Profound Medical Corp

Item 1A. Risk Factors.

Our business is subject to a number of risks, including risks that may prevent us from achieving our business objectives or may adversely affect our business, financial condition, results of operations, cash flows, and prospects. These risks are discussed more fully in the section entitled Risk Factors in our 2024 Annual Report. TheExcept as set forth below, there have been no material changes to the risk factors described in the 2024 Annual Report.

There is substantial doubt about whether we can continue as a going concern.

As of September 30, 2025, we held cash of $24,826, which we believe will not be sufficient to finance all of our planned business operations over the next year. Accordingly, there is substantial doubt as to whether existing cash resources are sufficient to enable us to continue our operations for the next 12 months as a going concern. Our management is evaluating and pursuing different strategies to obtain the required funding for our operations. These strategies may include but are not limited to public and private placements of equity and/or debt, licensing and/or collaboration arrangements and strategic alternatives with third parties, or other funding from the government or third parties. There can be no assurance that these funding efforts will be successful. If we are unable

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to obtain funds when needed or on acceptable terms, we may be required to curtail our current development programs, cut operating costs, forego future development and other opportunities or even liquidate our business interests and investors may lose their investment.

Any default under our existing debt that is not waived by the applicable lender could materially adversely impact our results of operations and financial results and may have a material adverse effect on the trading price of our Common Shares.

We are required to comply with the covenants in the CIBC Credit Agreement and such covenants may create a risk of default on our debt if we cannot satisfy or continue to satisfy these covenants. If we are determined not to have complied or in the future cannot comply with a debt covenant or anticipate that we will be unable to comply with a debt covenant under any debt instrument we are a party to, including the CIBC Loan, management may seek a waiver and/or amendment to the applicable debt instrument in respect of any such covenant in order to avoid any breach or default that might otherwise result therefrom. On March 31, 2024, we were in breach of the covenant in the CIBC Loan that revenue for any fiscal quarter must be 15% greater than revenue for the same fiscal quarter in the prior fiscal year. Prior to such breach, we obtained a waiver from CIBC, pursuant to which CIBC has waived such breach. On September 26, 2023, an amendment to the CIBC Loan changed financial covenants. The revised covenants specified that unrestricted cash must be greater than either (i) negative EBITDA for the most recent nine-month period or (ii) $7,500, reported monthly. Additionally, recurring revenue for any fiscal quarter must be 15% greater than the same quarter in the prior fiscal year, reported quarterly. As of December 31, 2024, we were in compliance with these covenants. On August 1, 2025, we were in breach of the covenant that unrestricted cash must be greater than either (i) negative EBITDA for the most recent nine-month period or (ii) $7,500. CIBC waived such breach for the period beginning on August 1, 2025 through the date of an amendment to the CIBC Credit Agreement on September 30, 2025, which revised the liquidity covenant to state that unrestricted cash must at all times be the greater of: (i) to the extent EBITDA is negative for such period, EBITDA for the most recent six-month period, or (ii) $10,000, reported on a monthly basis. We were in compliance with these financial covenants as of September 30, 2025. Future compliance with the financial covenants included in the CIBC Credit Agreement is dependent upon achieving certain revenue, EBITDA, and anticipated cash levels.

If we default under a debt instrument, including the CIBC Loan, and the default is not waived by the lender(s), the debt extended pursuant to the CIBC Loan and any other debt instruments could become due and payable prior to its stated due date. If such event were to occur in the future, we cannot give any assurance that (i) CIBC and/or our other lenders will agree to any covenant amendments or waive any covenant breaches or defaults that may occur, and (ii) we could pay this debt if it became due prior to its stated due date. As per managements most recent forecasts, we project to be in violation of one of the financial covenants under the CIBC Credit Agreement by June 30, 2026, where unrestricted cash will no longer exceed the required liquidity amount for the most recent six-month period. As per the terms of the CIBC Credit Agreement, based on this projected breach, CIBC may exercise the right to declare the outstanding debt obligation as immediately due and payable. Accordingly, if we are unable to negotiate a covenant waiver or replace or refinance our existing debt on favorable terms or at all, such default could materially adversely impact our results of operations and financial results and may have a material adverse effect on the trading price of our Common Shares. Future compliance with the financial covenants included in the CIBC Loan is dependent upon achieving certain revenue, EBITDA, and anticipated unrestricted cash levels.