause any damage to the Leased Premises, the Building, the Outside Areas or the Property or any component part thereof or the property of adjacent property owners.

4.4 Trash Disposal. Tenant shall obtain trash bins or other adequate garbage disposal facilities within the trash enclosure areas provided or permitted by Landlord outside the Leased Premises sufficient for the interim disposal of all of its trash, garbage and waste. All such trash, garbage and waste temporarily stored in such areas shall be stored in such a manner to minimize visibility from outside of such areas, and Tenant shall cause such trash, garbage and waste to be regularly removed from the Property. Tenant shall keep the Leased Premises and the Outside Areas in a clean, safe and neat condition free and clear of all of Tenant's trash, garbage, waste and/or boxes, pallets and containers containing same at all times.

4.5 Parking. In connection with Tenant's rights to the Outside Areas set forth in Paragraph 2.2, Tenant shall have the right to control all access to the parking areas within the Outside Area and tow any unauthorized vehicles. Tenant shall not, at any time, park or permit to be parked any recreational vehicles, inoperative vehicles or equipment in the Outside Areas or on any portion of the Property. Tenant agrees to assume responsibility for compliance by the Tenant Parties with the parking provisions contained herein. Landlord reserves the right to grant easements and access rights to others for use of the parking areas on the Property, provided that such grants do not reduce the number of parking spaces allocated to Tenant in Article 1. If at any time Tenant is not the sole tenant of the Building, Landlord shall have the right from time to time to establish reasonable rules and regulations and/or amendments or additions thereto respecting the use of the parking areas of the Property.

4.6 Signs. Subject to the other terms and conditions of this Paragraph 4.6, Tenant, at Tenant's sole cost and expense, shall: (i) have the right to install Tenant-identification signage on or adjacent to the front door(s) of the Leased Premises, (ii) have the right to place Tenant's name or logo on the existing monument sign of the Building (which is being newly installed by Landlord), and (iii) have the right to place Tenant's name or logo on the top of the Building, at a location mutually and reasonably agreed upon by Landlord and Tenant. The size, location, design and configuration of all signage shall be subject to Landlord's Building standards and its prior written approval, which shall not be unreasonably withheld, and shall be governed by and subject to the rules, regulations and permit requirements of the City of Santa Clara and any other applicable Laws and Restrictions. All of the foregoing rights set forth in this paragraph shall be personal to EBR Systems, Inc., a Delaware corporation, and no other party shall have any such right. Tenant shall not place or install on or within any portion of the Leased Premises, the exterior of the Building, the Outside Areas or the Property any sign, advertisement, banner, placard, or picture which is visible from the exterior of the Leased Premises, except as expressly allowed pursuant to this Paragraph 4.6. Tenant shall not place or install on or within any portion of the Leased Premises, the exterior of the Building, the Outside Areas or the Property any business identification sign which is visible from the exterior of the Leased Premises until Landlord shall have approved in writing and in its reasonable discretion the location, size, content, design, method of attachment and material to be used in the making of such sign; provided, however, that so long as such signs are normal and customary business directional or identification signs within the Building, Tenant shall not be required to obtain Landlord's approval. Any sign, once approved by Landlord, shall be installed at Tenant's sole cost and expense and only in strict compliance with Landlord's approval and any applicable Laws and Restrictions, using a person approved by Landlord to install same. Landlord may remove any signs (which have not been approved in writing by Landlord), advertisements, banners, placards or pictures so placed by Tenant on or within the Leased Premises, the exterior of the Building, the Outside Areas or the Property and charge to Tenant the cost of such removal, together with any costs incurred by Landlord to repair any damage caused thereby, including any cost incurred to restore the surface (upon which such sign was so affixed) to its original condition. Tenant shall remove all of Tenant's signs, repair any damage caused thereby, and restore the surface upon which the sign was affixed to its original condition, all to Landlord's reasonable satisfaction, upon the expiration or termination of this Lease. Notwithstanding the signage rights granted to Tenant pursuant to this Paragraph 4.6, Landlord reserves and retains the right to place Landlord's name and/or ownership affiliation in or on the Building, the Outside Areas or the Property, or on any of the signs located thereon, as determined in Landlord's sole discretion, at Landlord's sole cost and expense and subject to Tenant's approval, which shall not be unreasonably withheld, conditioned or delayed; provided, excluding any "for lease" signs, any such signage of Landlord in place as of the Effective Date of this Lease is hereby deemed approved by Tenant. Notwithstanding the foregoing to the contrary, Landlord shall have the right to place "for lease" signs at the Property if less than nine (9) months remains in the Lease Term (as may be extended) or if a default by Tenant beyond the expiration of any applicable notice and cure periods exists.

4.7 Compliance With Laws And Restrictions. Tenant shall abide by and shall promptly observe and comply with, at its sole cost and expense, all Laws and Restrictions respecting the use and occupancy of the Leased Premises, the Building, the Outside Areas and the Property, including, without limitation, Title 24, building codes, the Americans with Disabilities Act and the rules and regulations promulgated thereunder, and the Laws governing the use and/or disposal of hazardous materials, and shall defend with competent counsel, indemnify and hold Landlord harmless from any claims, damages or liability resulting from Tenant's failure to so abide, observe, or comply, except to the extent caused by (i) Landlord's gross negligence or willful misconduct or (ii) conditions existing prior to the Delivery Date, except to the extent such conditions are knowingly exacerbated by Tenant or any of the Tenant Parties, in which event such obligations of Tenant shall apply to the extent of such exacerbation. Tenant's obligations hereunder shall survive the expiration or sooner termination of this Lease. Upon the written request of Tenant, Landlord shall, at no cost, expense or liability to Landlord, reasonably cooperate with Tenant to obtain any and all permits, authorizations, commissioning or other approvals from applicable governmental authorities Tenant deems reasonably necessary for Tenant's Permitted Use of the Leased Premises, if and to the extent any such permits, authorizations, commissioning or other approvals require the cooperation of the property owner. To Landlord's actual knowledge as of the Effective Date of this Lease, the Leased Premises, the Building, the Outside Areas and the Property are in substantial compliance with all applicable Laws (hereinafter defined).

4.8 Compliance With Insurance Requirements. With respect to any insurance policies required or permitted to be carried by Landlord in accordance with the provisions of this Lease, Tenant shall not conduct nor knowingly permit any other person to conduct any activities nor keep, store or use (or allow any other person to keep, store or use) any item or thing within the Leased Premises, the Building, the Outside Areas or the Property which (i) is prohibited under the terms of any such policies, (ii) is reasonably expected to result in the termination of the coverage afforded under any of such policies, (iii) is reasonably expected to give the insurance carrier the right to cancel any of such policies, or (iv) is reasonably expected to increase the rates (over standard rates) charged for the coverage afforded under any of such policies. Tenant shall comply with all written requirements of any insurance company, insurance underwriter, or Board of Fire Underwriters which are necessary to maintain, at standard rates, the insurance coverages carried by either Landlord or Tenant pursuant to this Lease.

4.9 Landlord's Right To Enter. Landlord and its agents shall have the right to enter the Leased Premises during normal business hours after giving Tenant at least forty-eight (48) hours' notice (which may be electronic in nature and shall not be required in the event of an emergency) and subject to Tenant's reasonable security measures in non-emergency situations (including the right to have a representative present during such entry, in which case Tenant shall make a representative reasonably available for such purpose, failing which Landlord shall have the right to enter without such presence) for the purpose of (i) inspecting the same; (ii) showing the Leased Premises to prospective purchasers, mortgagees or, during the last nine (9) months of the Lease Term, tenants; (iii) making necessary alterations, additions or repairs as required by Landlord under this Lease; and (iv) performing any of Tenant's obligations when Tenant has failed to do so beyond applicable notice and cure periods. Landlord shall have the right to enter the Leased Premises during normal business hours (or as otherwise agreed), subject to at least forty-eight (48) hours' prior notice to Tenant (which may electronic in nature and shall not be required in the event of an emergency) and Tenant's reasonable security measures, for purposes of supplying any maintenance or services agreed to be supplied by Landlord. Landlord shall also have the right, upon at least forty-eight (48) hours' advance notice to Tenant (which may be electronic in nature and shall not be required in the event of an emergency), to access the Building's vertical risers and the interstitial space above Tenant's acoustical ceiling to connect new utility and communications lines from other floors to the base Building utility lines. Landlord shall have the right to enter the Outside Areas during normal business hours for purposes of (A) inspecting the exterior of the Building and the Outside Areas; (B) posting notices of nonresponsibility (and for such purposes Tenant shall provide Landlord at least ten (10) business days' prior written notice of any work to be performed on the Leased Premises, as well as notice within one (1) business day after the commencement of such work); and (C) supplying any services to be provided by Landlord. Any entry into the Leased Premises or the Outside Areas obtained by Landlord in accordance with this paragraph shall not be construed or deemed to be a forcible or unlawful entry into, or a detainer of, the Leased Premises, or an eviction, actual or constructive of Tenant from the Leased Premises or any portion thereof.

4.10 Use Of Outside Areas. Tenant, in its use of the Outside Areas, shall keep the Outside Areas in a safe condition reasonably free and clear of all debris, trash (except within existing enclosed trash areas), inoperable vehicles, and other items which are not specifically permitted by Landlord to be stored or located thereon by Tenant. If, in the opinion of Landlord, unauthorized persons are using any of the Outside Areas by reason of, or under claim of, the express or implied authority or consent of Tenant, then Tenant, upon demand of Landlord, shall restrain, to the fullest extent then allowed by Law, such unauthorized use, and shall initiate such appropriate proceedings as may be required to so restrain such use. Landlord reserves the right to grant easements and access rights to others for use of the Outside Areas and shall not be liable to Tenant for any diminution in Tenant's right to use the Outside Areas as a result. Notwithstanding anything to the contrary contained in this Lease, for so long as Tenant is the sole tenant of the Building, (i) subject to casualty, condemnation and Landlord's repair and maintenance obligations under this Lease, Landlord shall not voluntarily grant any easements or other rights giving any party rights to access, use or possess the Outside Areas, (ii) Tenant shall have the right, but not the obligation, to alter or improve the Outside Areas in compliance with Paragraph 6.1, and (iii) Tenant may utilize portions of the Outside Areas for the Permitted Use, including trailers and other mobile units for temporary storage purposes, provided that such trailers and mobile units shall be in compliance with all applicable Laws and Restrictions and all of the terms and conditions of this Lease. No such use of the Outside Areas described in the preceding sentence shall be deemed to increase the amount of Base Monthly Rent under this Lease.

4.11 Environmental Protection. Tenant's obligations under this Paragraph 4.11 shall survive the expiration or termination of this Lease.

(a) As used herein, the term "Hazardous Materials" shall mean any toxic or hazardous substance, material or waste or any pollutant or infectious or radioactive material, including but not limited to those substances, materials or wastes regulated now or in the future under any of the following statutes or regulations and any and all of those substances included within the definitions of "hazardous substances," "hazardous materials," "hazardous waste," "hazardous chemical substance or mixture," "imminently hazardous chemical substance or mixture," "toxic substances," "hazardous air pollutant," "toxic pollutant," or "solid waste" in the (a) Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA" or "Superfund"), as amended by the Superfund Amendments and Reauthorization Act of 1986 ("SARA"), 42 U.S.C. § 9601 et seq., (b) Resource Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C. § 6901 et seq., (c) Federal Water Pollution Control Act ("FSPCA"), 33 U.S.C. § 1251 et seq., (d) Clean Air Act ("CAA"), 42 U.S.C. § 7401 et seq., (e) Toxic Substances Control Act ("TSCA"), 14 U.S.C. § 2601 et seq., (f) Hazardous Materials Transportation Act, 49 U.S.C. § 1801, et seq., (g) Carpenter-Presley-Tanner Hazardous Substance Account Act ("California Superfund"), Cal. Health & Safety Code§ 25300 et seq., (h) California Hazardous Waste Control Act, Cal. Health & Safety code§ 25100 et seq., (i) Porter-Cologne Water Quality Control Act ("Porter-Cologne Act"), Cal. Water Code§ 13000 et seq., (i) Hazardous Waste Disposal Land Use Law, Cal. Health & Safety codes§ 25220 et seq., (k) Safe Drinking Water and Toxic Enforcement Act of 1986 ("Proposition 65"), Cal. Health & Safety code§ 25249.5 et seq., (1) Hazardous Substances Underground Storage Tank Law, Cal. Health & Safety code§ 25280 et seq., (m) Air Resources Law, Cal. Health & Safety Code§ 39000 et seq., and (n) regulations promulgated pursuant to said laws or any replacement thereof, or as similar terms are defined in the federal, state and local laws, statutes, regulations, orders or rules. Hazardous Materials shall also mean any and all other biohazardous wastes and substances, materials and wastes which are, or in the future become, regulated under applicable Laws for the protection of health or the environment, or which are classified as hazardous or toxic substances, materials or wastes, pollutants or contaminants, as defined, listed or regulated by any federal, state or local law, regulation or order or by common law decision, including, without limitation,

(i) trichloroethylene, tetrachloroethylene, perchloroethylene and other chlorinated solvents, (ii) any petroleum products or fractions thereof, (iii) asbestos, (iv) polychlorinated biphenyls, (v) flammable explosives, (vi) urea formaldehyde, (vii) radioactive materials and waste, and (viii) materials and wastes that are harmful to or may threaten human health, ecology or the environment.

(b) Notwithstanding anything to the contrary in this Lease, Tenant, at its sole cost, shall comply with, and shall cause the Tenant Parties to comply with, all Laws relating to the storage, use and disposal of Hazardous Materials at the Property by Tenant or any of the Tenant Parties; provided, however, that Tenant shall not be responsible (nor shall Tenant indemnify Landlord) for contamination of the Leased Premises and/or the Building or the Property (including, if applicable, any parking garage) by Hazardous Materials (x) existing as of the date the Leased Premises are delivered to Tenant (whether before or after the Lease Commencement Date), (y) that have migrated from outside the Property not caused by Tenant or any of the Tenant Parties, or (z) used, stored, disposed or otherwise released by Landlord or any Landlord Party ("Landlord's Hazardous Materials"). To the extent that Landlord's Hazardous Materials are discovered at the Property, Building or Leased Premises and remediation of the same is mandated by a governmental authority with competent jurisdiction in a written notice to Landlord (which remediation is not triggered by any of clauses (i)-(iii) of Paragraph 6.3), any remediation thereof of the Landlord's Hazardous Materials (to the extent so mandated) shall not be performed by Tenant and the cost therefor shall not be subject to inclusion in Property Maintenance Costs. Except for Office & Cleaning Supplies (hereinafter defined) and/or Permitted Hazardous Materials (hereinafter defined), Tenant shall not store, use or dispose of any Hazardous Materials within the Leased Premises. For purposes hereof, "Office & Cleaning Supplies" shall mean ordinary office and cleaning supplies used in compliance with all Laws and Restrictions. For purposes hereof, "Permitted Hazardous Materials" shall mean those Hazardous Materials set forth in Exhibit H attached hereto. Any changes to the Permitted Hazardous Materials shall be subject to the prior written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed. In no event shall Tenant or any of the Tenant Parties conduct any environmental tests of the Leased Premises or cause or permit to be discharged into the plumbing or sewage system of the Building or onto the land underlying or adjacent to the Building any Hazardous Materials. Tenant shall be solely responsible for and shall defend, indemnify, and hold Landlord and its agents harmless from and against all claims, costs and liabilities, including attorneys' fees and costs, arising out of or in connection with Tenant's storage, use and/or disposal of Hazardous Materials. If the presence of Hazardous Materials on the Leased Premises caused or permitted by Tenant or any of the Tenant Parties results in contamination or deterioration of water or soil, then Tenant shall promptly take any and all action necessary to clean up such contamination, but the foregoing shall in no event be deemed to constitute permission by Landlord to allow the presence of such Hazardous Materials. Tenant shall further be solely responsible for, and shall defend, indemnify, and hold Landlord and its agents harmless from and against all claims, costs and liabilities, including attorneys' fees and costs, arising out of or in connection with any removal, cleanup and restoration work and materials required hereunder to return the Leased Premises and any other property of whatever nature to their condition existing prior to the appearance of the Hazardous Materials.

(c) Upon termination or expiration of the Lease Term, Tenant at its sole expense shall cause all Hazardous Materials placed in or about the Leased Premises, the Building and/or the Property by Tenant or any of the Tenant Parties, and all installations (whether interior or exterior) made by or on behalf of Tenant or any of the Tenant Parties relating to the storage, use, disposal or transportation of Hazardous Materials to be removed from the Property and transported for use, storage or disposal in accordance and compliance with all Laws and other requirements respecting Hazardous Materials used or permitted to be used by Tenant. If Tenant uses any Hazardous Materials other than Office & Cleaning Supplies, then Tenant shall apply for and shall obtain from all appropriate regulatory authorities (including any applicable fire department or regional water quality control board) all permits, approvals and clearances necessary for the closure of the Property and shall take all other actions as may be required to complete the closure of the Building and the Property. The foregoing sentence shall not be read to imply that Tenant has any right to use any Hazardous Materials other than Office & Cleaning Supplies and Permitted Hazardous Materials. In addition, prior to vacating the Leased Premises, and as a part of Tenant's surrender obligations prior to the expiration or earlier termination of this Lease, but only if Landlord reasonably believes Tenant has caused or permitted contamination of any portion of the Property in violation of applicable Laws or Restrictions and notifies Tenant of the same, Tenant shall undertake and submit to Landlord, at Tenant's sole cost and expense, a Phase I environmental site assessment from an environmental consulting company reasonably acceptable to Landlord, which site assessment shall evidence Tenant's compliance with this Paragraph 4.11.

(d) At any time prior to the expiration of the Lease Term, if Landlord reasonably believes Tenant has caused or permitted contamination of any portion of the Property, subject to reasonable prior notice (not less than forty-eight (48) hours) and Tenant's reasonable security requirements and provided such activities do not unreasonably interfere with the conduct of Tenant's business at the Leased Premises, Landlord shall have the right to enter in and upon the Property, Building and Leased Premises in order to conduct appropriate tests of water and soil to determine whether levels of any Hazardous Materials in excess of legally permissible levels has occurred as a result of Tenant's use thereof. Landlord shall furnish copies of all such test results and reports to Tenant and, at Tenant's option and cost, shall permit split sampling for testing and analysis by Tenant. If the data from any tests authorized and undertaken by Landlord pursuant to this Paragraph indicates Tenant has caused or permitted contamination of the Property, in addition to Tenant's other obligations under this Lease with respect thereto, Tenant shall reimburse Landlord for the out-of-pocket costs and expenses incurred by Landlord in connection with such tests within thirty (30) days after Tenant's receipt of written notice therefor, which shall be accompanied by paid invoices for the same. If such tests do not reveal that Tenant has caused or permitted contamination of any portion of the Property, the cost of such tests shall be at the sole cost of Landlord and shall not be included within Property Maintenance Costs.

(e) Landlord may voluntarily cooperate in a reasonable manner with the efforts of all governmental agencies in reducing actual or potential environmental damage. Tenant agrees to reasonably cooperate with the requirements and recommendations of governmental agencies regulating, or otherwise involved in, the protection of the environment.

4.12 Rules And Regulations. If at any time Tenant is not the sole tenant of the Building, Landlord shall have the right from time to time to establish reasonable rules and regulations and/or amendments or additions thereto respecting the use of the Leased Premises and the Outside Areas for the care and orderly management of the Property. Upon delivery to Tenant of a copy of such rules and regulations or any amendments or additions thereto, Tenant shall comply with such rules and regulations. A violation by Tenant of any of such rules and regulations shall constitute a default by Tenant under this Lease. If there is a conflict between the rules and regulations and any of the provisions of this Lease, the provisions of this Lease shall prevail. Landlord shall not be responsible or liable to Tenant for the violation of such rules and regulations by any other tenant of the Property.

4.13 Reservations. Landlord reserves the right from time to time to grant, without the consent or joinder of Tenant, such easements, rights of way and dedications that Landlord reasonably deems necessary, and to cause the recordation of parcel maps and restrictions, so long as such easements, rights of way and dedications do not unreasonably interfere with the use of and access to the Leased Premises and Outside Areas (including all parking areas therein) by Tenant, decrease the rights of Tenant under this Lease (other than to a de minimis extent) or increase the amount of Rent or other fees paid by Tenant under this Lease. Tenant agrees to execute any documents reasonably requested by Landlord to effectuate any such easement rights, dedications, maps or restrictions.

ARTICLE 5

REPAIRS, MAINTENANCE, SERVICES AND UTILITIES

5.1 Repair And Maintenance. Except in the case of damage to or destruction of the Leased Premises, the Building, the Outside Areas or the Property for which the provisions of Article 10 shall control, and subject to Paragraph 9.3, the parties shall have the following obligations and responsibilities with respect to the repair and maintenance of the Leased Premises, the Building, the Outside Areas and the Property.

(a) Tenant's Obligations. Tenant shall, at all times during the Lease Term and at its sole cost and expense, regularly clean and keep and maintain in good order, condition and repair the Leased Premises and every part thereof including, without limiting the generality of the foregoing, (i) all interior walls, floors and ceilings, (ii) all windows, doors and skylights, (iii) all electrical wiring, conduits, connectors and fixtures within the Leased Premises, (iv) all interior sinks, toilets, and faucets, (v) all interior lighting fixtures, bulbs and lamps, (vi) any dedicated or supplemental HVAC equipment installed by or at the request of Tenant in compliance with the terms of this Lease, and (vii) all entranceways to the Leased Premises. Tenant shall, at its sole cost and expense, repair all damage to the Leased Premises, the Building, the Outside Areas or the Property caused by the activities of Tenant or any of the Tenant Parties promptly following written notice from Landlord to so repair such damages. If Tenant shall fail to perform the required maintenance or fail to make repairs required of it pursuant to this paragraph within a reasonable period of time following notice from Landlord to do so, then Landlord may, at its election and without waiving any other remedy it may otherwise have under this Lease or at law, perform such maintenance or make such repairs and charge to Tenant, as Additional Rent, the costs so incurred by Landlord for same. All glass within or a part of the Leased Premises, both interior and exterior, is at the sole risk of Tenant and any broken glass shall promptly be replaced by Tenant at Tenant's expense with glass of the same kind, size and quality.

(b) Landlord's Obligations.

(i) Landlord shall, at all times during the Lease Term, maintain in good condition and repair (a) the Outside Areas (including the parking lot surfaces, sidewalks, landscaping and all outdoor facilities, but excluding any of Tenant's property located therein), the foundation, roof structure (including the roof membrane), load-bearing and exterior walls of the Building, (b) the HVAC equipment and (c) mechanical and electrical systems and plumbing, pipes, and drains, to the extent the items described in clauses (b) and (c), serve both the Leased Premises and other portions of the Property. Landlord shall hire a licensed HVAC contractor to inspect and perform required maintenance on the HVAC equipment and systems serving the Leased Premises and/or the Building on a quarterly basis. Landlord shall also hire a licensed roofing contractor to regularly and periodically inspect and perform required maintenance on the roof of the Building on a semi-annual basis. Landlord shall keep the Outside Areas in a clean condition. Landlord shall regularly and periodically sweep and clean the driveways and parking areas within the Outside Areas. Unless necessitated by the negligence or willful misconduct of Tenant or any of the Tenant Parties, Landlord shall make any necessary (x) structural repairs or structural replacements to the Leased Premises and (y) repairs or replacements to (i) any fire alarm and communication system in the Leased Premises installed by Landlord, (ii) any sprinkler system installed by Landlord in the Leased Premises and (iii) the Outside Areas (exclusive of any of Tenant's property located therein); provided, if any of the foregoing are necessitated by the negligence or willful misconduct of Tenant or any of the Tenant Parties, Tenant shall reimburse to Landlord as Additional Rent, within thirty (30) days of receipt of the applicable invoices, the cost incurred by Landlord in connection therewith. Subject to the Warranty Period and Paragraph 13.12(c), the provisions of this subparagraph (b)(i) shall in no way limit the right of Landlord to charge to Tenant, as Additional Rent

pursuant to Article 3, the costs incurred by Landlord in performing such maintenance and/or inspections, and/or in making such repairs or replacements. All services provided, and all maintenance of the Building and the Outside Areas performed, by Landlord pursuant to the terms of this Lease shall be of a quality level consistent in all material respects with the standards from time to time applicable to the operation of similar buildings in the submarket where the Property is located.

(ii) If Landlord shall fail to commence any repair obligations required under Paragraphs 2.4 or 5.l(b)(i) above within thirty (30) days following Tenant's written request for such repairs and thereafter complete such repairs with commercially reasonable due diligence, except in the case of any emergency repairs (i.e., repairs required to avoid imminent, physical injury to any person or imminent, physical damage to any of Tenant's property) in which case Tenant shall provide notice as soon as reasonably practicable under the given circumstances and Tenant shall only be permitted to undertake the repair necessary to end the emergency, then Tenant may elect to make such repairs at Landlord's expense by complying with the following provisions of this Paragraph 5.l(b)(ii). Except in the case of emergency repairs, before making any repairs which are the obligation of Landlord under the terms of this Lease, and following the expiration of the applicable cure period set forth above with respect to non-emergency repairs, Tenant shall deliver to Landlord a notice for the need for such repair ("Self-Help Notice"), which notice shall specifically advise Landlord that Tenant intends to exercise its self-help right hereunder. Should Landlord fail, within three (3) business days following receipt of the Self-Help Notice, to commence the necessary repair, or to otherwise dispute in good faith the need for such repair or that such repair does not have to be taken by Landlord pursuant to the terms of this Lease, then Tenant shall have the right to make such repair on behalf of Landlord so long as such repair is performed in strict compliance with all Laws and Restrictions. In the event Tenant properly takes such action in accordance with this Paragraph 5.l(b)(ii), and such work will affect the Building structure and/or the Building systems (including any Base Building Systems), Tenant shall use a qualified contractor which normally and regularly performs similar work in comparable buildings in the area of the Property. Tenant shall provide Landlord with a reasonably detailed invoice together with reasonable supporting evidence of the costs actually incurred by Tenant in performing such repairs. To the extent such costs incurred by Tenant do not otherwise constitute Property Maintenance Costs, Landlord shall either reimburse Tenant for the reasonable costs of such repairs within thirty (30) days following receipt of Tenant's invoice for such costs or deliver a written objection stating with specificity the good-faith reasons Landlord disputes, the need for such repairs, or that such repair is not the obligation of Landlord pursuant to the terms of the Lease, or the costs so incurred are excessive. If Landlord fails to either pay Tenant's invoice within such thirty (30) day period or deliver a written objection, Tenant shall have the right to offset such costs against Base Monthly Rent next coming due under this Lease until fully paid, but not in excess of 50% of each monthly installment of Base Monthly Rent. If Landlord delivers to Tenant, within thirty (30) days, a written objection to the payment of such invoice, setting forth Landlord's reasons for its claim that such action did not have to be taken by Landlord pursuant to the terms of this Lease, or that in Landlord's reasonable and good-faith opinion the repairs were not necessary, or that the costs so incurred are excessive (in which case Landlord shall pay the amount it contends would not have been excessive if the only objection is to the costs incurred), then Tenant shall not be entitled to offset any amount from Base Monthly Rent, but as Tenant's sole and exclusive remedy, the dispute shall be resolved by arbitration pursuant to Paragraph 5.l(b)(iii) below. If Tenant prevails in the arbitration, the amount of the award shall include the amount of Tenant's expenditure, and interest at the Standard Interest Rate (from the time of each expenditure by Tenant until the date Tenant receives such amount by payment or offset) and Tenant's reasonable attorneys' fees and related costs, which shall be paid by Landlord to Tenant no later than ten (10) business days after the date of the award. Tenant shall be responsible for obtaining any required governmental permits before commencing the repair work, except in the case of emergency. Tenant shall be liable for any damage, loss or injury resulting from its performance of such work. If Landlord prevails in the arbitration, the amount of the award shall include Landlord's reasonable attorneys' fees and related costs and shall be deemed Additional Rent hereunder due and owing by Tenant no later than ten (10) business days after the date of the award.

(iii) Any dispute or claim under Paragraph 5.l(b)(ii) will be finally settled by binding arbitration in San Jose, California, in accordance with the rules of JAMS by one arbitrator appointed in accordance with said rules. The arbitrator shall apply California law, without reference to rules of conflicts of law or rules of statutory arbitration, to the resolution of any dispute. Judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. Notwithstanding the foregoing, the parties may apply to any court of competent jurisdiction for preliminary or interim equitable relief, or to compel arbitration in accordance with this paragraph, without breach of this arbitration provision.

5.2 Utilities. Tenant shall arrange at its sole cost and expense and in its own name, for the supply of gas, water, and electricity to the Leased Premises. Tenant shall be responsible for determining if the local supplier of water, gas and electricity can supply the needs of Tenant and whether or not the existing water, gas and electrical distribution systems within the Building and the Leased Premises are adequate for Tenant's needs. Tenant shall be responsible for determining if the existing sanitary and storm sewer systems now servicing the Leased Premises and the Property are adequate for Tenant's needs. Tenant shall pay all charges for water, gas, electricity and storm and sanitary sewer services as so supplied to the Leased Premises, irrespective of whether or not the services are maintained in Landlord's or Tenant's name, and any bills or invoices for such charges that are delivered to Landlord will be delivered to Tenant.

5.3 Security. Tenant acknowledges that Landlord has not undertaken any duty whatsoever to provide security for the Leased Premises, the Building, the Outside Areas or the Property and, accordingly, Landlord is not responsible for the security of same or the protection of Tenant's property or Tenant's employees, invitees, or contractors from any cause whatsoever, including but not limited to criminal and/or terrorist acts. To the extent Tenant determines that such security or protection services are advisable or necessary, subject to compliance with Paragraph 2.6 and Article 6, Tenant shall arrange for and pay the costs of providing same. In the event Landlord in its sole and absolute discretion agrees to provide any security services, whether it be guard or patrol service or access systems or otherwise, Landlord shall do so strictly as an accommodation to Tenant and Landlord shall have no obligation to continue to provide the same and no liability whatsoever in connection therewith, whether it be for failure to maintain the secure access system, or for failure of the guard or patrol service to provide adequate security, or otherwise. Without limitation, Paragraph 8.1 below is intended by Tenant and Landlord to apply to this Paragraph 5.3.

5.4 Energy And Resource Consumption.

(a) Energy Consumption Reduction Efforts. Landlord may voluntarily cooperate in a reasonable manner with the efforts of governmental agencies and/or utility suppliers in reducing energy or other resource consumption within the Property. Tenant shall not be entitled to terminate this Lease or to any reduction in or abatement of rent by reason of such cooperation. Tenant agrees to use commercially reasonable efforts to cooperate with Landlord and to abide by all reasonable rules established by Landlord (i) in order to maximize the efficient operation of the electrical and HVAC systems and all other energy or other resource consumption systems with the Property and/or (ii) in order to comply with the recommendations of utility suppliers and governmental agencies regulating the consumption of energy and/or other resources; provided that the same do not materially interfere with Tenant's business operations at the Property for the Permitted Use.

(b) Tenant Utility Usage Data Reporting. Within five (5) business days following Landlord's written request, Tenant shall, at no out-of-pocket cost to Tenant, provide its monthly electricity and natural gas/propane usage data for the Leased Premises to Landlord for the period of time requested by Landlord (in electronic or paper format) or, at Landlord's option, provide any written authorization or other documentation required for Landlord to request information regarding Tenant's electricity and natural gas/propane usage data with respect to the Leased Premises directly from the utility company.

5.5 Limitation Of Landlord's Liability. (i) Landlord shall not be liable to Tenant for injury to Tenant or any of the Tenant Parties, or damage to property of Tenant or any Tenant Parties, or loss of Tenant's or any Tenant Parties' business or profits, nor shall Tenant be entitled to terminate this Lease or to any reduction in or abatement of rent, by reason of (i) Landlord's failure to provide security services or systems within the Property for the protection of the Leased Premises, the Building, or the Outside Areas, or the protection of Tenant's property or any of the Tenant Parties, or (ii) Landlord's failure to perform any maintenance or repairs to the Leased Premises, the Building, the Outside Areas, or the Property until Tenant shall have first notified Landlord, in writing, of the need for such maintenance or repairs, and then only after Landlord shall have had a reasonable period of time following its receipt of such notice within which to perform such maintenance or repairs, or (iii) any failure, interruption, rationing or other curtailment in the supply of water, electric current, gas or other utility service to the Leased Premises, the Building, the Outside Areas, or the Property from whatever cause (other than Landlord's active gross negligence or willful misconduct), or (iv) the unauthorized intrusion or entry into the Leased Premises by third parties (other than Landlord or its agents).(ii) Notwithstanding the foregoing to the contrary, in the event that Tenant is prevented from using, and does not use, the Leased Premises or any portion thereof as a result of a Trigger Event (as defined below), then Tenant shall give Landlord written notice thereof and if such Trigger Event continues for five (5) consecutive business days after Landlord's receipt of such written notice from Tenant (such period herein called the "Eligibility Period"), then Tenant's Base Monthly Rent and Tenant's obligation to pay Property Operating Expenses shall be abated or reduced, as the case may be, beginning on the day immediately following the expiration of the Eligibility Period and continuing for such period of time that Tenant continues to be so prevented from using, and does not actually use, the Leased Premises or a portion thereof as a result of the subject Trigger Event, in the proportion that the rentable area of the portion of the Leased Premises that Tenant is prevented from using, and does not use, bears to the total rentable area of the Leased Premises. As used herein, the term "Trigger Event" means any of the following events: (1) any failure by Landlord to provide Tenant with access to the Leased Premises or the Property that materially impacts or interrupts Tenant's use of the Leased Premises, unless such failure is a result of any Laws or Restrictions, (2) Landlord's failure to perform Landlord's repair and maintenance obligations hereunder if such failure continues beyond any applicable notice and cure period and (3) a disruption of utilities to the Leased Premises, and such disruption is caused solely by the intentional acts, gross negligence or willful misconduct of Landlord or any of Landlord's employees, agents, contractors, or subcontractors (collectively "Landlord Parties"). This Paragraph 5.5(ii) shall not apply with respect to matters related to casualty or condemnation, which shall be governed by Article 10 and Article 11 below, respectively.

ARTICLE 6
ALTERATIONS AND IMPROVEMENTS

6.1 By Tenant. This Paragraph 6.1 does not relate to the Tenant Improvements installed in accordance with and pursuant to the Work Letter, but to other alterations, modifications, and improvements. Except for Permitted Alterations (hereinafter defined) Tenant shall not make any alterations to or modifications of the Leased Premises or the Outside Areas or construct any improvements within the Leased Premises or the Outside Areas until Landlord shall have first approved, in writing, the plans and specifications therefor, which approval shall not be unreasonably withheld, conditioned or delayed; provided such approval may be withheld in Landlord's sole discretion as to alterations, modifications, and improvements which affect the Building structure or materially affect Building systems (including the Base Building Systems). Tenant's written request shall also contain a request for Landlord to elect whether or not it will require Tenant to remove the subject alterations, modifications or improvements at the expiration or earlier termination of this Lease, and if such request is provided, Landlord shall notify Tenant at the time of its consent to the subject alterations, modifications or improvements whether or not it shall require Tenant to remove the same upon the expiration or earlier termination of this Lease. Provided that Tenant's written request for consent contains a request for Landlord to elect whether or not it will require Tenant to remove the subject alterations, modifications or improvements at the expiration or earlier termination of this Lease, then, if and only if, Landlord shall have notified Tenant in writing at the time Landlord provided consent to any modifications, alterations or improvements to be made by Tenant, Tenant shall, upon the expiration or earlier termination of this Lease, remove such modifications, alterations or improvements ("Required Removables") and repair all damage caused by such removal. For the avoidance of doubt, under no circumstance shall Tenant be required to remove or restore (or pay for any removal or restoration of) the Tenant Improvements or any Permitted Alterations; further, Tenant shall not have the right to remove the Tenant Improvements. All such modifications, alterations or improvements, once so approved, shall be made, constructed or installed by Tenant at Tenant's expense (including all permit fees and governmental charges related thereto), using a licensed contractor reasonably satisfactory to Landlord, in substantial compliance with the Landlord-approved plans and specifications therefor, if any. All work undertaken by Tenant shall be done in accordance with all Laws and Restrictions and in a good and workmanlike manner using new materials, unless otherwise reasonably approved by Landlord. Tenant shall not commence the making of any such modifications or alterations or the construction of any such improvements until (i) any and all required governmental approvals and permits shall have been obtained, (ii) all requirements regarding insurance imposed by this Lease have been satisfied, (iii) Tenant shall have given Landlord at least five

(5) business days prior written notice of its intention to commence such work so that Landlord may post and file notices of non-responsibility, and (iv) if requested by Landlord, Tenant shall have obtained contingent liability and broad form builder's risk insurance in an amount satisfactory to Landlord in its reasonable discretion to cover any perils relating to the proposed work not covered by insurance carried by Tenant pursuant to Article 9. As used in this Article, the term "modifications, alterations and/or improvements" shall include, without limitation, the installation of additional electrical outlets, overhead lighting fixtures, drains, sinks, partitions, doorways, or the like.

Notwithstanding the foregoing to the contrary, Tenant, without Landlord's prior written consent but upon prior written notice to Landlord, shall be permitted to make non-structural alterations within the Leased Premises if such modifications, alterations and/or improvements would not (a) have an adverse effect upon the structural integrity of the Building or the Building systems (including the Base Building Systems) and not be visible from outside the Leased Premises and (b) cost more than $500,000 in the aggregate in any consecutive twelve (12) month period, provided that in each case (x) Tenant provides Landlord the notices required under Paragraph 4.9(B); (y) Tenant shall notify Landlord in writing within thirty (30) days of completion of the modifications, alterations and/or improvements and deliver to Landlord a set of the plans and specifications therefor, either "as built" or marked to show construction changes made (if and as applicable); and (z) all such modifications, alterations and/or improvements are made in compliance with the provisions and restrictions set forth in this Paragraph 6.1 other than obtaining Landlord consent and any requirement for removal upon the expiration or sooner termination of this Lease (collectively, "Permitted Alterations"). Tenant shall have the right to install an electronic badge security system for the entry points to and within the Leased Premises without having to obtain Landlord's consent; provided Tenant gives Landlord electronic badges applicable to such entry security system for access to the Leased Premises.

6.2 Ownership Of Improvements. All modifications, alterations and improvements made or added to the Leased Premises by Tenant (other than Tenant's inventory, equipment, movable furniture, wall decorations and trade fixtures) shall be deemed real property and a part of the Leased Premises, but shall remain the property of Tenant during the Lease Term, and Tenant hereby covenants and agrees not to grant a security interest in any such items to any party other than Landlord without Landlord's prior written consent. Any such modifications, alterations or improvements, once completed, shall not be altered or removed from the Leased Premises during the Lease Term without Landlord's written approval first obtained in accordance with the provisions of Paragraph 6.1 above. At the expiration or sooner termination of this Lease, all such modifications, alterations and improvements other than Tenant's inventory, equipment, movable furniture, wall decorations and trade fixtures, shall automatically become the property of Landlord and shall be surrendered to Landlord as part of the Leased Premises as required pursuant to Article 2, unless Landlord shall require Tenant to remove any of such modifications, alterations or improvements in accordance with the provisions of Article 2, in which case Tenant shall so remove same. Landlord shall have no obligations to reimburse Tenant for all or any portion of the cost or value of any such modifications, alterations or improvements so surrendered to Landlord. All modifications, alterations or improvements which are installed or constructed on or attached to the Leased Premises by Landlord and/or at Landlord's expense shall be deemed real property and a part of the Leased Premises and shall be property of Landlord. All lighting, plumbing, electrical, and HYAC fixtures, partitioning, window coverings, wall coverings and floor coverings installed by Tenant shall be deemed improvements to the Leased Premises and not trade fixtures of Tenant. Notwithstanding the foregoing to the contrary, upon the expiration or earlier termination of this Lease, Landlord shall have the right to require Tenant to surrender any or all of the Landlord Portable Clean Rooms, and in such event, any such portable clean rooms shall automatically become the property of Landlord upon the expiration or earlier termination of this Lease. For purposes hereof "Landlord Portable Clean Rooms" shall mean any portable clean rooms which are installed by or on behalf of Tenant within the Leased Premises and paid for using the Tenant Improvement Allowance and/or any other funds provided by Landlord to Tenant under this Lease (if any). Any portable clean rooms installed by or on behalf of Tenant within the Leased Premises that were not paid for using the Tenant Improvement Allowance and/or any other funds provided by Landlord to Tenant under this Lease (if any) ("Tenant's Portable Clean Rooms") shall remain the property of Tenant, and at Tenant's election, Tenant may either remove such Tenant's Portable Clean Rooms or leave them on the Leased Premises upon the expiration or earlier termination of this Lease; provided that, if this Lease is terminated by Landlord in connection with a default by Tenant under this Lease (following the expiration of any applicable notice and cure periods), Landlord shall have the right to require Tenant to surrender any or all of Tenant's Portable Clean Rooms, and in such event, any such portable clean rooms shall automatically become the property of Landlord upon the termination of this Lease.

6.3 Alterations Required By Law. Tenant at its sole cost shall make all modifications, alterations and improvements to the Leased Premises, the Outside Areas or the Property that are required by any Law because of (i) Tenant's particular use or occupancy of the Leased Premises, the Outside Areas or the Property, (ii) Tenant's application for any permit or governmental approval, or (iii) Tenant's making of any modifications, alterations or improvements to or within the Leased Premises. If Landlord shall, at any time during the Lease Term, be required by any Law to make any modifications, alterations or improvements to the Building, the Outside Areas or the Property, the cost incurred by Landlord in making such modifications, alterations or improvements, including interest at a rate equal to the Standard Interest Rate, shall be amortized by Landlord over the useful life of such modifications, alterations or improvements, as determined in accordance with generally accepted accounting principles, and the monthly amortized cost of such modifications, alterations and improvements as so amortized shall be considered a Property Maintenance Cost, to the extent ineluctable as a Property Maintenance Cost as set forth in this Lease.

6.4 Liens. Tenant shall keep the Property and every part thereof free from any lien, and shall pay when due all bills arising out of any work performed, materials furnished, or obligations incurred by Tenant, its agents, employees or contractors relating to the Property. If any such claim of lien is recorded against Tenant's interest in this Lease, the Property or any part thereof, Tenant shall bond against, discharge or otherwise cause such lien to be entirely released within thirty (30) days after the sooner of Tenant's receipt of written notice of such lien, or Tenant obtaining actual knowledge of such lien. Tenant's failure to do so shall be conclusively deemed a material default under the terms of this Lease.

ARTICLE 7

ASSIGNMENT AND SUBLETTING BY TENANT

7.1 By Tenant. Except as set forth in this Article 7 to the contrary, Tenant shall not sublet the Leased Premises or any portion thereof or assign its interest in this Lease, sell, hypothecate, pledge, encumber or otherwise transfer its interest in this Lease, or permit the occupancy of the Leased Premises by any person or entity other than Tenant, whether voluntarily or by operation of Law, without Landlord's prior written consent which shall not be unreasonably withheld, conditioned or delayed. Except as set forth in this Article 7 to the contrary, any attempted subletting or assignment, sale, hypothecation, pledge, encumbrance or transfer, or occupancy of the Leased Premises by any person or entity other than Tenant, without Landlord's prior written consent, at Landlord's election, shall constitute a default by Tenant under the terms of this Lease. The acceptance of rent by Landlord from any person or entity other than Tenant, or the acceptance of rent by Landlord from Tenant with knowledge of a violation of the provisions of this paragraph, shall not be deemed to be a waiver by Landlord of any provision of this Article or this Lease or to be a consent to any subletting by Tenant or any assignment of Tenant's interest in this Lease. Without limiting the circumstances in which it may be reasonable for Landlord to withhold its consent to an assignment or subletting, Landlord and Tenant acknowledge that it shall be reasonable for Landlord to withhold its consent in the following instances:

(a) the proposed assignee or sublessee is a governmental agency;

(b) in Landlord's reasonable judgment, the use of the Leased Premises by the proposed assignee or sublessee would involve occupancy other than for a Permitted Use, would entail any alterations which would materially lessen the value of the leasehold improvements in the Leased Premises, or would require substantially increased services by Landlord;

(c) in Landlord's reasonable judgment, the credit-worthiness of the proposed assignee is less than that of Tenant or does not meet the minimum credit standards reasonably applied by Landlord across all of its properties in a nondiscriminatory manner;

(d) the proposed assignee or sublessee (or any of its affiliates) has been in material default under a lease, has been in litigation with a previous landlord, or in the ten (10) years prior to the assignment or sublease has filed for bankruptcy protection, has been the subject of an involuntary bankruptcy, or has been adjudged insolvent;

(e) Landlord (or any of its affiliates) has experienced a previous material default by or is in litigation with the proposed assignee or sublessee (or any of their affiliates);

(f) in Landlord's reasonable judgment, the Leased Premises, or the relevant part thereof, will be used in a manner that will violate any negative covenant as to use contained in this Lease;

(g) the use of the Leased Premises by the proposed assignee or sublessee will violate any Law or Restriction;

(h) the proposed assignee or sublessee is a current tenant at the Property;

(i) the proposed assignment or sublease fails to include all of the terms and provisions required to be included therein pursuant to this Article 7;

(j) Tenant is in default of any obligation of Tenant under this Lease, or Tenant has defaulted under this Lease on three or more occasions during the 12 months preceding the date that Tenant shall request consent; or

(k) in the case of a subletting of less than the entire Leased Premises, if the subletting would result in the division of the Leased Premises into more than two subparcels or would require improvements to be made outside of the Leased Premises in excess of $100,000.00.

7.2 Merger, Reorganization, or Sale of Assets.

(a) Subject to subparagraph (b) below: Any dissolution, merger, consolidation or other reorganization of Tenant, or the sale or other transfer in the aggregate over the Lease Term of a controlling percentage of the capital stock of or other equity interests in Tenant, or the sale or transfer of all or a substantial portion of the assets of Tenant, shall be deemed a voluntary assignment of Tenant's interest in this Lease. The phrase "controlling percentage" means the direct or indirect ownership of or right to vote (i) stock possessing more than fifty percent of the total combined voting power of all classes of Tenant's capital stock issued, outstanding and entitled to vote for the election of directors, or (ii) equity interests possessing the ability to direct the management of Tenant. If Tenant is a partnership, a withdrawal or change, voluntary, involuntary or by operation of Law, of any general partner, or the dissolution of the partnership, shall be deemed a voluntary assignment of Tenant's interest in this Lease. If Tenant's stock is not publicly-traded, following Landlord's request from time to time (but not more than once per calendar year, except in connection with a sale or financing of the Property or if Tenant is in default hereunder beyond applicable notice and cure periods), Tenant shall promptly provide Landlord with a statement certified by the Tenant's chief executive officer or chief financial officer, which shall provide the following information: (i) the names of all of Tenant's shareholders and their ownership interests at the time thereof, provided Tenant's shares are not publicly traded; (ii) the state in which Tenant is incorporated; (iii) the location of Tenant's principal place of business; (iv) information regarding a material change in the corporate structure of Tenant, including, without limitation, a merger or consolidation; and (v) any other information regarding Tenant's ownership that Landlord reasonably requests. If Tenant's stock is not publicly traded, in the event of an acquisition by one entity of the controlling percentage of the capital stock of Tenant where this Lease is not assigned to and assumed in full by such entity, it shall be a condition to Landlord's consent to such change in control that such entity acquiring the controlling percentage assume, as a primary obligor, all rights and obligations of Tenant under this Lease (and such entity shall execute all documents reasonably required to effectuate such assumption).

(b) Notwithstanding subparagraph (a) above, for so long as Tenant is a publicly- traded company on a nationally-recognized securities exchange, any transfer of Tenant's equity interests (or those of its Assignee Affiliates) whatsoever shall not be deemed a transfer or assignment under this Lease and, for the avoidance of doubt, shall not require Landlord's consent. In addition, provided that the conditions described below in this sentence have been satisfied prior to or upon such assignment or subleasing, Tenant may, without Landlord's prior written consent but upon prior written notice to Landlord, sublet the Leased Premises or assign this Lease to (the foregoing transactions referred to herein as "Permitted Transfers") (i) a subsidiary, affiliate, division, corporation or joint venture controlling, controlled by or under common control with Tenant, (ii) a successor entity resulting from a merger, consolidation, or reorganization by Tenant, or (iii) a purchaser of all or substantially all of Tenant's assets or stock, provided in all cases (i), (ii) and (iii) that (A) the successor entity, assignee or purchaser has a tangible net worth at least equal to the tangible net worth of Tenant immediately prior to the Effective Date of this Lease, and assumes in writing for the benefit of Landlord, this Lease and all of Tenant's obligations under this Lease, and (B) the surviving, succeeding, acquiring, merged, reorganized, or consolidated entity (hereafter, the "Assignee Affiliate") shall have unconditionally assumed in writing or guaranteed for the benefit of Landlord, in a form reasonably acceptable to Landlord, this Lease and all of Tenant's obligations under this Lease. If any assignment or subleasing occurs without such an assumption and/or without Landlord's consent as required in Paragraph 7.1 above, Tenant shall be deemed for all purposes to be in material default under this Lease and the Assignee Affiliate (and the successor entity, assignee, purchaser or subtenant) shall for all purposes be deemed to have unconditionally assumed in writing for the benefit of Landlord, this Lease and all of Tenant's obligations under this Lease. In all events, Tenant shall remain fully liable under this Lease. For purposes of clarity, Permitted Transfers shall not be subject to the other provisions of this Article 7, including having to obtain Landlord's consent, other than the applicable provisions of Paragraph 7.8.

7.3 Landlord's Election; Deemed Consent.

If Tenant shall desire to assign its interest under the Lease or to sublet the Leased Premises (other than pursuant to a Permitted Transfer), Tenant must first notify Landlord, in writing, of its intent to so assign or sublet, at least thirty (30) days in advance of taking any action with respect thereto. Once Tenant has identified a potential assignee or sublessee, Tenant shall notify Landlord, in writing, of its intent to so assign or sublet, at least thirty (30) days in advance of the date it intends to so assign its interest in this Lease or sublet the Leased Premises but not sooner than one hundred eighty (180) days in advance of such date, specifying in detail the terms of such proposed assignment or subletting, including the name of the proposed assignee or sublessee, the proposed assignee's or sublessee's intended use of the Leased Premises, current financial statements (including a balance sheet, income statement and statement of cash flow, all prepared in accordance with generally accepted accounting principles) of such proposed assignee or sublessee, the form of documents to be used in effectuating such assignment or subletting and such other information as Landlord may reasonably request. Landlord shall have a period of fifteen (15) days following receipt of such notice and the required information within which to do one of the following: (i) consent to such requested assignment or subletting subject to Tenant's compliance with the conditions set forth in Paragraph 7.4 below, or (ii) refuse to so consent to such requested assignment or subletting, provided that such consent shall not be unreasonably withheld, conditioned or delayed, or (iii) if the request from Tenant is for an assignment of this Lease or a sublease of all or substantially all of the Leased Premises for all of the remainder of the then current Lease Term, terminate this Lease, such termination to be effective on the date specified in Tenant's notice as the intended effective date of the assignment or subletting. During such fifteen (15) day period, Tenant covenants and agrees to supply to Landlord, upon request, all necessary or relevant information which Landlord may reasonably request respecting such proposed assignment or subletting and/or the proposed assignee or sublessee. In the event of an election by Landlord under clause (iii) above, Landlord shall have the right to enter into a direct lease with the proposed assignee or sublessee without payment of any consideration to Tenant.

If Landlord's consent is required with respect to an assignment or subletting as provided in this Article 7 and Landlord fails to respond to Tenant's request for consent within fifteen (15) days of Tenant's request and submission of the documents thereto as described above (together with any other information or documentation reasonably requested by Landlord in connection therewith), Tenant may send a second written request, which request shall contain, in bold, capital letters, the following: "SECOND NOTICE DELIVERED PURSUANT TO PARAGRAPH 7.3 OF LEASE-FAILURE TO TIMELY RESPOND WITHIN FIVE (5) BUSINESS DAYS SHALL RESULT IN DEEMED APPROVAL OF ASSIGNMENT OR SUBLEASE." If Landlord fails to respond to such second notice within five (5) business days of receipt, Tenant's request for the applicable assignment and/or subletting shall be deemed approved.

7.4 Conditions To Landlord's Consent. If Landlord elects to consent, or shall have been ordered to so consent by a court of competent jurisdiction, to such requested assignment or subletting, such consent shall be expressly conditioned upon the occurrence of each of the conditions below set forth, and any purported assignment or subletting made or ordered prior to the full and complete satisfaction of each of the following conditions shall be void and, at the election of Landlord, which election may be exercised at any time following such a purported assignment or subletting but prior to the satisfaction of each of the stated conditions, shall constitute a material default by Tenant under this Lease until cured by satisfying in full each such condition by the assignee or sublessee. The conditions are as follows:

(a) Landlord having approved in form and substance the assignment or sublease agreement and any ancillary documents, which approval shall not be unreasonably withheld, conditioned or delayed by Landlord if the requirements of this Article 7 are otherwise complied with.

(b) Each such sublessee or assignee having agreed, in writing reasonably satisfactory to Landlord and its counsel and for the benefit of Landlord, to assume, to be bound by, and to perform the obligations of this Lease to be performed by Tenant which relate to space being subleased.

(c) There shall not be a default by Tenant under this Lease (beyond applicable notice and cure periods) on the date of such assignment or subletting.

(d) Tenant having reimbursed to Landlord all reasonable costs and reasonable attorneys' fees (not to exceed $5,000.00) incurred by Landlord in conjunction with the processing and documentation of any such requested subletting or assignment. Tenant shall be obligated to so reimburse Landlord whether or not such subletting or assignment is completed.

(e) Tenant having delivered to Landlord a complete and fully-executed copy of such sublease agreement or assignment agreement (as applicable).

(f) Tenant having paid, or having agreed in writing to pay as to future payments, to Landlord fifty percent (50%) of all assignment consideration or excess rentals actually paid to Tenant or to any other on Tenant's behalf or for Tenant's benefit for such assignment or subletting as follows:

(i) If Tenant assigns its interest under this Lease and if all or a portion of the consideration for such assignment with respect to the transfer of this Lease is to be paid by the assignee at the time of the assignment, that Tenant shall have paid to Landlord and Landlord shall have received an amount equal to fifty percent (50%) of the assignment consideration (as defined below) so paid at the time of the assignment by the assignee; or

(ii) If Tenant assigns its interest under this Lease and if Tenant is to receive all or a portion of the consideration for such assignment in future installments, that Tenant and Tenant's assignee shall have entered into a commercially reasonable written agreement with and for the benefit of Landlord reasonably satisfactory to Landlord and its counsel whereby Tenant and Tenant's assignee jointly agree to pay to Landlord an amount equal to fifty percent (50%) of all such future assignment consideration installments actually paid by such assignee with respect to the transfer of this Lease as and when such assignment consideration is so paid; or

(iii) If Tenant subleases the Leased Premises, that Tenant and Tenant's sublessee shall have entered into a commercially reasonable written agreement with and for the benefit of Landlord reasonably satisfactory to Landlord and its counsel whereby Tenant and Tenant's sublessee jointly agree to pay to Landlord fifty percent (50%) of all excess rentals (as defined below) paid by such sublessee during the Lease Term.

7.5 Assignment Consideration And Excess Rentals Defined. For purposes of this Article, including any amendment to this Article by way of addendum or other writing: (i) the term "assignment consideration" shall mean all consideration paid by the assignee to Tenant or to any other party on Tenant's behalf or for Tenant's benefit as consideration for such assignment with respect to the transfer of this Lease, without deduction for any costs or expenses incurred by Tenant in connection with such assignment, except that Tenant may first deduct and recover third party, market rate leasing commissions, reasonable legal fees and reasonable tenant improvement costs paid in connection with the assignment and previously approved by Landlord in writing, and (ii) the term "excess rentals" shall mean all consideration to be paid by the sublessee to Tenant or to any other party on Tenant's behalf or for Tenant's benefit for the sublease of all or any part of the Leased Premises in excess of the Rent due to Landlord under the terms of this Lease for the portion subleased for the same period after deducting the costs of market rate leasing commissions, reasonable legal fees, any free base rent or other economic concessions reasonably provided to the sublessee and reasonable tenant improvement costs paid in connection with the sublease, in each case previously approved by Landlord in writing. Tenant agrees that the portion of any assignment consideration and/or excess rentals arising from any assignment or subletting by Tenant which is to be paid to Landlord pursuant to this Article now is and shall then be the property of Landlord and not the property of Tenant.

7.6 Payments. All payments required by this Article to be made to Landlord shall be made in cash in full as and when they become due. At the time Tenant, Tenant's assignee or sublessee makes each such payment to Landlord, Tenant or Tenant's assignee or sublessee, as the case may be, shall deliver to Landlord an itemized statement in reasonable detail showing the method by which the amount due Landlord was calculated and certified by the party making such payment as true and correct.

7.7 Good Faith. The rights granted to Tenant by this Article are granted in consideration of Tenant's express covenant, which Tenant hereby makes, that all pertinent allocations which are made by Tenant between the rental value of the Leased Premises and the value of any of Tenant's personal property which may be conveyed or leased (or services provided) generally concurrently with and which may reasonably be considered a part of the same transaction as the permitted assignment or subletting shall be made fairly, honestly and in good faith. If Tenant shall breach this covenant, Landlord may immediately declare Tenant to be in default under the terms of this Lease or exercise any other rights and remedies Landlord would have under the terms of this Lease in the case of a material default by Tenant under this Lease. Notwithstanding the foregoing, but subject to Paragraph 6.2, Tenant shall have the right to transfer any furniture, fixtures, equipment or other personal property of Tenant to a transferee for nominal consideration, or allow another to use such personal property at the Leased Premises during the Lease Tenn.

7.8 Effect Of Landlord's Consent. No subletting or assignment, even with the consent of Landlord, shall relieve Tenant of its personal and primary obligation to pay rent and to perform all of the other obligations to be performed by Tenant hereunder, and Tenant hereby agrees as follows in connection with any assignment of this Lease:

(a) The liability of Tenant under this Lease shall be primary, and in any right of action which shall accrue to Landlord under this Lease, Landlord may, at its option, proceed against Tenant without having commenced any action or obtained any judgment against an assignee. Tenant further agrees that it may be joined in any action against an assignee in connection with the said obligations of assignee and recovery may be had against Tenant in any such action. Tenant hereby expressly waives the benefits and defenses under California Civil Code Sections 2821, 2839, 2847, 2848, 2849 and 2855 to the fullest extent permitted by applicable law.

(b) If an assignee is in default of its obligations under this Lease (beyond all applicable notice and cure periods), Landlord may proceed against either Tenant or the assignee, or both, or Landlord may enforce against Tenant or the assignee any rights that Landlord has under this Lease, in equity or under applicable law. If this Lease terminates due to an assignee's default or bankruptcy or similar debtor protection law, Landlord may enforce this Lease against Tenant, even if Landlord would be unable to enforce it against the assignee. Tenant specifically agrees and understands that Landlord may proceed forthwith and immediately against an assignee or against Tenant following any default (beyond all applicable notice and cure periods) by an assignee. Tenant hereby waives all benefits and defenses under California Civil Code Sections 2845, 2848, 2849 and 2850, including without limitation: (i) the right to require Landlord to proceed against an assignee, proceed against or exhaust any security that Landlord holds from an assignee or pursue any other remedy in Landlord's power; (ii) any defense to its obligations hereunder based on the termination or limitation of an assignee's liability; and (iii) all notices of the existence, creation, or incurring of new or additional obligations. Landlord shall have the right to enforce this Lease regardless of the release or discharge of an assignee by Landlord or by operation of any law relating to protection of debtors, bankruptcy, assignments for the benefit of creditors, or insolvency.

(c) The obligations of Tenant under this Lease shall remain in full force and effect and Tenant shall not be discharged or limited by any of the following events with respect to an assignee or Tenant: (i) insolvency, bankruptcy, reorganization arrangement, adjustment, composition, assignment for the benefits of creditors, liquidation, winding up or dissolution (each a "Financial Proceeding"); or

(ii) any merger, acquisition, consolidation or change in entity structure, or any sale, lease, transfer, or other disposition of any entity's assets, or any sale or other transfer of interests in the entity, unless Tenant is not the surviving corporation following any transaction permitted under Paragraph 7.2(b)(ii) above (each an "Event of Reorganization"); or (iii) any sale, exchange, assignment, hypothecation or other transfer, in whole or in part, of Landlord's interest in the Leased Premises or the Lease. Without limiting the foregoing, unless prohibited by Laws, Tenant hereby expressly waives the benefits and defenses under any statute or judicial decision (including but not limited to the case styled In Re Arden, 176 F. 3d 1226 (9th Cir. 1999)) that would otherwise (i.e., were it not for such waiver) permit Tenant to claim or obtain the benefit of any so called "capped claim" available to an assignee in any Financial Proceeding. If all or any portion of the obligations guaranteed hereunder are paid or performed and all or any part of such payment or performance is avoided or recovered, directly or indirectly, from Landlord as a preference, fraudulent transfer or otherwise, then Tenant's obligations hereunder shall continue and remain in full force and effect as to any such avoided or recovered payment or performance.

(d) The provisions of this Lease may be changed by agreement between Landlord and an assignee without the consent of or notice to Tenant, provided that if the assignee is an Assignee Affiliate or person or entity for which Landlord's consent to the assignment of this Lease to such assignee was required (and such consent was so given by Landlord or deemed given by Landlord in accordance with Paragraph 7.3), the assignor will not be responsible for any new or increased obligations (monetary or otherwise) of the assignee under this Lease created or increased by Landlord and such assignee. For example, if Landlord and any such assignee amend this Lease to expand the Leased Premises, the assignor would remain liable for Rent applicable to the unexpanded portion of the Leased Premises, but the assignor would not be liable for Rent applicable to the expanded portion of the Leased Premises. This Lease may be assigned by Landlord or an assignee, and the Leased Premises, or a portion thereof, may be sublet by an assignee, all in accordance with the provisions of this Lease, without the consent of or notice to Tenant. Tenant shall remain primarily liable for the performance of the Lease so assigned, subject to the limitations set forth in the first sentence of this subparagraph (d).

Consent by Landlord to one or more assignments of Tenant's interest in this Lease or to one or more sublettings of the Leased Premises shall not be deemed to be a consent to any subsequent assignment or subletting. No subtenant shall have any right to assign its sublease or to further sublet any portion of the sublet premises or to permit any portion of the sublet premises to be used or occupied by any other party. No sublease for which Landlord's consent is required hereunder may be terminated or modified without Landlord's written consent. If Landlord shall have been ordered by a court of competent jurisdiction to consent to a requested assignment or subletting, or such an assignment or subletting shall have been ordered by a court of competent jurisdiction over the objection of Landlord, such assignment or subletting shall not be binding between the assignee (or sublessee) and Landlord until such time as all conditions set forth in Paragraph 7.4 above have been fully satisfied (to the extent not then satisfied) by the assignee or sublessee, including, without limitation, the payment to Landlord of all agreed assignment considerations and/or excess rentals then due Landlord. Upon a default while a sublease is in effect, Landlord may collect directly from the sublessee all sums becoming due to Tenant under the sublease and apply this amount against any sums due Landlord by Tenant, and Tenant authorizes and directs any sublessee to make payments directly to Landlord upon notice from Landlord. No direct collection by Landlord from any sublessee shall constitute a novation or release of Tenant or any guarantor, a consent to the sublease or a waiver of the covenant prohibiting subleases. Landlord, as Tenant's agent, may endorse any check, draft or other instrument payable to Tenant for sums due under a sublease, and apply the proceeds in accordance with this Lease; this agency is coupled with an interest and is irrevocable.

7.9 Permitted Occupants. Notwithstanding any contrary provision of this Article 7, Tenant shall have the right, without the receipt of Landlord's consent and without payment to Landlord of any amounts under Paragraph 7.5 above, but upon prior written notice to Landlord, to permit the use, sharing and/or separate occupancy of up to twenty five thousand (25,000) rentable square feet of space in the Leased Premises, in the aggregate, to any individual or entity (collectively, "Permitted Occupants") that

(a) has an ongoing business relationship with Tenant (other than the dual occupancy of the Leased Premises), (b) performs services for Tenant as subcontractors under Tenant's contracts, (c) is employed by persons or entities for whom Tenant is performing services on a contractual basis, or (d) is employed by persons or entities with whom Tenant is engaged in a joint venture or joint teaming effort, which use or occupancy shall include the use of a corresponding interior support area and other portions of the Leased Premises, on and subject to the following conditions: (i) each Permitted Occupant shall be of a character and reputation consistent with the quality of the Building and similar buildings in the submarket where the Property is located; (ii) such use, sharing and/or occupancy of the Leased Premises shall not be a subterfuge by Tenant to avoid its obligations under this Lease or the restrictions on assignments and subletting or allocation of assignment consideration and excess rentals pursuant to this Article 7; (iii) Tenant shall not permit such use by any Permitted Occupant for any use other than the Permitted Use or in a manner such that the density of use of any portion of the Leased Premises would materially and adversely increase the strain on the Building systems (including the Base Building Systems) beyond the manufacturer's recommended specifications therefor or would violate any Laws or Restrictions, including but not limited to fire codes; (iv) the Permitted Occupants shall obtain all permits and licenses required by Laws and Restrictions for occupying and use of the Leased Premises, if such permits and licenses are needed in addition to those held by Tenant; (v) the Permitted Occupants shall be subject to and subordinate to all of the terms and provisions of this Lease; and (vi) no such use, sharing and/or occupancy shall relieve Tenant from any liability or obligation of Tenant under this Lease. Tenant shall promptly supply Landlord with any documents or information reasonably requested by Landlord regarding the identity of any such Permitted Occupants. Any occupancy permitted under this Paragraph 7.9 shall not be deemed a transfer under this Article 7. Notwithstanding the foregoing, no such occupancy shall relieve Tenant from any liability under this Lease.

ARTICLE 8

LIMITATION ON LANDLORD'S LIABILITY AND INDEMNITY

8.1 Limitation On Landlord's Liability And Release. Landlord shall not be liable to Tenant for, and Tenant hereby releases and waives all claims and rights of recovery against Landlord and its partners, principals, members, managers, officers, agents, employees, lenders, attorneys, contractors, invitees, consultants, predecessors, successors and assigns (including without limitation prior and subsequent owners of the Property or portion thereof) (collectively, the "Landlord lndemnitees") from, any and all liability, whether in contract, tort or on any other basis, for any injury to or any damage sustained by Tenant or any of the Tenant Parties, any damage to property of Tenant or any of the Tenant Parties, or any loss to business, loss of profits or other financial loss of Tenant or any of the Tenant Parties resulting from or attributable to the condition of, the management of, the repair or maintenance of, the protection of, the supply of services or utilities to, the damage in or destruction of the Leased Premises, the Building, the Property, or the Outside Areas, including without limitation (i) the failure, interruption, rationing or other curtailment or cessation in the supply of electricity, water, gas or other utility service to the Property, the Building or the Leased Premises; (ii) the vandalism or forcible entry into the Building or the Leased Premises; (iii) the penetration of water into or onto any portion of the Leased Premises; (iv) the failure to provide security and/or adequate lighting in or about the Property, the Building or the Leased Premises, (v) the existence of any design or construction defects within the Property, the Building or the Leased Premises; (vi) the failure of any mechanical systems to function properly (such as the HVAC systems); (vii) the blockage of access to any portion of the Property, the Building or the Leased Premises, except that in each case Tenant does not so release Landlord from such liability to the extent such damage was proximately caused by Landlord's gross negligence, willful misconduct, or Landlord's failure to perform an obligation expressly undertaken by Landlord pursuant to this Lease after applicable notice and cure periods set forth in this Lease.

8.2 Tenant's Indemnification Of Landlord. Tenant shall defend with competent counsel reasonably satisfactory to Landlord any claims made or legal actions filed or threatened against the Landlord Indemnitees with respect to the violation of any Law, or the death, bodily injury, personal injury, property damage, or interference with contractual or property rights suffered by any third party occurring within the Leased Premises or resulting from the use or occupancy by Tenant or any of the Tenant Parties of the Leased Premises, the Building or the Outside Areas, or resulting from the activities of Tenant or any of the Tenant Parties in or about the Leased Premises, the Building, the Outside Areas or the Property, and Tenant shall indemnify and hold the Landlord Indemnitees harmless from any loss, liability, penalties, or expense whatsoever (including any loss attributable to vacant space which otherwise would have been leased, but for such activities) resulting therefrom, except to the extent proximately caused by the active gross negligence or willful misconduct of Landlord. This indemnity agreement shall survive the expiration or sooner termination of this Lease.

8.3 Landlord's Indemnification of Tenant. Landlord shall defend with competent counsel reasonably satisfactory to Tenant any claims made or legal actions filed or threatened against Tenant with respect to the violation of any Law, or the death, bodily injury, personal injury, property damage, or interference with contractual or property rights, to the extent proximately caused by the gross negligence or willful misconduct of Landlord, or Landlord's failure to perform an obligation expressly undertaken by Landlord pursuant to this Lease after applicable notice and cure periods set forth in this Lease, in each case except to the extent proximately caused by the negligence or willful misconduct of Tenant or any of the Tenant Parties. This indemnity agreement shall survive the expiration or sooner termination of this Lease.

ARTICLE 9
INSURANCE

9.1 Tenant's Insurance. Tenant shall maintain insurance complying with all of the following:

(a) Tenant shall procure, pay for and keep in full force and effect, at all times during the Lease Term, the following:

(i) Commercial general liability insurance insuring Tenant against liability for personal injury, bodily injury, death and damage to property occurring within the Leased Premises, or resulting from Tenant's use or occupancy of the Leased Premises, the Building, the Outside Areas or the Property, or resulting from Tenant's activities in or about the Leased Premises or the Property, with coverage in an amount equal to Tenant's Required Liability Coverage (as set forth in Article 1), which insurance shall contain tort liability assumed in an insured contract and "broad form property damage" language insuring Tenant's performance of Tenant's obligations to indemnify Landlord as contained in this Lease.

(ii) Fire and property damage insurance in "special form" coverage insuring Tenant against loss from physical damage to Tenant's personal property, inventory, trade fixtures and improvements (including the Tenant Improvements) within the Leased Premises with coverage for the full actual replacement cost thereof;

(iii) Business income/extra expense insurance at limits sufficient to pay Base Monthly Rent and Additional Rent for a period of not less than twelve (12) months;

(iv)  [Intentionally Omitted];

(v) [Intentionally Omitted];

(vi) Product liability insurance at the Leased Premises for not less than Tenant's Required Liability Coverage (as set forth in Article 1);

(vii) Workers' compensation insurance (statutory coverage) with employer's liability in amounts not less than $1,000,000 insurance sufficient to comply with all laws; and

(viii) With respect to making of any alterations or modifications or the construction of improvements or the like undertaken by Tenant, course of construction, commercial general liability, automobile liability and workers' compensation (to be carried by Tenant's contractor), in an amount and with coverage reasonably satisfactory to Landlord.

(b) Each policy of liability insurance required to be carried by Tenant pursuant to this paragraph with respect to the Leased Premises or the Property: (i) except in the case of Workers Compensation insurance, shall name Landlord, and such others as are designated by Landlord, as additional insureds; (ii) shall, with respect to insurance required by subparagraph (a)(ii) above, name Landlord, and such others as are designated by Landlord, as loss payees; (iii) shall be primary insurance providing that the insurer shall be liable for the full amount of the loss, up to and including the total amount of liability set forth in the declaration of coverage, without the right of contribution from or prior payment by any other insurance coverage of Landlord; (iv) shall be in a form satisfactory to Landlord; (v) shall be carried with companies reasonably acceptable to Landlord with Best's ratings of at least A- and VII; (vi) shall provide that such policy shall not be subject to cancellation, lapse or change except after at least thirty (30) days prior written notice to Landlord, and (vii) shall contain a "separation of insureds" clause. Each policy of property insurance maintained by Tenant with respect to the Leased Premises or the Property or any property therein (i) shall provide that such policy shall not be subject to cancellation, lapse or change except after at least thirty (30) days prior written notice to Landlord and (ii) shall contain a waiver and/or a permission to waive by the insurer of any right of subrogation against Landlord, its partners, principals, members, managers, officers, employees, agents and contractors, which might arise by reason of any payment under such policy or by reason of any act or omission of Landlord, its partners, principals, members, managers, officers, employees, agents and contractors.

(c) Prior to the time Tenant or any of its contractors enters the Leased Premises, Tenant shall deliver to Landlord, with respect to each policy of insurance required to be carried by Tenant pursuant to this Article, a certificate of the insurance certifying in form satisfactory to Landlord that a policy has been issued, providing the coverage required by this Paragraph and containing the provisions specified herein. With respect to each renewal or replacement of any such insurance, the requirements of this Paragraph must be complied with within seven (7) days prior to the expiration or cancellation of the policies being renewed or replaced. If Landlord's Lender or insurance broker reasonably determines at any time that the amount of coverage set forth in Paragraph 9.l(a) for any policy of insurance Tenant is required to carry pursuant to this Article is not adequate, then Tenant shall increase the amount of coverage for such insurance to such greater amount as Landlord's Lender or insurance broker reasonably deems adequate, provided such amounts are comparable to those required in similar buildings in the submarket where the Property is located. In the event Tenant does not maintain said insurance, Landlord may, in its sole discretion and without waiving any other remedies hereunder, procure said insurance and Tenant shall pay to Landlord as Additional Rent the cost of said insurance plus a five percent (5%) administrative fee.

9.2 Landlord's Insurance. With respect to insurance maintained by Landlord:

(a) Landlord shall maintain, as the minimum coverage required of it by this Lease, fire and property damage insurance in "special form" coverage insuring Landlord (and such others as Landlord may designate) against loss from physical damage to the Building with coverage of not less than one hundred percent (100%) of the full actual replacement cost thereof and against loss of rents for a period of not less than six months. Such fire and property damage insurance, at Landlord's election but without any requirements on Landlord's behalf to do so, (i) may be written in so-called "all risk" form, excluding only those perils commonly excluded from such coverage by Landlord's then property damage insurer; (ii) may provide coverage for physical damage to the improvements so insured for up to the entire full actual replacement cost thereof; (iii) may be endorsed to cover loss or damage caused by any additional perils against which Landlord may elect to insure, including earthquake and/or flood; and/or

(iv) may provide coverage for loss of rents for a period of up to twelve months. Landlord shall not be required to cause such insurance to cover any of Tenant's personal property, inventory, and trade fixtures, or any modifications, alterations or improvements made or constructed by Tenant to or within the Leased Premises. Landlord shall use commercially reasonable efforts to obtain such insurance at competitive rates.

(b) Landlord shall maintain commercial general liability insurance insuring Landlord (and such others as are designated by Landlord) against liability for personal injury, bodily injury, death, and damage to property occurring in, on or about, or resulting from the use or occupancy of the Property, or any portion thereof, with combined single limit coverage of at least Ten Million Dollars ($10,000,000). Landlord may carry such greater coverage as Landlord or Landlord's Lender, insurance broker, advisor or counsel may from time to time determine is reasonably necessary for the adequate protection of Landlord and the Property.

(d) Landlord may maintain any other insurance which in the opinion of its insurance broker, advisor or legal counsel is prudent to carry under the given circumstances, provided such insurance is commonly carried by owners of property similarly situated and operating under similar circumstances.

9.3 Mutual Waiver Of Subrogation. Landlord hereby releases Tenant, and Tenant hereby releases Landlord and its respective partners, principals, members, managers, officers, employees and servants, from any and all liability for loss, damage or injury to the property of the other in or about the Leased Premises or the Property which is caused by or results from a peril or event or happening which is covered by insurance actually carried and in force at the time of the loss by the party sustaining such loss; provided, however, that such waiver shall be effective only to the extent permitted by the insurance covering such loss and to the extent such insurance is not prejudiced thereby.

ARTICLE 10

DAMAGE TO LEASED PREMISES

10.1 Landlord's Duty To Restore. If the Leased Premises, the Building or the Outside Area are damaged by any peril after the Effective Date of this Lease, Landlord shall diligently restore the same, as and when required by this paragraph, unless this Lease is terminated by Landlord pursuant to Paragraph 10.3 or by Tenant pursuant to Paragraph 10.4. If this Lease is not so terminated, then upon the issuance of all necessary governmental permits, Landlord shall commence and diligently prosecute to completion the restoration of the Leased Premises, the Building or the Outside Area, as the case may be, to the extent then allowed by law, to substantially the same condition in which it existed as of the Lease Commencement Date. Landlord shall have no obligation to restore any alterations, modifications or improvements (including, without limitation, the Tenant Improvements) made by Tenant to the Leased Premises or Outside Areas or any of Tenant's personal property, inventory or trade fixtures. Upon completion of the restoration by Landlord, Tenant shall be responsible for the replacement or repair of all of Tenant's personal property, inventory, trade fixtures and other improvements constructed by Tenant within the Leased Premises and Outside Areas, to the extent then allowed by law, to substantially the same condition in which the same existed prior to the date of damage.

10.2 Insurance Proceeds. All insurance proceeds available from the fire and property damage insurance carried by Landlord shall be paid to and become the property of Landlord. If this Lease is terminated pursuant to either Paragraph 10.3 or 10.4, all insurance proceeds available from insurance carried by Tenant which cover loss of property that is Landlord's property (or becomes Landlord's property upon the expiration or termination of this Lease as expressly set forth in this Lease) shall be paid to and become the property of Landlord, and the remainder of such proceeds shall be paid to and become the property of Tenant. If this Lease is not terminated pursuant to either Paragraph 10.3 or 10.4, all insurance proceeds available from insurance carried by Tenant which cover loss to property that is Landlord's property shall be paid to and become the property of Landlord, and all proceeds available from such insurance which cover loss to property which would only become the property of Landlord upon the termination of this Lease shall be paid to and remain the property of Tenant. The determination of Landlord's property and Tenant's property shall be made pursuant to Paragraph 6.2.

10.3 Landlord's Right To Terminate. Landlord shall have the option to terminate this Lease in the event any of the following occurs, which option may be exercised only by delivery to Tenant of a written notice of election to terminate ("Landlord Termination Notice") within thirty (30) days after the date of such damage or destruction:

(a) The Building is damaged by any peril covered by valid and collectible insurance actually carried by Landlord and in force at the time of such damage or destruction (an "insured peril") to such an extent that the estimated cost to restore the Building exceeds the lesser of (i) the insurance proceeds available from insurance actually carried by Landlord, or (ii) fifty percent of the then actual replacement cost thereof. Notwithstanding the foregoing, Tenant shall have the right to nullify Landlord's election to terminate this Lease pursuant to clause (i), above, if Tenant notifies Landlord in writing within thirty (30) days of its receipt of the Landlord Termination Notice that it elects to pay the costs of restoration in excess of the insurance proceeds made available to Landlord (such excess, the "Tenant's Contribution"). If Tenant provides such notice in a timely manner, then, provided that Landlord and Tenant enter into an agreement concerning the payment of Tenant's Contribution reasonably acceptable to Landlord, Landlord's then current Lender and Tenant within thirty (30) days after Landlord's receipt of Tenant's notice, Landlord's election to so terminate this Lease shall be null and void.

(b) The Building is damaged by an uninsured peril, which peril Landlord was not required to insure against pursuant to the provisions of Article 9 of this Lease.

(c) The Building is damaged by any peril and, because of the Laws or Restrictions then in force, the Building (i) cannot be restored at reasonable cost or (ii) if restored, cannot be used for the same use being made thereof before such damage.

10.4 Tenant's Right To Terminate. If the Leased Premises, the Building or the Outside Area are damaged by any peril and Landlord does not elect to terminate this Lease or is not entitled to terminate this Lease pursuant to this Article, then as soon as reasonably practicable (and in no event later than thirty (30) days after such damage or destruction), Landlord shall furnish Tenant with the written opinion of Landlord's architect or construction consultant as to when the restoration work required of Landlord with respect to the Leased Premises may be complete. Tenant shall have the option to terminate this Lease (if Tenant is not then in default beyond applicable notice and cure periods) in the event any of the following occurs, which option may be exercised only by delivery to Landlord of a written notice of election to terminate within thirty (30) days after Tenant receives from Landlord the estimate of the time needed to complete such restoration, effective as of the date of the damage or destruction:

(a) If the time estimated to substantially complete the restoration required of Landlord exceeds two hundred seventy (270) days from and after the date the architect's or construction consultant's written opinion is delivered; or

(b) If the damage occurred within twelve months of the last day of the Lease Term and the time estimated to substantially complete the restoration required of Landlord exceeds ninety (90) days from and after the date such restoration is commenced.

In addition to the rights set forth above in this Paragraph 10.4, if neither party terminates the Lease pursuant to this Paragraph 10 and the restoration required of Landlord is not substantially completed within three hundred sixty-five (365) days of the date of such damage or destruction, then Tenant may terminate this Lease upon at least thirty (30) days' prior written notice to Landlord given not later than thirty (30) days after the expiration of said 365-day period, but prior to substantial completion of such restoration, which termination shall be effective upon the date set forth in Tenant's notice that is at least thirty (30) days after Landlord's receipt of such notice.

10.5 Tenant's Waiver. Landlord and Tenant agree that the provisions of Paragraph 10.4 above, captioned "Tenant's Right To Terminate", are intended to supersede and replace the provisions contained in California Civil Code, Section 1932, Subdivision 2, and California Civil Code, Section 1933, and accordingly, Tenant hereby waives the provisions of such Civil Code Sections and the provisions of any successor Civil Code Sections or similar laws hereinafter enacted.

10.6 Abatement Of Rent. In the event of damage to the Leased Premises which does not result in the termination of this Lease, then effective upon the date of such damage or destruction, the Base Monthly Rent (and any Additional Rent) shall be temporarily abated in proportion in the degree to which Tenant's use of the Leased Premises (during the restoration period) is impaired by such damage.

ARTICLE 11
CONDEMNATION

11.1 Tenant's Right To Terminate. Except as otherwise provided in Paragraph 11.4 below regarding temporary takings, Tenant shall have the option to terminate this Lease if, as a result of any taking, (i) all of the Leased Premises is taken, or (ii) twenty-five percent (25%) or more of the Leased Premises is taken and the part of the Leased Premises that remains cannot, within a reasonable period of time, be made reasonably suitable for the continued operation of Tenant's business, or (iii) permanent and material access to the Leased Premises is taken, or (iv) twenty-five percent (25%) or more of the parking spaces in the Outside Areas are taken. Tenant must exercise such option within thirty (30) days from and after the date the applicable portion of the Leased Premises is taken, to be effective on the date that possession of that portion of the Leased Premises that is condemned is taken by the condemnor.

11.2 Landlord's Right To Terminate. Except as otherwise provided in Paragraph 11.4 below regarding temporary takings, Landlord shall have the option to terminate this Lease if, as a result of any taking, (i) all of the Leased Premises is taken, (ii) twenty-five percent (25%) or more of the Leased Premises is taken and the part of the Leased Premises that remains cannot, within a reasonable period of time, be made reasonably suitable for the continued operation of Tenant's business, or (iii) because of the Laws or Restrictions then in force, the Leased Premises may not be used for the same use being made before such taking, whether or not restored as required by Paragraph 11.3 below. Any such option to terminate by Landlord must be exercised within thirty (30) days from and after the date the applicable portion of the Leased Premises is taken, to be effective as of the date possession is taken by the condemnor.

11.3 Restoration. If any part of the Leased Premises or the Building is taken and this Lease is not terminated, then Landlord shall, to the extent not prohibited by Laws or Restrictions then in force, repair any damage occasioned thereby to the remainder thereof to a condition reasonably suitable for Tenant's continued operations and otherwise, to the extent practicable, in the manner and to the extent provided in Paragraph 10.1.

11.4 Temporary Taking. If a material portion of the Leased Premises is temporarily taken for a period of one hundred eighty (180) days or less and such period does not extend beyond the Lease Expiration Date, this Lease shall remain in effect, and all rent shall be proportionately abated pursuant to Paragraph 11.6. If any material portion of the Leased Premises is temporarily taken for a period which exceeds one hundred eighty (180) days or which extends beyond the Lease Expiration Date, then the rights of Landlord and Tenant shall be determined in accordance with Paragraphs 11.1 and 11.2 above.

11.5 Division Of Condemnation Award. Any award made for any taking of the Property, the Building, or the Leased Premises, or any portion thereof, shall belong to and be paid to Landlord, and Tenant hereby assigns to Landlord all of its right, title and interest in any such award; provided, however, that Tenant shall be entitled to receive any portion of the award that is made specifically (i) for the taking of personal property, inventory or trade fixtures belonging to Tenant, (ii) for the interruption of Tenant's business or its moving costs, or (iii) for the value of any leasehold improvements installed and paid for by Tenant. In addition, Tenant shall have the right to file any separate claim available to Tenant for any of the costs described in clauses (i) through (iii) above, so long as such separate claim does not diminish Landlord's award. The rights of Landlord and Tenant regarding any condemnation shall be determined as provided in this Article, and each party hereby waives the provisions of Section 1265.130 of the California Code of Civil Procedure, and the provisions of any similar law hereinafter enacted, allowing either party to petition the Supreme Court to terminate this Lease and/or otherwise allocate condemnation awards between Landlord and Tenant in the event of a taking of the Leased Premises.

11.6 Abatement Of Rent. In the event of a taking of the Leased Premises which does not result in a termination of this Lease, then, as of the date possession is taken by the condemning authority, the Base Monthly Rent and Additional Rent shall be reduced in the same proportion that the area of that part of the Leased Premises so taken (less any addition to the area of the Leased Premises by reason of any reconstruction) bears to the area of the Leased Premises immediately prior to such taking.

11.7 Taking Defined. The term "taking" or "taken" as used in this Article 11 shall mean any transfer or conveyance of all or any portion of the Property to a public or quasi-public agency or other entity having the power of eminent domain pursuant to or as a result of the exercise of such power by such an agency, including any inverse condemnation and/or any sale or transfer by Landlord of all or any portion of the Property to such an agency under threat of condemnation or the exercise of such power.

ARTICLE 12
DEFAULT AND REMEDIES

12.1 Events Of Tenant's Default. Tenant shall be in default of its obligations under this Lease if any of the following events occur:

(a) Tenant shall have failed to pay Base Monthly Rent or any Additional Rent withing five (5) business days after receipt of written notice from Landlord that the same is overdue; or

(b) [Intentionally Omitted]; or

(c) Tenant shall have done or permitted to be done any act, use or thing in its use, occupancy or possession of the Leased Premises or the Building or the Outside Areas which is prohibited by the terms of this Lease or Tenant shall have failed to perform any term, covenant or condition of this Lease (except those requiring the payment of Base Monthly Rent or Additional Rent, which failures shall be governed by subparagraph (a) above) within the shorter of (i) any specific notice and time period expressly provided under this Lease for the performance of such term, covenant or condition, or (ii) thirty (30) days after written notice from Landlord to Tenant specifying the nature of such failure and requesting Tenant to perform same; provided that if the nature of such default is such that the same cannot reasonably be cured within a thirty (30) day period, no default shall be deemed to have occurred if Tenant diligently commences such cure within such 30-day period and thereafter diligently proceeds to rectify and cure such default; or

(d) Tenant shall have sublet the Leased Premises or assigned or encumbered its interest in this Lease in violation of the provisions contained in Article 7, whether voluntarily or by operation of law; or

(e) Tenant shall have abandoned the Leased Premises and failed to keep the same in a safe and secure condition, and to maintain the Leased Premises in accordance with this Lease; or

(f) Tenant shall have permitted or suffered the sequestration or attachment of, or execution on, or the appointment of a custodian or receiver with respect to, all or any substantial part of the property or assets of Tenant, and Tenant shall have failed to obtain a return or release of the same within sixty (60) days thereafter, or prior to sale pursuant to such sequestration, attachment or levy, whichever is earlier; or

(g) Tenant shall have made a general assignment of all or a substantial part of its assets for the benefit of its creditors; or

(h) Tenant shall have allowed (or sought) to have entered against it a decree or order which: (i) grants or constitutes an order for relief, appointment of a trustee, or condemnation or a reorganization plan under the bankruptcy laws of the United States; (ii) approves as properly filed a petition seeking liquidation or reorganization under said bankruptcy laws or any other debtor's relief law or similar statute of the United States or any state thereof; or (iii) otherwise directs the winding up or liquidation of Tenant; provided, however, if any decree or order was entered without Tenant's consent or over Tenant's objection, Landlord may not terminate this Lease pursuant to this Subparagraph if such decree or order is rescinded or reversed within thirty (30) days after its original entry;

(i) Tenant shall have voluntarily availed itself of the protection of any debtor's relief law, creditor moratorium law or other similar law for protection from creditors which does not require the prior entry of a decree or order; or

(j) A default of Tenant (beyond applicable notice and cure periods) occurs under the Parking Sublease.

12.2 Landlord's Remedies. In the event of any default by Tenant, and without limiting Landlord's right to indemnification as provided in Paragraph 8.2, Landlord shall have the following remedies, in addition to all other rights and remedies provided by law or otherwise provided in this Lease, to which Landlord may resort cumulatively, or in the alternative:

(a) Landlord may, at Landlord's election, keep this Lease in effect and enforce, by an action at law or in equity, all of its rights and remedies under this Lease including, without limitation,

(i) the right to recover the rent and other sums as they become due by appropriate legal action, (ii) the right to make payments required by Tenant, or perform Tenant's obligations and be reimbursed by Tenant for the cost thereof with interest at a rate equal to the Default Interest Rate from the date the sum is paid by Landlord until Landlord is reimbursed by Tenant, and (iii) the remedies of injunctive relief and specific performance to prevent Tenant from violating the terms of this Lease and/or to compel Tenant to perform its obligations under this Lease, as the case may be.

(b) Landlord may, at Landlord's election, terminate this Lease by giving Tenant written notice of termination, in which event this Lease shall terminate on the date set forth for termination in such notice, in which event Tenant shall immediately surrender the Leased Premises to Landlord, and if Tenant fails to do so, Landlord may, without prejudice to any other remedy which it may have for possession or arrearages in rent, enter upon and take possession of the Leased Premises and expel or remove Tenant and any other person who may be occupying the Leased Premises or any part thereof, without being liable for prosecution or any claim for damages therefor. Any termination under this subparagraph shall not relieve Tenant from its obligation to pay to Landlord all Base Monthly Rent and Additional Rent then or thereafter due, or any other sums due or thereafter accruing to Landlord, or from any claim against Tenant for damages previously accrued or then or thereafter accruing. In no event shall any one or more of the following actions by Landlord, in the absence of a written election by Landlord to terminate this Lease constitute a termination of this Lease:

(i) Appointment of a receiver or keeper in order to protect Landlord's interest hereunder;

(ii) Consent to any subletting of the Leased Premises or assignment of this Lease by Tenant, whether pursuant to the provisions hereof or otherwise; or

(iii) Any action taken by Landlord or its partners, principals, members, managers, officers, agents, employees, or servants, which is intended to mitigate the adverse effects of any breach of this Lease by Tenant, including, without limitation, any action taken to maintain and preserve the Leased Premises on any action taken to relet the Leased Premises or any portion thereof for the account at Tenant and in the name of Tenant.

(c) In the event Tenant breaches this Lease and abandons the Leased Premises, Landlord may terminate this Lease, but this Lease shall not terminate unless Landlord gives Tenant written notice of termination. If Landlord does not terminate this Lease by giving written notice of termination, Landlord may enforce all its rights and remedies under this Lease, including the right and remedies provided by California Civil Code Section 1951.4 ("lessor may continue lease in effect after lessee's breach and abandonment and recover rent as it becomes due, if lessee has right to sublet or assign, subject only to reasonable limitations"), as in effect on the Effective Date of this Lease.

(d) Landlord may, at Landlord's election, accelerate the payment of all Base Monthly Rent and Additional Rent due from Tenant under this Lease.

(e) In the event Landlord terminates this Lease, Landlord shall be entitled, at Landlord's election, to the rights and remedies provided in California Civil Code Section 1951.2, as in effect on the Effective Date of this Lease. For purposes of computing damages pursuant to Section 1951.2, an interest rate equal to the Default Interest Rate shall be used. Such damages shall include, without limitation:

(i) The worth at the time of the award of the unpaid rent which had been earned at the time of termination; plus

(ii) The worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss that Tenant proves could have been reasonably avoided; plus

(iii) The worth at the time of award of the amount by which the unpaid rent for the balance of the term after the time of award exceeds the amount of such rental loss that Tenant proves could be reasonably avoided, computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco, at the time of award plus one percent; plus

(iv) Any other amount necessary to compensate Landlord for all detriment proximately caused by Tenant's failure to perform Tenant's obligations under this Lease, or which in the ordinary course of things would be likely to result therefrom, including without limitation, the following: (i) expenses for cleaning, repairing or restoring the Leased Premises, (ii) expenses for altering, remodeling or otherwise improving the Leased Premises for the purpose of reletting, including removal of existing leasehold improvements and/or installation of additional leasehold improvements (regardless of how the same is funded, including reduction of rent, a direct payment or allowance to a new tenant, or otherwise), (iii) broker's fees allocable to the remainder of the term of this Lease, advertising costs and other expenses of reletting the Leased Premises; (iv) costs of carrying and maintaining the Leased Premises, such as taxes, insurance premiums, utility charges and security precautions (although the foregoing shall not in any way modify Paragraph 5.3 above), (v) expenses incurred in removing, disposing of and/or storing any of Tenant's personal property, inventory or trade fixtures remaining therein; (vi) reasonable attorney's fees, expert witness fees, court costs and other reasonable expenses incurred by Landlord (but not limited to taxable costs) in retaking possession of the Leased Premises, establishing damages hereunder, and releasing the Leased Premises; and (vii) any other expenses, costs or damages otherwise incurred or suffered as a result of Tenant's default; plus

(v) The unamortized amount of any tenant improvement or similar allowance paid or credited by Landlord to Tenant pursuant to this Lease or the Work Letter; plus

(f) Pursuant to California Code of Civil Procedure Section 1161.1, Landlord may accept a partial payment of Rent after serving a notice pursuant to California Code of Civil Procedure Section 1161, and may without further notice to the Tenant, commence and pursue an action to recover the difference between the amount demanded in that notice and the payment actually received. This acceptance of such a partial payment of Rent does not constitute a waiver of any rights, including any right the Landlord may have to recover possession of the Leased Premises. Further, Tenant agrees that any notice given by Landlord pursuant to Paragraph 12.1 of this Lease shall satisfy the requirements for notice under California Code of Civil Procedure Section 1161, and Landlord shall not be required to give any additional notice in order to be entitled to commence an unlawful detainer proceeding.

(g) Landlord may, but shall not be obligated so to do, and without waiving or releasing Tenant from any obligations of Tenant hereunder, make any payment or perform such other act on Tenant's part to be made or performed as provided in this Lease. All sums so paid by Landlord and all necessary incidental costs shall be payable to Landlord as Additional Rent on demand and Tenant covenants to pay such sums.

12.3 Landlord's Default And Tenant's Remedies. In the event Landlord fails to perform its obligations under this Lease or the Parking Sublease, Landlord shall nevertheless not be in default under the terms of this Lease (or the Parking Sublease, as applicable) until such time as Tenant shall have first given Landlord written notice specifying the nature of such failure to perform its obligations, and then only after Landlord shall have had thirty (30) days following its receipt of such notice within which to perform such obligations; provided that, if longer than thirty (30) days is reasonably required in order to perform such obligations, Landlord shall have such longer period; provided that Landlord diligently commences such cure within such 30-day period and thereafter diligently proceeds to rectify and cure such default. In the event of Landlord's default as above set forth, then, and only then, Tenant may then proceed in equity or at law to compel Landlord to perform its obligations and/or to recover damages proximately caused by such failure to perform (except as and to the extent Tenant has waived its right to damages as provided in this Lease).

12.4 Limitation Of Tenant's Recourse. Tenant's sole recourse against Landlord shall be to Landlord's interest in the Building. If Landlord is a corporation, trust, partnership, joint venture, limited liability company, unincorporated association, or other form of business entity, Tenant agrees that (i) the obligations of Landlord under this Lease shall not constitute personal obligations of the officers, directors, trustees, partners, joint venturers, members, managers, owners, stockholders, or other principals of such business entity, and (ii) Tenant shall have recourse only to the interest of such corporation, trust, partnership, joint venture, limited liability company, unincorporated association, or other form of business entity in the Building and the Outside Areas for the satisfaction of such obligations and not against the assets of such officers, directors, trustees, partners, joint venturers, members, managers, owners, stockholders or principals. Tenant shall not be permitted to recover from Landlord, special, punitive, speculative, lost profits or similar consequential damages as a result of any violation by Landlord of its obligations under this Lease. Additionally, if Landlord is a partnership or limited liability company, then Tenant covenants and agrees:

(a) No partner, manager, or member of Landlord shall be sued or named as a party in any suit or action brought by Tenant with respect to any alleged breach of this Lease (except to the extent necessary to secure jurisdiction over the partnership or limited liability company and then only for that sole purpose);

(b) No service of process shall be made against any partner, manager, or member of Landlord except for the sole purpose of securing jurisdiction over the partnership or limited liability company; and

(c) No writ of execution will ever be levied against the assets of any partner, manager, or member of Landlord other than to the extent of his or her interest in the assets of the partnership or limited liability company constituting Landlord.

Tenant further agrees that each of the foregoing covenants and agreements shall be enforceable by Landlord and by any partner or manager or member of Landlord and shall be applicable to any actual or alleged misrepresentation or nondisclosure made regarding this Lease or the Leased Premises or any actual or alleged failure, default or breach of any covenant or agreement either expressly or implicitly contained in this Lease or imposed by statute or at common law.

12.5 Tenant's Waiver. Except as expressly provided in Paragraph 5.l(b)(ii), Landlord and Tenant agree that the provisions of Paragraph 12.3 above are intended to supersede and replace the provisions of California Civil Code Sections 1932(1), 1941 and 1942, and accordingly, Tenant hereby waives the provisions of California Civil Code Sections 1932(1), 1941 and 1942 and/or any similar or successor law regarding Tenant's right to terminate this Lease or to make repairs and deduct the expenses of such repairs from the rent due under this Lease.

ARTICLE 13
GENERAL PROVISIONS

13.1 Taxes On Tenant's Property. Tenant shall pay before delinquency any and all taxes, assessments, license fees, use fees, permit fees and public charges of whatever nature or description levied, assessed or imposed against Tenant or Landlord by a governmental agency arising out of, caused by reason of or based upon Tenant's estate in this Lease, Tenant's ownership of property, improvements made by Tenant to the Leased Premises or the Outside Areas, improvements made by Landlord for Tenant's use within the Leased Premises or the Outside Areas, Tenant's use (or estimated use) of public facilities or services or Tenant's consumption (or estimated consumption) of public utilities, energy, water or other resources (collectively, "Tenant's Interest"). Upon demand by Landlord, Tenant shall furnish Landlord with satisfactory evidence of these payments. If any such taxes, assessments, fees or public charges are levied against Landlord, Landlord's property, the Building or the Property, or if the assessed value of the Building or the Property is increased by the inclusion therein of a value placed upon Tenant's Interest, regardless of the validity thereof, Landlord shall have the right to require Tenant to pay such taxes, and if not paid and satisfactory evidence of payment delivered to Landlord at least ten (10) days prior to delinquency, then Landlord shall have the right to pay such taxes on Tenant's behalf and to invoice Tenant for the same, in either case whether before or after the expiration or earlier termination of the Lease Term. Tenant shall, within the earlier to occur of (a) thirty (30) days of the date it receives an invoice from Landlord setting forth the amount of such taxes, assessments, fees, or public charge so levied, or (b) the due date of such invoice, pay to Landlord, as Additional Rent, the amount set forth in such invoice. Failure by Tenant to pay the amount so invoiced within such time period shall be conclusively deemed a default by Tenant under this Lease. Tenant shall have the right to bring suit in any court of competent jurisdiction to recover from the taxing authority the amount of any such taxes, assessments, fees or public charges so paid.

13.2 Holding Over. This Lease shall terminate without further notice on the Lease Expiration Date (as set forth in Article 1). Any holding over by Tenant after expiration of the Lease Term shall neither constitute a renewal nor extension of this Lease nor give Tenant any rights in or to the Leased Premises except as expressly provided in this Paragraph. Any such holding over to which Landlord has consented in writing (which consent Landlord may grant or withhold in its sole discretion) shall be construed to be a tenancy from month to month, on the same terms and conditions herein specified insofar as applicable, except that the Base Monthly Rent shall be increased to an amount equal to one hundred three percent (103%) of the Base Monthly Rent payable during the last full month of the Lease Term and there shall be no proration for any partial calendar month of the holdover period. Without limiting the foregoing, in the event of a holding over to which Landlord has consented, any rights of Landlord or obligations of Tenant set forth in this Lease and purporting to apply during the Lease Term, shall nonetheless also be deemed to apply during any such hold over period. Tenant acknowledges that if Tenant holds over without Landlord's consent, such holding over shall be construed to be a tenancy at sufferance, on the same terms and conditions herein specified insofar as applicable, except that the Base Monthly Rent shall be increased to an amount equal to one hundred fifty percent (150%) of the Base Monthly Rent payable during the last full month immediately preceding such holding over and there shall be no proration for any partial calendar month of the holdover period. Therefore, if Tenant fails to surrender the Leased Premises upon the expiration or termination of this Lease (or on or before the expiration of any holdover period to which Landlord has consented in writing) and Landlord has notified Tenant in writing that Landlord has entered into a lease agreement with a successor tenant for the Leased Premises or any portion thereof or is in active negotiations with a replacement tenant for the Leased Premises or any portion thereof (i.e., Landlord having exchanged a letter of intent, term sheet or outline of proposed terms), in addition to any other liabilities to Landlord accruing therefrom, Tenant shall protect, defend, indemnify and hold Landlord harmless from and against all claims resulting from such failure, including, without limiting the foregoing, any claims made by such succeeding tenant founded upon such failure to surrender, and any losses suffered by Landlord, including lost profits (in excess of holdover rent paid by Tenant), resulting from such failure to surrender.

13.3 Subordination To Mortgages. This Lease is subject to and subordinate to all ground leases, mortgages and deeds of trust (each, a "Mortgage") which affect the Building or the Property and which are of public record as of the Effective Date of this Lease, and to all renewals, modifications, consolidations, replacements and extensions thereof. Notwithstanding the foregoing, if requested by Landlord, Tenant agrees, within ten (10) business days after Landlord's written request therefor, to execute, acknowledge and deliver to Landlord any and all commercially reasonable documents or instruments reasonably requested by Landlord or by the existing lessor or lender under any Mortgage (each, a "Mortgagee") to assure the subordination of this Lease to such Mortgage, including but not limited to a subordination agreement in the form attached to this Lease as Exhibit D or such other form as any such Mortgagee may reasonably require. However, if a Mortgagee shall advise Landlord that it desires or requires this Lease to be made prior and superior to its Mortgage, then, promptly following written request of Landlord to Tenant, Tenant shall promptly execute, acknowledge and deliver any and all customary or reasonable documents or instruments which Landlord and such Mortgagee deems reasonably necessary or desirable to make this Lease prior thereto. Tenant hereby consents to Landlord's ground leasing the land underlying the Building or the Property and/or encumbering the Building or the Property as security for future loans on such terms as Landlord shall desire, all of which future ground leases, mortgages or deeds of trust shall be subject to and subordinate to this Lease. However, if any such future Mortgagee shall require that this Lease be made subject to and subordinate to such future Mortgage, then Tenant agrees, within ten (10) business days after Landlord's written request therefor, to execute, acknowledge and deliver to Landlord any and all commercially reasonable documents or instruments reasonably requested by Landlord or by such Mortgagee to assure the subordination of this Lease to such future Mortgage, but only if such Mortgagee concurrently enters into an agreement not to disturb Tenant's quiet possession of the Leased Premises so long as Tenant is not in default under this Lease beyond applicable notice and cure periods (a "Nondisturbance Agreement"). If the proposed form of Nondisturbance Agreement is on a different form than the form attached hereto as Exhibit D, then Tenant shall not object to any concept included in such other form if a similar concept was included in Exhibit D. If Tenant shall fail to execute and deliver a Nondisturbance Agreement within ten (10) business days after Landlord's request therefor, Landlord shall have the right to provide Tenant with a second written request which request shall contain, in bold, capital letters, the following: "THIS NOTICE CONSTITUTES LANDLORD'S SECOND NOTICE OF ITS DEMAND FOR TENANT TO DELIVER A NONDISTURBANCE AGREEMENT PURSUANT TO PARAGRAPH 13.3 OF THE LEASE; TENANT'S FAILURE TO RESPOND TO THIS NOTICE WITH AN EXECUTED NONDISTURBANCE AGREEMENT INSUBSTANTIALLY THE FORM PROVIDED IN THE LEASE WITHIN FIVE (5) BUSINESS DAYS SHALL RESULT IN AN EVENT OF DEFAULT UNDER THE LEASE." If Tenant fails to respond to such second notice with an executed Nondisturbance Agreement in substantially the form provided in Exhibit D attached hereto within five (5) business days of receipt, such failure shall be a default by Tenant under this Lease, no further notice shall be required under Paragraph 12.l(c) or any other provision of this Lease, and Landlord shall have all of the rights and remedies available to Landlord as Landlord would otherwise have in the case of any other default by Tenant. If Landlord assigns this Lease as security for a loan, Tenant agrees to execute such commercially reasonable documents as are reasonably requested by the lender and to provide reasonable provisions in this Lease protecting such Mortgagee's security interest which are customarily required by institutional lenders making loans secured by a deed of trust, which may include but shall not be limited to those provisions contained in Exhibit D attached hereto. Notwithstanding anything to the contrary contained herein, the effectiveness of this Lease is conditioned upon Tenant's receipt of a Nondisturbance Agreement from any Mortgagee existing as of the Effective Date of this Lease. Landlord agrees to use commercially reasonable efforts to obtain a Nondisturbance Agreement from any future Mortgagee of Landlord with respect to any Mortgage which affects the Property. Notwithstanding the foregoing, this Lease and Tenant's obligations hereunder shall not be affected or impaired in any respect should any such future Mortgagee decline to enter into such Nondisturbance Agreement, except that this Lease shall not be subject and subordinate to the applicable Mortgage as provided in this Paragraph 13.3 unless and until a Nondisturbance Agreement with such Mortgagee is entered into. For the avoidance of doubt, Tenant's obligation to subordinate its interest in this Lease to any future Mortgage shall be conditioned upon Tenant's receipt from any future Mortgagee of a Non-Disturbance Agreement in such future Mortgagee's standard and recordable form reasonably acceptable to Tenant.

13.4 Tenant's Attornment Upon Foreclosure. Tenant shall, upon request, attorn (i) to any purchaser of the Building or the Property at any foreclosure sale or private sale conducted pursuant to any security instruments encumbering the Building or the Property, (ii) to any grantee or transferee designated in any deed given in lieu of foreclosure of any security interest encumbering the Building or the Property, or (iii) to the lessor under an underlying ground lease of the land underlying the Building or the Property, should such ground lease be terminated; provided that such purchaser, grantee or lessor recognizes in writing Tenant's rights under this Lease and agrees to assume all of the Landlord's obligations under this Lease, subject to the terms of any applicable Nondisturbance Agreement.

13.5 Mortgagee Protection. In the event of any default of this Lease on the part of Landlord, Tenant will give notice by registered mail to any Lender or lessor under any underlying ground lease who shall have previously requested, in writing, to Tenant that it be provided with such notice, and Tenant shall offer such Lender or lessor a reasonable opportunity to cure the default, including time to obtain possession of the Leased Premises by power of sale or judicial foreclosure or other appropriate legal proceedings if reasonably necessary to effect a cure, subject to the terms of any applicable Nondisturbance Agreement.

13.6 Estoppel Certificate. Tenant will, following any request by Landlord, promptly execute and deliver (or provide factual corrections) to Landlord an estoppel certificate substantially in the fonn attached hereto as Exhibit E, (i) certifying that this Lease is unmodified and in full force and effect, or, if modified, stating the nature of such modification and certifying that this Lease, as so modified, is in full force and effect, (ii) stating the date to which the rent and other charges are paid in advance, if any, (iii) acknowledging that there are not, to Tenant's knowledge, any uncured defaults on the part of Landlord hereunder, or specifying such defaults if any are claimed, and (iv) certifying such other information about this Lease as may be reasonably requested by Landlord, its Lender or prospective lenders, investors or purchasers of the Building or the Property. If Tenant shall fail to execute and deliver such estoppel certificate within ten (10) business days after Landlord's request therefor, Landlord shall have the right to provide Tenant with a second written request which request shall contain, in bold, capital letters, the following: "THIS NOTICE CONSTITUTES LANDLORD'S SECOND NOTICE OF ITS DEMAND FOR TENANT'S ESTOPPEL CERTIFICATE PURSUANT TO PARAGRAPH 13.6 OF THE LEASE; TENANT'S FAILURE TO RESPOND TO THIS NOTICE WITH AN EXECUTED ESTOPPEL CERTIFICATE IN SUBSTANTIALLY THE FORM PROVIDED IN THE LEASE WITHIN FIVE (5) BUSINESS DAYS SHALL RESULT IN AN EVENT OF DEFAULT UNDER THE LEASE." If Tenant fails to respond to such second notice with an executed estoppel certificate in substantially the form provided in Exhibit E attached hereto within five (5) business days of receipt, such failure shall be a default by Tenant under this Lease, no further notice shall be required under Paragraph 12. l(c) or any other provision of this Lease, and Landlord shall have all of the rights and remedies available to Landlord as Landlord would otherwise have in the case of any other default by Tenant. Landlord and Tenant intend that any statement delivered pursuant to this paragraph may be relied upon by any Lender or purchaser or prospective Lender or purchaser of the Building, the Property, or any interest in them.

13.7 Tenant's Financial Information. Not more than one (1) time in any calendar year, except if Tenant is in default under this Lease or in connection with a sale or financing of the Property, Tenant shall, within ten (10) business days after Landlord's written request therefor, deliver to Landlord a copy of Tenant's current audited financial statements (including a balance sheet, income statement and statement of cash flow, all prepared in accordance with generally accepted accounting principles), and any such other information reasonably requested by Landlord regarding Tenant's financial condition; provided, however, that as long as the common stock of Tenant (or its assigns permitted pursuant to this Lease or otherwise approved by Landlord in writing) is publicly-traded on any national stock exchange, and such information is publicly available as part of Tenant's filings with such exchange, and such materials are current per applicable regulatory filing requirements, then such requirement shall be fulfilled by such filings. Landlord shall be entitled to disclose such financial statements or other information to its Lender, to any present or prospective principal of or investor in Landlord, or to any prospective Lender or purchaser of the Building or the Property, or any portion thereof or interest therein. Any such financial statement or other information which is marked "confidential" or "company secrets" (or is otherwise similarly marked by Tenant) shall be confidential and shall not be disclosed by Landlord to any third party except as specifically provided in this paragraph, unless the same becomes a part of the public domain without the fault of Landlord.

13.8 Transfer By Landlord. Landlord and its successors in interest shall have the right to transfer their interest in the Building or the Property or any portion thereof at any time and to any person or entity; provided, however, that if Landlord sells the Building at any time while Landlord remains obligated to disburse all or any portion of the Tenant Improvement Allowance, such transferee shall expressly agree in writing to assume Landlord's then outstanding obligations at the time of such sale with respect to the Tenant Improvement Allowance in accordance with the terms and conditions of this Lease. Except as set forth in the immediately preceding sentence, in the event of any such transfer, the Landlord originally named herein (and in the case of any subsequent transfer, the transferor), from the date of such transfer, shall be automatically relieved, without any further act by any person or entity, of all liability for (i) the performance of the obligations of the Landlord hereunder which may accrue after the date of such transfer, and (ii) repayment of any unapplied portion of the Security Deposit (upon transferring or crediting the same to the transferee), and (iii) the performance of the obligations of the Landlord hereunder which have accrued before the date of transfer if its transferee agrees to assume and perform all such prior obligations of the Landlord hereunder. Tenant shall attorn to any such transferee. After the date of any such transfer, the term "Landlord" as used herein shall mean the transferee of such interest in the Building or the Property.

13.9 Force Majeure. Any prevention, delay or stoppage due to strikes, lockouts, labor disputes, acts of God, acts of war, terrorist acts, inability to obtain services, labor, or materials or reasonable substitutes therefor, governmental actions, civil commotions, fire or other casualty, delay in obtaining approvals, building permits and certificates of occupancy within normal time frames and other causes beyond the reasonable control of the party obligated to perform, except with respect to the obligations imposed with regard to Rent and other charges to be paid by Tenant pursuant to this Lease (collectively, a "Force Majeure"), notwithstanding anything to the contrary contained in this Lease, shall excuse the performance of such party for a period equal to any such prevention, delay or stoppage and, therefore, if this Lease specifies a time period for performance of an obligation of either party, that time period shall be extended by the period of any delay in such party's performance caused by a Force Majeure.

13.10 Notices. Any notice required or permitted to be given under this Lease other than statutory notices shall be in writing and (i) personally delivered, (ii) sent by United States mail, registered or certified mail, postage prepaid, return receipt requested, (iii) sent by Federal Express or similar nationally recognized overnight courier service, or (iv) transmitted by email with a hard copy sent within one (1) business day by any of the foregoing means, and in all cases addressed as follows, and such notice shall be deemed to have been given upon the date of actual receipt or delivery (or refusal to accept delivery) at the address specified below (or such other addresses as may be specified by notice in the foregoing manner) as indicated on the return receipt or air bill:

If to Landlord:	Drawbridge 4600 Patrick Henry, LLC Three Embarcadero Center
	Suite 2310
	San Francisco, California 94111 Attention: Michael Embree
	Email: membree@drawbridgerealty.com

	with a copy to:

	Mintz Levin Cohn Ferris Glovsky and Popeo PC 2049 Century Park East
	Suite 300
	Los Angeles, California 90067
	Attention: Brandon Barker
	Email: bebarker@mintz.com

If to Tenant:	If prior to the Lease Commencement Date:

	EBR Systems, Inc.

	480 Oakmead Pkwy
	Sunnyvale, CA 94085
	Attention: Gary Doherty
	Email: Gary.doherty@ebrsystemsinc.com

	with a copy to:

	Cooley LLP
	11951 Freedom Dr., Suite 1400
	Reston, VA 20190
	Attention: Peter Crain, Esq.
	Email: pcrain@cooley.com

	If after the Lease Commencement Date:

	EBR Systems, Inc.
	At the Leased Premises
	Attention: Gary Doherty
	Email: Gary.doherty@ebrsystemsinc.com

	with a copy to:

	Cooley LLP
	11951 Freedom Dr., Suite 1400
	Reston, VA 20190
	Attention: Peter Crain, Esq.
	Email: pcrain@cooley.com

Any notice given in accordance with the foregoing shall be deemed received upon actual receipt or refusal to accept delivery. Any notice required by statute and not waived in this Lease shall be given and deemed received in accordance with the applicable statute or as otherwise provided by Law. Notices may be given by counsel on behalf of a party.

13.11 Attorneys' Fees and Costs. In the event any party shall bring any action, arbitration, or other proceeding alleging a breach of any provision of this Lease, or a right to recover rent, to terminate this Lease, or to enforce, protect, interpret, determine, or establish any provision of this Lease or the rights or duties hereunder of either party, the prevailing party shall be entitled to recover from the non-prevailing party as a part of such action or proceeding, or in a separate action for that purpose brought within one year from the determination of such proceeding, reasonable attorneys' fees, expert witness fees, court costs and reasonable disbursements, made or incurred by the prevailing party.

13.12 Definitions. Any term that is given a special meaning by any provision in this Lease shall, unless otherwise specifically stated, have such meaning wherever used in this Lease or in any Addenda or amendment hereto. In addition to the terms defined in Article 1, the following terms shall have the following meanings:

(a) Real Property Taxes. The term "Real Property Tax" or "Real Property Taxes" shall each mean Tenant's Expense Share of the following (to the extent applicable to any portion of the Lease Tenn, regardless of when the same are imposed, assessed, levied, or otherwise charged): (i) all taxes, assessments, levies and other charges of any kind or nature whatsoever, general and special, foreseen and unforeseen (including all installments of principal and interest required to pay any general or special assessments for public improvements and any increases resulting from reassessments caused by any change in ownership or new construction), now or hereafter imposed by any governmental or quasi-governmental authority or special district having the direct or indirect power to tax or levy assessments, which are levied or assessed for whatever reason against the Property, or any portion thereof, or Landlord's interest herein, or the fixtures, equipment and other property of Landlord that is an integral part of the Property and located thereon, or Landlord's business of owning, leasing or managing the Property or the gross receipts, income or rentals from the Property, (ii) all charges, levies or fees imposed by any governmental authority against Landlord by reason of or based upon the use of or number of parking spaces within the Property, the amount of public services or public utilities used or consumed (e.g. water, gas, electricity, sewage or waste water disposal) at the Property, the number of persons employed by tenants of the Property, the size (whether measured in area, volume, number of tenants or whatever) or the value of the Property, or the type of use or uses conducted within the Property, and all costs and fees (including attorneys' fees) reasonably incurred by Landlord in contesting any Real Property Tax and in negotiating with public authorities as to any Real Property Tax. If, at any time during the Lease Tenn, the taxation or assessment of the Property prevailing as of the Effective Date of this Lease shall be altered so that in lieu of or in addition to any the Real Property Tax described above there shall be levied, awarded or imposed (whether by reason of a change in the method of taxation or assessment, creation of a new tax or charge, or any other cause) an alternate, substitute, or additional use or charge (i) on the value, size, use or occupancy of the Property or Landlord's interest therein or (ii) on or measured by the gross receipts, income or rentals from the Property, or on Landlord's business of owning, leasing or managing the Property or (iii) computed in any manner with respect to the operation of the Property, then any such tax or charge, however designated, shall be included within the meaning of the terms "Real Property Tax" or "Real Property Taxes" for purposes of this Lease. Notwithstanding the foregoing, the terms "Real Property Tax" or "Real Property Taxes" shall not include estate, inheritance, transfer, gift or franchise taxes of Landlord or the federal or state income tax imposed on Landlord's income (personal or corporate) from all sources, any fines, penalties or interest resulting from Landlord's failure to timely pay any taxes (unless and to the extent such failure is the result of Tenant's failure to timely pay any Real Property Taxes), any items which are included in Property Maintenance Costs, any real estate taxes directly payable to the applicable taxing authority by Tenant or any other tenant of the Property (i.e., not paid by Landlord) under the applicable provisions of this Lease or their respective leases, and any Real Estate Taxes attributable to a period of time outside of the Lease Term. If Landlord receives a refund of Real Property Taxes or a credit against its future Real Property Taxes for any calendar year during the Lease Tenn for which Tenant paid Real Property Taxes, Landlord shall, at its election, either pay to Tenant, or credit against subsequent payments of Property Operating Expenses due hereunder, an amount equal to Tenant's Expense Share of the refund, net of any costs and expenses (including reasonable attorneys' fees) incurred by Landlord in achieving such refund; provided, however, if this Lease shall have expired or is otherwise terminated, Landlord shall refund in cash any such refund or credit due to Tenant within thirty (30) days after Landlord's receipt of such refund or its receipt of such credit against future Real Property Taxes. Landlord's obligation to so refund to Tenant any such refund or credit of Real Property Taxes shall survive such expiration or termination.

(b) Landlord's Insurance Costs. The term "Landlord's Insurance Costs" shall mean Tenant's Expense Share (to the extent applicable to any portion of the Lease Term, regardless of when the same are incurred) of the costs to Landlord to carry and maintain the policies of fire and property damage insurance for the Building and the Property and general liability and any other insurance required or permitted to be carried by Landlord pursuant to Article 9, together with any deductible amounts paid by Landlord upon the occurrence of any insured casualty or loss.

(c) Property Maintenance Costs. The term "Property Maintenance Costs" shall mean (to the extent applicable to any portion of the Lease Term, regardless of when the same are incurred):

(i) Tenant's Expense Share of all other costs and expenses (except Landlord's Insurance Costs and Real Property Taxes) paid or incurred by Landlord in protecting, operating, maintaining, repairing and preserving the Building, the Outside Areas, and the Property and all parts thereof, including without limitation, (A) the amortizing portion of any costs incurred by Landlord in the making of any modifications, alterations or improvements required by any governmental authority as set forth in Article 6, which are so amortized during the Lease Term; (B) salaries for employees engaged in the operation and maintenance of the Building, the Outside Areas, and the Property (such as, but without limitation, managers, administrators and engineers); and (C) such other costs as may be paid or incurred with respect to operating, maintaining, and preserving the Building, the Property, the Outside Areas pursuant to Paragraph 5.l(b) or otherwise, including, without limitation, repairing and resurfacing the exterior surfaces of the Building (including roofs), repairing and resurfacing paved areas, repairing and replacing structural parts of the Building, repairing and replacing, when necessary, electrical, plumbing, and HVAC systems serving the Building, providing security services for the Property and maintaining any environmental efficiency standards and ratings for the Building, including, without limitation, costs relating to any initiatives to improve ESG Performance (as defined below); plus

(ii) without limitation or duplication of the foregoing, Tenant's Expense Share of all costs and expenses paid or incurred by Landlord for employee shuttles and other transportation management efforts at the Property.

(iii) Notwithstanding the foregoing or anything to the contrary in this Lease, Tenant shall not be responsible for the payment of, and "Property Maintenance Costs" shall not include: (i) depreciation charges, penalties, premiums, interest and principal payments on Mortgages, ground rental payments and real estate brokerage and leasing commissions incurred by Landlord, excluding any payments by Landlord under the Parking Lease (as defined in the Parking Sublease); (ii) costs incurred for Landlord's general overhead, including the operation of the business entity which constitutes Landlord (as distinguished from the costs of operating, maintaining, repairing and managing the Property); (iii) costs of selling or financing any of Landlord's interest in the Property (for avoidance of doubt, excluding any capital expenditures that are ineluctable in Property Maintenance Costs); (iv) costs incurred by Landlord which are reimbursed by other tenants of the Property (other than through pass-through provisions in leases) or by insurance proceeds actually received by Landlord; (v) expenses incurred by Tenant or Landlord to the extent arising from the gross negligence or willful misconduct of Landlord in connection with this Lease; (vi) reserves in excess of commercially reasonable amounts for comparable properties; (vii) costs incurred to remove, abate or remediate Landlord's Hazardous Materials as set forth in Paragraph 4.1 l(b); (ix) Landlord's Insurance Costs or Real Property Taxes, or any other costs or fees that would result in double charges under this Lease; (x) costs in connection with leasing space in the Building, including brokerage commissions, brochures and marketing supplies, and legal fees in negotiating and preparing lease documents; (xi) salaries, fringe benefits or any other form of compensation of (y) employees above the grade of general manager (or its substantive equivalent), and (z) employees whose time is not spent directly and solely in the operation of the Property, provided that if any employee performs services in connection with the Property and other properties, costs associated with such employee may be proportionately included in Property Maintenance Costs based on the percentage of time such employee spends in connection with the operation, maintenance and management of the Property; (xii) overhead and profit increment paid to Landlord or to subsidiaries or affiliates of Landlord for goods and/or services at the Property to the extent the same exceeds the costs of such by unaffiliated third parties on a competitive basis; (xiii) costs incurred by Landlord in connection with the correction of latent defects in the original construction of the Building or the Outside Area; (xiv) all expenditures considered capital in nature as determined in accordance with generally accepted accounting principles, except those capital expenditures incurred which (i) are intended to reduce Property Operating Expenses, or (ii) are required by any applicable Laws or Restrictions after the Effective Date of this Lease, or (iii) are required to comply with Landlord's repair, maintenance and replacement obligations

under this Lease, the cost of any of the forgoing to be amortized, with interest at the Standard Interest Rate, on a straight-line basis, over the useful life of the Capital Expenditure in question as determined based upon generally accepted accounting principles; (xv) expenses in connection with services or other benefits which are provided to another tenant or occupant of the Building or Property and which do not benefit Tenant; (xvi) all advertising and promotional costs but excluding any cost associated with life safety information or education services which are provided to the tenants of the Building or Property; (xvii) any costs resulting from the gross negligence or willful misconduct of Landlord; (xviii) costs, other than those incurred in ordinary maintenance and repair, for sculptures, paintings, fountains or other objects of art or the display of such items; (xix) any compensation or benefits paid to or provided to clerks, attendants or other persons in commercial concessions operated by Landlord; (xx) the cost of complying with any Laws in effect (and as interpreted and enforced) on the Delivery Date, provided that if any portion of the Property that was in compliance with applicable Laws (as interpreted and enforced) on the Delivery Date becomes out of compliance due to normal wear and tear, the cost of bringing such portion of the Property into such compliance shall be included in Property Maintenance Costs unless otherwise excluded pursuant to the terms hereof, and (xxi) any cost incurred prior to the Lease Commencement Date including, but not limited to, amortization of capital expense, taxes incurred for prior years but billed and paid after the Lease Commencement Date, etc., unless and to the extent incurred prior to the Lease Commencement Date but attributable to any period of time from and after the Lease Commencement Date (e.g., an expense incurred prior to the Lease Commencement Date for a period of time that straddles the Lease Commencement Date may be included in Property Maintenance Costs to the extent applicable to the period of time from and after the Lease Commencement Date).

(d) Property Operating Expenses. The term "Property Operating Expenses" shall mean and include all Real Property Taxes, plus all Landlord's Insurance Costs, plus all Property Maintenance Costs, plus any amounts considered Property Operating Expenses under the Parking Sublease, plus monthly professional management fees equal to three percent (3%) of Rent (including Rent that would otherwise be due and payable during any abatement, credit, offset or free rent period).

Notwithstanding the foregoing, Tenant shall not be responsible for payment of any Excess Increase in Controllable Expenses in any calendar year. As used herein: (1) the term "Controllable Expenses" means Property Operating Expenses other than Real Property Taxes, Landlord's Insurance Costs, utilities, amounts due and payable by Landlord under the Parking Lease, and any other Property Operating Expenses not within the reasonable control of Landlord, (2) the term "Base Year Controllable Expenses" means the actual Controllable Expenses (annualized) incurred in calendar year 2025, grossed up as if the Property had been 100% leased and occupied for the entirety of calendar year 2025, (3) the term "Annual Increase" means a five percent (5%) per annum increase in Controllable Expenses, calculated annually on a compounding and cumulative basis, over the Base Year Controllable Expenses, and (4) the term "Excess Increase in Controllable Expenses" means an increase in Controllable Expenses in any given calendar year (annualized and grossed up as if the Property had been 100% leased and occupied for the entirety of such year) to the extent the Controllable Expenses in such year exceed the total Controllable Expenses that would have resulted in such year had Controllable Expenses increased each year by the amount of the Annual Increase. By way of example, but without limitation, if Base Year Controllable Expenses were $100.00 in calendar year 2025, then the total Controllable Expenses that could be included in Property Operating Expenses for calendar year 2026 would be $105.00, the total Controllable Expenses that could be included in Property Operating Expenses for calendar year 2027 would be $110.25, the total Controllable Expenses that could be included in Property Operating Expenses for calendar year 2028 would be $115.76, and so on. In the preceding example, if Controllable Expenses in both calendar year 2027 and calendar year 2028 were $112.50, then Landlord could only include $110.25 of Controllable Expenses within Property Operating Expenses in calendar year 2027, but $112.50 in calendar year 2028. The language of this paragraph shall apply only to the Leased Premises demised hereunder and shall not apply to any expansion space.

(e) Law. The term "Law" or "Laws" shall mean any judicial decisions and any statute, constitution, ordinance, resolution, regulation, rule, code, administrative order, condition of approval, or other requirements of any municipal, county, state, federal, or other governmental agency or authority having jurisdiction over the parties to this Lease, the Leased Premises, the Building, the Property, or any of them, in effect either at the Effective Date of this Lease or at any time during the Lease Tenn, including, without limitation, any regulation, order, or policy of any quasi-official entity or body (e.g. a board of fire examiners or a public utility or special district). Except to the extent otherwise expressly provided in this Lease, to the extent any Law or Restriction places limits on the Building or any portion thereof, or on the Property or any portion thereof, such limits shall be equitably allocated to the Leased Premises pro rata in the same proportion that the rentable square footage of the Leased Premises bears to the rentable square footage of the applicable Building or portion thereof, the Property, or portion thereof, as applicable.

(f) Lender. The term "Lender" shall mean the holder of any promissory note or other evidence of indebtedness secured by the Property or any portion thereof.

(g) Rent. The term "Rent" shall mean collectively Base Monthly Rent and all Additional Rent.

(h) Restrictions. The term "Restrictions" shall mean (as they may exist from time to time) any and all covenants, conditions and restrictions, private agreements, easements, and any other recorded documents or instruments affecting the use of the Property, the Building, the Leased Premises, and/or the Outside Areas. From and after the Effective Date of this Lease and continuing throughout the Lease Tenn, Landlord shall not voluntarily grant any Restrictions that would encumber the Leased Premises or the Outside Areas in a manner that would materially interfere with or prevent the Permitted Use within the Leased Premises or Outside Areas or Tenant's access to the Leased Premises or Outside Areas.

13.13 General Waivers. One party's consent to or approval of any act by the other party requiring the first party's consent or approval shall not be deemed to waive or render unnecessary the first party's consent to or approval of any subsequent similar act by the other party. No waiver of any provision hereof, or any waiver of any breach of any provision hereof, shall be effective unless in writing and signed by the waiving party. The receipt by Landlord of any rent or payment with or without knowledge of the breach of any other provision hereof shall not be deemed a waiver of any such breach. No waiver of any provision of this Lease shall be deemed a continuing waiver unless such waiver specifically states so in writing and is signed by both Landlord and Tenant. No delay or omission in the exercise of any right or remedy accruing to either party upon any breach by the other party under this Lease shall impair such right or remedy or be construed as a waiver of any such breach theretofore or thereafter occurring. The waiver by either party of any breach of any provision of this Lease shall not be deemed to be a waiver of any subsequent breach of the same or any other provisions herein contained.

13.14 Miscellaneous. Should any provisions of this Lease prove to be invalid or illegal, such invalidity or illegality shall in no way affect, impair or invalidate any other provisions hereof, and such remaining provisions shall remain in full force and effect. Time is of the essence with respect to the performance of every provision of this Lease in which time of performance is a factor. Any copy of this Lease which is executed by the parties shall be deemed an original for all purposes. This Lease shall, subject to the provisions regarding assignment, apply to and bind the respective heirs, successors, executors, administrators and assigns of Landlord and Tenant. The benefit of each indemnity obligation of Tenant under this Lease is assignable in whole or in part by Landlord. The term "party" shall mean Landlord or Tenant as the context implies. If Tenant consists of more than one person or entity, then all members of Tenant shall be jointly and severally liable hereunder. If this Lease is signed by Tenant by an individual "doing business as " or "dba" another person or entity or entity name, the individual who signs this Lease will be deemed to be the Tenant hereunder for all purposes. Submission of this Lease for review, examination or signature by Tenant does not constitute an offer to lease, a reservation of or an option for lease, or a binding agreement of any kind, and notwithstanding any inconsistent language contained in any other document, this Lease is not effective as a lease or otherwise until execution and delivery by both Landlord and Tenant, and prior to such mutual execution and delivery, neither party shall have any obligation to negotiate and may discontinue discussions and negotiations at any time for any reason or no reason. This Lease shall be construed and enforced in accordance with the Laws of the State in which the Leased Premises are located. The headings and captions in this Lease are for convenience only and shall not be construed in the construction or interpretation of any provision hereof. When the context of this Lease requires, the neuter gender includes the masculine, the feminine, a partnership, corporation, limited liability company, joint venture, or other form of business entity, and the singular includes the plural. The terms "must," "shall," "will," and "agree" are mandatory. The term "may" is permissive. The term "governmental agency" or "governmental authority" or similar terms shall include, without limitation, all federal, state, city, local and other governmental and quasi-governmental agencies, authorities, bodies, boards, etc., and any party or parties having enforcement rights under any Restrictions. When a party is required to do something by this Lease, it shall do so at its sole cost and expense without right of reimbursement from the other party unless specific provision is made therefor. Where a party's consent is required hereunder, unless provided to the contrary, such consent shall not be unreasonably withheld, conditioned or delayed; provided that, it shall be reasonable for any such consent of Landlord hereunder to be withheld until Landlord's receipt of the consent of any Lender, if and to the extent Landlord is required to obtain such Lender's consent. Landlord and Tenant shall both be deemed to have drafted this Lease, and the rule of construction that a document is to be construed against the drafting party shall not be employed in the construction or interpretation of this Lease. Where either party is obligated not to perform any act or is not permitted to perform any act, such party is also obligated to restrain any others reasonably within its control, including agents, invitees, contractors, subcontractors and employees, from performing such act. Landlord shall not become or be deemed a partner or a joint venturer with Tenant by reason of any of the provisions of this Lease.

13.15 Patriot Act Compliance.

(a) Tenant will use its good faith and commercially reasonable efforts to comply with the Patriot Act (as defined below) and all applicable requirements of governmental authorities having jurisdiction over Tenant or the Property, including those relating to money laundering and terrorism. In the event that Tenant fails to comply with the Patriot Act or any such requirements of governmental authorities, any and all reasonable costs and expenses incurred by Landlord in connection therewith shall be deemed Additional Rent and shall be immediately due and payable. For purposes hereof, the term "Patriot Act" means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as the same may be amended from time to time, and corresponding provisions of future laws.

(b) Neither Tenant nor to Tenant's knowledge any owner of a direct or indirect interest in Tenant (a) is listed on any Government Lists (as defined below), (b) is a person who has been determined by competent authority to be subject to the prohibitions contained in Presidential Executive Order No. 13224 (Sept. 23, 2001) or any other similar prohibitions contained in the rules and regulations of OFAC (as defined below) or in any enabling legislation or other Presidential Executive Orders in respect thereof, (c) has been previously indicted for or convicted of any felony involving a crime or crimes of moral turpitude or for any Patriot Act Offense (as defined below), or (d) is currently under investigation by any governmental authority for alleged criminal activity. For purposes hereof, the term "Patriot Act Offense" means any violation of the criminal laws of the United States of America or of any of the several states, or that would be a criminal violation if committed within the jurisdiction of the United States of America or any of the several states, relating to terrorism or the laundering of monetary instruments, including any offense under (a) the criminal laws against terrorism; (b) the criminal laws against money laundering, (c) the Bank Secrecy Act, as amended, (d) the Money Laundering Control Act of 1986, as amended, or the (e) Patriot Act. "Patriot Act Offense" also includes the crimes of conspiracy to commit, or aiding and abetting another to commit, a Patriot Act Offense. For purposes hereof, the term "Government Lists" means (i) the Specially Designated Nationals and Blocked Persons Lists maintained by Office of Foreign Assets Control ("OFAC”), or (ii) any other list of terrorists, terrorist organizations or narcotics traffickers maintained pursuant to any of the Rules and Regulations of OFAC or pursuant to any Executive Order of the President of the United States of America.

13.16 Reservation of Property Data. Tenant acknowledges and agrees that Landlord owns all right, title and interest in and to any and all digital and intellectual property rights outside the Building within the Property, including the exterior of the Building, whether now or hereafter in existence, including, without limitation, any digital representations of the same (including photographs, artistic renderings, other types of images, and/or digital tokens incorporating such representations) (collectively, the "Digital Property Rights"). Tenant's leasing of the Leased Premises shall not be deemed to create or convey any right, title or interest in or to any of the Digital Property Rights for the benefit of Tenant, whether expressed or implied, and Tenant hereby disclaims any such right, title or interest and waives any right to use any of the Digital Property Rights without the prior written consent of Landlord in its sole and absolute discretion.

13.17 Sustainability. Tenant acknowledges that current and future disclosures and information may be required by Landlord's ESG Performance initiatives and applicable Laws and Restrictions in connection with the leasing of the Leased Premises. Tenant shall provide Landlord any and all information reasonably requested by Landlord in connection with the ESG Performance of the Leased Premises and/or any other information necessary for Landlord to comply with applicable Laws, Restrictions and/or Landlord's ESG Performance initiatives, including to maintain or obtain any ESG Certifications for the Building. Tenant consents to Landlord's using such data, provided that Landlord will exercise commercially reasonable care to maintain the privacy of Tenant's specific and identifiable consumption data. Notwithstanding anything to the contrary in this Lease, Landlord shall have the right to institute such requirements, policies, programs and measures or pursue ESG Certifications as may be required to comply with any applicable Laws or Restrictions. Tenant shall use commercially reasonable efforts to operate the Leased Premises in a manner that seeks to reduce energy and water use and waste generation and increase recycling within the Building and the Leased Premises. As used herein, "ESG Performance" means all or any of the following environmental, social, and governance activities arising from the operation or use of the Leased Premises: energy consumption; renewable energy use; water consumption and discharge; waste and recycling generation and management; generation and/or emission of greenhouse gases; adverse environmental or social impacts; indoor air quality management; and tenant health and well-being initiatives. As used herein, "ESG Certifications" means environmental or social certifications for the Building, such as Energy Star, Leadership in Energy and Environmental Design (LEED) program, Fitwel, WELL, BREEAM and any other certification promoted by the U.S. Green Building Council or others.

ARTICLE 14

LEGAL AUTHORITY,

BROKERS AND ENTIRE AGREEMENT

14.1 Legal Authority. If Tenant or any entity constituting Tenant is a corporation, limited partnership, limited liability company, or other legal entity, each individual executing this Lease on behalf of such corporation, limited partnership, limited liability company, or other legal entity, represents and warrants that Tenant is validly formed and duly authorized and existing, that Tenant is qualified to do business in the State in which the Leased Premises are located, that Tenant has the full right and legal authority to enter into this Lease, and that he or she is duly authorized to execute and deliver this Lease on behalf of Tenant in accordance with its terms. If Landlord or any entity constituting Landlord is a corporation, limited partnership, limited liability company, or other legal entity, Landlord represents and warrants that it is validly formed and duly authorized and existing, that Landlord is qualified to do business in the State in which the Leased Premises are located, that Landlord has the full right and legal authority to enter into this Lease, and that the individual executing this Lease on behalf of Landlord is duly authorized to execute and deliver this Lease on behalf of Landlord in accordance with its terms.

14.2 Brokerage Commissions. Tenant represents, warrants and agrees that it has not had any dealings with any real estate broker(s), leasing agent(s), finder(s) or salesmen, other than Landlord's Broker and Tenant's Broker with respect to the lease by it of the Leased Premises pursuant to this Lease, and that it will indemnify, defend with competent counsel, and hold Landlord harmless from any liability for the payment of any real estate brokerage commissions, leasing commissions or finder's fees claimed by any other real estate broker(s), leasing agent(s), finder(s), or salesmen to be earned or due and payable by reason of Tenant's agreement or promise (implied or otherwise) to pay (or to have Landlord pay) such a commission or finder's fee by reason of its leasing the Leased Premises pursuant to this Lease. Landlord represents, warrants and agrees that it has not had any dealings with any real estate broker(s), leasing agent(s), finder(s) or salesmen, other than the Landlord's Broker and the Tenant's Broker (as such brokers are named in Article 1) with respect to this Lease, and that it will indemnify, defend with competent counsel, and hold Tenant harmless from any liability for the payment of any real estate brokerage commissions, leasing commissions or finder's fees claimed by any other real estate broker(s), leasing agent(s), finder(s), or salesmen to be earned or due and payable by reason of Landlord's agreement or promise (implied or otherwise) to pay (or to have Tenant pay) such a commission or finder's fee by reason of Tenant's leasing the Leased Premises pursuant to this Lease.

14.3 Entire Agreement. This Lease and the Exhibits (as described in Article 1), which Exhibits are by this reference incorporated herein, constitute the entire agreement between the parties, and there are no other agreements, understandings or representations between the parties relating to the lease by Landlord of the Leased Premises to Tenant, except as expressed herein. No subsequent changes, modifications or additions to this Lease shall be binding upon the parties unless in writing and signed by both Landlord and Tenant.

14.4 Landlord's Representations. Tenant acknowledges that neither Landlord nor any of its agents made any representations or warranties respecting the Property, the Building or the Leased Premises, upon which Tenant relied in entering into this Lease, which are not expressly set forth in this Lease. Tenant further acknowledges that neither Landlord nor any of its agents made any representations as to (i) whether the Leased Premises may be used for Tenant's intended use under existing Law, or (ii) the suitability of the Leased Premises for the conduct of Tenant's business, or (iii) the exact square footage of the Leased Premises or the Building, and that Tenant relies solely upon its own investigations with respect to such matters. Tenant expressly waives any and all claims for damage by reason of any statement, representation, warranty, promise or other agreement of Landlord or Landlord's agent(s), if any, not contained in this Lease or in any Exhibit attached hereto.

ARTICLE 15

OPTION TO EXTEND

15.1 Option to Extend. So long as EBR Systems, Inc., a Delaware corporation, is the Tenant hereunder and occupies at least seventy-five percent (75%) of the Leased Premises, and subject to the conditions set forth in clauses (a) and (b) below, Tenant shall have one (1) option to extend the Lease Term of this Lease with respect to the entirety of the Leased Premises, for a period of five (5) years from the expiration of the initial, unextended Lease Term (the "Extension Period"):

(a) The option to extend shall be exercised, if at all, by notice of exercise given to Landlord by Tenant not more than twelve (12) months nor less than nine (9) months prior to the expiration of the initial, unextended Lease Tenn; and

(b) Anything herein to the contrary notwithstanding, if Tenant is in default (beyond applicable notice and cure periods) under any of the terms, covenants or conditions of this Lease, either at the time Tenant exercises the extension option or on the commencement date of the Extension Period, Landlord shall have, in addition to all of Landlord's other rights and remedies provided in this Lease, the right to terminate such option to extend upon notice to Tenant.

15.2 Fair Market Rent. In the event the extension option is exercised in a timely fashion, the Lease shall be extended for the term of the Extension Period upon all of the terms and conditions of this Lease, provided that the Base Monthly Rent for the Extension Period shall be equal to the "Fair Market Rent" for the Leased Premises, adjusted as set forth below. For purposes hereof, "Fair Market Rent" shall mean the then-prevailing base monthly rent, including annual increases, being charged to tenants for space of comparable size, use, age and condition in comparable buildings in the Santa Clara market, taking into consideration any prevailing concessions then being offered in such market, and shall be determined pursuant to the process described below. No commission shall be due or payable to any broker retained by Tenant with regard to this Lease for the Extension Period.

15.3 Tenant's Election. Within thirty (30) days after receipt of Tenant's notice of exercise, Landlord shall notify Tenant in writing of Landlord's estimate of the Base Monthly Rent for the Extension Period, based on the provisions of Paragraph 15.2 above. Within thirty (30) days after receipt of such notice from Landlord, Tenant shall have the right either to (i) accept Landlord's statement of Base Monthly Rent as the Base Monthly Rent for the Extension Period; or (ii) elect to arbitrate Landlord's estimate of Fair Market Rent, such arbitration to be conducted pursuant to the provisions hereof. Failure on the part of Tenant to respond to Landlord within such thirty (30) day period shall constitute Tenant's election to arbitrate in accordance with Paragraph 15.4 below. If Tenant elects (or is deemed to elect) arbitration, the arbitration shall be concluded within ninety (90) days after the date of Tenant's election (or the expiration of the thirty (30) day response period if Tenant is deemed to have made such election), subject to extension for an additional thirty (30) day period if a third arbitrator is required and does not act in a timely manner. To the extent that arbitration has not been completed prior to the expiration of any preceding period for which Base Monthly Rent has been determined, Tenant shall pay Base Monthly Rent at the Fair Market Rent rate reasonably calculated by Landlord, with the potential for an adjustment to be made once Fair Market Rent is ultimately determined by arbitration.

15.4 Rent Arbitration. In the event of arbitration, the judgment or the award rendered in any such arbitration may be entered in any court having jurisdiction and shall be final and binding between the parties. The arbitration shall be conducted and determined in the City and County of Santa Clara in accordance with the then prevailing rules of the American Arbitration Association or its successor for arbitration of commercial disputes except to the extent that the procedures mandated by such rules shall be modified as follows:

(a) Each party shall appoint an arbitrator on its behalf, in accordance with this Paragraph 15.4, and notify the other party of the name and address of its appointed arbitrator within fifteen (15) days of Tenant's election or deemed election to arbitrate the issue of Fair Market Rent. Each arbitrator shall be qualified as a real estate appraiser familiar with the Fair Market Rent of similar office space in the Santa Clara area who would qualify as an expert witness over objection to give opinion testimony addressed to the issue in a court of competent jurisdiction. If either party fails to notify the other party of the appointment of its arbitrator, within or by the time above specified, then the arbitrator appointed by the other party shall be the arbitrator to determine the issue.

(b) In the event that two arbitrators are chosen pursuant to Paragraph 15.4(a) above, the arbitrators so chosen shall, within fifteen (15) days after the second arbitrator is appointed determine the Fair Market Rent. The two arbitrators shall be engaged solely to determine the amount of the Fair Market Rent for the Leased Premises for the Extension Period. If the two arbitrators shall be unable to agree upon a determination of Fair Market Rent within such fifteen (15) day period, they, themselves, shall appoint a third arbitrator, who shall be a competent and impartial person with qualifications similar to those required of the first two arbitrators pursuant to Paragraph 15.4(a). In the event they are unable to agree upon such appointment within seven (7) days after expiration of such fifteen (15) day period, the third arbitrator shall be selected by the parties themselves, if they can agree thereon, within a further period of fifteen (15) days. If the parties do not so agree, then either party, on behalf of both, may request appointment of such a qualified person by the then Presiding Judge of the California Superior Court acting in such Judge's private and not such Judge's official capacity having jurisdiction over the County of Santa Clara, and the other party shall not raise any question as to such Judge's full power and jurisdiction to entertain the application for and make the appointment. The third arbitrator shall decide the Fair Market Rent if it has not previously been resolved by following the procedure set forth below.

(c) Where an issue cannot be resolved by agreement between the two arbitrators selected by or for Landlord and Tenant or settlement between the parties during the course of arbitration, the issue shall be resolved by the three arbitrators within fifteen (15) days of the appointment of the third arbitrator in accordance with the following procedure. The arbitrator selected by each of the parties shall state in writing such arbitrator's determination of the Fair Market Rent supported by the reasons therefor with counterpart copies to each party. The arbitrators shall arrange for a simultaneous exchange of such proposed resolutions. The role of the third arbitrator shall be to select which of the two proposed resolutions most closely approximates such arbitrator's determination of Fair Market Rent. The third arbitrator shall have no right to propose a middle ground or any modification of either of the two proposed resolutions. The resolution such arbitrator chooses as most closely approximating such arbitrator's determination shall constitute the decision of the arbitrators and be final and binding upon the parties.

(d) In the event of a failure, refusal or inability of any arbitrator to act, such arbitrator's successor shall be appointed by such arbitrator, but in the case of the third arbitrator, such arbitrator's successor shall be appointed in the same manner as provided for appointment of the third arbitrator. The arbitrators shall decide the issue within fifteen (15) days after the appointment of the third arbitrator. Any decision in which the arbitrator appointed by Landlord and the arbitrator appointed by Tenant concur shall be binding and conclusive upon the parties. Each party shall pay the fee and expenses of its respective arbitrator and both shall share the fee and expenses of the third arbitrator, if any, and the attorneys' fees and expenses of counsel for the respective parties and of witnesses shall be paid by the respective party engaging such counsel or calling such witnesses.

(e) The arbitrators shall have the right to consult experts and competent authorities to obtain factual information or evidence pertaining to a determination of Fair Market Rent, but any such consultation shall be made in the presence of both parties with full right on their part to cross examine. The arbitrators shall render their decision and award in writing with counterpart copies to each party. The arbitrators shall have no power to modify the provisions of this Lease.

ARTICLE 16

TELECOMMUNICATIONS SERVICE

16.1 Telecommunications Service. Notwithstanding any other provision of this Lease to the contrary:

(a) Landlord shall have no responsibility for providing to Tenant any telecommunications equipment of any kind, including but not limited to wiring and cabling, within the Leased Premises or for providing telephone, data or telecommunications service or connections from the utility to the Leased Premises; and

(b) Landlord makes no warranty as to the quality, continuity or availability of the telecommunications or data services in the Building, and Tenant hereby waives any claim against Landlord for any actual or consequential damages (including damages for loss of business) in the event Tenant's telecommunications or data services in any way are interrupted, damaged or rendered less effective, except to the extent caused by the active gross negligence or willful misconduct of Landlord, its agents or employees. Tenant accepts the telecommunications and data equipment in its "AS-IS" condition, and Tenant shall be solely responsible for contracting with a reliable third party vendor to assume responsibility for the maintenance and repair thereof (which contract shall contain provisions requiring such vendor to meet local and federal requirements for telecommunications and data material and workmanship). Except to the extent caused by the active gross negligence or willful misconduct of Landlord, its agents or employees. Landlord shall not be liable to Tenant and Tenant waives all claims against Landlord whatsoever, whether for personal injury, property damage, loss of use of the Leased Premises, or otherwise, due to the interruption or failure of telecommunications and data services to the Leased Premises. Tenant hereby holds Landlord harmless and agrees to indemnify, protect and defend Landlord from and against any liability for any damage, loss or expense due to any failure or interruption of telecommunications and data service to the Leased Premises for any reason. Tenant agrees to obtain business interruption insurance adequate to cover any damage, loss or expense occasioned by the interruption of telecommunications and data service, except to the extent caused by the active gross negligence or willful misconduct of Landlord, its agents or employees.

ARTICLE 17 PARKING SUBLEASE

17.1 Parking Sublease. Concurrently with the execution and delivery of this Lease, Landlord, as sublessor, and Tenant, as sublessee, shall enter into that certain Sublease Agreement in the form attached hereto as Exhibit G (the "Parking Sublease"), pursuant to which Landlord shall sublease to Tenant and Tenant shall sublease from Landlord, upon the terms and conditions set forth in the Parking Sublease, the Sublease Premises. On or before the Effective Date of this Lease, Landlord shall obtain the consent of the City and County of San Francisco to the Parking Sublease in substantially the form of consent attached as Exhibit B to the Parking Sublease (the "Parking Sublease Consent"). The effectiveness of this Lease shall be contingent upon receipt of the Parking Sublease Consent.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the respective dates below set forth with the intent to be legally bound thereby as of the Effective Date of this Lease first above set forth.

LANDLORD:

DRAWBRIDGE 4600 PATRICK HENRY, LLC,

a Delaware limited liability company

By:	/s/ Charlie McEachron
Name:	Charlie McEachron
Title:	Chief Executive Officer

TENANT:

EBR SYSTEMS, INC.,

a Delaware corporation

By:	/s/ Gary Doherty
Name:	Gary Doherty
Title:	Chief Financial Officer

[Signature Page to the Lease]

EXHIBIT A

SITE PLAN

Exhibit A-1

EXHIBIT B

FORM OF LEASE COMMENCEMENT DATE CERTIFICATE

This LEASE COMMENCEMENT DATE CERTIFICATE ("Certificate") is made this day of ,202_, by and between DRAWBRIDGE 4600 PATRICK HENRY, LLC, a Delaware limited liability company ("Landlord"), and EBR SYSTEMS, INC., a Delaware corporation ("Tenant"), and is attached to and made a part of that certain Lease dated as of ,2024, by and between Landlord and Tenant (the "Lease").

Landlord and Tenant hereby acknowledge and agree for all purposes of the Lease that (i) the Delivery Date as defined in Paragraph 2.4 of the Lease is ,and (ii) the Lease Commencement Date as defined in Paragraph 2.3 of the Lease is ,202_.

IN WITNESS WHEREOF, Landlord and Tenant have executed this Certificate on the date first above written.

LANDLORD:

DRAWBRIDGE 4600 PATRICK HENRY, LLC,
a Delaware limited liability company


By:
Name:
Title:

TENANT:

EBR SYSTEMS, INC.,
a Delaware corporation


By:
Name:
Title:

Exhibit B-1

EXHIBIT C

WORK LETTER

THIS WORK LETTER ("Work Letter") sets forth the agreement of Landlord and Tenant with respect to the improvements to be constructed in the Leased Premises, as defined in the Lease to which this Work Letter is attached as an exhibit. In the event of any inconsistency between the terms of this Work Letter and the terms of the Lease, the terms of the Lease shall control. All defined terms used herein shall have the meanings set forth in the Lease, unless otherwise defined in this Work Letter.

1. Tenant Improvements. Tenant shall construct, furnish or install all improvements, equipment or fixtures that are necessary for Tenant's use and occupancy of the entirety of the Leased Premises (collectively, the "Tenant Improvements"). Tenant shall complete construction of the Tenant Improvements for the entirety of the Leased Premises. Tenant shall also be responsible for the cost of any alterations to the Building or Property required as a result of the Tenant Improvements. Tenant will engage a consultant reasonably approved by Landlord to manage the design and construction of the Tenant Improvements ("Tenant Improvement Project Manager"). Tenant shall cause all drawings and specifications for the Tenant Improvements to be prepared by an architect selected by Tenant and reasonably approved by Landlord ("Tenant Improvement Architect") and to be constructed by a general contractor licensed in California, selected by Tenant, and reasonably approved by Landlord ("Tenant Improvement Contractor"). Landlord's prior written consent, which shall not be unreasonably withheld, conditioned or delayed, shall be required if Tenant desires to change its Tenant Improvement Architect, Tenant Improvement Contractor or Tenant Improvement Project Manager. Landlord shall respond to Tenant's request for consent to (or consent to change) its Tenant Improvement Architect, Tenant Improvement Contractor or Tenant Improvement Project Manager within five (5) business days after receipt of written notice thereof. Landlord's failure to respond to Tenant's request for consent to the Tenant Improvement Project Manager or Tenant Improvement Architect or Tenant Improvement Contractor within such 5-business day period shall be deemed Landlord's approval. Tenant shall furnish to Landlord a copy of the executed contracts between Tenant and Tenant Improvement Project Manager, Tenant and Tenant Improvement Architect, and Tenant and Tenant Improvement Contractor, covering all of Tenant's obligations under this Work Letter.

The Tenant Improvements shall be in conformity with drawings and specifications submitted to and approved by Landlord, which approval shall not be unreasonably withheld, conditioned or delayed, and shall be performed in accordance with the following provisions:

Tenant Improvement Space Plans: Landlord and Tenant hereby approve of the space plan attached to this Work Letter as Exhibit B (the "Tenant Improvement Space Plans").

Exhibit C-1

Tenant Improvement Design Development Plans: Tenant shall prepare and submit to Landlord for its approval Tenant Improvement design development plans consistent with the approved Tenant Improvement Space Plans ("Tenant Improvement Design Development Plans"). Within five (5) business days after receipt of Tenant's drawings, Landlord shall return one set of prints thereof with Landlord's approval and/or suggested modifications noted thereon. If Landlord fails to respond within five (5) business days, then Tenant may send a notice to Landlord, which notice must contain the following inscription, in 12 point font and bold faced lettering: "SECOND NOTICE DELIVERED PURSUANT TO WORK LETTER-FAILURE TO TIMELY RESPOND WITHIN FIVE (5) BUSINESS DAYS SHALL RESULT IN DEEMED APPROVAL." If Tenant sends such a notice, and Landlord fails to respond within five (5) business days after its receipt of same, the proposed drawings shall be deemed approved. If Landlord has approved Tenant's drawings subject to modifications, such modifications shall be deemed to be acceptable to and approved by Tenant unless Tenant shall prepare and resubmit revised drawings for further consideration by Landlord. If Landlord has suggested modifications without approving Tenant's drawings, Tenant shall prepare and resubmit revised drawings for consideration by Landlord. All revised drawings shall be submitted, with changes highlighted, to Landlord following Landlord's return to Tenant of the drawings originally submitted, and Landlord shall approve or disapprove such revised drawings within three (3) business days following receipt of the same. The parties shall follow the foregoing process until the Tenant Improvement Design Development Plans are approved. Notwithstanding anything herein to the contrary, Landlord may only object to such Tenant Improvement Design Development Plans if they present a Design Problem. As used in this Work Letter, the term "Design Problem" means that the proposed Tenant Improvement (or applicable plans showing any such Tenant Improvement) would cause an adverse effect on the structural aspects of the Building or Building Systems (including the Base Building Systems), trigger any obligation of Landlord to make the Building or Property comply with Laws or Restrictions (unless Tenant pays for the cost of such compliance), vitiate or otherwise reduce any warranty for Landlord's benefit with respect to the Building or Property, materially increase the cost of Landlord's maintenance or repair costs with respect to the Building or Property unless Tenant agrees in writing to pay such costs as billed by Landlord, conflict with or violate applicable Laws or Restrictions, affect the exterior appearance of the Building, affect any governmental approvals for the Building, fail to comply with standards applicable to the operation of similar buildings in the submarket where the Property is located, or substantially increase the cost of construction of the Tenant Improvements.

Tenant Improvement Working Drawings: Tenant shall prepare and submit to Landlord for its approval Tenant Improvement working drawings consistent with the approved Tenant Improvement Design Development Plans ("Tenant Improvement Working Drawings") including mechanical, electrical, and plumbing plans. Within five (5) business days after receipt of Tenant's drawings, Landlord shall return one set of prints thereof with Landlord's approval and/or suggested modifications noted thereon. If Landlord fails to respond within five (5) business days, then Tenant may send a notice to Landlord, which notice must contain the following inscription, in 12 point font and bold faced lettering: "SECOND NOTICE DELIVERED PURSUANT TO WORK LETTER-FAILURE TO TIMELY RESPOND WITHIN FIVE (5) BUSINESS DAYS SHALL RESULT IN DEEMED APPROVAL." If Tenant sends such a notice, and Landlord fails to respond within five (5) business days after its receipt of same, the proposed drawings shall be deemed approved. If Landlord has approved Tenant's drawings subject to modifications, such modifications shall be deemed to be acceptable to and approved by Tenant unless Tenant shall prepare and resubmit revised drawings for further consideration by Landlord. If Landlord has suggested modifications without approving Tenant's drawings, Tenant shall prepare and resubmit revised drawings for consideration by Landlord. All revised drawings shall be submitted, with changes highlighted, to Landlord following Landlord's return to Tenant of the drawings originally submitted, and Landlord shall approve or disapprove such revised drawings within three (3) business days following receipt of the same. The parties shall follow the foregoing process until the Tenant Improvement Working Drawings are approved. Notwithstanding anything herein to the contrary, Landlord may only object to such Tenant Improvement Working Drawings or any Tenant Improvement shown therein if they present a Design Problem.

Exhibit C-2

Final Tenant Improvement Plans: Tenant shall submit the approved Tenant Improvement Working Drawings to the Santa Clara Building Department and any other applicable governmental authorities for a Tenant Improvement building permit and any other applicable governmental approvals prior to or substantially concurrently with the commencement of such work. The Tenant Improvement Working Drawings as modified by the City of Santa Clara and any other applicable governmental authorities are defined herein as the "Final Tenant Improvement Plans." Within one (1) business day after receipt, Tenant shall deliver to Landlord a copy of the City of Santa Clara building permit and any other applicable governmental approvals for the Final Tenant Improvement Plans. Notwithstanding the foregoing, Tenant may commence construction of the Tenant Improvements "at risk" prior to issuance of a building permit or the Final Tenant Improvement Plans, provided that Tenant is solely responsible, at Tenant's sole cost and expense, for making any changes required by the City of Santa Clara Building Department and/or any other applicable governmental approvals (which changes shall remain subject to Landlord's review and approval if they could reasonably be expected to result in a Design Problem) and Tenant indemnifies Landlord and the Landlord Indemnitees for all costs of such changes and any claims arising out of such changes.

Any material changes to the Final Tenant Improvement Plans shall be subject to Landlord's prior written approval, which shall not be unreasonably withheld, conditioned or delayed. As used herein, the term "Material Change" shall mean a change to the Final Tenant Improvement Plans that that exceeds Fifty Thousand Dollars ($50,000) in cost or could reasonably be expected to result in a Design Problem.

Tenant acknowledges that it will engage the Tenant Improvement Architect, the Tenant Improvement Project Manager, and the Tenant Improvement Contractor, and shall be solely responsible for the actions and omissions of its architects, engineers, contractors, and project/construction managers and for any loss, liability, claim, cost, damage or expense suffered by Landlord or any other entity or person as a result of the acts or omissions of its architect, engineers or project/construction managers.

Landlord's approval of any of Tenant's architects, engineers or project/construction managers and of any documents prepared by any of them shall not be for the benefit of Tenant or any third party, and Landlord shall have no duty to Tenant or to any third parties for the actions or omissions of Tenant's architects, engineers or project/construction managers. Tenant shall indemnify and hold harmless Landlord from and against any and all losses, costs, damages, claims and liabilities arising from the actions or omissions of Tenant's architects, engineers and project/construction managers.

The Tenant Improvements shall be constructed by Tenant Improvement Contractor in accordance with the Final Tenant Improvement Plans, in compliance with all of the terms and conditions of this Work Letter and the Lease, and in compliance with all applicable Laws and Restrictions. The Tenant Improvement Contractor shall obtain a builder's risk policy of insurance in an amount and form and issued by a carrier reasonably satisfactory to Landlord, and its subcontractors shall carry workers' compensation insurance for their employees as required by applicable Law. The builder's risk policy of insurance shall name Landlord and any other parties designated by Landlord as additional insureds and shall not be cancelable without at least thirty (30) days' prior written notice to Landlord.

Tenant shall notify Landlord of its intention to commence construction ten (10) days prior to commencement and shall again notify Landlord of actual commencement within one (1) business day thereafter. Landlord shall have the right to post in a conspicuous location on the Building or the Leased Premises, as well as record with the County of Santa Clara, a Notice of Non-Responsibility.

Tenant shall, and shall cause the Tenant Improvement Project Manager to, use commercially reasonable efforts to cause construction of the Final Tenant Improvement Plans to be performed in as efficient a manner as is commercially reasonable. All work to be performed inside or outside of the Building shall be coordinated with Landlord. Tenant and the Tenant Improvement Contractor shall conduct their work and employ labor in such manner as to maintain harmonious labor relations.

Exhibit C-3

Tenant, at Tenant's sole cost and expense, shall within a reasonable amount of time clear debris resulting from the Tenant Improvement construction. No trash, or other debris, or other waste may be deposited at any time outside the Building except in containers reasonably approved by Landlord. If Tenant fails to comply with the foregoing, Landlord may, after written notice to Tenant, remove it at Tenant's expense, which expense shall equal the cost of removal plus five percent (5%) of such costs as a management fee. Storage of Tenant Improvement construction materials, tools and equipment shall be coordinated with Landlord. Tenant shall reimburse Landlord on demand for the cost of repairing any damage to the Building or Property caused by Tenant Improvement Contractor and its subcontractors during the construction of the Tenant Improvements. Upon completion of the Tenant Improvements, Tenant shall cause the Building and the Outside Areas to be clean and free from construction debris resulting from Tenant's Tenant Improvement construction.

Tenant shall submit to Landlord, a Certificate of Substantial Completion, AJA Document G704, by its Tenant Improvement Architect for the Final Tenant Improvement Plans, a copy of all final inspection cards for the Tenant Improvements signed by the appropriate City of Santa Clara inspector and any other evidences of completion issued by any applicable governmental authorities, in each case promptly following Tenant's receipt thereof.

Tenant shall submit to Landlord two CDs containing copies of all Tenant Improvement as-built plans and specifications, warranties, and operating manuals covering all of the work in the Final Tenant Improvement Plans.

Any minor work required for Tenant's occupancy of the Leased Premises but not included in the Final Tenant Improvement Plans such as the procurement and installation of furniture, fixtures, equipment, interior artwork and signage, shall not require Landlord approval but shall be installed in a good and workmanlike manner by Tenant.

2. Tenant Improvement Costs. The costs and expenses of the development and construction of the Tenant Improvements shall be paid in accordance with this Paragraph 2.

(a) Tenant Improvements. Unless specified otherwise herein, Tenant shall bear and pay the cost of the Tenant Improvements (which cost shall include, without limitation, the costs of construction as provided for in the Tenant Improvement Contractor's contract, the cost of permits, and all architectural, design, space planning, and engineering services obtained by Tenant in connection with the Tenant Improvements, and Landlord's fee for construction oversight only (in an amount equal to one half of one percent (0.5%) of the Tenant Improvement Allowance)); provided that so long as Tenant is not in default under the Lease beyond applicable notice and cure periods, Landlord shall contribute a maximum of $80.00 per rentable square foot of the Leased Premises, for an aggregate maximum of $4,090,880.00 (the "Tenant Improvement Allowance"), which shall be utilized only for the Tenant Improvements and any related costs, including but not limited to design, engineering, construction, furniture and equipment appurtenant to the Leased Premises, cabling, project management fees, moving expenses, and signage, and shall be available to Tenant only until the date that is twenty-four (24) months following the Effective Date of this Lease (subject to extension for Landlord Delay) (the "Disbursement Deadline"), after which Tenant shall have no further right to request, and Landlord shall have no further obligation to provide, any portion of the Tenant Improvement Allowance. Subject to the Disbursement Deadline, and based upon applications for payment prepared, certified and submitted by Tenant as described below, Landlord shall make progress payments from the Tenant Improvement Allowance to Tenant in accordance with the provisions of this Paragraph 2, as follows:

Exhibit C-4

(i) Not later than the 25th day of each month Tenant shall submit applications for payment to Landlord in a form reasonably acceptable to Landlord, including Tenant Improvement Contractor's Application and Certification for Payment AIA G702 certified by Tenant Improvement Architect, and certified as correct by an authorized representative of Tenant, for payment of that portion of the cost of the Tenant Improvements allocable to labor, materials and equipment incorporated in the Building during the period from the first day of the same month projected through the last day of the month. Each application for payment shall set forth such information and shall be accompanied by copies of such supporting documentation as shall be reasonably requested by Landlord, including the following:

(A) Invoices and canceled checks.

(B) Fully executed conditional lien releases in the form prescribed by applicable Law from the Tenant Improvement Contractor and all subcontractors and suppliers furnishing labor or materials during such period and fully executed unconditional lien releases from all such entities covering the prior payment period.

completion.

(ii) Tenant shall submit with each application for payment all documents necessary to effect and perfect the transfer of title to the materials or equipment for which application for payment is made.

(iii) On or before the 30^th day following submission of the application for payment, so long as Tenant is not in default under the terms of this Work Letter or the Lease, Landlord shall pay a share of such payment determined by multiplying the amount of such payment by a fraction, the numerator of which is the amount of the Tenant Improvement Allowance, and the denominator of which is the sum of (i) the estimated construction cost of all Tenant Improvement work and materials for the entire Leased Premises, and (ii) the estimated cost of all professional services, fees and permits in connection therewith. Tenant shall pay the balance of such payment, provided that at such time as Landlord has paid the entire Tenant Improvement Allowance on account of such Tenant Improvement work, all billings shall be paid entirely by Tenant. If upon completion of the Tenant Improvement work and payment in full to the Tenant Improvement Contractor, the architect and engineer, and payment in full of all fees and permits, the portion of the cost of the Tenant Improvement work, architects' and engineers' fees, permits and fees theretofore paid by Landlord is less than the Tenant Improvement Allowance, Landlord shall reimburse Tenant for costs expended by Tenant for Tenant Improvement work up to the amount by which the Tenant Improvement Allowance exceeds the portion of such cost theretofore paid by Landlord. Landlord shall have no obligation to advance the Tenant Improvement Allowance to the extent it exceeds the total cost of the Tenant Improvement work. In no event shall Landlord have any responsibility for the cost of the Tenant Improvement work in excess of the Tenant Improvement Allowance. Landlord shall have no obligation to make any payments to Tenant Improvement Contractor's material suppliers or subcontractors or to determine whether amounts due them from Tenant Improvement Contractor in connection with the Tenant Improvement work have, in fact, been paid.

(iv) Notwithstanding anything to the contrary herein, Landlord shall have no obligation to disburse any portion of the Tenant Improvement Allowance so long as a Letter of Credit satisfying the requirements of Paragraph 3.7(b) of the Lease has not been received by Landlord from Tenant and remains in effect. The foregoing shall not apply to the Test Fit Allowance.

(b) Test Fit Allowance. Landlord shall pay Tenant up to $0.20 per rentable square foot of the Leased Premises (i.e., $10,227.20) (the "Test Fit Allowance") in reimbursement of the reasonable, third party costs incurred by Tenant to have a preliminary test fit performed in connection with the development of the Tenant Improvement Space Plans; such reimbursement by Landlord shall be paid within thirty (30) days following the receipt by Landlord from Tenant of an invoice from Tenant together with a reasonable substantiation of the costs so incurred by Tenant. Such payment from Landlord to Tenant shall be in addition to the Tenant Improvement Allowance.

Exhibit C-5

(i) Submit to Landlord a detailed breakdown of Tenant's final and total construction costs, together with receipted evidence showing payment thereof, satisfactory to Landlord.

(ii) Submit to Landlord evidence showing compliance with any applicable Laws and Restrictions, including, without limitation, the building permit for the Tenant Improvements signed off by the applicable governmental authorities and any other applicable governmental approvals.

(iii) Submit to Landlord the as-built plans and specifications referred to above.

3. Assignment of Rights Against Architect, Contractor, etc. Tenant hereby collaterally assigns to Landlord on a non-exclusive basis any and all rights Tenant may have against the Tenant Improvement Contractor, the Tenant Improvement Architect, the Tenant Improvement Project Manager, and any other of Tenant's consultants, subcontractors, agents, etc., relating to the Tenant Improvements, without in any way obligating Landlord to pursue or prosecute such rights. Landlord acknowledges and agrees that such assignment is for security purposes only, and is not an absolute or current assignment of such rights. Tenant shall retain the right to pursue or prosecute any such rights to the extent that Landlord does not do so. Tenant shall promptly cause the Tenant Improvement Contractor, the Tenant Improvement Architect, the Tenant Improvement Project Manager, and any other of Tenant's consultants, subcontractors, agents, etc. (once each such person has been engaged) to execute and deliver to Landlord a consent in the form of Exhibit A attached hereto, consenting to the foregoing assignment.

4. Completion. Upon the earlier to occur of (i) Tenant's receipt of any final certificates and permits, if any, issued by the City of Santa Clara or any other applicable governmental authorities evidencing completion of the Tenant Improvements, (ii) [Intentionally Omitted], (iii) the date that the Tenant Improvement Architect furnishes a certificate of substantial completion confirming that the Tenant Improvements have been substantially completed, subject to minor details of construction, decoration or mechanical adjustment which do not unreasonably affect Tenant's ability to do business in the Leased Premises, or (iv) the date upon which Tenant opens for business in the Leased Premises or any portion thereof, the Tenant Improvements shall be deemed complete and possession of the Leased Premises shall be deemed delivered to Tenant for all purposes under the Lease.

5. Landlord Delay. A "Landlord Delay" means the length of any actual delay in the permitting, construction or completion of the Tenant Improvements which actually and directly delays completion of the Tenant Improvements, which (a) is not caused by Force Majeure, and (b) is caused by:

(i) Any material interference with the Tenant Improvements due to entry into the Building by Landlord, or any of Landlord's agents, employees, licensees, contractors or subcontractors (as distinguished from any interference pursuant to Landlord's rights under the Lease), which interference is not ceased within three (3) business days after Landlord's receipt of notice therefor from Tenant (including a reasonably detailed description of such interference); or

(ii) Any failure of Landlord to respond to Tenant's request for consent or approval within the time periods set forth in this Work Letter;

Exhibit C-6

(iii) Any matters specifically identified elsewhere in this Work Letter or in the Lease as Landlord Delays; or

(iv) Landlord's failure to deliver possession of the Leased Premises in the Delivery Condition within the period set forth in Paragraph 2.4 of the Lease, then the date upon which the Tenant Improvements are deemed complete in accordance with Paragraph 4 of this Work Letter shall be delayed by the cumulative duration of such Landlord Delays.

Exhibit C-7

EXHIBIT A TO WORK LETTER

FORM OF CONSENT TO ASSIGNMENT

This CONSENT TO ASSIGNMENT ("Consent") is dated as of this__ day of _________,202_, by ______________,a ____________ (["Tenant Improvement Architect"/"Tenant Improvement Contractor"/"Tenant Improvement Project Manager"/"Other Consultant"]), in favor of Drawbridge 4600 Patrick Henry, LLC, a Delaware limited liability company ("Landlord").

RECITALS

A. Landlord and EBR Systems, Inc., a Delaware corporation ("Tenant"), entered into that certain Lease dated as of ____________,2024 (the "Lease") for premises located in the City of Santa Clara, County of Santa Clara, State of California, commonly known as or otherwise described as 4600 Patrick Henry Drive, Santa Clara, California; and

B. Exhibit C to the Lease is a Work Letter pursuant to which Tenant has retained [Tenant Improvement Architect/Tenant Improvement Contractor/Tenant Improvement Project Manager/Other Consultant].

AGREEMENT

Now THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, [Tenant Improvement Architect/Tenant Improvement Contractor/Tenant Improvement Project Manager/Other Consultant] hereby consents to the assignment effected by Paragraph 3 of the Work Letter.

IN WITNESS WHEREOF, [Tenant Improvement Architect/Tenant Improvement Contractor/Tenant Improvement Project Manager/Other Consultant] has executed this Consent as of the date first written above.

[TENANT IMPROVEMENT ARCHITECT/TENANT IMPROVEMENT CONTRACTOR/TENANT IMPROVEMENT PROJECT MANAGER/OTHER CONSULT ANT]

	[TENANT IMPROVEMENT ARCHITECT/TENANT IMPROVEMENT CONTRACTOR/TENANT IMPROVEMENT PROJECT MANAGER/OTHER CONSULT ANT]

	By:
	Title:

	By:
	Title:

Exhibit C-8

EXHIBIT B TO WORK LETTER

TENANT IMPROVEMENT SPACE PLANS

Exhibit C-9

EXHIBIT D

FORM OF SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT

[Attached]

Exhibit D-1

SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT

This SUBORDINATION, NON-DISTURBANCE, AND ATTORNMENT AGREEMENT (the "Agreement") is dated as of [_________], 202[_] and is by and among DRAWBRIDGE 4600 PATRICK HENRY, LLC, a Delaware limited liability company, having an office at Three Embarcadero Center, Suite 2300, San Francisco, California 94111 ("Landlord"), EBR SYSTEMS, INC., a Delaware corporation, having an office at 480 Oakmead Pkwy, Sunnyvale, CA 94085 ("Tenant"), and FORETHOUGHT LIFE INSURANCE COMPANY, an Indiana life insurance company, having an office at 30 Hudson Yards, Suite 7500, New York, New York 10001, in its role as lead lender on behalf of itself and any other lenders party to the Loan Documents (defined below) (together with their affiliates, participants, successors and assigns and such other co-lenders as may exist from time to time, collectively, "Lender").

WHEREAS, Lender has made or intends to make a loan to Landlord and certain of its affiliates (the "Loan"), which Loan shall be evidenced by one or more promissory notes (as the same may be amended, modified, restated, severed, consolidated, renewed, replaced, or supplemented from time to time, the "Promissory Note") and secured by, among other things, that certain Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing (as the same may be amended, restated, replaced, severed, split, supplemented or otherwise modified from time to time, the "Mortgage") encumbering the real property located at 4600 Patrick Henry Drive, Santa Clara, California 95054, more particularly described on Exhibit A annexed hereto and made a part hereof (the "Property");

WHEREAS, by a lease agreement (the "Lease") dated [_______, _ 20_], between Landlord (or Landlord's predecessor in title) and Tenant, Landlord leased to Tenant a portion of the Property, as said portion is more particularly described in the Lease (such portion of the Property hereinafter referred to as the "Premises");

WHEREAS, Tenant acknowledges that Lender will rely on this Agreement in making the Loan to Landlord; and

WHEREAS, Lender and Tenant desire to evidence their understanding with respect to the Mortgage and the Lease as hereinafter provided.

NOW, THEREFORE, in consideration of the mutual agreements hereinafter set forth, the parties hereto hereby agree as follows:

1. Tenant covenants, stipulates and agrees that the Lease and all of Tenant's right, title and interest in and to the Property thereunder (including but not limited to any option to purchase, right of first refusal to purchase or right of first offer to purchase the Property or any portion thereof) is hereby, and shall at all times continue to be, subordinated and made secondary and inferior in each and every respect to the Mortgage and the lien thereof, to all of the terms, conditions and provisions thereof and to any and all advances made or to be made thereunder, so that at all times the Mortgage shall be and remain a lien on the Property prior to and superior to the Lease for all purposes, subject to the provisions set forth herein. Subordination is to have the same force and effect as if the Mortgage and such renewals, modifications, consolidations, replacements and extensions had been executed, acknowledged, delivered and recorded prior to the Lease, any amendments or modifications thereof and any notice thereof.

2. Lender agrees that if Lender exercises any of its rights under the Mortgage, including entry or foreclosure of the Mortgage or exercise of a power of sale under the Mortgage, Lender will not disturb Tenant's right to use, occupy and possess the Premises under the terms of the Lease so long as Tenant is not in default beyond any applicable notice and grace period under any term, covenant or condition of the Lease.

3. If, at any time Lender (or any person, or such person's successors or assigns, who acquires the interest of Landlord under the Lease through foreclosure of the Mortgage or otherwise) shall succeed to the rights of Landlord under the Lease as a result of a default or event of default under the Mortgage, Tenant shall attorn to and recognize such person so succeeding to the rights of Landlord under the Lease (herein sometimes called "Successor Landlord'') as Tenant's landlord under the Lease, said attornment to be effective and self-operative without the execution of any further instruments. Although said attornment shall be self-operative, Tenant agrees to execute and deliver to Lender or to any Successor Landlord, such other instrument or instruments as Lender or such other person shall from time to time request in order to confirm said attornment.

4. Landlord authorizes and directs Tenant to honor any written demand or notice from Lender instructing Tenant to pay rent or other sums to Lender rather than Landlord (a "Payment Demand''), regardless of any other or contrary notice or instruction which Tenant may receive from Landlord before or after Tenant's receipt of such Payment Demand. Tenant may rely upon any notice, instruction, Payment Demand, certificate, consent or other document from, and signed by Lender, and Tenant shall have no duty to Landlord to investigate the same or the circumstances under which the same was given. Any payment made by Tenant to Lender or in response to a Payment Demand shall be deemed proper payment by Tenant of such sum pursuant to the Lease.

5. If Lender shall become the owner of the Property or the Property shall be sold by reason of foreclosure or other proceedings brought to enforce the Mortgage or if the Property shall be transferred by deed in lieu of foreclosure, Lender or any Successor Landlord shall not be:

(a) liable for any act or omission of any prior landlord (including Landlord) or bound by any obligation to make any payment to Tenant which was required to be made prior to the time Lender succeeded to any prior landlord (including Landlord); or

(b) obligated to cure any defaults of any prior landlord (including Landlord) which occurred, or to make any payment to Tenant which was required to be paid by any prior landlord (including Landlord), prior to the time that Lender, or any Successor Landlord succeeded to the interest of such landlord under the Lease; or

(c) obligated to perform any construction obligations of any prior landlord (including Landlord) under the Lease or liable for any defects (latent, patent or otherwise) in the design, workmanship, materials, construction or otherwise with respect to improvements and buildings constructed on the Property, except that Lender or any Successor Landlord shall be responsible for repair, restoration, and maintenance obligations expressly provided in the Lease; or

(d) subject to any offsets, defenses or counterclaims which Tenant may be entitled to assert against any prior landlord (including Landlord); or

(e) bound by any payment of rent or additional rent by Tenant to any prior landlord (including Landlord) for more than one month in advance; or

(f) bound by any amendment, modification, termination or surrender of the Lease made without the written consent of Lender (except in each case that, pursuant to any termination right of Tenant set forth in the Lease, Tenant may exercise its rights under the Lease after giving to Lender the notice and cure period required by the Lease); or

(g) liable or responsible for or with respect to the retention, application and/or return to Tenant of any security deposit paid to any prior landlord (including Landlord), whether or not still held by such prior landlord, unless and until Lender or any Successor Landlord has actually received said deposit or transfer of the letter of credit for its own account as the landlord under the Lease as security for the performance of Tenant's obligation under the Lease (which deposit shall, nonetheless, be held subject to the provisions of the Lease).

Upon any attornment pursuant to this Agreement, Landlord shall promptly deliver to Lender or Successor Landlord, as the case may be, the Security Deposit (as defined in the Lease). Notwithstanding anything to the contrary in this Agreement, Lender or Successor Landlord, as the case may be, shall honor the payment of the Tenant Improvement Allowance (as defined in the Lease).

6. Tenant hereby represents, warrants, covenants and agrees to and with Lender:

(a) to deliver to Lender, by certified mail, return receipt requested, a duplicate of each notice of default delivered by Tenant to Landlord at the same time as such notice is given to Landlord and no such notice of default shall be deemed given by Tenant under the Lease unless and until a copy of such notice shall have been so delivered to Lender. Lender shall have the right (but shall not be obligated) to cure such default. Tenant shall accept performance by Lender of any term, covenant, condition or agreement to be performed by Landlord under the Lease with the same force and effect as though performed by Landlord. Tenant further agrees to afford Lender a period of thirty (30) days beyond any period afforded to Landlord for the curing of such default during which period Lender may elect (but shall not be obligated) to seek to cure such default, or, if such default cannot be cured within that time, then such additional time as may be necessary to cure such default (including but not limited to commencement of foreclosure proceedings) during which period Lender may elect (but shall not be obligated) to seek to cure such default, prior to taking any action to terminate the Lease. If the Lease shall terminate for any reason, upon Lender's written request given within thirty (30) days after such termination, Tenant, within fifteen (15) days after such request, shall execute and deliver to Lender a new lease of the Premises for the remainder of the term of the Lease and upon all of the same terms, covenants and conditions of the Lease;

(b) that Tenant is the sole owner of the leasehold estate created by the Lease; and

(c) to promptly certify in writing to Lender, in connection with any proposed assignment of the Mortgage, whether or not any default on the part of Landlord then exists under the Lease and to deliver to Lender any tenant estoppel certificates required under the Lease.

7. Tenant acknowledges that the interest of Landlord under the Lease is assigned to Lender solely as security for the Promissory Note, and Lender shall have no duty, liability or obligation under the Lease or any extension or renewal thereof, unless Lender shall specifically undertake such liability in writing or Lender becomes and then only with respect to periods in which Lender becomes, the fee owner of the Property.

8. This Agreement shall be governed by and construed in accordance with the laws of the State in which the Premises is located (excluding the choice of law rules thereof).

9. This Agreement and each and every covenant, agreement and other provisions hereof shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns (including, without limitation, any successor holder of the Promissory Note) and may be amended, supplemented, waived or modified only by an instrument in writing executed by the party against which enforcement of the termination, amendment, supplement, waiver or modification is sought.

10. All notices to be given under this Agreement shall be in writing and shall be deemed served upon receipt by the addressee if served personally or, if mailed, upon the first to occur of receipt or the refusal of delivery as shown on a return receipt, after deposit in the United States Postal Service certified mail, postage prepaid, addressed to the address of Landlord, Tenant, or Lender appearing below. Such addresses may be changed by notice given in the same manner. If any party consists of multiple individuals or entities, then notice to any one of same shall be deemed notice to such party.

If to Lender:

Forethought Life Insurance Company
30 Hudson Yards, Suite 7500

New York, New York 10001

Attention: Real Estate General Counsel

Email: RECreditNotices@kkr.com

with a copy to :

Forethought Life Insurance Company
c/o Global Atlantic Financial Company
20 Guest Street, 9th Floor

Attention: Mortgage Operations
Email: Mortgage_Ops@gafg.com

	Forethought Life Insurance Company c/o Global Atlantic Financial Company 30 Hudson Yards, Suite 7500 New York, New York 10001 Attention: Gary Silber Email: gary.silber@gafg.com

with a copy to:	Brownstein Hyatt Farber Schreck, LLP 675 15^th Street, Suite 2900 Denver, Colorado 80202 Attention: David Curfman, Esq Email: dcurfman@bhfs.com

If to Tenant:	If prior to the Lease Commencement Date:

	EBR Systems, Inc. 480 Oakmead Pkwy Sunnyvale, CA 94085 Attention: Gary Doherty Email: Gary.doherty@ebrsystemsinc.com

with a copy to:	Cooley LLP 11951 Freedom Dr., Suite 1400 Reston, VA 20190 Attention: Peter Crain, Esq. Email: pcrain@cooley.com

	If after the Lease Commencement Date:

	EBR Systems, Inc. At the Leased Premises Attention: Gary Doherty Email: Gary.doherty@ebrsystemsinc.com

with a copy to:	Cooley LLP 11951 Freedom Dr., Suite 1400 Reston, VA 20190 Attention: Peter Crain, Esq. Email: pcrain@cooley.com

If to Landlord:	Drawbridge 4600 Patrick Henry, LLC Three Embarcadero Center Suite 2310 San Francisco, California 94111 Attention: Michael Embree Email: membree@drawbridgerealty.com

with a copy to :

Mintz Levin Cohn Ferris Glovsky and Popeo PC

2049 Century Park East

Suite 300

Los Angeles, California 90067

Attention: Brandon Barker

Email: bebarker@mintz.com

11. If this Agreement conflicts with the Lease, then this Agreement shall govern as between the parties and any Successor Landlord, including upon any attornment pursuant to this Agreement. This Agreement supersedes, and constitutes full compliance with, any provisions in the Lease that provide for subordination of the Lease to, or for delivery of nondisturbance agreements by the holder of, the Mortgage.

12. In the event Lender shall acquire Landlord's interest in the Premises, Tenant shall look only to the estate and interest, if any, of Lender in the Property for the satisfaction of Tenant's remedies for the collection of a judgment (or other judicial process) requiring the payment of money in the event of any default by Lender as a Successor Landlord under the Lease or under this Agreement, and no other property or assets of Lender shall be subject to levy, execution or other enforcement procedure for the satisfaction of Tenant's remedies under or with respect to the Lease, the relationship of the landlord and tenant under the Lease or Tenant's use or occupancy of the Premises or any claim arising under this Agreement.

13. If any provision of this Agreement is held to be invalid or unenforceable by a court of competent jurisdiction, such provision shall be deemed modified to the extent necessary to be enforceable, or if such modification is not practicable, such provision shall be deemed deleted from this Agreement, and the other provisions of this Agreement shall remain in full force and effect, and shall be liberally construed in favor of Lender.

14. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written.

	TENANT:

	EBR SYSTEMS, INC., a Delaware corporation


	By:
		Name:
		Title:

STATE OF ---	)
	) ss.
COUNTY OF ---	)

On the ___ day of ___ in the year ____________ before me, the undersigned, a Notary Public in and for said State, personally appeared _______________, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his capacity, and that by his signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument.


(Notarial Seal)	Notary Public

[Signatures continue on following page]

	LANDLORD:

	DRAWBRIDGE 4600 PATRICK HENRY, LLC, a Delaware limited liability company


	By:
		Name:
		Title:

STATE OF ---	)
	) ss.
COUNTY OF ---	)


(Notarial Seal)	Notary Public

[Signatures continue on following page]

	LENDER, in its role as lead lender on behalf of itself and any other lenders party to the Loan Documents:

	FORETHOUGHT LIFE INSURANCE COMPANY, an Indiana life insurance company


	By:
		Name:
		Title:

STATE OF ---	)
	) ss.
COUNTY OF _______	)


(Notarial Seal)	Notary Public

[Signatures continue on following page]

Exhibit A

Legal Description of Property

Real property in the City of Santa Clara, County of Santa Clara, State of California, described as follows:

PARCEL ONE:

ALL OF PARCEL 17, AS SHOWN UPON THAT CERTAIN MAP ENTITLED, "PARCEL MAP BEING A RESUBDIVISION OF PARCELS 1, 3, 4, 5 & 9 AND AREAS A, B, & D AS SHOWN ON PARCEL MAP 3399 RECORDED IN BOOK 368 OF MAPS AT PAGES 36 AND 37, SANTA CLARA COUNTY RECORDS", WHICH MAP WAS FILED FOR RECORD IN THE OFFICE OF THE RECORDER OF THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA ON DECEMBER 29, 1976 IN BOOK 386 OF MAPS AT PAGES 4 AND 5.

PARCEL TWO:

THAT PORTION OF THE FOLLOWING DESCRIBED REAL PROPERTY THAT LIES WITHIN THE AREA DELINEATED ON THE SAN FRANCISCO WATER DEPARTMENT DRAWING C-1096 ATTACHED TO THAT CERTAIN UNRECORDED LEASE DATED JULY 26, 1977 BETWEEN CITY AND COUNTY OF SAN FRANCISCO, A MUNICIPAL CORPORATION, BY AND THROUGH ITS PUBLIC UTILITIES COMMISSION AND VANDERSON CONSTRUCTION, INC., A CALIFORNIA CORPORATION, WHOSE INTEREST WAS ASSIGNED TO LARVAN PROPERTIES, A CALIFORNIA GENERAL PARTNERSHIP BY INSTRUMENT DATED JULY 26, 1977, WHICH INTEREST WAS ASSIGNED TO MELP VII L.P., A CALIFORNIA LIMITED PARTNERSHIP, BY INSTRUMENT DATED MARCH 12, 1998, WHICH INTEREST WAS ASSIGNED TO JAMES R. CASTELLANOS, TRUSTEE OF THE JRC TRUST I U/T/A/ DATED AUGUST 14, 1986, DAVID J. TEECE, GILBERT I. MORGAN, TRUSTEE OF THE GILBERT

I. MORGAN REVOCABLE 1991 TRUST, AND AUDREY MORGAN, AS TENANTS IN COMMON, WHICH INTEREST WAS ASSIGNED TO 4600 PATRICK HENRY, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, BY INSTRUMENT DATED MARCH 2000, WHICH INTEREST WAS ASSUMED BY SBMS 2000-C3 HENRY DRIVE LIMITED PARTNERSHIP, A DELAWARE LIMITED PARTNERSHIP, WHICH INTEREST WAS ASSIGNED TO MCKAY HENRY, LLC, AS LESSEE, BY INSTRUMENT DATED OCTOBER 14, 2011 AND WHICH INTEREST WAS ASSIGNED TO DRAWBRIDGE 4600 PATRICK HENRY, LLC, A DELAWARE LIMITED LIABILITY COMPANY BY INSTRUMENT DATED, MAY 2, 2013 AND WHICH LEASE HAS BEEN AMENDED BY THAT CERTAIN AMENDMENT TO PARKING AND LANDSCAPING LEASE DATED MARCH 14, 1998 AND BY THAT CERTAIN AMENDMENT NO. 2 TO PARKING AND LANDSCAPING LEASE DATED JANUARY 26, 1999 AS THE SAME IS DISCLOSED BY THAT CERTAIN MEMORANDUM OF GROUND LEASE RECORDED MAY 3, 2013, AS DOCUMENT NO. 22204316 AS FOLLOWS:

A STRIP OF LAND 80 FEET WIDE, LYING 40 FEET EITHER SIDE OF THE FOLLOWING DESCRIBED CENTER LINE AND EXTENSIONS THERETO, ACROSS THAT CERTAIN PARCEL OF LAND OF WHICH A ONE-HALF INTEREST WAS CONVEYED TO MRS. AIMEE L. JOHNSON BY THAT CERTAIN ORDER AND DECREE OF SETTLEMENT AND FINAL DISTRIBUTION OF THE ESTATE OF WILLIAM BILLINGS, DECEASED, DATED FEBRUARY 18, 1944 AND RECORDED FEBRUARY 18, 1944 IN VOLUME 1186 AT PAGE 129, OFFICIAL RECORDS, SANTA CLARA COUNTY, HEREINAFTER REFERRED TO AS THE JOHNSON PARCEL; SAID CENTER LINE BEING MORE PARTICULARLY DESCRIBED AS BEGINNING AT A POINT IN THE WESTERLY BOUNDARY OF THE COFFIN ROAD, SAID POINT BEING DISTANT ALONG SAID WESTERLY BOUNDARY SOUTH 0Q 01' 45" EAST 986.97 FEET AND SOUTH 0Q 01' 15" WEST 317.36 FEET FROM ITS INTERSECTION WITH THE NORTHERLY BOUNDARY OF THE ABOVE MENTIONED JOHNSON PARCEL; THENCE, FROM SAID POINT OF COMMENCEMENT, NORTH 89Q 33' 45" WEST 236.55 FEET AND SOUTH 77Q 28' WEST 2443.74 FEET TO A POINT IN THE COMMON BOUNDARY BETWEEN THE ABOVE MENTIONED JOHNSON PARCEL AND THAT CERTAIN PARCEL OF LAND CONVEYED BY MARIA FARIA TO SAN JOSE ABSTRACT AND TITLE INSURANCE CO., BY DEED DATED APRIL 24, 1943 AND RECORDED APRIL 26, 1943 IN VOLUME 1140 AT PAGE 94, OFFICIAL RECORDS, SANTA CLARA COUNTY, HEREINAFTER REFERRED TO AS THE SAN JOSE ABSTRACT AND TITLE INSURANCE CO. PARCEL; SAID POINT BEING DISTANT ALONG SAID COMMON BOUNDARY NORTH OQ 02' WEST 235.84 FEET FROM THE SOUTHEASTERLY CORNER OF THE ABOVE MENTIONED SAN JOSE ABSTRACT AND TITLE INSURANCE CO. PARCEL; THE EASTERLY END OF SAID STRIP BEING THE ABOVE MENTIONED WESTERLY BOUNDARY OF THE COFFIN ROAD, AND THE WESTERLY END OF SAID STRIP BEING THE ABOVE MENTIONED COMMON BOUNDARY BETWEEN THE JOHNSON AND SAN JOSE ABSTRACT AND TITLE INSURANCE CO. PARCELS.

PARCEL THREE:

THOSE REAL PROPERTY RIGHTS AS RESERVED IN THAT CERTAIN DEED RECORDED ON NOVEMBER 03, 1950 IN BOOK 2089, PAGE 315, OFFICIAL RECORDS OF SANTA CLARA COUNTY.

EXHIBIT E

FORM OF ESTOPPEL CERTIFICATE

_____________, 20__

Re:	4600 Patrick Henry Drive,
	Santa Clara, California

Ladies and Gentlemen:

Reference is made to that certain Lease, dated as of _____________,20_, between Drawbridge 4600 Patrick Henry, LLC, a Delaware limited liability company ("Landlord"), and the undersigned (herein referred to as the "Lease"). A copy of the Lease [and all amendment thereto] is[are] attached hereto as Exhibit A. At the request of Landlord in connection with ..___________State reasons for request for estoppel certificate _____________,the undersigned hereby certifies to Landlord and to [state names of other parties requiring certification (e.g., lender, purchaser, investor)] ("Lender"/ "Purchaser"/ "Investor"), as of the date hereof, and each of your respective successors and assigns, as follows:

1. The undersigned is the tenant under the Lease.

2. The Lease is in full force and effect and has not been amended, modified, supplemented or superseded except as indicated in Exhibit A.

3. There is no presently exercisable defense, offset, claim or counterclaim by or in favor of the undersigned against Landlord under the Lease or against the obligations of the undersigned under the Lease. The undersigned has no renewal, extension or expansion option, no right of first offer or right of first refusal and no other similar right to renew or extend the term of the Lease or expand the property demised thereunder except as may be expressly set forth in the Lease. The undersigned has no right or option to purchase the Leased Premises or the Property.

4. The undersigned has accepted possession of the Leased Premises, all improvements to be constructed in the Leased Premises by Landlord, if any, have been completed and accepted by Tenant, and any tenant construction or other allowances have been paid in full except for:_____________

5. The undersigned is not aware of any default now existing of the undersigned or of Landlord under the Lease, nor of any event which with notice or the passage of time or both would constitute a default of the undersigned or of Landlord under the Lease.

6. The undersigned has not received notice of a prior transfer, assignment, hypothecation or pledge by Landlord of any of Landlord's interest in the Lease. The undersigned has not assigned, sublet or transferred its interest in the Lease or the premises demised thereunder and is in occupancy of the premises demised thereunder.

Exhibit E-1

7. The current monthly base rent due under the Lease is $__________and has been paid through , and all additional rent due and payable under the Lease has been paid through . No rent has been paid for more than one (1) month in advance of the due date thereof.

8. The term of the Lease commenced on ______________,and expires on _______________,unless sooner terminated pursuant to the provisions of the Lease. Landlord has performed all work required by the Lease for the undersigned's initial occupancy of the demised property.

9. The undersigned has deposited the sum of $_____________ with Landlord as security for the performance of its obligations as tenant under the Lease, and no portion of such deposit has been applied by Landlord to any obligation under the Lease.

10. There is no free rent period pending, nor is Tenant entitled to any Landlord's contribution.

11. The undersigned has not assigned the Lease and has not subleased the Leased Premises or any part thereof.

12. Other than in compliance with all applicable laws and incidental to the ordinary course of the undersigned's permitted use of the leased premises, the undersigned has not used or stored any hazardous substances in the leased premises.

13. No voluntary actions or, to the undersigned's knowledge, involuntary actions are pending against the undersigned under the bankruptcy laws of the United States or any state thereof.

The undersigned certifies that the individual executing this estoppel certificate on behalf of the undersigned is authorized to do so on behalf of the undersigned. The above certifications are made to Landlord and [Lender/ Purchaser/ Investor] knowing that Landlord and [Lender/ Purchaser/ Investor] will rely thereon in [making a loan secured in part by an assignment of the Lease/ accepting an assignment of the Lease/ investing in Landlord/other]. Nothing in this estoppel certificate shall be deemed to amend, modify or alter the Lease and in the event of any conflict between the Lease and this estoppel certificate, the Lease shall prevail. This estoppel certificate is delivered in good faith and shall not subject the undersigned or the individual signatory to any liability (other than estoppel effect) for any purpose, including, without limitation, damages for inaccuracies, errors or omissions.

Very truly yours,


By:
Name:
Title:

Exhibit E-2

EXHIBIT F

FORM OF LETTER OF CREDIT

[Attached]

Exhibit F-1

IRREVOCABLE STANDBY LETTER OF CREDIT NUMBER __________

ISSUE DATE: _______________

ISSUING BANK:

FIRST-CITIZENS BANK & TRUST COMPANY

3003 TASMAN DRIVE

2ND FLOOR, MAIL SORT HF210 SANTA CLARA, CALIFORNIA 95054

BENEFICIARY:

APPLICANT:

AMOUNT:	US$___	_______AND XX/100 U.S. DOLLARS)

EXPIRATION DATE:	___________________________ (ONEYEARFROMISSUEDATE)

PLACE OF EXPIRATION:	ISSUING BANK'S COUNTERS AT ITS ABOVE ADDRESS

DEAR SIR/MADAM:

WE HEREBY ESTABLISH OUR IRREVOCABLE STANDBY LETTER OF CREDIT NO. SVBSF IN YOUR FAVOR AVAILABLE BY PAYMENT AGAINST YOUR PRESENTATION TO US OF THE FOLLOWING DOCUMENT:

BENEFICIARY'S SIGNED AND DATED STATEMENT STATING AS FOLLOWS:

"WE HEREBY DEMAND THE AMOUNT OF US$_________________, UNDER IRREVOCABLE STANDBY LETTER OF CREDIT NO. SVBSF-- WITH PAYMENT TO BE MADE TO THE FOLLOWING ACCOUNT:

[INSERT WIRE INSTRUCTIONS (TO INCLUDE NAME AND ACCOUNT NUMBER OF THE BENEFICIARY)]."

PARTIAL DRAWS AND MULTIPLE PRESENTATIONS ARE ALLOWED.

THIS LETTER OF CREDIT SHALL BE AUTOMATICALLY EXTENDED FOR ADDITIONAL PERIODS OF ONE YEAR, WITHOUT AMENDMENT, FROM THE PRESENT OR EACH FUTURE EXPIRATION DATE UNLESS AT LEAST 60 DAYS PRIOR TO THE THEN CURRENT EXPIRATION DATE WE SEND TO YOU A NOTICE BY OVERNIGHT COURIER SERVICE AT THE ABOVE ADDRESS THAT THIS LETTER OF CREDIT

ALL THE DETAILS SET FORTH HEREIN IN THIS LETTER OF CREDIT DRAFT IS APPROVED BY APPLICANT. IF THERE IS ANY DISCREPANCY BETWEEN THE DETAILS OF THIS LETTER OF CREDIT DRAFT AND THE LETTER OF CREDIT APPLICATION, BETWEEN APPLICANT AND FIRST CITIZENS BANK & TRUST COMPANY, THE DETAILS HEREOF SHALL PREVAIL.

Applicant's Authorized Signature		Date:

SVB Confidential

WILL NOT BE EXTENDED BEYOND THE THEN CURRENT EXPIRATION DATE. IN NO EVENT SHALL THIS LETTER OF CREDIT BE AUTOMATICALLY EXTENDED BEYOND _____________. IN THE EVENT WE SEND SUCH NOTICE OF NON-EXTENSION, YOU MAY DRAW HEREUNDER BY YOUR PRESENTATION TO US OF YOUR SIGNED AND DATED STATEMENT AS SET FORTH ABOVE.

ALL DEMANDS FOR PAYMENT SHALL BE MADE BY PRESENTATION OFTHE REQUIRED DOCUMENTS ON A BUSINESS DAY AT OUR OFFICE (THE "BANK'S OFFICE") AT: FIRST-CITIZENS BANK & TRUST COMPANY,: 3003 TASMAN DRIVE, MAIL SORT HF 210, SANTA CLARA, CA 95054, ATTENTION: GLOBAL TRADE FINANCE. AS USED IN THIS LETTER OF CREDIT, "BUSINESS DAY" SHALL MEAN ANY DAY OTHER THAN A SATURDAY, SUNDAY OR A DAY ON WHICH BANKING INSTITUTIONS IN THE STATE OF CALIFORNIA ARE AUTHORIZED OR REQUIRED BYLAW TO CLOSE.

FACSIMILE PRESENTATIONS ARE ALSO PERMITTED. EACH FACSIMILE TRANSMISSION SHALL BE MADE AT: (408) 496-2418 OR (408) 969-6510; AND UNDER CONFIRMATORY TELEPHONE ADVICE TO: (408) 450-5001 OR (408) 654-7176, FIRST-CITIZENS BANK & TRUST COMPANY ATTENTION: GLOBAL TRADE FINANCE. ABSENCE OF THE AFORESAID TELEPHONE ADVICE SHALL NOT AFFECT OUR OBLIGATION TO HONOR ANY DRAW REQUEST. IF YOU PRESENT A DEMAND FOR PAYMENT BY FACSIMILE, YOU DO NOT NEED TO PRESENT THE ORIGINAL OF THIS LETTER OF CREDIT OR ANY AMENDMENTS, IF ANY.

WE ENGAGE WITH YOU THAT PRESENTATIONS MADE UNDER AND IN CONFORMITY WITH THE TERMS AND CONDITIONS OF THIS LETTER OF CREDIT WILL BE DULY HONORED.

THIS LETTER OF CREDIT IS TRANSFERABLE (AND MAY BE SUCCESSIVELY TRANSFERRED) IN WHOLE BUT NOT IN PART ONE OR MORE TIMES, BUT IN EACH INSTANCE ONLY TO A SINGLE BENEFICIARY AS TRANSFEREE AND FOR THE THEN AVAILABLE AMOUNT, ASSUMING SUCH TRANSFER TO SUCH TRANSFEREE WOULD BE IN COMPLIANCE WITH THEN APPLICABLE LAW AND REGULATION, INCLUDING BUT NOT LIMITED TO THE REGULATIONS OF THE U.S. DEPARTMENT OF TREASURY AND U.S. DEPARTMENT OF COMMERCE. AT THE TIME OF TRANSFER, THE ORIGINAL LETTER OF CREDIT AND ORIGINALS OR COPIES OF ALL AMENDMENTS, IF ANY, TO THIS LETTER OF CREDIT MUST BE SURRENDERED TO US AT OUR ADDRESS INDICATED IN THIS LETTER OF CREDIT TOGETHER WITH OUR TRANSFER FORM ATTACHED HERETO AS EXHIBIT A DULY EXECUTED. APPLICANT SHALL PAY OUR TRANSFER FEE OF ¼ OF 1% OF THE TRANSFER AMOUNT (MINIMUM US$250.00) UNDER THIS LETTER OF CREDIT AND SUCH TRANSFER FEE SHALL NOT BE A CONDITION OF ANY SUCH TRANSFER. EACH TRANSFER SHALL BE EVIDENCED BY EITHER (1) OUR ENDORSEMENT ON THE REVERSE OF THE LETTER OF CREDIT AND WE SHALL FORWARD THE ORIGINAL OF THE LETTER OF CREDIT SO ENDORSED TO THE TRANSFEREE OR (2) OUR ISSUING A REPLACEMENT LETTER OF CREDIT TO THE TRANSFEREE ON SUBSTANTIALLY THE SAME TERMS AND CONDITIONS AS THE TRANSFERRED LETTER OF CREDIT (IN WHICH EVENT, UPON THE TRANSFEREE'S RECEIPT OF SUCH REPLACEMENT LETTER OF CREDIT, THE TRANSFERRED LETTER OF CREDIT SHALL HAVE NO FURTHER EFFECT).

IF ANY INSTRUCTIONS ACCOMPANYING A DRAWING UNDER THIS LETTER OF CREDIT REQUEST THAT PAYMENT IS TO BE MADE BY TRANSFER TO YOUR ACCOUNT WITH ANOTHER BANK, WE WILL ONLY EFFECT SUCH PAYMENT BY FED WIRE TO A U.S. REGULATED BANK, AND WE AND/OR SUCH OTHER BANK MAY RELY ON AN ACCOUNT NUMBER SPECIFIED IN SUCH INSTRUCTIONS EVEN IF THE NUMBER IDENTIFIES A PERSON OR ENTITY DIFFERENT FROM THE INTENDED PAYEE.

THIS LETTER OF CREDIT IS SUBJECT TO THE INTERNATIONAL STANDBY PRACTICES (ISP98), INTERNATIONAL CHAMBER OF COMMERCE, PUBLICATION NO. 590.

Applicant's Authorized Signature		Date:

SVB Confidential

FIRST-CITIZENS BANK & TRUST COMPANY


AUTHORIZED SIGNATURE

ALL THE DETAILS SET FORTH HEREIN IN THIS LETTER OF CREDIT DRAFT IS APPROVED BY APPLICANT. IF THERE IS ANY DISCREPANCY BETWEEN THE DETAILS OF THIS LETTER OF CREDIT DRAFT AND THE LETTER OF CREDIT APPLICATION, BETWEEN APPLICANT AND FIRST CITIZENS BANK & TRUST COMPANY, THE DETAILS HEREOF SHALL PREVAIL.

Applicant's Authorized Signature		Date:

SVB Confidential

IRREVOCABLE STANDBY LETTER OF CREDIT NUMBER __________

EXHIBIT A

FORM OF TRANSFER FORM

DATE: ____________________

TO: FIRST-CITIZENS BANK & TRUST COMPANY
3003 TASMAN DRIVE	RE: IRREVOCABLE STANDBY LETTER OF CREDIT
SANTA CLARA, CA 95054	NO. _______________ISSUED BY
ATTN: GLOBAL TRADE FINANCE	FIRST-CITIZENS BANK & TRUST COMPANY
SANTA CLARA
STANDBY LETTERS OF CREDIT	L/CAMOUNT: _____________________

LADIES AND GENTLEMEN:

FOR VALUE RECEIVED, THE UNDERSIGNED BENEFICIARY HEREBY IRREVOCABLY TRANSFERS TO:


(NAME OF TRANSFEREE)


(ADDRESS)

ALL RIGHTS OF THE UNDERSIGNED BENEFICIARY TO DRAW UNDER THE ABOVE LETTER OF CREDIT UP TO ITS AVAILABLE AMOUNT AS SHOWN ABOVE AS OF THE DATE OF THIS TRANSFER.

BY THIS TRANSFER, ALL RIGHTS OF THE UNDERSIGNED BENEFICIARY IN SUCH LETTER OF CREDIT ARE TRANSFERRED TO THE TRANSFEREE. TRANSFEREE SHALL HAVE THE SOLE RIGHTS AS BENEFICIARY THEREOF, INCLUDING SOLE RIGHTS RELATING TO ANY AMENDMENTS, WHETHER INCREASES OR EXTENSIONS OR OTHER AMENDMENTS, AND WHETHER NOW EXISTING OR HEREAFTER MADE. ALL AMENDMENTS ARE TO BE ADVISED DIRECTLY TO THE TRANSFEREE WITHOUT NECESSITY OF ANY CONSENT OF OR NOTICE TO THE UNDERSIGNED BENEFICIARY.

THE ORIGINAL OF SUCH LETTER OF CREDIT IS RETURNED HEREWITH, AND WE ASK YOU TO EITHER (1) ENDORSE THE TRANSFER ON THE REVERSE THEREOF, AND FORWARD IT DIRECTLY TO THE TRANSFEREE WITH YOUR CUSTOMARY NOTICE OF TRANSFER, OR (2) ISSUE A REPLACEMENT LETTER OF CREDIT TO THE TRANSFEREE ON SUBSTANTIALLY THE SAME TERMS AND CONDITIONS AS THE TRANSFERRED LETTER OF CREDIT (IN WHICH EVENT, UPON THE TRANSFEREE'S RECEIPT OF SUCH REPLACEMENT LETTER OF CREDIT, THE TRANSFERRED LETTER OF CREDIT SHALL HAVE NO FURTHER EFFECT).

SINCERELY,

(BENEFICIARY'S NAME)

(SIGNATURE OF BENEFICIARY)

(NAME AND TITLE)

SIGNATURE AUTHENTICATED

The name(s), title(s), and signature(s) conform to that/those on file with us for the company and the signature(s) is/are authorized to execute this instrument.

Name of Bank)

(Address of Bank)

(City, State, ZIP Code)

(Authorized Name and Title)

(Telephone number)

ALL THE DETAILS SET FORTH HEREIN IN THIS LETTER OF CREDIT DRAFT IS APPROVED BY APPLICANT. IF THERE IS ANY DISCREPANCY BETWEEN THE DETAILS OF THIS LETTER OF CREDIT DRAFT AND THE LETTER OF CREDIT APPLICATION, BETWEEN APPLICANT AND FIRST CITIZENS BANK & TRUST COMPANY, THE DETAILS HEREOF SHALL PREVAIL.

Applicant's Authorized Signature		Date:

SVB Confidential

EXHIBIT G

FORM OF PARKING SUBLEASE

[Attached]

Exhibit G-1

PARKING SUBLEASE

This PARKING SUBLEASE (the "Parking Sublease") is for reference purposes made as of January 17, 2025 by and between DRAWBRIDGE 4600 PATRICK HENRY, LLC, a Delaware limited liability company ("Sublessor"), and EBR SYSTEMS, INC., a Delaware corporation ("Sublessee").

RECITALS

A. The City and County of San Francisco, a municipal corporation ("City"), acting by and through its Public Utilities Commission ("SFPUC"), as the landlord, and Sublessor, as the tenant, are parties to that certain Public Utilities Commission San Francisco Water Department Right of Way Lease dated July 26, 1977, between City and Vanderson Construction, Inc., a California corporation, whose interest as lessee was assigned to Larvan Properties, a California general partnership, by instrument dated July 26, 1977, which interest was assigned to MELP VII L.P., a California limited partnership, by instrument dated March 12, 1998, which interest was assigned to James R. Castellanos, Trustee of The JRC Trust I ult/a dated August 14, 1986, David J. Teece, Gilbert I. Morgan, Trustee of The Gilbert I. Morgan Revocable 1991 Trust, and Audrey Morgan, as tenants in common, which interest was assigned to 4600 Patrick Henry, LLC, a California limited liability company, by instrument dated March 2000, which interest was assumed by SBMS 2000-C3 Henry Drive Limited Partnership, a Delaware limited partnership, which interest was assigned to McKay Henry, LLC, a California limited liability company, by instrument dated October 14, 2011, and which interest was thereafter assigned to Lessee, as lessee., as amended by that certain Amendment to Parking and Landscaping Lease dated March 14, 1998, as further amended by that certain Amendment No. 2 to Parking and Landscaping Lease dated January 24, 1999 (collectively, and as the same may be hereafter amended, modified or changed, the "1977 Parking Lease"), pursuant to which Sublessor leases from the City an approximately 0.346 acre parcel of land shown crosshatched on Exhibit A attached to and made a part of the 1977 Lease (the "City Premises").

B. Concurrently with the execution and delivery of this Parking Sublease, Sublessor, as landlord ("Landlord"), and Sublessee, as tenant ("Tenant"), shall enter into that certain Lease of even date herewith (the "Commercial Lease"), pursuant to which Sublessor shall lease to Sublessee and Sublessee shall lease from Sublessor, upon the terms and conditions set forth in the Commercial Lease, those certain premises (the "Leased Premises"), consisting of approximately 51,136 rentable square feet comprising all of the interior space in that certain building (the "Building") located at 4600 Patrick Henry Drive in the City of Santa Clara, County of Santa Clara, State of California. The Building is located adjacent to the City Premises. A true and complete copy of the Commercial Lease is attached hereto as Exhibit B.

C. Sublessee desires during the Sublease Term (defined below) the use of the access roads, parking areas, circulation drives, and facilities within the City Premises (hereinafter referred to as the "Sublease Premises") for parking and vehicular and pedestrian access to and from the Leased Premises and to perform Sublessee's obligations under this Parking Sublease, subject to the terms and conditions set forth below. Subject to the City consenting to this Parking Sublease, Sublessor is willing to grant Sublessee the use of the access roads, parking areas, circulation drives, and facilities within the Sublease Premises during the Sublease Term for parking and vehicular and pedestrian access to and from the Leased Premises and to perform Sublessee's obligations under this Parking Sublease, subject to the terms and conditions set forth below.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

1. Sublease of Sublease Premises Subject to the terms and conditions set forth in this Parking Sublease, Sublessor hereby subleases to Sublessee, and Sublessee hereby subleases from Sublessor, during the Sublease Term, the Sublease Premises for parking and vehicular and pedestrian access to and from the Leased Premises. Sublessor shall deliver to Sublessee, and Sublessee shall accept, possession of the Sublease Premises in its AS IS condition, WITH ALL FAULTS on the Parking Sublease Commencement Date (as defined below). During the Sublease Tenn, Sublessee shall have the use of the access roads, parking areas, circulation drives, and facilities within the Sublease Premises for parking, and vehicular and pedestrian access to and from the Leased Premises and to perform Sublessee's obligations under this Parking Sublease, subject to the right of the City under the 1977 Parking Lease to enter into the City Premises and the right of Sublessor and its agents, employees, contractors and other representatives to access the Sublease Premises to the extent needed to perform any of Sublessor's obligations under this Parking Sublease or the Commercial Lease. The right of Sublessee and its employees, agents, representatives, vendors, invitees, guests, permittees, and contractors (collectively, "Sublessee Agents") to use the Sublease Premises shall be subject and subordinate to the terms and conditions of the 1977 Parking Lease, and Sublessee shall not act or fail to act, or permit any of the Sublessee Agents to act or fail to act, in any manner that will cause a violation or breach of any of the provisions of the 1977 Parking Lease. If Sublessee or any of the Sublessee Agents act or fail to act in any manner that causes a violation or breach of any of the provisions of the 1977 Parking Lease, then such violation or breach shall not constitute or be deemed a breach or default by Landlord under the Commercial Lease or by Sublessor under this Parking Sublease. Sublessee hereby acknowledges that it has received a copy of the 1977 Parking Lease from Sublessor.

2. City Consent to Parking Sublease. Notwithstanding anything contained in this Parking Sublease to the contrary, the effectiveness of this Parking Sublease is expressly conditioned upon Sublessee's receipt of the written consent of the City to Sublessee's use of the Sublease Premises pursuant to the terms of this Parking Sublease during the Sublease Term on substantially the form attached hereto as Exhibit C or such other form required by the City that is reasonably acceptable to Sublessor. Notwithstanding anything to the contrary set forth in this Parking Sublease, nothing in this Parking Sublease shall be deemed to amend or modify the terms and conditions of the 1977 Parking Lease. In the event of any conflict between the terms and conditions of this Parking Sublease and the terms and conditions of the 1977 Parking Lease, the terms and conditions of the 1977 Parking Lease shall govern and control. Any consent provided by the City to this Parking Sublease shall not be deemed to be an endorsement or approval by the City of the terms and/or conditions of the Commercial Lease.

3. Use. Sublessee and the Sublessee Agents may use the Sublease Premises during the Sublease Term solely for the purposes expressly provided in Paragraph 1 above and then only in conformance with this Parking Sublease and all applicable governmental laws, regulations, rules, and ordinances. Sublessee shall not commit or suffer to be committed, any waste upon the Sublease Premises, or any nuisance, or other acts or things which may unreasonably disturb the quiet enjoyment of any other tenant or occupant in any buildings adjacent to or near the Property (as defined in the Commercial Lease), or allow any sale by auction upon the Sublease Premises. No waste materials or refuse shall be dumped upon or permitted to remain upon any part of the Sublease Premises, except in trash containers designated for that purpose by Sublessor. No materials, supplies, equipment, finished products or semifinished products, raw materials, or articles of any nature shall be stored upon or permitted to remain on any portion of the Sublease Premises. Sublessee shall not operate any recreational vehicles, inoperative vehicles, or equipment on any portion of the Sublease Premises.

4. Sublease Term. Unless sooner terminated in accordance with the terms hereof, the term of this Parking Sublease (the "Sublease Term") shall commence on the date first written above (the "Parking Sublease Commencement Date"), and as stated in Exhibit B, and shall be coterminous with the Lease Term (as defined in the Commercial Lease), as it may be extended pursuant to Article 15 of the Commercial Lease. Notwithstanding the foregoing to the contrary, if Sublessor and Sublessee desire to extend the Lease Tenn, but not pursuant to Article 15 of the Commercial Lease, this Parking Sublease shall only continue during such extension of the Lease Term if the City provides its written consent to Sublessee's use of the Sublease Premises pursuant to the terms of this Parking Sublease during such extension of the Lease Term on a form required by the City that is reasonably acceptable to Sublessor. If, during the Sublease Term, the 1977 Parking Lease terminates, in whole or in part, for any or no reason, then this Parking Sublease shall terminate automatically concurrently therewith unless earlier terminated. Sublessor agrees that it will not voluntarily amend or modify the 1977 Parking Lease in a manner that would materially and adversely affect Sublessee's use of the Leased Premises or access to the Leased Premises or reduce the aggregate number of parking spaces within the Sublease Premises below those, when added to the number of parking spaces on the Property, required to service the Leased Premises under the applicable zoning for the Property (as defined in the Commercial Lease). If the Commercial Lease terminates for any or no reason, then this Parking Sublease shall terminate automatically concurrently therewith unless earlier terminated.

5. Rent. In consideration for Sublessor subleasing the Sublease Premises to Sublessee pursuant to the terms of this Parking Sublease, Sublessee shall pay to Sublessor, as rent, concurrently with Sublessee's execution and delivery of this Parking Sublease, the sum of One Dollar ($1.00).

6. Additional Rent. All real property taxes and other sums due hereunder shall be referred to herein collectively as "Additional Rent".

7. Place of Payment. Rent, Additional Rent and other sums, if any, required to be paid by Sublessee to Sublessor pursuant to the terms hereof, shall be payable in lawful money of the United States of America to Sublessor to such person(s) and to such place(s) as Sublessor shall designate in writing from time to time.

8. Expenses. As a part of Property Operating Expenses (as defined in the Commercial Lease) under the Commercial Lease, Sublessee shall reimburse Sublessor, as Additional Rent, all taxes and assessments levied or assessed on the Sublease Premises and/or on Sublessor's leasehold interest in the Sublease Premises (except to the extent such taxes, if such taxes were considered Real Property Taxes (as defined in the Commercial Lease) under the Commercial Lease, would be excluded from the definition of Property Operating Expenses pursuant to the terms of the Commercial Lease), together with all other rent due and payable by Sublessor under the 1977 Parking Lease, which become due or accrue during the Sublease Term under the 1977 Parking Lease.

9. Indemnity. Sublessee shall defend with competent counsel satisfactory to Sublessor any claims made or legal actions filed or threatened against the Landlord Indemnitees (as defined in the Commercial Lease) with respect to the violation of any Law (as defined in the Commercial Lease), or the death, bodily injury, personal injury, property damage, or interference with contractual or property rights suffered by any third party occurring within the Sublease Premises or resulting from the use by Sublessee or any of the Sublessee Agents of the Sublease Premises, or resulting from the activities or actions of Sublessee or any of the Sublessee Agents in or about the Sublease Premises, and Sublessee shall indemnify and hold the Landlord Indemnitees harmless from any loss, liability, penalties, or expense whatsoever resulting therefrom, except to the extent proximately caused by the active gross negligence or willful misconduct of Sublessor. Sublessor shall defend with competent counsel reasonably satisfactory to Sublessee any claims made or legal actions filed or threatened against Sublessee with respect to the violation of any Law, or the death, bodily injury, personal injury, property damage, or interference with contractual or property rights, to the extent proximately caused by the gross negligence or willful misconduct of Sublessor, or Sublessor's failure to perform an obligation expressly undertaken by Sublessor pursuant to this Parking Sublease after applicable notice and cure periods set forth in Paragraph 12.3 of the Commercial Lease, in each case except to the extent proximately caused by the negligence or willful misconduct of Sublessee or any of the Sublessee Agents. For avoidance of doubt, the indemnity in Section 19 of the 1977 Parking Lease is incorporated herein by this reference and applies to any actions of Sublessee under this Parking Sublease. This Section 9 shall survive the expiration or sooner termination of this Parking Sublease.

10. Alterations. Sublessee shall not make or permit any improvements, alterations, or additions to the Sublease Premises without the prior written consent of Sublessor and of the City, which consent may be given or withheld by Sublessor or the City, in their respective sole and absolute discretion. Notwithstanding the foregoing, Sublessor shall not withhold its consent to any such alteration to the Sublease Premises if the City has provided its written consent to the same.

11. Reimbursable Expenses. Sublessee shall pay or reimburse Sublessor, as Additional Rent, within thirty (30) days following Sublessee's receipt from time to time of a written invoice(s), together with reasonable supporting documentation, for all costs and expenses charged to or payable by Sublessor under the 1977 Parking Lease as a result of any violation thereof by Sublessee or any of the Sublessee Agents.

12. Assignment and Subletting. Sublessee shall not be entitled to assign, encumber or otherwise transfer this Parking Sublease or any interest herein, or to further sublet all or any portion of the City Premises or the Sublease Premises without the prior written consent of Sublessor and the City, which consent may be withheld in the respective sole and absolute discretion of Sublessor and/or the City.

13. Acceptance of Sublease Premises. Sublessee acknowledges that neither Sublessor nor any of the Landlord lndemnitees have made any representation or warranty (express or implied) as to the suitability of Sublessor's interest in the Sublease Premises for the conduct of Sublessee's business, the condition of the Sublease Premises, or the use which may be made thereof and Sublessee has independently investigated and is satisfied that the Sublease Premises is suitable for Sublessee's intended use.

14. Default. Any default by Sublessee under Paragraph 12.1 of the Commercial Lease shall automatically be a default by Sublessee under this Parking Sublease.

15. Casualty; Condemnation. If there is any damage to or destruction of any of the parking areas located in the Sublease Premises, then, unless the Commercial Lease is otherwise terminated pursuant to Article 10 thereof, Sublessor shall be responsible for maintaining, repairing, or replacing, as the case may be, such parking areas and the costs for such maintenance, repair or replacement shall be included in Property Operating Expenses. In the event of any taking or partial taking of the Sublease Premises related to the exercise of the power of eminent domain, Sublessee shall not be entitled to any award made, consideration paid or damages ordered as a result of such taking, it being understood that the 1977 Parking Lease currently provides that the City shall be entitled to any such award, consideration or damages.

16. Insurance. Throughout the term of this Parking Sublease, Sublessee shall obtain and keep in force, at its sole cost and expense, the insurance required of the "Lessee" set forth in Section 22 of the 1977 Parking Lease, including, if and as applicable, any increases in liability limits and amounts required by the City thereunder. The foregoing shall not be construed to obviate Sublessor's obligation to obtain and keep in force all policies of insurance required of the "Lessee" under the 1977 Parking Lease.

17. Additional Provisions Incorporated by Reference into this Parking Sublease. The provisions of Paragraphs 2.7, 3.4, 3.5, 4.7, 4.8, 4.9, 4.11, 4.12, 4.13, 5.l(b), 5.3, 5.5, 6.3, 6.4, 8.1, 9.1, 9.3, 13.1, 13.2, 13.6, 13.8, 13.9, 13.10, 13.11, 13.12, 13.13, 13.14, 13.16, 13.17 and Articles 12 and 14 of the Commercial Lease, also specified in Exhibit B, shall be deemed incorporated herein by reference and, in connection therewith, all such provisions of the Commercial Lease shall be read and construed mutatis mutandis so as to apply such provisions to this Parking Sublease in lieu of the Commercial Lease, Sublessor in lieu of Landlord, Sublessee in lieu of Tenant, the Sublease Premises in lieu of the Leased Premises, and otherwise, as applicable.

18. Successors and Assigns. This Parking Sublease contains the entire agreement of the parties hereto concerning Sublessee's sublease of the Sublease Premises, and the covenants and conditions herein contained, and shall apply to and bind the permitted successors and assigns of the parties hereto.

19. Surrender of the Sublease Premises. On the expiration or earlier termination of this Parking Sublease, Sublessee shall surrender the Sublease Premises to Sublessor in its condition existing as of the date possession or use of the same is delivered to Sublessee, ordinary wear and tear excepted. If the Sublease Premises is not so surrendered at the expiration or earlier termination of this Parking Sublease, Sublessee shall indemnify, defend, protect and hold the Landlord Indemnitees harmless from and against loss or liability resulting from delay by Sublessee in so surrendering the Sublease Premises, including without limitation, any costs required to place the Sublease Premises in such condition and any claims made by any succeeding tenant, subtenant or licensee or losses to Sublessor due to lost opportunities to sublease to succeeding subtenants or to license to licensees.

20. Counterparts. This Parking Sublease may be executed in counterparts, each of which shall be deemed an original and together shall constitute one instrument. Signatures to this Parking Sublease transmitted by hand-delivery, mail, overnight courier (such as Federal Express), pdf. Electronic transmission or electronic signature shall be valid and effective to bind the party so signing.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, Sublessor and Sublessee have executed this Parking Sublease as of the date first set forth above.

SUBLESSOR:

DRAWBRIDGE 4600 PATRICK HENRY, LLC,

a Delaware limited liability company

By:	/s/ Charlie McEachron
Name:	Charlie McEachron
Title:	Chief Executive Officer

SUBLESSEE:

EBR SYSTEMS, INC.,

a Delaware corporation

By:	/s/ Gary Doherty
Name:	Gary Doherty
Title:	Chief Financial Officer

EXHIBIT A TO PARKING SUBLEASE

SUBLEASE PREMISES

[Attached]

EXHIBIT B TO PARKING SUBLEASE

COMMERCIAL LEASE

[Attached]

EXHIBIT B-1 TO PARKING SUBLEASE

CONFIRMATION OF COMMENCEMENT DATE

January 17, 2025

RE: Parking Sublease between EBR SYSTEMS, INC., a Delaware corporation (Sublessee), and DRAWBRIDGE 4600 PATRICK HENRY, LLC, a Delaware limited liability company (Sublessor), for the Premises leased to Sublessor, under the Parking Lease between Sublessor and the CITY AND COUNTY OF SAN FRANCISCO, a municipal corporation, acting by and through its Public Utilities Commission.

This letter will confirm that for all purposes of the Parking Sublease, the Parking Sublease Commencement Date (as defined in Section 4 of the Parking Sublease) is January 17, 2025, and the Lease Commencement Date (as defined in Paragraph 2.3 of the Commercial Lease) is to be determined as set forth in Paragraph 2.3 of the Commercial Lease. Unless otherwise extended or terminated earlier, this Parking Sublease is expected to expire on the last day of the one hundred thirty-second (132nd) full calendar month following the Lease Commencement Date.

	DRAWBRIDGE 4600 PATRICK HENRY, LLC, a Delaware limited liability company

	By:	/s/ Charlie McEachron
	Name:	Charlie McEachron
	Title:	Chief Executive Officer

EXHIBIT B-2 TO PARKING SUBLEASE

EXCERPTS FROM COMMERCIAL LEASE

2.7

Accessibility. In accordance with California Civil Code Section 1938, Landlord hereby informs Tenant that as of the Effective Date of this Lease, the Leased Premises has not been inspected by a Certified Access Specialist (as defined in California Civil Code Section 55.52(3)) ("CASp"). California Civil Code Section 1938(e) provides:

Accordingly, Landlord and Tenant hereby mutually agree that if Tenant desires to obtain a CASp inspection, (i) the CASp inspection shall be at Tenant's sole cost and expense, (ii) the inspection shall be performed by a CASp that is then currently certified in California and has been reasonably approved by Landlord, (iii) the CASp inspection shall take place during regular business hours with at least five (5) business day's prior written notice to Landlord, and if at any time Tenant is not the sole tenant of the Building, shall not materially disrupt any of the other tenants within the Building, (iv) Tenant shall promptly provide Landlord with a copy of the final report prepared in connection with the CASp inspection (the "CASp Report"), and (v) Tenant shall be solely responsible for promptly making any repairs or modifications necessary to correct violations of construction-related accessibility standards that are noted in the CASp Report, except to the extent such correction obligations are required of Landlord under this Lease (the "Required Modifications") and shall defend with competent counsel, indemnify and hold Landlord harmless from any claims, damages or liability resulting from Tenant's failure to make such Required Modifications. The Required Modifications shall not proceed until Landlord has approved in writing: (y) Tenant's contractor, and (z) complete and detailed plans and specifications for the Required Modifications. The Required Modifications shall be performed in a good and workmanlike manner in compliance with all of the terms of this Lease, including without limitation, Article 6 hereof. At Landlord's sole discretion, Landlord may elect to complete the Required Modifications. If Landlord elects to complete the Required Modifications, Landlord may forward invoices and bills for the expenses of the Required Modifications to Tenant, and Tenant shall, as Additional Rent, pay such invoices or bills and deliver satisfactory evidence of such payment to Landlord within thirty (30) days after Tenant's receipt of such invoices and bills.

Tenant hereby acknowledges and agrees that the CASp Report is to be kept strictly confidential, except as necessary for Tenant to complete Required Modifications and correct violations of construction-related accessibility standards as noted in the CASp Report. Accordingly, except as provided above or as may be required by law or court order, Tenant shall not release, publish or otherwise distribute (and shall not authorize or permit any other person or entity to release, publish or otherwise distribute) any information contained in the CASp Report, except as may be reasonably necessary in connection with Tenant's enforcement of rights under this Lease. Tenant's obligations hereunder shall survive the expiration or sooner termination of this Lease.

4.11 Environmental Protection. Tenant's obligations under this Paragraph 4.11 shall survive the expiration or termination of this Lease.

(a) As used herein, the term "Hazardous Materials" shall mean any toxic or hazardous substance, material or waste or any pollutant or infectious or radioactive material, including but not limited to those substances, materials or wastes regulated now or in the future under any of the following statutes or regulations and any and all of those substances included within the definitions of "hazardous substances," "hazardous materials," "hazardous waste," "hazardous chemical substance or mixture," "imminently hazardous chemical substance or mixture," "toxic substances," "hazardous air pollutant," "toxic pollutant," or "solid waste" in the (a) Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA" or "Superfund"), as amended by the Superfund Amendments and Reauthorization Act of 1986 ("SARA"), 42 U.S.C. § 9601 et seq., (b) Resource Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C. § 6901 et seq., (c) Federal Water Pollution Control Act ("FSPCA"), 33 U.S.C. § 1251 et seq., (d) Clean Air Act ("CAA"), 42 U.S.C. § 7401 et seq., (e) Toxic Substances Control Act ("TSCA"), 14 U.S.C. § 2601 et seq., (f) Hazardous Materials Transportation Act, 49 U.S.C. § 1801, et seq., (g) Carpenter-Presley-Tanner Hazardous Substance Account Act ("California Superfund"), Cal. Health & Safety Code § 25300 et seq., (h) California Hazardous Waste Control Act, Cal. Health & Safety code§ 25100 et seq., (i) Porter-Cologne Water Quality Control Act ("Porter-Cologne Act"), Cal. Water Code§ 13000 et seq., (j) Hazardous Waste Disposal Land Use Law, Cal. Health & Safety codes§ 25220 et seq., (k) Safe Drinking Water and Toxic Enforcement Act of 1986 ("Proposition 65"), Cal. Health & Safety code§ 25249.5 et seq., (l) Hazardous Substances Underground Storage Tank Law, Cal. Health & Safety code § 25280 et seq., (m) Air Resources Law, Cal. Health & Safety Code§ 39000 et seq., and (n) regulations promulgated pursuant to said laws or any replacement thereof, or as similar terms are defined in the federal, state and local laws, statutes, regulations, orders or rules. Hazardous Materials shall also mean any and all other biohazardous wastes and substances, materials and wastes which are, or in the future become, regulated under applicable Laws for the protection of health or the environment, or which are classified as hazardous or toxic substances, materials or wastes, pollutants or contaminants, as defined, listed or regulated by any federal, state or local law, regulation or order or by common law decision, including, without limitation, (i) trichloroethylene, tetrachloroethylene, perchloroethylene and other chlorinated solvents, (ii) any petroleum products or fractions thereof, (iii) asbestos, (iv) polychlorinated biphenyls, (v) flammable explosives, (vi) urea formaldehyde, (vii) radioactive materials and waste, and (viii) materials and wastes that are harmful to or may threaten human health, ecology or the environment.

(b) Notwithstanding anything to the contrary in this Lease, Tenant, at its sole cost, shall comply with, and shall cause the Tenant Parties to comply with, all Laws relating to the storage, use and disposal of Hazardous Materials at the Property by Tenant or any of the Tenant Parties; provided, however, that Tenant shall not be responsible (nor shall Tenant indemnify Landlord) for contamination of the Leased Premises and/or the Building or the Property (including, if applicable, any parking garage) by Hazardous Materials (x) existing as of the date the Leased Premises are delivered to Tenant (whether before or after the Lease Commencement Date), (y) that have migrated from outside the Property not caused by Tenant or any of the Tenant Parties, or (z) used, stored, disposed or otherwise released by Landlord or any Landlord Party ("Landlord's Hazardous Materials"). To the extent that Landlord's Hazardous Materials are discovered at the Property, Building or Leased Premises and remediation of the same is mandated by a governmental authority with competent jurisdiction in a written notice to Landlord (which remediation is not triggered by any of clauses (i)-(iii) of Paragraph 6.3), any remediation thereof of the Landlord's Hazardous Materials (to the extent so mandated) shall not be performed by Tenant and the cost therefor shall not be subject to inclusion in Property Maintenance Costs. Except for Office & Cleaning Supplies (hereinafter defined) and/or Permitted Hazardous Materials (hereinafter defined), Tenant shall not store, use or dispose of any Hazardous Materials within the Leased Premises. For purposes hereof, "Office & Cleaning Supplies" shall mean ordinary office and cleaning supplies used in compliance with all Laws and Restrictions. For purposes hereof, "Permitted Hazardous Materials" shall mean those Hazardous Materials set forth in Exhibit H attached hereto. Any changes to the Permitted Hazardous Materials shall be subject to the prior written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed. In no event shall Tenant or any of the Tenant Parties conduct any environmental tests of the Leased Premises or cause or permit to be discharged into the plumbing or sewage system of the Building or onto the land underlying or adjacent to the Building any Hazardous Materials. Tenant shall be solely responsible for and shall defend, indemnify, and hold Landlord and its agents harmless from and against all claims, costs and liabilities, including attorneys' fees and costs, arising out of or in connection with Tenant's storage, use and/or disposal of Hazardous Materials. If the presence of Hazardous Materials on the Leased Premises caused or permitted by Tenant or any of the Tenant Parties results in contamination or deterioration of water or soil, then Tenant shall promptly take any and all action necessary to clean up such contamination, but the foregoing shall in no event be deemed to constitute permission by Landlord to allow the presence of such Hazardous Materials. Tenant shall further be solely responsible for, and shall defend, indemnify, and hold Landlord and its agents harmless from and against all claims, costs and liabilities, including attorneys' fees and costs, arising out of or in connection with any removal, cleanup and restoration work and materials required hereunder to return the Leased Premises and any other property of whatever nature to their condition existing prior to the appearance of the Hazardous Materials.

4.12 Rules And Regulations. If at any time Tenant is not the sole tenant of the Building, Landlord shall have the right from time to time to establish reasonable rules and regulations and/or amendments or additions thereto respecting the use of the Leased Premises and the Outside Areas for the care and orderly management of the Property. Upon delivery to Tenant of a copy of such rules and regulations or any amendments or additions thereto, Tenant shall comply with such rules and regulations. A violation by Tenant of any of such rules and regulations shall constitute a default by Tenant under this Lease. If there is a conflict between the rules and regulations and any of the provisions of this Lease, the provisions of this Lease shall prevail. Landlord shall not be responsible or liable to Tenant for the violation of such rules and regulations by any other tenant of the Property.

4.13 Reservations. Landlord reserves the right from time to time to grant, without the consent or joinder of Tenant, such easements, rights of way and dedications that Landlord reasonably deems necessary, and to cause the recordation of parcel maps and restrictions, so long as such easements, rights of way and dedications do not unreasonably interfere with the use of and access to the Leased Premises and Outside Areas (including all parking areas therein) by Tenant, decrease the rights of Tenant under this Lease (other than to a de minimis extent) or increase the amount of Rent or other fees paid by Tenant under this Lease. Tenant agrees to execute any documents reasonably requested by Landlord to effectuate any such easement rights, dedications, maps or restrictions.

(b) Landlord's Obligations.

(ii) If Landlord shall fail to commence any repair obligations required under Paragraphs 2.4 or 5.l(b)(i) above within thirty (30) days following Tenant's written request for such repairs and thereafter complete such repairs with commercially reasonable due diligence, except in the case of any emergency repairs (i.e., repairs required to avoid imminent, physical injury to any person or imminent, physical damage to any of Tenant's property) in which case Tenant shall provide notice as soon as reasonably practicable under the given circumstances and Tenant shall only be permitted to undertake the repair necessary to end the emergency, then Tenant may elect to make such repairs at Landlord's expense by complying with the following provisions of this Paragraph 5.l(b)(ii). Except in the case of emergency repairs, before making any repairs which are the obligation of Landlord under the terms of this Lease, and following the expiration of the applicable cure period set forth above with respect to non-emergency repairs, Tenant shall deliver to Landlord a notice for the need for such repair ("Self-Help Notice"), which notice shall specifically advise Landlord that Tenant intends to exercise its self-help right hereunder. Should Landlord fail, within three (3) business days following receipt of the Self-Help Notice, to commence the necessary repair, or to otherwise dispute in good faith the need for such repair or that such repair does not have to be taken by Landlord pursuant to the terms of this Lease, then Tenant shall have the right to make such repair on behalf of Landlord so long as such repair is performed in strict compliance with all Laws and Restrictions. In the event Tenant properly takes such action in accordance with this Paragraph 5.1(b)(ii), and such work will affect the Building structure and/or the Building systems (including any Base Building Systems), Tenant shall use a qualified contractor which normally and regularly performs similar work in comparable buildings in the area of the Property. Tenant shall provide Landlord with a reasonably detailed invoice together with reasonable supporting evidence of the costs actually incurred by Tenant in performing such repairs. To the extent such costs incurred by Tenant do not otherwise constitute Property Maintenance Costs, Landlord shall either reimburse Tenant for the reasonable costs of such repairs within thirty (30) days following receipt of Tenant's invoice for such costs or deliver a written objection stating with specificity the good-faith reasons Landlord disputes, the need for such repairs, or that such repair is not the obligation of Landlord pursuant to the terms of the Lease, or the costs so incurred are excessive. If Landlord fails to either pay Tenant's invoice within such thirty (30) day period or deliver a written objection, Tenant shall have the right to offset such costs against Base Monthly Rent next coming due under this Lease until fully paid, but not in excess of 50% of each monthly installment of Base Monthly Rent. If Landlord delivers to Tenant, within thirty (30) days, a written objection to the payment of such invoice, setting forth Landlord's reasons for its claim that such action did not have to be taken by Landlord pursuant to the terms of this Lease, or that in Landlord's reasonable and good-faith opinion the repairs were not necessary, or that the costs so incurred are excessive (in which case Landlord shall pay the amount it contends would not have been excessive if the only objection is to the costs incurred), then Tenant shall not be entitled to offset any amount from Base Monthly Rent, but as Tenant's sole and exclusive remedy, the dispute shall be resolved by arbitration pursuant to Paragraph 5.l(b)(iii) below. If Tenant prevails in the arbitration, the amount of the award shall include the amount of Tenant's expenditure, and interest at the Standard Interest Rate (from the time of each expenditure by Tenant until the date Tenant receives such amount by payment or offset) and Tenant's reasonable attorneys' fees and related costs, which shall be paid by Landlord to Tenant no later than ten (10) business days after the date of the award. Tenant shall be responsible for obtaining any required governmental permits before commencing the repair work, except in the case of emergency. Tenant shall be liable for any damage, loss or injury resulting from its performance of such work. If Landlord prevails in the arbitration, the amount of the award shall include Landlord's reasonable attorneys' fees and related costs and shall be deemed Additional Rent hereunder due and owing by Tenant no later than ten (10) business days after the date of the award.

(ii) Notwithstanding the foregoing to the contrary, in the event that Tenant is prevented from using, and does not use, the Leased Premises or any portion thereof as a result of a Trigger Event (as defined below), then Tenant shall give Landlord written notice thereof and if such Trigger Event continues for five (5) consecutive business days after Landlord's receipt of such written notice from Tenant (such period herein called the "Eligibility Period"), then Tenant's Base Monthly Rent and Tenant's obligation to pay Property Operating Expenses shall be abated or reduced, as the case may be, beginning on the day immediately following the expiration of the Eligibility Period and continuing for such period of time that Tenant continues to be so prevented from using, and does not actually use, the Leased Premises or a portion thereof as a result of the subject Trigger Event, in the proportion that the rentable area of the portion of the Leased Premises that Tenant is prevented from using, and does not use, bears to the total rentable area of the Leased Premises. As used herein, the term "Trigger Event" means any of the following events: (1) any failure by Landlord to provide Tenant with access to the Leased Premises or the Property that materially impacts or interrupts Tenant's use of the Leased Premises, unless such failure is a result of any Laws or Restrictions, (2) Landlord's failure to perform Landlord's repair and maintenance obligations hereunder if such failure continues beyond any applicable notice and cure period and (3) a disruption of utilities to the Leased Premises, and such disruption is caused solely by the intentional acts, gross negligence or willful misconduct of Landlord or any of Landlord's employees, agents, contractors, or subcontractors (collectively "Landlord Parties"). This Paragraph 5.5(ii) shall not apply with respect to matters related to casualty or condemnation, which shall be governed by Article 10 and Article 11 below, respectively.

6.4 Liens. Tenant shall keep the Property and every part thereof free from any lien, and shall pay when due all bills arising out of any work performed, materials furnished, or obligations incurred by Tenant, its agents, employees or contractors relating to the Property. If any such claim of lien is recorded against Tenant's interest in this Lease, the Property or any part thereof, Tenant shall bond against, discharge or otherwise cause such lien to be entirely released within thirty (30) days after the sooner of Tenant's receipt of written notice of such lien, or Tenant obtaining actual knowledge of such lien. Tenant's failure to do so shall be conclusively deemed a material default under the terms of this Lease.

9.1 Tenant's Insurance. Tenant shall maintain insurance complying with all of the following:

(a) Tenant shall procure, pay for and keep in full force and effect, at all times during the Lease Term, the following:

(iii) Business income/extra expense insurance at limits sufficient to pay Base Monthly Rent and Additional Rent for a period of not less than twelve (12) months;

(iv) [Intentionally Omitted];

(v) [Intentionally Omitted];

(vi) Product liability insurance at the Leased Premises for not less than Tenant's Required Liability Coverage (as set forth in Article 1);

(vii) Workers' compensation insurance (statutory coverage) with employer's liability in amounts not less than $1,000,000 insurance sufficient to comply with all laws; and

agency under threat of condemnation or the exercise of such power.

ARTICLE 12

DEFAULT AND REMEDIES

12.1 Events Of Tenant's Default. Tenant shall be in default of its obligations under this Lease if any of the following events occur:

(a) Tenant shall have failed to pay Base Monthly Rent or any Additional Rent withing five (5) business days after receipt of written notice from Landlord that the same is overdue; or

(b) [Intentionally Omitted]; or

(30) days after written notice from Landlord to Tenant specifying the nature of such failure and requesting Tenant to perform same; provided that if the nature of such default is such that the same cannot reasonably be cured within a thirty (30) day period, no default shall be deemed to have occurred if Tenant diligently commences such cure within such 30-day period and thereafter diligently proceeds to rectify and cure such default; or

(d) (i) Tenant shall have sublet the Leased Premises or assigned or encumbered its interest in this Lease in violation of the provisions contained in Article 7, whether voluntarily or by operation of law; or

(e) Tenant shall have abandoned the Leased Premises and failed to keep the same in a safe and secure condition, and to maintain the Leased Premises in accordance with this Lease; or

(g) Tenant shall have made a general assignment of all or a substantial part of its assets for the benefit of its creditors; or

(j) A default of Tenant (beyond applicable notice and cure periods) occurs under the Parking Sublease.

(a) Landlord may, at Landlord's election, keep this Lease in effect and enforce, by an action at law or in equity, all of its rights and remedies under this Lease including, without limitation, (i) the right to recover the rent and other sums as they become due by appropriate legal action, (ii) the right to make payments required by Tenant, or perform Tenant's obligations and be reimbursed by Tenant for the cost thereof with interest at a rate equal to the Default Interest Rate from the date the sum is paid by Landlord until Landlord is reimbursed by Tenant, and (iii) the remedies of injunctive relief and specific performance to prevent Tenant from violating the terms of this Lease and/or to compel Tenant to perform its obligations under this Lease, as the case may be.

(i) Appointment of a receiver or keeper in order to protect Landlord's interest hereunder;

(ii) Consent to any subletting of the Leased Premises or assignment of this Lease by Tenant, whether pursuant to the provisions hereof or otherwise; or

(d) Landlord may, at Landlord's election, accelerate the payment of all Base Monthly Rent and Additional Rent due from Tenant under this Lease.

(i) The worth at the time of the award of the unpaid rent which had been earned at the time of termination; plus

(b) No service of process shall be made against any partner, manager, or member of Landlord except for the sole purpose of securing jurisdiction over the partnership or limited liability company; and

13.1 Taxes On Tenant's Property. Tenant shall pay before delinquency any and all taxes, assessments, license fees, use fees, permit fees and public charges of whatever nature or description levied, assessed or imposed against Tenant or Landlord by a governmental agency arising out of, caused by reason of or based upon Tenant's estate in this Lease, Tenant's ownership of property, improvements made by Tenant to the Leased Premises or the Outside Areas, improvements made by Landlord for Tenant's use within the Leased Premises or the Outside Areas, Tenant's use (or estimated use) of public facilities or services or Tenant's consumption (or estimated consumption) of public utilities, energy, water or other resources (collectively, "Tenant's Interest"). Upon demand by Landlord, Tenant shall furnish Landlord with satisfactory evidence of these payments. If any such taxes, assessments, fees or public charges are levied against Landlord, Landlord's property, the Building or the Property, or if the assessed value of the Building or the Property is increased by the inclusion therein of a value placed upon Tenant's Interest, regardless of the validity thereof, Landlord shall have the right to require Tenant to pay such taxes, and if not paid and satisfactory evidence of payment delivered to Landlord at least ten (10) days prior to delinquency, then Landlord shall have the right to pay such taxes on Tenant's behalf and to invoice Tenant for the same, in either case whether before or after the expiration or earlier termination of the Lease Term. Tenant shall, within the earlier to occur of (a) thirty (30) days of the date it receives an invoice from Landlord setting forth the amount of such taxes, assessments, fees, or public charge so levied, or (b) the due date of such invoice, pay to Landlord, as Additional Rent, the amount set forth in such invoice. Failure by Tenant to pay the amount so invoiced within such time period shall be conclusively deemed a default by Tenant under this Lease. Tenant shall have the right to bring suit in any court of competent jurisdiction to recover from the taxing authority the amount of any such taxes, assessments, fees or public charges so paid.

13.6 Estoppel Certificate. Tenant will, following any request by Landlord, promptly execute and deliver (or provide factual corrections) to Landlord an estoppel certificate substantially in the form attached hereto as Exhibit E, (i) certifying that this Lease is unmodified and in full force and effect, or, if modified, stating the nature of such modification and certifying that this Lease, as so modified, is in full force and effect, (ii) stating the date to which the rent and other charges are paid in advance, if any, (iii) acknowledging that there are not, to Tenant's knowledge, any uncured defaults on the part of Landlord hereunder, or specifying such defaults if any are claimed, and (iv) certifying such other information about this Lease as may be reasonably requested by Landlord, its Lender or prospective lenders, investors or purchasers of the Building or the Property. If Tenant shall fail to execute and deliver such estoppel certificate within ten (10) business days after Landlord's request therefor, Landlord shall have the right to provide Tenant with a second written request which request shall contain, in bold, capital letters, the following: "THIS NOTICE CONSTITUTES LANDLORD'S SECOND NOTICE OF ITS DEMAND FOR TENANT'S ESTOPPEL CERTIFICATE PURSUANT TO PARAGRAPH 13.6 OF THE LEASE; TENANT'S FAILURE TO RESPOND TO THIS NOTICE WITH AN EXECUTED ESTOPPEL CERTIFICATE IN SUBSTANTIALLY THE FORM PROVIDED IN THE LEASE WITHIN FIVE (5) BUSINESS DAYS SHALL RESULT IN AN EVENT OF DEFAULT UNDER THE LEASE." If Tenant fails to respond to such second notice with an executed estoppel certificate in substantially the form provided in Exhibit E attached hereto within five (5) business days of receipt, such failure shall be a default by Tenant under this Lease, no further notice shall be required under Paragraph 12. l(c) or any other provision of this Lease, and Landlord shall have all of the rights and remedies available to Landlord as Landlord would otherwise have in the case of any other default by Tenant. Landlord and Tenant intend that any statement delivered pursuant to this paragraph may be relied upon by any Lender or purchaser or prospective Lender or purchaser of the Building, the Property, or any interest in them.

If to Landlord:	Drawbridge 4600 Patrick Henry, LLC
	Three Embarcadero Center
	Suite 2310
	San Francisco, California 94111
	Attention: Michael Embree
	Email: membree@drawbridgerealty.com

	with a copy to:

	Mintz Levin Cohn Ferris Glovsky and Popeo PC
	2049 Century Park East
	Suite 300
	Los Angeles, California 90067
	Attention: Brandon Barker
	Email: bebarker@mintz.com

If to Tenant:	If prior to the Lease Commencement Date:

	EBR Systems, Inc.
	480 Oakmead Pkwy
	Sum1yvale, CA 94085
	Attention: Gary Doherty
	Email: Gary.doherty@ebrsystemsinc.com

	with a copy to:

	Cooley LLP
	11951 Freedom Dr., Suite 1400
	Reston, VA 20190
	Attention: Peter Crain, Esq.
	Email: pcrain@cooley.com

	If after the Lease Commencement Date:

	EBR Systems, Inc.
	At the Leased Premises
	Attention: Gary Doherty
	Email: Gary.doherty@ebrsystemsinc.com

	with a copy to:

	Cooley LLP
	11951 Freedom Dr., Suite 1400
	Reston, VA 20190

(a) Real Property Taxes. The term "Real Property Tax" or "Real Property Taxes" shall each mean Tenant's Expense Share of the following (to the extent applicable to any portion of the Lease Tenn, regardless of when the same are imposed, assessed, levied, or otherwise charged): (i) all taxes, assessments, levies and other charges of any kind or nature whatsoever, general and special, foreseen and unforeseen (including all installments of principal and interest required to pay any general or special assessments for public improvements and any increases resulting from reassessments caused by any change in ownership or new construction), now or hereafter imposed by any governmental or quasi-governmental authority or special district having the direct or indirect power to tax or levy assessments, which are levied or assessed for whatever reason against the Property, or any portion thereof, or Landlord's interest herein, or the fixtures, equipment and other property of Landlord that is an integral part of the Property and located thereon, or Landlord's business of owning, leasing or managing the Property or the gross receipts, income or rentals from the Property, (ii) all charges, levies or fees imposed by any governmental authority against Landlord by reason of or based upon the use of or number of parking spaces within the Property, the amount of public services or public utilities used or consumed (e.g. water, gas, electricity, sewage or waste water disposal) at the Property, the number of persons employed by tenants of the Property, the size (whether measured in area, volume, number of tenants or whatever) or the value of the Property, or the type of use or uses conducted within the Property, and all costs and fees (including attorneys' fees) reasonably incurred by Landlord in contesting any Real Property Tax and in negotiating with public authorities as to any Real Property Tax. If, at any time during the Lease Tenn, the taxation or assessment of the Property prevailing as of the Effective Date of this Lease shall be altered so that in lieu of or in addition to any the Real Property Tax described above there shall be levied, awarded or imposed (whether by reason of a change in the method of taxation or assessment, creation of a new tax or charge, or any other cause) an alternate, substitute, or additional use or charge (i) on the value, size, use or occupancy of the Property or Landlord's interest therein or (ii) on or measured by the gross receipts, income or rentals from the Property, or on Landlord's business of owning, leasing or managing the Property or (iii) computed in any manner with respect to the operation of the Property, then any such tax or charge, however designated, shall be included within the meaning of the terms "Real Property Tax" or "Real Property Taxes" for purposes of this Lease. Notwithstanding the foregoing, the terms "Real Property Tax" or "Real Property Taxes" shall not include estate, inheritance, transfer, gift or franchise taxes of Landlord or the federal or state income tax imposed on Landlord's income (personal or corporate) from all sources, any fines, penalties or interest resulting from Landlord's failure to timely pay any taxes (unless and to the extent such failure is the result of Tenant's failure to timely pay any Real Property Taxes), any items which are included in Property Maintenance Costs, any real estate taxes directly payable to the applicable taxing authority by Tenant or any other tenant of the Property (i.e., not paid by Landlord) under the applicable provisions of this Lease or their respective leases, and any Real Estate Taxes attributable to a period of time outside of the Lease Term. If Landlord receives a refund of Real Property Taxes or a credit against its future Real Property Taxes for any calendar year during the Lease Term for which Tenant paid Real Property Taxes, Landlord shall, at its election, either pay to Tenant, or credit against subsequent payments of Property Operating Expenses due hereunder, an amount equal to Tenant's Expense Share of the refund, net of any costs and expenses (including reasonable attorneys' fees) incurred by Landlord in achieving such refund; provided, however, if this Lease shall have expired or is otherwise terminated, Landlord shall refund in cash any such refund or credit due to Tenant within thirty (30) days after Landlord's receipt of such refund or its receipt of such credit against future Real Property Taxes. Landlord's obligation to so refund to Tenant any such refund or credit of Real Property Taxes shall survive such expiration or termination.

(c) Property Maintenance Costs. The term "Property Maintenance Costs" shall mean (to the extent applicable to any portion of the Lease Term, regardless of when the same are incurred):

(iii) Notwithstanding the foregoing or anything to the contrary in this Lease, Tenant shall not be responsible for the payment of, and "Property Maintenance Costs" shall not include:

(i) depreciation charges, penalties, premiums, interest and principal payments on Mortgages, ground rental payments and real estate brokerage and leasing commissions incurred by Landlord, excluding any payments by Landlord under the Parking Lease (as defined in the Parking Sublease); (ii) costs incurred for Landlord's general overhead, including the operation of the business entity which constitutes Landlord (as distinguished from the costs of operating, maintaining, repairing and managing the Property); (iii) costs of selling or financing any of Landlord's interest in the Property (for avoidance of doubt, excluding any capital expenditures that are ineluctable in Property Maintenance Costs); (iv) costs incurred by Landlord which are reimbursed by other tenants of the Property (other than through pass-through provisions in leases) or by insurance proceeds actually received by Landlord; (v) expenses incurred by Tenant or Landlord to the extent arising from the gross negligence or willful misconduct of Landlord in connection with this Lease; (vi) reserves in excess of commercially reasonable amounts for comparable properties; (vii) costs incurred to remove, abate or remediate Landlord's Hazardous Materials as set forth in Paragraph 4.1 l(b); (ix) Landlord's Insurance Costs or Real Property Taxes, or any other costs or fees that would result in double charges under this Lease; (x) costs in connection with leasing space in the Building, including brokerage commissions, brochures and marketing supplies, and legal fees in negotiating and preparing lease documents; (xi) salaries, fringe benefits or any other form of compensation of (y) employees above the grade of general manager (or its substantive equivalent), and (z) employees whose time is not spent directly and solely in the operation of the Property, provided that if any employee performs services in connection with the Property and other properties, costs associated with such employee may be proportionately included in Property Maintenance Costs based on the percentage of time such employee spends in connection with the operation, maintenance and management of the Property; (xii) overhead and profit increment paid to Landlord or to subsidiaries or affiliates of Landlord for goods and/or services at the Property to the extent the same exceeds the costs of such by unaffiliated third parties on a competitive basis; (xiii) costs incurred by Landlord in connection with the correction of latent defects in the original construction of the Building or the Outside Area; (xiv) all expenditures considered capital in nature as determined in accordance with generally accepted accounting principles, except those capital expenditures incurred which (i) are intended to reduce Property Operating Expenses, or (ii) are required by any applicable Laws or Restrictions after the Effective Date of this Lease, or (iii) are required to comply with Landlord's repair, maintenance and replacement obligations under this Lease, the cost of any of the forgoing to be amortized, with interest at the Standard Interest Rate, on a straight-line basis, over the useful life of the Capital Expenditure in question as determined based upon generally accepted accounting principles; (xv) expenses in connection with services or other benefits which are provided to another tenant or occupant of the Building or Property and which do not benefit Tenant; (xvi) all advertising and promotional costs but excluding any cost associated with life safety information or education services which are provided to the tenants of the Building or Property; (xvii) any costs resulting from the gross negligence or willful misconduct of Landlord; (xviii) costs, other than those incurred in ordinary maintenance and repair, for sculptures, paintings, fountains or other objects of art or the display of such items; (xix) any compensation or benefits paid to or provided to clerks, attendants or other persons in commercial concessions operated by Landlord; (xx) the cost of complying with any Laws in effect (and as interpreted and enforced) on the Delivery Date, provided that if any portion of the Property that was in compliance with applicable Laws (as interpreted and enforced) on the Delivery Date becomes out of compliance due to normal wear and tear, the cost of bringing such portion of the Property into such compliance shall be included in Property Maintenance Costs unless otherwise excluded pursuant to the terms hereof, and (xxi) any cost incurred prior to the Lease Commencement Date including, but not limited to, amortization of capital expense, taxes incurred for prior years but billed and paid after the Lease Commencement Date, etc., unless and to the extent incurred prior to the Lease Commencement Date but attributable to any period of time from and after the Lease Commencement Date (e.g., an expense incurred prior to the Lease Commencement Date for a period of time that straddles the Lease Commencement Date may be included in Property Maintenance Costs to the extent applicable to the period of time from and after the Lease Commencement Date).

Notwithstanding the foregoing, Tenant shall not be responsible for payment of any Excess Increase in Controllable Expenses in any calendar year. As used herein: ( 1) the term "Controllable Expenses" means Property Operating Expenses other than Real Property Taxes, Landlord's Insurance Costs, utilities, amounts due and payable by Landlord under the Parking Lease, and any other Property Operating Expenses not within the reasonable control of Landlord, (2) the term "Base Year Controllable Expenses" means the actual Controllable Expenses (annualized) incurred in calendar year 2025, grossed up as if the Property had been 100% leased and occupied for the entirety of calendar year 2025, (3) the term "Annual Increase" means a five percent (5%) per annum increase in Controllable Expenses, calculated annually on a compounding and cumulative basis, over the Base Year Controllable Expenses, and (4) the term "Excess Increase in Controllable Expenses" means an increase in Controllable Expenses in any given calendar year (annualized and grossed up as if the Property had been 100% leased and occupied for the entirety of such year) to the extent the Controllable Expenses in such year exceed the total Controllable Expenses that would have resulted in such year had Controllable Expenses increased each year by the amount of the Annual Increase. By way of example, but without limitation, if Base Year Controllable Expenses were $100.00 in calendar year 2025, then the total Controllable Expenses that could be included in Property Operating Expenses for calendar year 2026 would be $105.00, the total Controllable Expenses that could be included in Property Operating Expenses for calendar year 2027 would be $110.25, the total Controllable Expenses that could be included in Property Operating Expenses for calendar year 2028 would be $115.76, and so on. In the preceding example, if Controllable Expenses in both calendar year 2027 and calendar year 2028 were $112.50, then Landlord could only include $110.25 of Controllable Expenses within Property Operating Expenses in calendar year 2027, but $112.50 in calendar year 2028. The language of this paragraph shall apply only to the Leased Premises demised hereunder and shall not apply to any expansion space.

(e) Law. The term "Law" or "Laws" shall mean any judicial decisions and any statute, constitution, ordinance, resolution, regulation, rule, code, administrative order, condition of approval, or other requirements of any municipal, county, state, federal, or other governmental agency or authority having jurisdiction over the parties to this Lease, the Leased Premises, the Building, the Property, or any of them, in effect either at the Effective Date of this Lease or at any time during the Lease Term, including, without limitation, any regulation, order, or policy of any quasi-official entity or body (e.g. a board of fire examiners or a public utility or special district). Except to the extent otherwise expressly provided in this Lease, to the extent any Law or Restriction places limits on the Building or any portion thereof, or on the Property or any portion thereof, such limits shall be equitably allocated to the Leased Premises pro rata in the same proportion that the rentable square footage of the Leased Premises bears to the rentable square footage of the applicable Building or portion thereof, the Property, or portion thereof, as applicable.

(f) Lender. The term "Lender" shall mean the holder of any promissory note or other evidence of indebtedness secured by the Property or any portion thereof.

(g) Rent. The term "Rent" shall mean collectively Base Monthly Rent and all Additional Rent.

(h) Restrictions. The term "Restrictions" shall mean (as they may exist from time to time) any and all covenants, conditions and restrictions, private agreements, easements, and any other recorded documents or instruments affecting the use of the Property, the Building, the Leased Premises, and/or the Outside Areas. From and after the Effective Date of this Lease and continuing throughout the Lease Term, Landlord shall not voluntarily grant any Restrictions that would encumber the Leased Premises or the Outside Areas in a manner that would materially interfere with or prevent the Permitted Use within the Leased Premises or Outside Areas or Tenant's access to the Leased Premises or Outside Areas.

13.14 Miscellaneous. Should any provisions of this Lease prove to be invalid or illegal, such invalidity or illegality shall in no way affect, impair or invalidate any other provisions hereof, and such remaining provisions shall remain in full force and effect. Time is of the essence with respect to the performance of every provision of this Lease in which time of performance is a factor. Any copy of this Lease which is executed by the parties shall be deemed an original for all purposes. This Lease shall, subject to the provisions regarding assignment, apply to and bind the respective heirs, successors, executors, administrators and assigns of Landlord and Tenant. The benefit of each indemnity obligation of Tenant under this Lease is assignable in whole or in part by Landlord. The term "party" shall mean Landlord or Tenant as the context implies. If Tenant consists of more than one person or entity, then all members of Tenant shall be jointly and severally liable hereunder. If this Lease is signed by Tenant by an individual "doing business as" or "dba" another person or entity or entity name, the individual who signs this Lease will be deemed to be the Tenant hereunder for all purposes. Submission of this Lease for review, examination or signature by Tenant does not constitute an offer to lease, a reservation of or an option for lease, or a binding agreement of any kind, and notwithstanding any inconsistent language contained in any other document, this Lease is not effective as a lease or otherwise until execution and delivery by both Landlord and Tenant, and prior to such mutual execution and delivery, neither party shall have any obligation to negotiate and may discontinue discussions and negotiations at any time for any reason or no reason. This Lease shall be construed and enforced in accordance with the Laws of the State in which the Leased Premises are located. The headings and captions in this Lease are for convenience only and shall not be construed in the construction or interpretation of any provision hereof. When the context of this Lease requires, the neuter gender includes the masculine, the feminine, a partnership, corporation, limited liability company, joint venture, or other form of business entity, and the singular includes the plural. The terms "must," "shall," "will," and "agree" are mandatory. The term "may" is permissive. The term "governmental agency" or "governmental authority" or similar terms shall include, without limitation, all federal, state, city, local and other governmental and quasi-governmental agencies, authorities, bodies, boards, etc., and any party or parties having enforcement rights under any Restrictions. When a party is required to do something by this Lease, it shall do so at its sole cost and expense without right of reimbursement from the other party unless specific provision is made therefor. Where a party's consent is required hereunder, unless provided to the contrary, such consent shall not be unreasonably withheld, conditioned or delayed; provided that, it shall be reasonable for any such consent of Landlord hereunder to be withheld until Landlord's receipt of the consent of any Lender, if and to the extent Landlord is required to obtain such Lender's consent. Landlord and Tenant shall both be deemed to have drafted this Lease, and the rule of construction that a document is to be construed against the drafting party shall not be employed in the construction or interpretation of this Lease. Where either party is obligated not to perform any act or is not permitted to perform any act, such party is also obligated to restrain any others reasonably within its control, including agents, invitees, contractors, subcontractors and employees, from performing such act. Landlord shall not become or be deemed a partner or a joint venturer with Tenant by reason of any of the provisions of this Lease.

13.17 Sustainability. Tenant acknowledges that current and future disclosures and information may be required by Landlord's ESG Performance initiatives and applicable Laws and Restrictions in connection with the leasing of the Leased Premises. Tenant shall provide Landlord any and all information reasonably requested by Landlord in connection with the ESG Performance of the Leased Premises and/or any other information necessary for Landlord to comply with applicable Laws, Restrictions and/or Landlord's ESG Performance initiatives, including to maintain or obtain any ESG Certifications for the Building. Tenant consents to Landlord's using such data, provided that Landlord will exercise commercially reasonable care to maintain the privacy of Tenant's specific and identifiable consumption data. Notwithstanding anything to the contrary in this Lease, Landlord shall have the right to institute such requirements, policies, programs and measures or pursue ESG Certifications as may be required to comply with any applicable Laws or Restrictions. Tenant shall use commercially reasonable efforts to operate the Leased Premises in a manner that seeks to reduce energy and water use and waste generation and increase recycling within the Building and the Leased Premises. As used herein, "ESG Performance" means all or any of the following environmental, social, and governance activities arising from the operation or use of the Leased Premises: energy consumption; renewable energy use; water consumption and discharge; waste and recycling generation and management; generation and/or emission of greenhouse gases; adverse environmental or social impacts; indoor air quality management; and tenant health and well-being initiatives. As used herein, "ESG Certifications" means environmental or social certifications for the Building, such as Energy Star, Leadership in Energy and Environmental Design (LEED) program, Fitwel, WELL, BREEAM and any other certification promoted by the U.S. Green Building Council or others.

ARTICLE 14

LEGAL AUTHORITY,

BROKERS AND ENTIRE AGREEMENT

EXHIBIT B-3 TO PARKING SUBLEASE

COMMERCIAL LEASE

[Attached]

EXHIBIT C TO PARKING SUBLEASE

FORM OF CITY CONSENT

LESSOR CONSENT TOP ARKING SUBLEASE

This Lessor Consent to Parking Sublease ("Consent") is entered into as of _____________ by the CITY AND COUNTY OF SAN FRANCISCO, a municipal corporation ("City"), by and through its Public Utilities Commission ("SFPUC"), in favor of DRAWBRIDGE 4600 PATRICK HENRY, LLC, a Delaware limited liability company ("Drawbridge").

RECITALS

A. City owns certain real property located in the City of Santa Clara, County of Santa Clara, State of California, as more particularly described and depicted in the Lease (defined below) (the "Leased Premises").

B. City is the lessor under that certain Public Utilities Commission San Francisco Water Department Right of Way Lease (the "1977 Parking Lease") dated July 26, 1977, between City and Vanderson Construction, Inc., a California corporation, whose interest as lessee was assigned to Larvan Properties, a California general partnership, by instrument dated July 26, 1977, which interest was assigned to MELP VII L.P., a California limited partnership, by instrument dated March 12, 1998, which interest was assigned to James R. Castellanos, Trustee of The JRC Trust I ult/a dated August 14, 1986, David J. Teece, Gilbert I. Morgan, Trustee of The Gilbert I. Morgan Revocable 1991 Trust, and Audrey Morgan, as tenants in common, which interest was assigned to 4600 Patrick Henry, LLC, a California limited liability company, by instrument dated March 2000, which interest was assumed by SBMS 2000-C3 Henry Drive Limited Partnership, a Delaware limited partnership, which interest was assigned to McKay Henry, LLC, a California limited liability company, by instrument dated October 14, 2011, and which interest was thereafter assigned to Drawbridge, as lessee.

C. The 1977 Parking Lease has been amended by that certain Amendment to Parking and Landscaping Lease dated March 14, 1998 and by that certain Amendment No. 2 to Parking and Landscaping Lease dated January 26, 1999 (collectively, the"1977 Parking Lease Amendments"). All references to the"1977 Parking Lease" in this Consent shall mean the 1977 Parking Lease, as amended by the 1977 Parking Lease Amendments.

D. Drawbridge owns certain real property located adjacent to the Premises (the "Adjacent Property") and entered into that certain Lease dated as of _____________ (the "Commercial Lease"), with EBR Systems, Inc., a Delaware corporation ("Tenant"), as lessee, related to the Adjacent Property.

E. In connection with the lease of the Adjacent Property pursuant to the Commercial Lease, Drawbridge desire to sublease to Tenant, as sublessee, certain rights and interests of Drawbridge under the 1977 Parking Lease, pursuant to the terms and conditions of that certain Parking Sublease dated as of _____________________, by and between Drawbridge, as sublessor, and Tenant, as sublessee (the "Proposed Parking Sublease").

F. Drawbridge and Tenant desire City's consent to the Proposed Parking Sublease pursuant to the terms and conditions of the 1977 Parking Lease.

CONSENT

1. City hereby consents to the Proposed Parking Sublease. Notwithstanding anything to the contrary in this Consent, City's consent to any extension of the Proposed Parking Sublease Term pursuant to Article 15 of the Commercial Lease will be deemed approved only after Drawbridge sufficiently demonstrates and attests that Tenant has fully complied with all applicable provisions of Article 15, without any waiver of this provision by Drawbridge.

2. This Consent shall not be deemed to be a consent to any subsequent assignment, modification, sublet, sublicense, or transfer, but rather any subsequent assignment, modification sublet, sublicense, or transfer of Drawbridge's or Tenant's interest under the 1977 Parking Lease or Proposed Parking Sublease, respectively, shall require the prior written consent of City in each and every instance.

3. Notwithstanding anything to the contrary set forth in this Consent, nothing in this Consent or in the Proposed Parking Sublease shall be deemed to modify or amend the terms of the 1977 Parking Lease. In the event of any conflict between the 1977 Parking Lease and this Consent or the Proposed Parking Sublease, the terms of the 1977 Parking Lease shall govern.

4. This Consent shall not constitute an approval or endorsement of any specific item or provision contained in the Proposed Parking Sublease or the Commercial Lease, or of any terms of the Proposed Parking Sublease or Commercial Lease that may be incorporated by reference into the Proposed Parking Sublease, which Proposed Parking Sublease shall remain subject and subordinate to the terms of the 1977 Parking Lease.

5. This Consent may be executed in counterparts, each of which shall be deemed an original and together shall constitute one instrument.

City has executed this Consent as of the date first written above.

CITY:

CITY AND COUNTY OF SAN FRANCISCO,

a municipal corporation

By:
Name:
Title:

APPROVED AS TO FORM:

_______________________, City Attorney

By:
Name:
Title:

EXHIBIT H

PERMITTED HAZARDOUS MATERIALS

Exhibit H-1

Exhibit 19.1

EBR SYSTEMS, INC.

SECURITIES TRADING POLICY

1 Introduction

This document sets out the policy sets forth guidelines with respect to transactions in securities of EBR Systems, Inc. (EBR) and in the securities of other applicable U.S. publicly traded companies that EBR has business relationship with.

2 Persons covered by this policy

2.1 This policy applies to each of the following persons:

(a)

all directors, officers and employees of EBR and its subsidiaries (the Group);

(b)

all other personnel of the Group (including contractors) who may become aware of inside information; and

(c)

any family members, trusts, partnerships, bodies corporate, nominees and other persons, over whom a person listed in paragraphs 2.1(a) or 2.1(b) has, or may reasonably be expected to have, investment control or influence,

(each of the persons in paragraphs 2.1(a), 2.1(b) and 2.1(c) together, EBR Personnel).

2.2 There are additional trading restrictions on the following persons:

(a)

all directors and other key management personnel¹ of EBR;

(b)

any other person designated by the board of directors of EBR (Board) from time to time; and

(c)

any family members, trusts, partnerships, bodies corporate, nominees and other persons, over whom a person listed in paragraphs 2.2(a) or 2.2(b) has, or may reasonably be expected to have, investment control or influence,

(together, the Designated Persons and each a Designated Person).

3 Securities covered by this policy

3.1 Subject to specific exceptions set forth in paragraph 9, this Securities Trading Policy applies to engaging in any transactions in EBR securities, including (as applicable):

(a)

shares of stock (including but not limited to common or preferred stock);

(b)

CHESS Depositary Interests;

_____________________________

¹ In this policy, “key management personnel” has the meaning given in AASB 124 issued by the Australian Accounting Standards Board. As at the date of this policy, this means:

those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity.

(c)

debentures (including bonds and notes);

(d)

options and warrants over unissued shares or debentures;

(e)

a renounceable or unrenouncable right to subscribe for shares or debentures;

(f)

interests in managed investment schemes, trusts and other financial products; and

(g)

derivative products issued over or in respect of any of the above (e.g. swaps, futures, hedges, and options) whether settled by cash or otherwise.

3.2 Trading in EBR securities includes:

(a)

acquiring or disposing of EBR securities on market or through an off market transaction;

(b)

acquiring or disposing of EBR securities in connection with margin lending or any other security arrangement; and

(c)

security lending arrangements affecting EBR securities.

Accordingly, for purposes of this policy, the terms “trade,” “trading” and “transactions” include not only purchases and sales of EBR’s securities in the public market but also any other purchases, sales, transfers, gifts or other acquisitions and dispositions of common or preferred equity, options, warrants and other securities (including debt securities) and other arrangements or transactions that affect economic exposure to changes in the prices of these securities.

4 Prohibition on insider trading for all EBR Personnel

4.1 Regulation

Trading of EBR securities is governed by, amongst other things, the Australian Corporations Act 2001 (Cth) (Corporations Act), the ASX Listing Rules, applicable U.S. securities laws and regulations, and other applicable securities laws. As EBR’s securities are traded on ASX, this policy focuses on Australian securities laws, however the securities trading laws of the jurisdiction in which the transaction occurs should also be considered.

4.2 General rules

The Corporations Act prohibits trading of inside information.

(a)

“Inside information” is information that:

(i)

is not generally available; and

(ii)

if it were generally available, a reasonable person would expect it to have a material effect on the price or value of securities, or on a decision to buy or sell securities.

(b)

EBR Personnel must not trade in EBR securities when they possess inside information and they know or ought reasonably to know that:

(i)

the information is not generally available to the public; and

(ii)

if the information were generally available, it would be expected to have a material effect on the price or value of EBR securities.

(c)

This prohibition also extends to the following activities:

(i)

advising, procuring or encouraging another person to deal, or enter into an agreement to deal, in EBR’s securities; and

(ii)

directly or indirectly communicating the information to another person who the EBR Personnel believes is likely to deal in, or procure another person to deal in, those securities,

(together, the Additional Prohibited Activities).

(d)

This prohibition applies at all times irrespective of:

(i)

how the EBR Personnel learns of the information;

(ii)

whether the trading occurs outside of a Blackout Period (defined below); or

(iii)

whether the trading was approved with written clearance (whether in exceptional circumstances or otherwise).

(e)

EBR Personnel should consider carefully whether they are in possession of “inside information” and, if they have any doubt, they should not trade or undertake any Additional Prohibited Activities.

(f)

The prohibition on trading lifts once material nonpublic information becomes publicly disseminated. But for U.S. securities law purposes, for information to be considered publicly disseminated, it must be widely disseminated through a press release, a filing with the Securities and Exchange Commission (the “SEC”), or other widely disseminated announcement. Once information is publicly disseminated, it is still necessary to afford the investing public with sufficient time to absorb the information. Generally speaking, information will be considered publicly disseminated for purposes of this policy only after two full trading days have elapsed since the information was publicly disclosed. For example, if EBR announces material nonpublic information before trading begins on Wednesday, then a transaction in our securities may be executed on Friday; if EBR announces material nonpublic information after trading ends on Wednesday, then a transaction in our securities may be executed on Monday. Depending on the particular circumstances, EBR may determine that a longer or shorter waiting period should apply to the release of specific material nonpublic information.

4.3 Examples of inside information

The following list is illustrative only and is not exhaustive. Inside information could include:

(a)

a possible acquisition or sale of any assets or businesses by any member of the Group;

(b)

a pending or proposed merger, acquisition, or tender offer;

(c)

any other type of change of control transaction;

(d)

the potential entry into, variation or termination of a material agreement;

(e)

a pending public or private sale of debt or equity securities;

(f)

quarterly or annual results;

(g)

the financial performance of EBR against its budget or forecasts, including significant variances in results from previous guidance and changing or confirming such guidance on a later date or other projections of future financial performance;

(h)

impending bankruptcy;

(i)

status of product or product candidate development or regulatory approvals;

(j)

major scientific, clinical or regulatory developments, including developments with the U.S. Food and Drug Administration and similar foreign agencies;

(k)

notice of issuance of a significant patent, or other developments regarding EBR’s material intellectual property;

(l)

senior management or Board changes;

(m)

a significant change in the operations or direction of the business;

(n)

a proposed dividend or change of dividend policy;

(o)

regulatory action or investigations undertaken by a government or regulatory authority;

(p)

a material change in EBR’s capital structure;

(q)

any material claim against any member of the Group or other unexpected material liability, including any legal proceedings;

(r)

employee layoffs;

(s)

a disruption in EBR’s operations or breach or unauthorized access of its property or assets, including its facilities and information technology infrastructure;

(t)

accounting restatements;

(u)

major awards or cancellations of contracts or license agreements with customers or suppliers; or

(v)

industry or regulatory issues that may have a material impact on EBR’s business.

5 Additional trading restrictions for Designated Persons

5.1 Overview

In addition to the general trading restrictions set out in this policy that apply to all EBR Personnel, trading in EBR securities by Designated Persons will generally only be permitted outside of a Blackout Period after clearance is obtained, as outlined below. That means that, except as described in this policy, Designated Persons will be able to trade in EBR securities only during limited open trading window periods that generally will begin after two full trading days have elapsed since the public dissemination of EBR’s annual, semi-annual or quarterly financial results and end at the beginning of the next quarterly trading blackout period. Of course, even during an open trading window period, Designated Persons may not (unless an exception applies) conduct any trades in EBR’s securities if they are otherwise in possession of material nonpublic information.

5.2 Blackout periods

EBR Personnel are prohibited from trading in EBR securities during the following periods:

(a)

from the date which is 30 days before EBR’s half-year end until the date which is two trading days after the release of EBR’s half-year financial results to the ASX;

(b)

from the date which is 30 days before EBR’s year end until the date which is two trading days after the release of EBR’s full-year financial results to the ASX and comparable disclosure is made in the United States;

(c)

from that date which is three weeks before the end of each fiscal quarter and until the date which is two full trading days have elapsed since the public dissemination of EBR’s financial results for that quarter; and

(d)

for so long as EBR is required to provide quarterly cash flow reports to the ASX, from the date that is two weeks before the end of the first and third quarters of a financial year until the date which is two trading days after the release of the cash flow report to the ASX,

(each of these periods being a Blackout Period).

In addition to the Blackout Periods specified above, the Board may, from time to time, declare any other relevant period to be a Blackout Period for the purposes of this policy, or determine that a period will not be a Blackout Period or vary the opening or closing date of any Blackout Period. Please note that any Blackout Period may commence early or may be extended if, in the judgment of the Chief Executive Officer or Chief Financial Officer there exists undisclosed information that would make trades by EBR Personnel inappropriate. It is important to note that the fact that the Blackout Period has commenced early or has been extended should be considered material nonpublic information that should not be communicated to any other person.

The Chief Financial Officer will notify the Designated Persons of the precise opening and closing date of each Blackout Period.

Event-Specific Trading Blackouts

From time to time, an event may occur that is material to EBR and is known by only a few directors, officers and/or employees. So long as the event remains material and nonpublic, the persons designated by the Chief Executive Officer or Chief Financial Officer may not trade in EBR’s securities. In that situation, EBR will notify the designated individuals that they cannot trade in the EBR’s securities. The existence of an event-specific trading blackout should also be considered material nonpublic information and should not be communicated to any other person. Even if one has not been designated as a person who should not trade due to an event-specific trading blackout, they should not trade while aware of material nonpublic information. Exceptions will not be granted during an event-specific trading blackout.

5.3 Trading outside of Blackout Periods

Designated Persons may trade in EBR securities outside of a Blackout Period if they obtain prior written clearance as follows:

(a)

for trading by directors and the Chief Executive Officer of EBR – from the Chair;

(b)

for trading by the Chair – from the Board or a committee thereof; and

(c)

for trading by employees (who are not also directors) – from the Chief Executive Officer or Chief Financial Officer.

Paragraphs (a), (b) and (c) of this section 5.3 will be applied to Designated Persons described in paragraph 2.2(c) of the definition in section 2 as though the Designated Person was the director, Chair or employee to whom the Designated Person is connected.

5.4 Written clearance to trade during a Blackout Period

Designated Persons may trade in EBR securities during a Blackout Period with:

(a)

the prior written clearance of the Chair, in consultation with Company legal counsel; or

(b)

if the Chair is absent or if the relevant trading is proposed to be undertaken by the Chair – the prior written clearance of the Board, in consultation with Company legal counsel,

provided that at least one of the following exceptional circumstances applies:

(c)

if the Designated Person is facing severe financial hardship (as determined by the relevant decision maker approving the clearance) and can only meet their financial commitments by selling their securities;

(d)

if the Designated Persons is required by a court order, a court enforceable undertaking (e.g. a bona fide family settlement), or some other overriding legal or regulatory requirement to transfer, or accept a transfer, of EBR securities; or

(e)

such other exceptional circumstances as may from time to time be determined by the Chair or Board (as applicable) and which would not create a material risk of violating applicable securities laws.

No such clearance shall be provided if the proposed trade would violate the securities laws of any applicable jurisdiction.

5.5 Clearance procedures

The person from whom the clearance is sought under section 5.3 or 5.4 (Clearance Officer) may appoint a delegate (which must be the Board or a committee thereof, in the case of a delegation by the Chair) to act on his or her behalf in the case of a temporary absence.

The Designated Person seeking the clearance must give the Clearance Officer all information or certifications which the Clearance Officer may request for the purpose of determining whether to grant the clearance. In every case, the Designated Person must certify that they are not in possession of any inside information that might preclude them from trading at that time.

The clearance may be given or refused by the Clearance Officer in their discretion, with or without conditions, and with or without giving any reasons. A decision to refuse clearance is final and binding on the Designated Person, and the Designated Person must keep the decision and any reasons given confidential.

Where clearance is given, the relevant trading must occur within the seven days beginning on the day after the clearance. The clearance may however be withdrawn by the Board, Chair, Chief Executive Officer or Clearance Officer at their discretion before the relevant trading occurs (for instance, if new information comes to light or there is a change in circumstances).

Clearance to trade will not be granted if the Clearance Officer believes that EBR is likely in the short term to release a periodic financial report or other financial data or make an announcement of market sensitive information under ASX Listing Rule 3.1, or if the trade would violate the securities laws of any applicable jurisdiction.

Any written clearance provided to trade is not an endorsement of the proposed trade and the Designated Person is individually responsible for their investment decisions and their compliance with insider trading laws. If the Designated Person does come into possession of inside information after receiving a clearance to trade, they must not trade despite having the clearance.

6 Other restrictions

6.1 No short-term trading in EBR securities

Designated Persons are encouraged to be long-term holders of EBR securities.

As speculation in short-term fluctuations in EBR securities does not promote market or securityholder confidence in the integrity of EBR, no Designated Person may trade in EBR securities on a short-term basis. Short-term means less than three months (or such longer period as is applicable to a Designated Person subject to the reporting requirements of Section 16 of the U.S. Securities Exchange Act of 1934, as amended).

6.2 No hedging and pledging

All Designated Persons who hold securities in EBR which are unvested or subject to escrow are prohibited from engaging in any conduct that seeks to secure the economic value attaching to the relevant securities and remove the element of price risk inherent in the value of those securities, while the securities remain unvested or subject to escrow.

Prohibited conduct includes writing forward contracts or put or call options over the underlying securities, trading in derivative products or entering into other arrangements intended to hedge a “profit” in those securities, a margin loan or similar funding arrangement or other financial transaction which can give rise to pledging, lending or using the securities as collateral.

After vesting and the cessation of any applicable escrow arrangements, a holder of the relevant securities may undertake any transaction of a type referred to in this section provided they obtain written clearance in the manner described in sections 5.4 and 5.5 and comply with all applicable laws (including insider trading laws) and the other provisions of this policy (including with respect to when trading can occur) when undertaking any such transaction.

6.3 ASX notification by directors

Whilst EBR’s securities are included on the official list of the ASX, directors must notify EBR if there is a change in their security interests as soon as possible to enable EBR to comply with relevant timeframes under the ASX Listing Rules in relation to notification of changes to directors' relevant interests.

Any director requiring assistance in this regard should contact the Australian Company Secretary.

Directors should also comply with the requirements under the Company's Section 16 Compliance Program. See Section 10 below.

7 Guidelines for directors, officers and employees of the Group

It is the responsibility of each director, officer and employee of the Group to ensure that they observe this policy and the prohibition on insider trading and encourage and take all reasonable steps to ensure that any other EBR Personnel related to them observes this policy and the prohibition on insider trading.

Where a director, officer or employee is unsure as to whether they are in possession of inside information they should discuss the matter with the Chief Financial Officer or his/her respective delegates.

8 Securities of other companies

The prohibited insider trading under the Corporations Act also extends to trading in securities of other listed companies with which the Group may be dealing (including suppliers or distributors or other commercial partners) where a director, officer or employee of the Group possesses “inside information” in relation to that other company.

That is, if EBR Personnel are aware of information that is not generally available that may have a material effect on the price or value of another company's securities; they should not trade in the securities of that company.

9 Exceptions to the policy

Subject to the insider trading provisions of the Corporations Act (described in section 4), U.S. securities laws, and any other relevant laws, EBR Personnel may at any time (including during a Blackout Period):

(a)

exercise options or other rights acquired under an EBR equity incentive plan for cash (but may not sell all or part of the shares received upon exercise of the options as part of a broker-assisted cashless exercise or any other market sale, whether or not for the purpose of generating the cash needed to pay the exercise price or pay taxes);

(b)

surrender of shares directly to EBR to satisfy tax withholding obligations as a result of the issuance of shares upon vesting or exercise of restricted stock units, options or other equity awards granted under EBR’s equity compensation plans. Of course, any market sale of the shares received upon exercise or vesting of any such equity awards remains subject to all provisions of this policy whether or not for the purpose of generating the cash needed to pay the exercise price or pay taxes;

(c)

effect transactions in EBR securities pursuant to approved trading plans properly established under Rule 10b5-1 of the United States Securities Exchange Act of 1934, as amended (a “10b5-1 Trading Plan”). So long as a 10b5-1 Trading Plan is properly established, purchases and sales of EBR securities pursuant to that Trading Plan are not subject to this policy. To be properly established, a Trading Plan must be established in compliance with the requirements of Rule 10b5-1 of the Exchange Act and any applicable 10b5-1 trading plan guidelines of EBR at a time when EBR was not in a Blackout Period and the participant was not otherwise aware of any material nonpublic information relating to EBR or the securities subject to the Trading Plan. Moreover, all 10b5-1 Trading Plans must be reviewed and approved by EBR before being established to confirm that the 10b5-1 Trading Plan complies with all pertinent company policies and applicable securities laws.

10 Short-Swing Trading, Control Stock and Section 16 Reports

Officers and directors subject to the reporting obligations under Section 16 of the Exchange Act should take care to avoid short-swing transactions (within the meaning of Section 16(b) of the Exchange Act) and the restrictions on sales by control persons (Rule 144 under the Securities Act of 1933, as amended), and should file all appropriate Section 16(a) reports (Forms 3, 4 and 5), which are described in EBR’s Section 16 Compliance Program, and any notices of sale required by Rule 144.

11 Policy’s Duration

This policy continues to apply to Designated Persons’ transactions in EBR’s securities and the securities of other applicable public companies as more specifically set forth in this policy, even after their relationship with EBR has ended. If a Designated Person is aware of material nonpublic information when their relationship with EBR ends, they may not trade EBR’s securities or the securities of other applicable publicly traded companies until the material nonpublic information has been publicly disseminated or is no longer material. Further, if a Designated Person leaves EBR during a trading blackout period, then they may not trade EBR’s securities or the securities of other applicable companies until the trading blackout period has ended.

12 Individual Responsibility

Persons subject to this policy have ethical and legal obligations to maintain the confidentiality of information about EBR and to not engage in transactions in EBR’s securities or the securities of other applicable public companies while aware of material nonpublic information, as more specifically set forth in this policy. Each individual is responsible for making sure that he or she complies with this policy, and that any family member, household member or other person or entity whose transactions are subject to this policy, as discussed above, also comply with this policy. In all cases, the responsibility for determining whether an individual is aware of material nonpublic information rests with that individual, and any action on the part of EBR or any employee or director of EBR pursuant to this policy (or otherwise) does not in any way constitute legal advice or insulate an individual from liability under applicable securities laws. Individuals could be subject to severe legal penalties and disciplinary action by EBR for any conduct prohibited by this policy or applicable securities laws. See “Penalties” below.

13 Penalties

Anyone who engages in insider trading or otherwise violates this policy may be subject to both civil liability and criminal penalties in the US. Insider trading is also a criminal offence under the Corporations Act, punishable by substantial fines or imprisonment or both. Insider trading may also attract civil penalties and sanctions. A court may impose substantial pecuniary penalties, and order compensation paid to persons suffering related loss or damage.

In addition to severe legal penalties for any conduct prohibited by this policy or applicable securities laws, breaches of this policy will be regarded as serious misconduct and may be subject to disciplinary action, which may include termination of employment.

14 Further information

Any person who has questions about this policy, or who requires further information, should contact the Chief Financial Officer.

15 Review of this policy

This policy may be amended by resolution of the Board.

Adopted by the Board of EBR Systems, Inc. on October 15, 2021 and amended on September 23, 2024.

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement No. 333-282848 on Form S-8 of our report dated March 24, 2025 relating to the financial statements of EBR Systems, Inc. appearing in this Annual Report on Form 10-K for the year ended December 31, 2024.

/s/ Deloitte & Touche LLP

Tempe, AZ

March 24, 2025

Exhibit 31.1

Certification of Principal Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, John McCutcheon, certify that:

1. I have reviewed this Annual Report on Form 10-K of EBR Systems, Inc;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 24, 2025

/s/ John McCutcheon

John McCutcheon

Chief Executive Officer

(Principal Executive Officer)

Exhibit 31.2

Certification of Principal Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Gary Doherty, certify that:

1. I have reviewed this Annual Report on Form 10-K of EBR Systems, Inc;

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 24, 2025

/s/ Gary Doherty

Gary Doherty

Chief Financial Officer

(Principal Financial Officer)

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. §1350), John McCutcheon, Chief Executive Officer of EBR Systems, Inc. (the “Company”), and Gary Doherty, Chief Financial Officer of the Company, each hereby certifies that:

The Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, to which this Certification is attached as Exhibit 32.1 (the “Annual Report”), fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act; and

The information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: March 24, 2025

In Witness Whereof, the undersigned have set their hands hereto as of the 24^th day of March 2024.

/s/ John McCutcheon

/s/ Gary Doherty

John McCutcheon

Gary Doherty

Chief Executive Officer

(Principal Executive Officer)

Chief Financial Officer

(Principal Financial Officer)

“This certification accompanies the Form 10-K to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of EBR Systems, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-K), irrespective of any general incorporation language contained in such filing.”