Pulse Biosciences
Annual Report 2016

Plain-text annual report

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549____________________________________________Form 10-K____________________________________________(Mark One)☒☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2016or☐☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from toCommission File Number 001-34899____________________________________________Pulse Biosciences, Inc.(Exact name of registrant as specified in its charter)____________________________________________​Nevada46-5696597(State or other jurisdiction ofincorporation or organization)(I.R.S. EmployerIdentification No.)​ 849 Mitten Road, Suite 104Burlingame, CA94010(Address of principal executive offices)(Zip Code)(Registrant’s telephone number, including area code): (650) 697-3939Securities registered pursuant to Section 12(b) of the Act: Title of Each ClassName of Each Exchange on Which RegisteredCommon Stock, par value $0.001 per shareThe NASDAQ Stock Market LLCSecurities registered pursuant to Section 12(g) of the Act: NoneIndicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒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 1934during 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 filingrequirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data Filerequired to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for suchshorter period that the registrant was required to submit and post such files). Yes ☒ No ☐ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, tothe best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or anyamendment to this Form 10-K. ☐Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer ☐Accelerated filer ☐Non-accelerated filer ☐ (Do not check if a smaller reporting company)Smaller reporting company ☒Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ Aggregate market value of registrant’s common stock held by non-affiliates of the registrant on June 30, 2016, based upon the closing price ofCommon Stock on such date as reported by NASDAQ Capital Markets, was approximately $54,677,000. Shares of voting stock held by each officerand director have been excluded in that such persons may be deemed to be affiliates. This assumption regarding affiliate status is not necessarily aconclusive determination for other purposes.Number of shares outstanding of the issuer’s common stock as of March 3, 2017: 14,136,220DOCUMENTS INCORPORATED BY REFERENCE:Portions of the registrant’s definitive Proxy Statement relating to its 2017 Annual Meeting of Stockholders to be held on May 16, 2017 are incorporatedby reference into Part III of this Form 10-K where indicated. Such Proxy Statement will be filed with the U.S. Securities and Exchange Commissionwithin 120 days after the end of the fiscal year to which this report relates. Table of Contents TABLE OF CONTENTSPage PART IItem 1.Business3 Item 1A.Risk Factors16 Item 1B.Unresolved Staff Comments37 Item 2.Properties37 Item 3.Legal Proceedings37 Item 4.Mine Safety Disclosures37 PART IIItem 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities38 Item 6.Selected Financial Data41 Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations42 Item 7A.Quantitative and Qualitative Disclosures about Market Risk50 Item 8.Financial Statements and Supplementary Data51 Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure71 Item 9A.Controls and Procedures71 Item 9B.Other Information72 PART IIIItem 10.Directors, Executive Officers and Corporate Governance73 Item 11.Executive Compensation73 Item 12.Security Ownership of Certain Beneficial Owners and Management and Related StockholderMatters73 Item 13.Certain Relationships and Related Transactions, and Director Independence73 Item 14.Principal Accounting Fees and Services73 PART IVItem 15.Exhibits, Financial Statement Schedules74 ​Signatures 75 ​Exhibit Index 76 2 Table of Contents SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTSThis Annual Report on Form 10-K, or Annual Report, contains “forward-looking statements” that involve substantial risks anduncertainties. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,”“would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,”“ongoing” or the negative of these terms or other comparable terminology, although not all forward-looking statements containthese words. These statements relate to future events or our future financial performance or condition and involve known andunknown risks, uncertainties and other factors that could cause our actual results, levels of activity, performance or achievement todiffer materially from those expressed or implied by these forward-looking statements.You should read this Annual Report and the documents that we reference elsewhere in this Annual Report completely and with theunderstanding that our actual results may differ materially from what we expect as expressed or implied by our forward-lookingstatements. In light of the significant risks and uncertainties to which our forward-looking statements are subject, you should notplace undue reliance on or regard these statements as a representation or warranty by us or any other person that we will achieveour objectives and plans in any specified timeframe, or at all. We discuss many of these risks and uncertainties in greater detail inthis Annual Report, particularly in Part I. Item 1A. “Risk Factors.” These forward-looking statements represent our estimates andassumptions only as of the date of this Annual Report regardless of the time of delivery of this Annual Report. Except as requiredby law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of newinformation, future events or otherwise after the date of this Annual Report.In this Annual Report on Form 10-K, references to “Pulse,” “Pulse Biosciences,” “we,” “us,” “our” and the “Company” refer toPulse Biosciences, Inc. and its wholly owned subsidiaries, unless expressly indicated or the context otherwise requires. Part I Item 1. BusinessGeneralWe are a medical technology company developing a novel tissue treatment platform based upon our proprietary Nano-Pulse Stimulation (NPS) technology. We believe NPS will provide unique benefits to patients in a wide variety of medicalapplications. We are currently pursuing applications in immuno-oncology, dermatology, general tissue treatment and veterinarymedicine, and we may pursue many others in the future Nano-Pulse Stimulation is a non-thermal, precise, focal drug-free tissue treatment technology that initiates cell deathwithin treated tissue. NPS utilizes nanosecond pulsed electric fields to induce cell signaling and the activation of cellularpathways by creating transient nanopores in cellular membranes and organelles. Once created, these transient nanopores allow ionsto pass through these membranes, which disrupts cellular function and initiates cell death. NPS cell death eliminates treated tissuecells with a minimal inflammatory response, leading to a favorable healing process and the replacement of treated tissue cells withhealthy tissue cells.In pre-clinical models of cancerous lesions, NPS has been shown to induce immunogenic cell death (ICD), a process thatleads to the exposure of the unique cancer cell antigens to the immune system, resulting in the generation of cytotoxic T-cells andthe mounting of an adaptive immune response targeted against those cells, without any observed toxic side effects. Based on thispre-clinical research, we believe NPS can offer a novel tumor treatment therapy, as a monotherapy and in combination with othertherapies.The PulseTxTM System (PulseTx) is our proprietary NPS delivery system comprised of a tunable nanosecond pulsegeneration system and interchangeable tissue applicators, designed to enable the application of NPS across a variety of tissuetreatment applications. We believe the unique biological response of cells to our novel NPS technology enables Pulse Biosciencesthe opportunity to pursue therapeutic applications across a wide array of tissues types, including benign and cancerous lesions.The favorable healing characteristics of NPS afford opportunities in applications such a as dermatology and aesthetics, while theability to initiate ICD holds promise in key applications such as immune-oncology.Pulse Biosciences strategy is to deploy the PulseTx System in pilot clinical studies to help identify those applicationswhere NPS represents a high value opportunity. Based on these results and the market opportunity we will pursue the requiredregulatory clearances and ultimately commercialize these opportunities. 3 Table of Contents Our Proprietary Nano-Pulse Stimulation TechnologyWe are developing a therapeutic tissue treatment platform based upon our proprietary NPS technology. NPS is a local, non-thermal, and drug-free treatment that can physically stimulate cell death, a process in which cells systematically eliminatethemselves to make way for new cells. The NPS cell death process triggers a cascade of cellular events that in preclinical modelshas been shown to induce a sustained adaptive immune response when employed in cancerous tumor cells, producing a durablesystemic therapeutic benefit from a local treatment.Programmed cell death is a normal process exhibited by many cells in the human body when they are no longer functioningproperly. It involves a slow “digestion” of cellular proteins and DNA in the cells that are then recognized and removed by theimmune system. When this process results in ICD, it stimulates the immune system to generate an immune response that activelyseeks out and destroys any similar cells in the body. Pre-clinical studies suggest that NPS can stimulate programmed cell death andICD in cancer cells.We believe the unique characteristics of NPS cell death will translate to positive clinical outcomes and may establish NPS asa superior treatment modality across a variety of potential applications, including oncology, dermatology, and other minimallyinvasive applications where current treatment modalities do not provide benefits comparable to those afforded by NPS.NPS exerts an electrical force on water molecules, driving them into the lipid bilayer, and producing transient, water-fillednanopores in cell and organelle membranes. These transient pores allow ions to pass through them, and this canhave several immediate effects including the release of calcium ionsfrom the endoplasmic reticulum and the termination of themitochondrial membrane potential. Downstream effects of NPSinclude initiating a signaling cascade that we believe can result inICD in immunogenic lesions. ICD is a process by which cells areinduced to die in a manner that activates the immune system to bothclear the dying tumor cell and enroll cytotoxic T cells (CD8 +) andother immune system cells to recognize and eliminate cells of thesame tumor type. Alternatively, in non-immunogenic lesions, webelieve NPS can initiate a positive healing response with littleinflammation.It is this nanoporation effect on internal cellular membranes that differentiates our technology from other energy -basedtherapies, such as irreversible electroporation (IRE) and radiofrequency ablation (RFA).We believe we are a uniquely positioned medical technology company with the intellectual property, technology, and know-howto commercialize our NPS technology. Many other medical device companies produce products for treating and ablating tumorsusing a number of different modalities, including the use of extreme heat (e.g. RFA, microwave ablation or electrocauterization) orcold (e.g. cryoablation), or weaker electric fields with much longer pulses (e.g. IRE). The use of these modalities generally leads toimmediate cellular necrosis. We believe that NPS differs significantly as it offers a non-thermal and non-ionizing technology thatcan be used to precisely treat a volume of tissue with minimal inflammatory response, potentially reducing collateral damage tosurrounding tissue with a favorable healing profile. We believe these attributes, as well as the ability to induce ICD, will enable theuse of NPS in a number of high value applications.The cellular response to NPS is believed to occur in the following steps:·Nanopores form within cellular membranes immediately and calcium increases in the cytoplasm within one second;·Phosphatidylserine (PS) is externalized to the cell surface within several seconds and is one marker used by theimmune system to target and phagocytose unhealthy cells;·Calcium-dependent reactive oxygen species (ROS) generation occurs within approximately one minute;·Pyknosis and DNA fragmentation are stimulated within approximately 10 minutes (pyknosis is the shrinking of a cellnucleus along with condensation of the tissue in a cell that is undergoing necrosis or programmed cell death); 4 Table of Contents ·Calreticulin protein is externalized to the cell surface to become a second “eat me” signal within approximately twohours;·Caspase activation occurs within approximately three hours (caspases are a family of cellular proteins that are normallyinactive but can be activated during programmed cell death to degrade other cellular proteins); and·We believe an adaptive immune response to the treated tumor can be triggered over a period of 14-28 days, asdemonstrated in pre-clinical models showing the presence of CD8 + T cells,Potential Benefits of NPS Technology:·Fast, precise, and focal treatment of tissue;·Induction of ICD, which can induce a targeted adaptive immune response;·Elimination of unwanted tissue with a favorable healing profile;·Reduction of potential damage to adjacent tissue because NPS does not rely on heat for ablation; and,·Utilization as a monotherapy or in combination with other therapeutics such as checkpoint inhibitor therapies (αPD-1,αPD-L1, αCTLA-4).Side Effects of NPS TechnologyWe recently completed a clinical study treating skin with NPS at multiple energy levels, utilizing multiple applicatorconfigurations and applying up to 30 separate NPS treatments to each patient over the course of the 60-day treatment phase of thestudy. During the study, no adverse events were reported and no side effects were observed. Furthermore, subsequent histologicalreview of the treated tissues did not reveal negative unintended tissue responses resulting from the NPS treatments.During the course of conducting pre-clinical studies, over 1,000 tumors have been treated with NPS with no consistent sideeffects observed. Our predecessors and others carried out longer-term experiments in which a single tumor was ablated in eachanimal followed by observation for a period of 4 months for melanoma and 300 days for pancreatic cancer. No side effects wereobserved in these animals. The few reported problems observed over the past 10 years of animal studies resulted from improperplacement of the applicators.Our Proprietary NPS Delivery SystemTo deliver our NPS therapies and treatments we have developed our NPS platform, the PulseTx system. The PulseTx is a first-of-its-kind tunable nanosecond pulse generation and interchangeable applicator system designed to enable NPS treatments andtherapies across multiple clinical and research application. The PulseTx is comprised of two primary components:·The PulseTx Generator: a novel and proprietary tunable pulse generator capable of delivering treatments with varyingpulse amplitude, duration, frequency and number. These are the key NPS parameters for stimulating cell death and ICDin tissue. The ability to tune these parameters with the PulseTx enables the development treatments of and therapies fora variety of applications and tissue types.·PulseTx Applicator Suite; a suite of interchangeable NPS treatment applicators that deliver NPS directly to the tissuebeing treated. We are designing a suite of single and multiple use PulseTx Applicators tailored to specific applications,including open or minimally invasive surface, surgery or solid tissue treatments.We believe that the design of the PulseTx system will allow the system to be deployed in a standard clinic or laboratorysetting, without the need for special facilities or installation requirements.We submitted a United States Food and Drug Administration (FDA) 510(k) for the PulseTx System for soft tissue ablationduring the first quarter of 2017. We plan to conduct post-market studies that we believe will demonstrate improved clinicaloutcomes and drive specific indications. Although additional and broader indications may be cleared through the 510(k) process,we may be required to pursue Premarket Approval from the FDA to make labeling claims for specific indications. 5 Table of Contents ApplicationsDermatology/AestheticsWe believe NPS has high potential to offer improved clinical outcomes for a broad range of dermatology conditions andaesthetic improvement applications for which targeted removal of skin lesions is medically or cosmetically desirable. Currentdermatology procedures to remove lesions or undesired skin tissue typically involve either excision (e.g. surgery) or the use ofextreme heat (e.g. lasers or radiofrequency energy) or extreme cold (e.g. cryoablation). Patients are advised that these methods oftissue removal can be effective, but carry a risk of collateral damage to nearby healthy tissue and the associated inflammatoryresponse to severe tissue injury, which can result in visible scars and pigment changes that can appear as cosmetically undesirableas the original lesion. The novel NPS non-thermal mechanism for removing undesired skin lesions has the potential for both reducing collateraldamage to surrounding healthy tissue and minimizing the inflammatory response as compared to standard treatment modalities,both of which can help contribute to cosmetically desired appearance of the skin when the lesion is eliminated and the skin ishealed. We recently completed our first NPS clinical study in dermatology, a dose response study in skin. This important skin safetyand dose response study was designed to evaluate the tissue effects of a wide range of NPS energy “doses” on healthy skin. Over170 individual sections of skin were tested during the course of the study. The interim analysis of investigator evaluations,clinical photographs, and microscopic examination of tissue samples consistently demonstrated a pattern of controlled destructionof targeted tissue in the upper layer of the skin (the epidermis) where many skin lesions are located, and a tissue sparing effect inthe dermal skin layer. This finding of selective epidermal effects was consistent and apparent for all tested energy settings in thestudy. In addition, based on key microscopic indicators of long-term skin safety, a dermatopathologist concluded NPS has a lowrisk of undesired dermal damage and a restoration of a normal population of the melanocytes that produce skin pigment in theepidermis, when compared to untreated controls.Based on the promising interim analysis from this recent NPS dose-response study, we have identified multiple potentiallyhigh value applications in dermatology for which the non-thermal effects of NPS in normal skin epidermis may lead to improvedpatient experiences and improved outcomes when compared to existing more destructive lesion removal methods. Potentialapplication candidates in dermatology include Seborrheic Keratosis, warts, cherry angiomas, Basal Cell Carcinoma, SquamousCell Carcinoma (SCC), and Actinic Keratosis, although we believe there are more skin conditions to consider for futurestudies. Key considerations in prioritizing our initial clinical application include, a substantial market size for skin treatments thatare more typically paid directly by patients, a likelihood of favorable clinical outcomes based on the continued analysis of ourdose response study data, comparisons to the current standards of care for lesion removal, and an indication for which there is a510(k) pathway for clearance may be possible. Once we choose the initial application in dermatology, we will pursue a clinicalstudy that we believe can be the basis for a 510(k) clearance for a specific indication.We intend to pursue one or more clinical studies of NPS in dermatology applications during 2017 with the longer term planof demonstrating the benefits of NPS in a range of dermatology conditions for which a non-thermal alternative to current methodsmay be preferred.OncologyWe believe that NPS may afford a new paradigm in the treatment of certain cancers, either as a standalone therapy or incombination with other therapies currently available and in development. Immunotherapy continues to transform cancer care asthe field advances with scientific discoveries in the laboratory and clinic.It is well established that cancer cells can be recognized by the immune system. Under normal circumstances, these cancercells will be detected by the immune surveillance system and eliminated. However, when cancer cells either evade or defeat theimmune surveillance system, tumors grow and spread in an unregulated manner resulting in malignancies and, over time, may evencause the lack or loss of response to treatments. We believe that NPS may offer a novel approach to treating tumors as a monotherapy and in combination with othertherapies. Pre-clinical research demonstrates that NPS ablates treated tumors, modulates the tumor microenvironment of treatedtumors and induces ICD in a drug-free manner. As a result of ICD, the patient’s immune system is able to detect the tumor cellantigens and mount an immune response specifically against those tumor cells that were treated with NPS.Specifically, when tumors are treated with NPS, the cellular transient nanopores in individual tumor cells triggerendoplasmic reticulum stress and the release of intracellular calcium along with ROS and the emission of danger-associated 6 Table of Contents molecular patterns (DAMPs). As a result, these tumor cells undergo ICD, which is a unique form of cell death that is responsible forrecruiting immune cells to the site of the NPS-treated tumors for antigen processing and presentation.ICD is a desirable form of cell death in cancer therapy as it exhibits a preference for the cross-presentation of tumor cellantigens in the lymph nodes. The hallmark of ICD and cross-presentation is the generation of an adaptive immune responseincluding CD4+ helper-T cells and, more important for killing cancer cells, CD8+ cytotoxic-T cells. In effect, NPS serves as an insitu personalized cancer vaccination against a patient’s own tumors. Furthermore, we believe the microenvironment in NPS-treatedtumors is modified and that the protective mechanisms surrounding the tumor are reduced and possibly eliminated.The ability of NPS to initiate an immune response against cancerous tumors and the related cancer microenvironment maylend itself more favorably to immunogenic cancers. Cancer immunogenicity reflects a tumor’s ability to stimulate an immuneresponse. It has been hypothesized that cancer immunogenicity increases with mutation rate, meaning the more mutations a tumorhas, the higher the chance the tumor antigens can trigger the immune response. Cancers with the highest mutation rates includemelanoma, certain lung cancers, and bladder cancer. Relative to existing immune therapies, we believe that NPS therapy will activate the adaptive immune response specific toan individual’s tumors in a non-toxic, targeted manner. Given the many different approaches to modulating an immune responseand the ability of an immune response to access tumors, significant potential exists for NPS to be synergistic with existingtherapies and therapies in development. Our previously published pre-clinical work demonstrated the ability of NPS to treat and eliminate targeted melanoma tumorsand that NPS-treated tumor cells can be used as a vaccine to protect mice against fibrosarcoma subdermal allografts. Additionalpre-clinical studies conducted to date confirm the elimination of NPS treated tumors along with the generation of an adaptiveimmune response against various other tumor types. We continue to develop NPS, delineate the immune response and exploreadditional applications in oncology using pre-clinical animal models in preparation for upcoming clinical studies.We are in the early stages of planning to commence our first clinical oncology study in patients with unresectable in-transitmelanoma. We believe the high immunogenicity of melanoma lends itself well to our NPS therapy and we plan to initiate an openlabel study of in-transit melanoma in 2017.Minimally Invasive Ablation ApplicationsWe believe the use of NPS to treat and/or ablate tissue in a minimally invasive manner is an exciting opportunity for thetechnology. NPS may offer a new approach to eliminate unwanted tissue that we believe will be predictable and uniform and willresult in minimal collateral damage to surrounding tissue. We believe that these benefits can be important to several minimallyinvasive high value applications, including atrial fibrillation and other cardiac applications, lung disease, Barret’s esophagus, ear,nose and throat papillomas and thyroid nodules.Veterinary ApplicationsWe believe that NPS can provide a novel treatment in veterinary medicine, one that can provide a minimally invasiveapproach for pets in this largely cash pay-for-service market. Although the FDA does have regulatory oversight over medicaldevices used in veterinary medicine and can take appropriate regulatory action if a device is misbranded, no regulatory clearanceis necessary to introduce a therapy or device to the market. We believe that addressing the veterinary oncology market is attractive because:·animal data might yield information on the novel biological effects of NPS on tumors, especially confirmation of anadaptive immune response, which would help validate potential translational applications to humans;·it may offer a faster path to commercialization because of the less stringent regulatory pathway for veterinary medicaldevices; and·it is large and continues to grow.StrategyWe have consolidated several different entities working on nanosecond pulsed electric fields, and we now own or license 49issued patents and 61 filed patent applications in the United States and worldwide. This novel platform technology with strong IPprotection allows us to follow a broad, platform based approach to introducing our NPS technology and related 7 Table of Contents therapies and devices.Our strategy is to:·Develop a general purpose NPS platform for use across a broad array of applications. We are developing a versatilenanosecond pulse generation system, the PulseTx System, that can produce pulses of variable number, width,amplitude, and frequency and can be used with various applicator types and deployed into a wide range ofapplications;·Demonstrate the unique benefits of our NPS technology and the PulseTx System across a number of compellingtreatment applications. We intend to conduct multiple clinical trials to demonstrate the unique ability of NPS to treattissues across a number of applications with the highest value to clinicians and patients. We believe that a solidfoundation of clinical data will provide the opportunity to pursue regulatory clearances and demonstrate to cliniciansand patients the favorable treatment outcomes and patient experience afforded by our technology;·Pursue 510(k) clearance from the FDA for general soft tissue ablation followed by post-market studies to showimproved clinical outcomes across a number of applications. We submitted an FDA 510(k) for the PulseTx System inthe first quarter of 2017. We believe a 510(k) clearance for soft tissue ablation will provide a foundation for futureclearances with specific indications that we will pursue with the addition of clinical data; and·Commercialize applications by focusing initially on those clinical uses requiring modest clinical data to demonstrateefficacy and safety and for which cash payment patterns or coded reimbursement arrangements are well-established. Conditions that require long-term evidence to support third-party reimbursement and/or a longer time horizon toevaluate efficacy and safety, including various skin cancers, are expected later in the commercial launch sequence.Intellectual PropertyWe believe that our current and any future patents and other proprietary rights we own or license are and will be essential toour business and create an important competitive advantage for us. We also rely on trade secrets, know-how, continuingtechnological innovations and licensing opportunities to develop, maintain and strengthen our competitive position. We seek toprotect our intellectual property, in part, through confidentiality agreements with our employees, consultants and other parties,patent registration and access control to sensitive information. Our success also will depend on the ability of our licensors toobtain, maintain (including making periodic filings and payments) and enforce confidentiality agreements and patent protectionfor their intellectual property, in particular, those patents and other intellectual property to which we have secured rights.We own or license 49 issued patents and 61 filed patent applications in the United States and worldwide to protect theintellectual property on which nanosecond pulsed electric field technology is based on. Our United States issued patents are set toexpire between 2020 and 2034.As we expand our business internationally, we will seek patent, trademark and copyright protections as appropriate andavailable and conduct our business with the protections of confidentiality and trade secrets. Depending on the jurisdiction, wemay not be able to obtain the scope of protections we seek, in which event we will need to balance the available protectionsagainst the importance of such market to us.Research and DevelopmentWe are currently conducting research and development activities in pursuit of commercial applications for our NPStechnology, but have not yet commercialized or recognized revenue from our technology. Therefore, the majority of our businessactivities are devoted to research, including clinical trials, related to our core technologies and development of devices andproducts based on those technologies. Research and development expenses totaled $6.0 million, $2.6 million and $26,000 for theyears ended December 31, 2016 and 2015 and for the period of May 19, 2014 (inception) through December 31, 2014,respectively. Research and development expenses are expected to increase substantially during the fiscal year ending 2017,reflecting the increased growth in our operational activities and expansion of our clinical trial programs. Our R&D development team incorporates data and feedback obtained from our clinical and research programs into thedevelopment of the PulseTx NPS System and further inform our clinical strategies. We believe that developing and leveragingrelationships among clinicians is a key element in driving the adoption of our technology in clinical studies in the 8 Table of Contents short-term and enhances the potential for possible commercial systems in the future.CompetitionThe applications we intend to target are subject to intense competition from rapidly evolving companies and new scientificdiscoveries. We compete against well-established incumbent technologies offering products in oncology, dermatology andaesthetics, minimally invasive treatments, and veterinary applications. Given the broad scope of our technology, we facecompetition ranging from large manufacturers with multiple business lines to small companies with focused products, as well asproviders of other medical therapies and therapeutics for conditions that we intend to treat. Our future success will depend on ourability to establish and maintain a competitive position in current and future technologies.In immuno-oncology, we compete with multiple new technologies stimulating the immune system to target cancer. Anincreased understanding of the multiple mechanisms by which cancer or precancerous cells can evade the immune system hashelped researchers develop drugs including those that target immune inhibitors or stimulate T-cell production. For example,approved checkpoint inhibitor therapeutics are administered systemically and modulate the immune system in a more global way,which can lead to significant side effects including autoimmune diseases. Companies with approved checkpoint inhibitorsinclude: Bristol-Myers Squibb and Merck. CAR-T cell therapy has gained attention recently; which refers to a therapy where Tcells are removed from a patient and modified to express receptors on its surface that are specific to a cancer type. These cells arethen cultured and infused back into the body. Companies developing CAR-T cell therapies include Juno Therapeutics and KitePharma.We compete with multiple tissue removal technologies. These technologies cause immediate cell necrosis, killing cellswithin seconds to hours following exposure and triggering inflammation. Our technology is unique and differentiated in that NPSstimulates primarily intracellular cell death which we believe would be less traumatic to treated tissue and would result in lessscarring or collateral damage to surrounding tissues. Tissue removal technologies include RFA, microwave ablation, cryoablation,laser therapies and IRE.IRE uses pulsed electric fields at a high voltage in hundreds of microsecond pulse widths. These pulses cause irreversibledamage to cell membranes, resulting in necrosis (death) of the tumor cells. However, this technology stimulates nerves and musclesin a manner that makes it common for clinicians to use general anesthesia and muscle blockade during treatment. In contrast, NPSutilizes pulses 1,000 times shorter and in pre-clinical and limited clinical studies has not required the use of muscle blockade.Moreover, our technology transiently permeabilizes internal organelles which can lead to a signaling cascade ending inimmunogenic cell death.Tissue ablation companies for therapeutic applications include: Medtronic, Boston Scientific, AngioDynamics and St. JudeMedical. Ablation companies for dermatologic and aesthetic applications include: Alma Lasers, Cutera and Syneron Medical.Government RegulationIn general, medical device companies must navigate a challenging regulatory environment. The FDA regulates themedical device market to ensure the safety and efficacy of these products. The FDA allows for two primary pathways for a medicaldevice to gain approval for commercialization: a successful pre-market approval, or PMA application or 510(k) clearance. Acompletely novel product must go through the more rigorous premarket approval, or PMA, process if it cannot receiveauthorization through a 510(k). The FDA has established three different classes of medical devices that indicate the level of riskassociated with using a device and consequent degree of regulatory controls needed to govern its safety and efficacy. Level I andLevel II devices are considered lower risk and often can gain approval for commercial distribution by submitting a notificationrequest to the FDA, generally known as the 510(k) process. The devices regarded as the highest risk by the FDA are designatedClass III status and generally require the submission of a PMA application for approval to commercialize a product. Thesegenerally include life-sustaining, life-supporting, or implantable devices or devices without a known predicate technology alreadyapproved by the FDA.The 510(k) clearance path can be significantly less time-consuming than PMA approval, making this route preferable fora medical device company. Through a 510(k), a company must provide documentation that its device is safe and effective byshowing it is substantially equivalent to a device already cleared through a 510(k) or in distribution before May 28, 1976 forwhich the FDA has not yet required a PMA submission. The FDA has a 90 calendar day review goal from the date of the 510(k)submission to authorize or decline commercial distribution of the device. However, similar to the PMA 9 Table of Contents process, approval may take longer than this 90 day goal. If the FDA resolves that the product is not substantially equivalent to apredicate device, a clearance will not be granted.A PMA application must be accompanied by substantial data that supports the safety and efficacy of the device, whichincludes the provision of preclinical, clinical, technical, manufacturing and labeling information. If the FDA deems the applicationacceptable to pass through the first level of scrutiny, it has 180 days to review the submission, but it can typically take longer (upto several years) as this regulatory body can request additional information or clarifications. The FDA may also impose additionalregulatory hurdles for a PMA, including the institution of an outside advisory panel of experts to assess the application or providerecommendations as to whether to approve the device. Although the FDA in the end approves or disapproves the device, in nearlyall cases the FDA follows the recommendation from the independent panel concerning approvability of the new device. As part ofthis process, the FDA will also inspect the manufacturing operations of the company requesting approval to verify compliancewith quality control regulations. Significant changes in the fabrication of a device, or alterations in the labeling or design of aproduct require new PMA applications or PMA supplements for a product originally approved under a PMA. This createssubstantial regulatory risk for devices undergoing the PMA route.Pervasive and Continuing RegulationAfter a device is placed on the market, numerous regulatory requirements continue to apply. These include:·The FDA’s QSR which requires manufacturers, including third-party manufacturers, to follow stringent design,testing, control, documentation and other quality assurance procedures during all aspects of the manufacturingprocess;·labeling regulations and FDA prohibitions against the promotion of products for uncleared, unapproved or off-labeluses;·clearance or approval of product modifications that could significantly affect safety or efficacy or that wouldconstitute a major change in intended use;·medical device reporting, or MDR, regulations, which require that manufacturers report to the FDA if their devicemay have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause orcontribute to a death or serious injury if the malfunction were to recur; and·post-market surveillance regulations, which apply when necessary to protect the public health or to provideadditional safety and effectiveness data for the device.After a device receives 510(k) clearance or PMA approval, any modification that could significantly affect its safety oreffectiveness, or that would constitute a major change in its intended use, will require a new clearance or approval. The FDArequires each manufacturer to make this determination initially, but the FDA can review any such decision and can disagree with amanufacturer’s determination. If the FDA disagrees with the determination not to seek a new 510(k) clearance or PMA, the FDAmay retroactively require a new 510(k) clearance or premarket approval. The FDA could also require a manufacturer to ceasemarketing and distribution and/or recall the modified device until 510(k) clearance or premarket approval is obtained. Also, inthese circumstances, it may be subject to significant regulatory fines, penalties, and warning letters.The MDR regulations require that we report to the FDA any incident in which our product may have caused orcontributed to a death or serious injury or in which our product malfunctioned and, if the malfunction were to recur, would likelycause or contribute to death or serious injury.The FDA has broad post-market and regulatory enforcement powers. We may be subject to unannounced inspections bythe FDA and the Food and Drug Branch of CDHS to determine our compliance with the QSR and other regulations, and theseinspections may include the manufacturing facilities of our suppliers.Failure to comply with applicable regulatory requirements can result in enforcement action by FDA, which may includeany of the following sanctions:·warning letters, fines, injunctions, consent decrees and civil penalties;·repair, replacement, refunds, recall or seizure of our products; 10 Table of Contents ·operating restrictions, partial suspension or total shutdown of production;·refusing our requests for 510(k) clearance or premarket approval of new products, new intended uses ormodifications to existing products;·withdrawing 510(k) clearance or premarket approvals that have already been granted; and·criminal prosecution.Regulatory System for Medical Devices in EuropeThe European Union consists of 28 member states and has a coordinated system for the authorization of medical devices.The E.U. Medical Devices Directive, or MDD, sets out the basic regulatory framework for medical devices in the European Union.This directive has been separately enacted in more detail in the national legislation of the individual member states of theEuropean Union.The system of regulating medical devices operates by way of a certification for each medical device. Each certificateddevice is marked with CE mark which shows that the device has a Certificat de Conformité. There are national bodies known asCompetent Authorities in each member state which oversee the implementation of the MDD within their jurisdiction. The meansfor achieving the requirements for CE mark varies according to the nature of the device. Devices are classified in accordance withtheir perceived risks, similarly to the U.S. system. The class of a product determines the requirements to be fulfilled before CE markcan be placed on a product, known as a conformity assessment. Conformity assessments for our products are carried out as requiredby the MDD. Each member state can appoint Notified Bodies within its jurisdiction. If a Notified Body of one member state hasissued a Certificat de Conformité, the device can be sold throughout the European Union without further conformance tests beingrequired in other member states.Health Insurance Portability and Accountability ActThe Health Insurance Portability and Accountability Act of 1996, or HIPAA, established for the first time comprehensivefederal protection for the privacy and security of health information. The HIPAA standards apply to three types of organizations, orCovered Entities: health plans, healthcare clearing houses, and healthcare providers which conduct certain healthcare transactionselectronically. Title II of HIPAA, the Administrative Simplification Act, contains provisions that address the privacy of health data,the security of health data, the standardization of identifying numbers used in the healthcare system and the standardization ofcertain healthcare transactions. The privacy regulations protect medical records and other protected health information by limitingtheir use and release, giving patients the right to access their medical records and limiting most disclosures of health informationto the minimum amount necessary to accomplish an intended purpose. The HIPAA security standards require the adoption ofadministrative, physical, and technical safeguards and the adoption of written security policies and procedures. HIPAA requiresCovered Entities to obtain a written assurance of compliance from individuals or organizations who provide services to CoveredEntities involving the use or disclosure of protected health information (“Business Associates”).On February 17, 2009, Congress enacted Subtitle D of the Health Information Technology for Economic and ClinicalHealth Act, or HITECH, provisions of the American Recovery and Reinvestment Act of 2009. HITECH amends HIPAA and, amongother things, expands and strengthens HIPAA, creates new targets for enforcement, imposes new penalties for noncompliance andestablishes new breach notification requirements for Covered Entities and Business Associates. Regulations implementing majorprovisions of HITECH were finalized on January 25, 2013 through publication of the HIPAA Omnibus Rule, or the Omnibus Rule.The Omnibus Rule contained significant changes for Covered Entities and Business Associates with respect to permitted uses anddisclosures of Protected Health Information.Under HITECH’s new breach notification requirements, Covered Entities must report breaches of protected healthinformation that has not been encrypted or otherwise secured in accordance with guidance from the Secretary of the U.S.Department of Health and Human Services, or the Secretary. Required breach notices must be made as soon as is reasonablypracticable, but no later than 60 days following discovery of the breach. Reports must be made to affected individuals and to theSecretary and in some cases, they must be reported through local and national media, depending on the size of the breach. We arecurrently subject to the HIPAA regulations. We are subject to audit under the U.S. Department of Health and Human Services, orHHS, HITECH-mandated audit program. We may also be audited in connection with a privacy complaint. We are subject toprosecution and/or administrative enforcement and increased civil and criminal penalties for non-compliance, including a new,four-tiered system of monetary penalties adopted under HITECH. We are also subject to enforcement by 11 Table of Contents state attorneys general who were given authority to enforce HIPAA under HITECH. To avoid penalties under the HITECH breachnotification provisions, we must ensure that breaches of protected health information are promptly detected and reported withinthe company, so that we can make all required notifications on a timely basis. However, even if we make required reports on atimely basis, we may still be subject to penalties for the underlying breach.In addition to the federal privacy regulations, there are a number of state laws regarding the privacy and security of healthinformation and personal data that are applicable to clinical laboratories. The compliance requirements of these laws, includingadditional breach reporting requirements, and the penalties for violation vary widely and new privacy and security laws in thisarea are evolving. Requirements of these laws and penalties for violations vary widely. We believe that we have taken the stepsrequired of us to comply with health information privacy and security statutes and regulations in all jurisdictions, both state andfederal. However, we may not be able to maintain compliance in all jurisdictions where we do business. Failure to maintaincompliance, or changes in state or federal laws regarding privacy or security, could result in civil and/or criminal penalties andcould have a material adverse effect on our business.If we or our operations are found to be in violation of HIPAA, HITECH or their implementing regulations, we may besubject to penalties, including civil and criminal penalties, fines, and exclusion from participation in U.S. federal or state healthcare programs, and the curtailment or restructuring of our operations. HITECH increased the civil and criminal penalties that maybe imposed against Covered Entities, their Business Associates and possibly other persons, and gave state attorneys general newauthority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorney’sfees and costs associated with pursuing federal civil actions.In addition to federal privacy regulations, there are a number of state laws governing confidentiality of health informationthat are applicable to our operations. New laws governing privacy may be adopted in the future as well. We have taken steps tocomply with health information privacy requirements that are applicable to us.Federal, State and Foreign Fraud and Abuse LawsBecause of the significant federal funding involved in Medicare and Medicaid, Congress and the states have enacted, andactively enforce, a number of laws to eliminate fraud and abuse in federal healthcare programs. Our business is subject tocompliance with these laws. In March 2010, the Recipient Protection and Affordable Care Act, as amended by the Healthcare andEducation Affordability Reconciliation Act, which we refer to collectively as the Affordable Care Act, was enacted in the UnitedStates. The provisions of the Affordable Care Act are effective on various dates. The Affordable Care Act expands thegovernment’s investigative and enforcement authority and increases the penalties for fraud and abuse, including amendments toboth the Anti-Kickback Statute and the False Claims Act, to make it easier to bring suit under these statutes. The Affordable CareAct also allocates additional resources and tools for the government to police healthcare fraud, with expanded subpoena power forHHS, additional funding to investigate fraud and abuse across the healthcare system and expanded use of recovery auditcontractors for enforcement.Anti-Kickback Statutes. The federal healthcare programs’ Anti-Kickback Statute prohibits persons from knowingly andwillfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in exchange for or to induce either thereferral of an individual, or the furnishing or arranging for a good or service, for which payment may be made under a federalhealthcare program such as Medicare or Medicaid.The definition of “remuneration” has been broadly interpreted to include anything of value, including, for example, gifts,certain discounts, the furnishing of free supplies, equipment or services, credit arrangements, payment of cash and waivers ofpayments. Several courts have interpreted the statute’s intent requirement to mean that if any one purpose of an arrangementinvolving remuneration is to induce referrals of federal healthcare covered businesses, the statute has been violated. Penalties forviolations include criminal penalties and civil sanctions such as fines, imprisonment and possible exclusion from Medicare,Medicaid and other federal healthcare programs. In addition some kickback allegations have been claimed to violate the FederalFalse Claims Act, discussed in more detail below.The Anti-Kickback Statute is broad and prohibits many arrangements and practices that are otherwise lawful in businessesoutside of the healthcare industry. Recognizing that the Anti-Kickback Statute is broad and may technically prohibit manyinnocuous or beneficial arrangements, Congress authorized the Office of Inspector General, or OIG, of HHS to issue a series ofregulations known as “safe harbors.” These safe harbors set forth provisions that, if all their applicable requirements are met, willassure healthcare providers and other parties that they will not be prosecuted under the Anti-Kickback Statute. The failure of atransaction or arrangement to fit precisely within one or more safe harbors does not necessarily mean that it is illegal or thatprosecution will be pursued. However, conduct and business arrangements that do 12 Table of Contents not fully satisfy an applicable safe harbor may result in increased scrutiny by government enforcement authorities such as OIG.Many states have adopted laws similar to the Anti-Kickback Statute. Some of these state prohibitions apply to referral ofrecipients for healthcare items or services reimbursed by any source, not only the Medicare and Medicaid programs.Government officials have focused their enforcement efforts on the marketing of healthcare services and products, amongother activities, and recently have brought cases against companies, and certain individual sales, marketing and executivepersonnel, for allegedly offering unlawful inducements to potential or existing customers in an attempt to procure their business.Federal False Claims Act. Another development affecting the healthcare industry is the increased use of the federal FalseClaims Act, and in particular, action brought pursuant to the False Claims Act’s “whistleblower” or “qui tam” provisions. TheFalse Claims Act imposes liability on any person or entity that, among other things, knowingly presents, or causes to be presented,a false or fraudulent claim for payment by a federal healthcare program. The qui tam provisions of the False Claims Act allow aprivate individual to bring actions on behalf of the federal government alleging that the defendant has violated the False ClaimsAct and to share in any monetary recovery. In recent years, the number of suits brought against healthcare providers by privateindividuals has increased dramatically. In addition, various states have enacted false claims laws analogous to the False ClaimsAct, and many of these state laws apply where a claim is submitted to any third-party payor and not just a federal healthcareprogram.When an entity is determined to have violated the False Claims Act, it may be required to pay up to three times the actualdamages sustained by the government, plus civil penalties of between $5,500 and $11,000 for each separate instance of falseclaim. As part of any settlement, the government may ask the entity to enter into a corporate integrity agreement, which imposescertain compliance, certification and reporting obligations. There are many potential bases for liability under the False Claims Act.Liability arises, primarily, when an entity knowingly submits, or causes another to submit, a false claim for reimbursement to thefederal government. The federal government has used the False Claims Act to assert liability on the basis of inadequate care,kickbacks and other improper referrals, and improper use of Medicare numbers when detailing the provider of services, in additionto the more predictable allegations as to misrepresentations with respect to the services rendered. In addition, the federalgovernment has prosecuted companies under the False Claims Act in connection with off-label promotion of products. Our futureactivities relating to the reporting of wholesale or estimated retail prices of our products, the reporting of discount and rebateinformation and other information affecting federal, state and third-party reimbursement of our products and the sale andmarketing of our products may be subject to scrutiny under these laws.While we are unaware of any current matters, we are unable to predict whether we will be subject to actions under theFalse Claims Act or a similar state law, or the impact of such actions. However, the costs of defending such claims, as well as anysanctions imposed, could significantly affect our financial performance.The Sunshine Act. The Physician Payment Sunshine Act, or the Sunshine Act, which was enacted as part of the AffordableCare Act, requires all entities that operate in the United States and manufacturers of a drug, device, biologic or other medicalsupply that is covered by Medicare, Medicaid or the Children’s Health Insurance Program to report annually to the Secretary ofHHS: (i) payments or other transfers of value made by that entity, or by a third-party as directed by that entity, to physicians andteaching hospitals or to third parties on behalf of physicians or teaching hospitals; and (ii) physician ownership and investmentinterests in the entity. The payments required to be reported include the cost of meals provided to a physician, travelreimbursements and other transfers of value, including those provided as part of contracted services such as speaker programs,advisory boards, consultation services and clinical trial services. The final rule implementing the Sunshine Act required datacollection on payments to begin on August 1, 2013. The first annual report, comprised of data collected from August 1, 2013 toDecember 31, 2013, was due March 31, 2014. The statute requires the federal government to make reported information availableto the public starting September 2014, which it has. Failure to comply with the reporting requirements can result in significantcivil monetary penalties ranging from $1,000 to $10,000 for each payment or other transfer of value that is not reported (up to amaximum per annual report of $150,000) and from $10,000 to $100,000 for each knowing failure to report (up to a maximum perannual report of $1.0 million). Additionally, there are criminal penalties if an entity intentionally makes false statements in suchreports. We are subject to the Sunshine Act and the information we disclose may lead to greater scrutiny, which may result inmodifications to established practices and additional costs. Additionally, similar reporting requirements have also been enacted onthe state level domestically, and an increasing number of countries worldwide either have adopted or are considering similar lawsrequiring transparency of interactions with healthcare professionals. 13 Table of Contents Foreign Corrupt Practices Act. The Foreign Corrupt Practices Act, or FCPA, prohibits any United States individual orbusiness from paying, offering, or authorizing payment or offering of anything of value, directly or indirectly, to any foreignofficial, political party or candidate for the purpose of influencing any act or decision of the foreign entity in order to assist theindividual or business in obtaining or retaining business. The FCPA also obligates companies whose securities are listed in theUnited States to comply with accounting provisions requiring us to maintain books and records that accurately and fairly reflectall transactions of the corporation, including international subsidiaries, if any, and to devise and maintain an adequate system ofinternal accounting controls for international operations.International Laws. In Europe, various countries have adopted anti-bribery laws providing for severe consequences, inthe form of criminal penalties and/or significant fines, for individuals and/or companies committing a bribery offense. Violationsof these anti-bribery laws, or allegations of such violations, could have a negative impact on our business, results of operations andreputation. For instance, in the United Kingdom, under the Bribery Act 2010, which went into effect in July 2011, a bribery occurswhen a person offers, gives or promises to give a financial or other advantage to induce or reward another individual to improperlyperform certain functions or activities, including any function of a public nature. Bribery of foreign public officials also fallswithin the scope of the Bribery Act 2010. Under the new regime, an individual found in violation of the Bribery Act of 2010, facesimprisonment of up to 10 years. In addition, the individual can be subject to an unlimited fine, as can commercial organizationsfor failure to prevent bribery.There are also international privacy laws that impose restrictions on the access, use, and disclosure of health information.All of these laws may impact our business. Our failure to comply with these privacy laws or significant changes in the lawsrestricting our ability to obtain required patient information could significantly impact our business and our future business plans.U.S. Healthcare ReformChanges in healthcare policy could increase our costs and subject us to additional regulatory requirements that mayinterrupt commercialization of our current and future solutions. Changes in healthcare policy could increase our costs, decreaseour revenues and impact sales of and reimbursement for our current and future solutions. The Affordable Care Act substantiallychanges the way healthcare is financed by both governmental and private insurers, and significantly impacts our industry. The Actcontains a number of provisions that impact our business and operations, some of which in ways we cannot currently predict,including those governing enrollment in federal healthcare programs and reimbursement changes.There will continue to be proposals by legislators at both the federal and state levels, regulators and third-party payors toreduce costs while expanding individual healthcare benefits. Certain of these changes could impose additional limitations on theprices we will be able to charge for our current and future solutions or the amounts of reimbursement available for our current andfuture solutions from governmental agencies or third-party payors. While in general it is too early to predict specifically whateffect the Affordable Care Act and its implementation or any future healthcare reform legislation or policies will have on ourbusiness, current and future healthcare reform legislation and policies could have a material adverse effect on our business andfinancial condition.Third-Party ReimbursementPayment for patient care in the United States is generally made by third-party payors, including privateinsurers and government insurance programs, such as Medicare and Medicaid. The Medicare program, thelargest single payor in the United States, is a federal governmental health insurance program administered by theCenters for Medicare and Medicaid Services, or CMS, and covers certain medical care expenses for eligibleelderly and disabled individuals. Because a large percentage of the population with PAD includes Medicarebeneficiaries, and private insurers may follow the coverage and payment policies of Medicare, Medicare’scoverage and payment policies are significant to our operations EnvironmentalWe are subject to federal, state and local laws, rules, regulations and policies governing the use, generation, manufacture,storage, air emission, effluent discharge, handling and disposal of certain hazardous and potentially hazardous substances used inconnection with our operations. Although we believe that we have complied with these laws and regulations in all materialrespects and, to date, have not been required to take any action to correct any noncompliance, there can be no assurance that wewill not be required to incur significant costs to comply with environmental regulations in the future. 14 Table of Contents InsuranceWe maintain product and clinical trial liability insurance coverage which includes a maximum of per claim and an annualaggregate policy limits, subject to self-insured retentions. The policy covers, subject to policy conditions and exclusions, claimsof bodily injury and property damage from any product manufactured by us or from trial-related adverse events.There is no assurance that our level of coverage is adequate. We may not be able to sustain or maintain our current level ofcoverage and cannot assure you that adequate insurance coverage will continue to be available on commercially reasonable terms,or at all. A successful product liability claim may exceed our existing coverages and may make future coverages significantly moreexpensive, if available at all.EmployeesAs of December 31, 2016, we had 13 full-time employees. Of these employees, nine were in research and development andfour were in general and administration. Substantially all of our employees are located at our headquarters in Burlingame,California. None of our employees are represented by labor unions or are covered by a collective bargaining agreement withrespect to their employment. We have not experienced any work stoppages, and we consider our relationship with our employeesto be good.Available InformationWe were incorporated in Nevada on May 19, 2014 under the name Electroblate, Inc. Electroblate, Inc. changed its name toPulse Biosciences, Inc. effective December 8, 2015. Our corporate offices are located at 849 Mitten Road, Suite 104, Burlingame,California. Our telephone number is (650) 697-3939. Our website is located at www.pulsebiosciences.com. The information that can be accessed through our website is notincorporated into this Annual Report on Form 10-K, and the inclusion of our website address is an inactive textual reference only.Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to reports filedor furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, are available free of chargethrough the “Investor Relations” section of our website as soon as reasonably practicable after we electronically file such materialwith, or furnish it to, the Securities and Exchange Commission (SEC).Additionally, we use our website as a channel for distribution for important company information. Important information,including press releases, analyst presentations and financial information regarding us, as well as corporate governance information,is routinely posted and accessible on the “Investor Relations” section of the website, which is accessible by clicking “Investors”on the menu tab labeled “About Us” on our website home page. 15 Table of Contents Item 1A. Risk FactorsInvesting in our common stock involves a high degree of risk. You should consider carefully the risks and uncertaintiesdescribed below, together with all of the other information in this Annual Report on Form 10-K, including our financialstatements and related notes, which could have a material adverse effect on our business, financial condition, results ofoperations and prospects. The risks described below are not the only risks facing us. Risks and uncertainties not currently knownto us or that we currently deem to be immaterial also may materially affect our business, financial condition, results of operationsand prospects.Risks Relating to Our Business, Industry and Financial ConditionSince we have a limited operating history and have not commenced any revenue producing operations, it is difficult forpotential investors to evaluate the future of our business. We are a clinical-stage medical technology company and have not yet commenced revenue-producing operations. To date,our operations on a consolidated basis have consisted of the continued development of our technologies and implementation ofthe early parts of our business plan. We have incurred significant operating losses in each year since our inception and we expectto continue to incur additional loses for the next several years. In addition, a high percentage of our expenses will continue to befixed; accordingly, our losses may be greater than expected and our operating results may suffer. We have limited historicalfinancial data upon which we may base our projected revenue and base our planned operating expenses. Our limited operatinghistory makes it difficult for potential investors to evaluate our technology or prospective operations and business prospects.We currently have no commercial products or product revenue and may never become profitable.To date, we have not generated revenue and have relied on equity-based financing from the sale of securities to fund ouroperations. We expect that our future financial results will depend primarily on our success in obtaining approval for, launching,selling and supporting our PulseTxTM System or other products based on Nano Pulse Stimulation, or NPS; however, our technologyis still in development. We expect to expend significant resources on hiring of personnel, continued scientific and productresearch and development, potential product testing and preclinical and clinical investigation, intellectual property developmentand prosecution, marketing and promotion, capital expenditures, working capital, general and administrative expenses, and feesand expenses associated with our capital raising efforts. We expect to incur costs and expenses related to consulting costs,laboratory development costs, hiring of scientists, engineers, and other operational personnel, and the continued development ofrelationships with potential partners. We are incurring significant operating losses, we expect to continue to incur additional losesfor the next several years, and we cannot assure you that we will generate revenue or be profitable in the future. Our future productsmay never be approved or become commercially viable or accepted for use. Even if we find commercially viable applications forour technology, which may include licensing, we may never recover our research and development expenses. Investment in medical technology is highly speculative, because it entails substantial upfront capital expenditures andsignificant risk that any potential planned product will fail to demonstrate adequate efficacy or clinical utility. Investors shouldevaluate an investment in us in light of the uncertainties encountered by developing medical technology companies in acompetitive environment. There can be no assurance that our efforts will be successful or that we will ultimately be able to achieve profitability. Even if we achieve profitability, we may not be able to sustain or increase profitability on a quarterly orannual basis. Our failure to become and remain profitable could adversely affect the market price of our common stock and couldsignificantly impair our ability to raise capital, expand our business or continue to implement our business plan.We anticipate needing additional financing to execute our business plan and fund operations, which additional financingmay not be available on reasonable terms or at all. Our ability to continue as a going concern ultimately is dependent upon our generating cash flow from sales that aresufficient to fund operations or finding adequate financing to support our operations. Currently, we have no product revenue, andwe do not have arrangements in place for all the anticipated, required financing to be able to fully implement our business plan.We cannot give any assurance that we will be able to obtain all the necessary funding that we may need. We believe we willrequire additional capital in the future to fully develop our technologies and planned products to the stage of a commerciallaunch. We may pursue additional funding through various financing sources, including the private sale of our equity and debtsecurities, licensing fees for our technology, joint ventures with capital partners and project type financing. If we raise funds byissuing equity or equity-linked securities, dilution to our stockholders will result. Any equity securities 16 Table of Contents issued may also provide for rights, preferences or privileges senior to those of holders of our common stock. The terms of debtsecurities issued or borrowings could impose significant restrictions on our operations. We also may seek government basedfinancing, such as development and research grants. There can be no assurance that funds will be available on commerciallyreasonable terms, if at all. The incurrence of additional indebtedness or the issuance of certain equity securities could result in increased fixed paymentobligations and could also result in restrictive covenants, such as limitations on our ability to incur additional debt or issueadditional equity, limitations on our ability to acquire or license intellectual property rights, and other operating restrictions thatcould adversely affect our ability to conduct our business. In addition, the issuance of additional equity securities by us, or thepossibility of such issuance, may cause the market price of our common stock to decline. In the event that we enter intocollaborations or licensing arrangements to raise capital, we may be required to accept unfavorable terms. These agreements mayrequire that we relinquish, or license to a third party on unfavorable terms, our rights to technologies or product candidates that weotherwise would seek to develop or commercialize ourselves, or reserve certain opportunities for future potential arrangements when we might otherwise be able to achieve more favorable terms. In addition, we may be forced to work with a partner on one ormore of our products or market development programs, which could lower the economic value of those programs to us.If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, we may terminate ordelay the development of one or more of our products, delay clinical trials necessary to market our products, or delayestablishment of sales and marketing capabilities or other activities necessary to commercialize our products. If this were to occur,our ability to grow and support our business and to respond to market challenges could be significantly limited or we may beunable to continue operations, in which case you could lose your entire investment.If we lose key management personnel, our ability to identify, develop and commercialize new or next generation productcandidates will be impaired, could result in loss of markets or market share and could make us less competitive. We are highly dependent upon the principal members of our management team and the members of our scientific team,including our Chief Executive Officer, Darrin Uecker. These persons have significant experience and knowledge with sub-microsecond pulsed electric fields and more broadly in life sciences and medical technologies. The loss of any team member couldimpair our ability to design, identify, and develop new intellectual property and new scientific or product ideas. The loss of a keyemployee, the failure of a key employee to perform in his or her current position or our inability to attract and retain skilledemployees could result in our inability to continue to grow our business or to implement our business strategy. We compete forqualified management and scientific personnel with other life science companies, academic institutions and research institutions.Our employees could leave our company with little or no prior notice and may be free to work for a competitor. If one or more ofour senior executives or other key personnel were unable or unwilling to continue in their present positions, we may not be able toreplace them easily or at all, and other senior management may be required to divert attention from other aspects of the business. Inaddition, we do not have “key person” life insurance policies covering any member of our management team or other keypersonnel. The loss of any of these individuals or any inability to attract or retain qualified personnel, including scientists,engineers and others, could prevent us from pursuing collaborations and materially and adversely affect our product developmentand introductions, business growth prospects, results of operations and financial condition.There is a limited talent pool of experienced professionals in our industry. If we are not able to retain and recruitpersonnel with the requisite technical skills, we may be unable to successfully execute our business strategy.The specialized nature of our industry results in an inherent scarcity of experienced personnel in the field. Our future successdepends upon our ability to attract and retain highly skilled personnel, including scientific, technical, commercial, business,regulatory and administrative personnel, necessary to support our anticipated growth, develop our business and perform certaincontractual obligations. Given the scarcity of professionals with the scientific knowledge that we require and the competition forqualified personnel among life science businesses, we may not succeed in attracting or retaining the personnel we require tocontinue and grow our operations. 17 Table of Contents We expect to operate in a highly competitive market, we may face competition from large, well-established medical deviceand product manufacturers with significant resources, and we may not be able to compete effectively. The medical technology, medical device, biotechnology and pharmaceutical industries are characterized by intense anddynamic competition to develop new technologies and proprietary therapies. We may find ourselves in competition withcompanies that have competitive advantages over us, such as:·significantly greater name recognition; ·established relations with healthcare professionals, customers and third-party payers;·established distribution networks; ·additional lines of products, and the ability to offer rebates, higher discounts or incentives to gain a competitiveadvantage;·greater experience in conducting research and development, manufacturing, clinical trials, obtaining regulatoryapproval for products, and marketing approved products; and·greater financial and human resources for product development, sales and marketing, and patent litigation.We may also face increased competition in the future as new companies enter our markets and as scientific developmentssurrounding electro-signaling therapeutics continue to accelerate. While we will seek to expand our technological capabilities toremain competitive, research and development by others may render our technology or product candidates obsolete ornoncompetitive or result in treatments or cures superior to any therapy developed by us. As a result, we may not be able to competeeffectively against current and potential future competitors or their devices and products. We may rely on third parties for our sales, marketing, manufacturing and distribution, and these third parties may notperform satisfactorily.We do not currently conduct many aspects of sales, marketing, manufacturing or distribution. To be able to commercializeour planned products, we may elect to internally develop all of the foregoing or utilize third parties with respect to one or more ofthese items. Our reliance on these third parties may reduce our control over these activities; however, reliance on third parties doesnot relieve us of our responsibility to ensure compliance with all required legal, regulatory and scientific standards. Any failure ofthese third parties to perform satisfactorily and in compliance with relevant laws and regulations could lead to delays in thedevelopment of our planned products, including delays in our clinical trials, or failure to obtain regulatory approval for ourplanned products, or failure to successfully commercialize our planned products or other future products. Some of these eventscould be the basis for FDA or other regulatory action, including injunction, recall, seizure or total or partial suspension ofproduction.We do not have any corporate experience in establishing these capabilities, and therefore, we may be unsuccessful inachieving commercialization and earning revenues. We believe that setting up the commercialization aspects of a company willtake a substantial amount of capital and commitment of time and effort. We may seek development and marketing partners andlicense our technology to others in order to avoid our having to provide the marketing, manufacturing and distributioncapabilities within our organization. There can be no assurance that we will find any development and marketing partners orcompanies that are interested in licensing our technology. If we are unable to establish and maintain adequate sales, marketing,manufacturing and distribution capabilities, independently or with others, we will not be able to generate product revenue, andmay not become profitable. If we are unable to manage the anticipated growth of our business, our future revenue and operating results may beharmed.Any growth that we experience in the future could provide challenges to our organization, requiring us to expand our salespersonnel and manufacturing operations and general and administrative infrastructure. Future growth will impose significantadded responsibilities on management, including the need to identify, recruit, train and integrate additional employees. Rapidexpansion in personnel could mean that less experienced people carry out our research and development activities, manufactureour PulseTx System devices and market and sell our NPS therapies and treatments, which could result in inefficiencies andunanticipated costs, reduced quality and disruptions to our operations. In addition, rapid and significant growth may strain ouradministrative and operational infrastructure, and the failure to continue to upgrade our technical, administrative, operating andfinancial control systems or the occurrence of unexpected expansion difficulties could have a material adverse effect on ourbusiness, financial condition and results of operations and our ability to timely execute our business plan. If we are unable to manage our growth effectively, it may be difficult for us to execute our business strategy and our business could be harmed. 18 Table of Contents Rapidly changing technology in life sciences could make the products we are developing obsolete. The medical technology industry is characterized by rapid and significant technological changes, frequent new productintroductions and enhancements and evolving industry standards. Our future success will depend on our ability to continuallydevelop and then improve the products that we design and to develop and introduce new products that address the evolving needsof our customers on a timely and cost-effective basis. We also will need to pursue new market opportunities that develop as a resultof technological and scientific advances. These new market opportunities may be outside the scope of our proven expertise or inareas which have unproven market demand. Any new products developed by us may not be accepted in the intended markets. Ourinability to gain market acceptance of new products could harm our future operating results.Security breaches, loss of data and other disruptions to us or our third-party service providers could compromise sensitiveinformation related to our business or prevent us from accessing critical information and expose us to liability, which couldadversely affect our business and our reputation.In the ordinary course of our business, we, and our third-party service providers may collect and store sensitive data,including legally protected health information, personally identifiable information about our patients, information related to ourtrials, intellectual property, and our proprietary business and financial information. We manage and maintain our applications anddata utilizing a combination of on-site and vendor-owned systems. We face a number of risks related to our protection of, and ourservice providers’ protection of, this critical information, including loss of access, unauthorized disclosure and unauthorizedaccess, as well as risks associated with our ability to identify and audit such events.Although we take measures to protect sensitive information from unauthorized access or disclosure, our informationtechnology and infrastructure may be vulnerable to attacks by hackers or viruses or otherwise breached due to employee error,malfeasance or other activities. While we have not experienced any such attack or breach, if such an event were to occur, ournetworks would be compromised and the information we store on those networks could be accessed by unauthorized parties,publicly disclosed, lost or stolen. Any such access, disclosure or other loss of information could result in legal claims orproceedings, liability under laws that protect the privacy of personal information, such as the federal Health Insurance Portabilityand Accountability Act of 1996, or HIPAA, as amended by the Health Information Technology for Economic and Clinical HealthAct of 2009, or HITECH, and regulatory penalties. Unauthorized access, loss or dissemination could also disrupt our operations,including our ability to process tests, provide test results, provide services, conduct research and development activities, collect,process and prepare company financial information, provide information about our product candidates and manage theadministrative aspects of our business and could damage our reputation, any of which could adversely affect our business. In addition, the interpretation and application of federal and state consumer, health-related and data protection laws in theUnited States are often uncertain, contradictory and in flux. It is possible that these laws may be interpreted and applied in amanner that is inconsistent with our practices. If so, this could result in government-imposed fines or orders requiring that wechange our practices, which could adversely affect our business. Complying with these various laws could cause us to incursubstantial costs or require us to change our business practices, systems and compliance procedures in a manner adverse to ourbusiness.Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of anyproducts that we may develop.We face an inherent risk of product liability exposure related to the future sale of planned products and the use of plannedproducts in human clinical studies. For example, we may be sued if any of our product candidates, including any that aredeveloped in combination therapies, allegedly causes injury or is found to be otherwise unsuitable during product testing,manufacturing, marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defectsin design, a failure to warn of dangers inherent in the product, negligence, strict liability and a breach of warranties. We may alsobe subject to liability for a misunderstanding of, or inappropriate reliance upon, the information we provide. If we cannotsuccessfully defend ourselves against claims that our planned products caused injuries, we may incur substantial liabilities.Regardless of merit or eventual outcome, liability claims may result in:·decreased demand for any planned products that we may develop;·injury to our reputation and significant negative media attention;·withdrawal of patients from clinical studies or cancellation of studies;·significant costs to defend the related litigation and distraction to our management team;·substantial monetary awards to patients; 19 Table of Contents ·loss of revenue; and·the inability to commercialize any products that we may develop.For example, if we pursue clinical trials in the field of oncology, patients with the types and stages of cancer targeted by ourNPS technology may already be in severe and advanced stages of disease, may have worsened conditions despite traditionaltherapies, may not be surgical candidates, and/or may have both known and unknown significant pre-existing and potentially life-threatening conditions. During the course of treatment, patients may suffer adverse events, including death, for reasons that may berelated to our NPS Technology or our PulseTx System. Such events could subject us to costly litigation, require us to paysubstantial amounts of money to injured patients, delay, negatively impact or end our opportunity to receive or maintainregulatory approval to market those products, or require us to suspend or abandon our commercialization efforts. Even in acircumstance in which we do not believe that an adverse event is related to our product, the investigation into the circumstancemay be time-consuming or inconclusive. These investigations may interrupt our sales efforts, delay our regulatory approvalprocesses, or impact and limit the type of regulatory approvals our products could receive or maintain. As a result of these factors, aproduct liability claim, even if successfully defended, could harm our business.We currently maintain product liability insurance coverage, which may not be adequate to cover all liabilities that we mayincur. Insurance coverage is increasingly expensive. We may not be able to maintain insurance coverage at a reasonable cost or inan amount adequate to satisfy any liability that may arise.Our ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited.We have incurred net losses since our inception and anticipate that we will continue to incur significant losses for theforeseeable future. If not utilized, the federal and state NOL carryforwards will begin to expire in various years beginning after2032. Under the Internal Revenue Code of 1986, as amended, or the Code, and certain similar state tax provisions, a corporation isgenerally allowed a deduction for net operating losses, or NOLs, carried over from a prior taxable year. Under those provisions, wecan carry forward our NOLs to offset our future taxable income, if any, until such NOLs are used or expire. The same is true of otherunused tax attributes, such as tax credits.In addition, under Section 382 of the Internal Revenue Code, a corporation that undergoes an “ownership change” is subjectto limitations on its ability to utilize its pre-change net operating losses (“NOLs”) to offset future taxable income. We believe thatwe may have had one or more ownership changes, and, as a result, a portion of our existing NOLs may be subject to limitation.Future changes in our stock ownership could result in additional limitations. We may not be able to utilize a material portion ofour NOLs even if we attain profitability.We have a substantial amount of goodwill and intangible assets which over time may have to be written down as we makethe required periodic assessments as to their value as reflected on our financial statements. A significant portion of our total assets are comprised of goodwill and intangibles that arose from our 2014 businessacquisitions. We review goodwill for impairment at least annually or whenever changes in circumstances indicate that the carryingvalue of the goodwill may not be recoverable. We also review our intangible assets for impairment at each fiscal year end or whenevents or changes in circumstances indicate the carrying value of these assets may exceed their current fair values. If we take animpairment charge for either goodwill or intangible assets, the overall assets will be reduced. Such an impairment charge mayresult in a change in the perceived value of the company and ultimately may be reflected as a reduction in the market price of oursecurities. Additionally, an impairment charge may also adversely influence our ability to raise capital in the future.We have identified a material weakness in our internal control over financial reporting. If our remediation of this materialweakness is not effective, or if we experience additional material weaknesses in the future or otherwise fail to maintain aneffective system of internal control over financial reporting in the future, we may not be able to accurately or timely report ourfinancial condition or results of operations, which may adversely affect investor confidence in us and, as a result, the value ofour common stock.As a public company, we are required to maintain internal control over financial reporting and to report any materialweaknesses in such internal controls. Section 404 of the Sarbanes-Oxley Act requires that we evaluate and determine theeffectiveness of our internal control over financial reporting and, beginning with our second annual report following our initialpublic offering, which will be the year ending December 31, 2017, provide a management report on internal control over financialreporting. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such thatthere is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected on atimely basis. 20 Table of Contents In connection with the audit of our financial statements as of and for the year ended December 31, 2016, we identified amaterial weakness in our internal control over financial reporting. The material weakness related to a lack of effective controls toadequately restrict access and segregate duties. Specifically, due to the limited number of staff in our accounting function, certainpersonnel had the ability to prepare and post journal entries without a qualified independent review performed by someonewithout this ability. Upon identifying this material weakness, we performed additional procedures to evaluate the impact on thefinancial statements. Based on these procedures, we believe the material weakness did not result in any material misstatements toour financial statements. However, this material weakness could result in a misstatement of our accounts or disclosures that wouldresult in a material misstatement of our financial statements that would not be prevented or detected. We are implementingmeasures designed to improve our internal control over financial reporting to remediate this material weakness, including thefollowing:·We are evaluating our accounting system access rights so that there are accounting personnel without journal entryaccess who can perform review activities.·We are formalizing our internal control documentation and strengthening supervisory reviews by our management.·We are in the process of adding additional accounting personnel and will be segregating duties amongst accountingpersonnel.We cannot assure you that the measures we have taken to date, and are continuing to implement, will be sufficient toremediate the material weakness we have identified or avoid potential future material weaknesses. If the steps we take do notcorrect the material weakness in a timely manner, we will be unable to conclude that we maintain effective internal control overfinancial reporting. Accordingly, there could continue to be a reasonable possibility that a material misstatement of our financialstatements would not be prevented or detected on a timely basis.In addition to the remediation efforts related to the material weakness described above, we are in the process of designingand implementing the internal control over financial reporting required to comply with Section 404 of the Sarbanes Oxley Act.This process will be time consuming, costly and complicated. If during the evaluation and testing process, we identify one or moreother material weaknesses in our internal control over financial reporting, our management will be unable to assert that our internalcontrol over financial reporting is effective. Even if our management concludes that our internal control over financial reporting iseffective, our independent registered public accounting firm may conclude that there are material weaknesses with respect to ourinternal controls or the level at which our internal controls are documented, designed, implemented or reviewed. If we are unableto assert that our internal control over financial reporting is effective, or when required in the future, if our independent registeredpublic 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 stockcould be adversely affected, and we could become subject to investigations by the stock exchange on which our securities arelisted, the SEC, or other regulatory authorities, which could require additional financial and management resources.Our facilities in California are located near known earthquake faults, and the occurrence of an earthquake or othercatastrophic disaster could cause damage to our facilities and equipment, which could require us to cease or curtail operations. Our facilities in the San Francisco Bay Area are located near known earthquake fault zones and are vulnerable to damagefrom earthquakes. We are also vulnerable to damage from other types of disasters, including fire, floods, power loss,communications failures and similar events. If any disaster were to occur, our ability to operate our business at our facilities wouldbe seriously, or potentially completely, impaired. In addition, the nature of our activities could cause significant delays in ourresearch programs and commercial activities and make it difficult for us to recover from a disaster. The insurance we maintain maynot be adequate to cover our losses resulting from disasters or other business interruptions. Accordingly, an earthquake or otherdisaster could materially and adversely harm our ability to conduct business.Risks Related to Product DevelopmentWe currently do not have any products approved by the FDA or other similar foreign regulatory authorities forcommercial sale or any commercialized products. To date, we have invested a substantial amount of time and capital to research and develop the foundations of ourtechnology and potential applications. For us to develop any products that might ultimately be commercialized, we will have toinvest further time and capital in research and product development, medical and other regulatory compliance, and marketdevelopment. Therefore, we may never develop any products that can be commercialized. All of our development efforts will 21 Table of Contents require substantial additional investment, which may never result in any revenue. Our efforts may not lead to approved orcommercially successful products for a number of reasons, including:·we may not be able to complete the science and develop any planned products for NPS; ·we may not be able to obtain regulatory approvals for our planned products, or the approved indications may benarrower than we seek;·we may experience delays in our development program, clinical trials and the regulatory approval process;·our NPS technology may not prove to be safe or effective in clinical trials;·physicians may not receive any reimbursement from third-party payers, or the level of reimbursement may beinsufficient to support widespread adoption of any of our products;·any products that are approved may not be accepted in the marketplace by physicians or patients;·we may not be able to manufacture our products in commercial quantities or at an acceptable cost; and·rapid technological change or the appearance of a new competitive technology may make our technology andproducts obsolete.Our efforts may never demonstrate the feasibility of our technology. Our research and development efforts remain subject to all of the risks associated with the development of new therapies,devices, treatment modalities, and related products based on our NPS technology. NPS applications are not yet fully developed.Development of the underlying technology, including the development of the PulseTx System, may be affected by unanticipatedtechnical or other problems, among other development and research issues, and the possible insufficiency of funds needed in orderto complete development of these products or devices. Safety, regulatory and efficacy issues, clinical hurdles or challenges alsomay result in delays and cause us to incur additional expenses that may increase our need for capital and result in additionallosses. In addition, the potential indications for NPS are numerous, and we may fail to pursue the most optimal indications. If wecannot complete, or if we experience significant delays in developing our technology, applications or products for use in potentialcommercial applications, particularly after incurring significant expenditures, our business may fail and investors may lose theentirety of their investment. The mechanism of action of NPS has not been fully determined or validated.The exact mechanism(s) of action(s) of NPS is not fully understood, and data is still being gathered regarding its use.Furthermore, there are only a relatively small number of scientists and researchers who can be considered experts in the use of thisemerging technology. A full understanding of a future product’s mechanism of action and a large stable of scientific experts aretypically believed to make product development less risky. The FDA or similar foreign regulatory authorities may view this asincreasing the potential risks, and diminishing the potential benefits, of products based on NPS technology. In addition, potentialpartners may view this as a limitation of the program, and it may be more challenging for us to obtain a partnership on favorableterms as a result.NPS or our planned products may cause serious adverse side effects or have other properties that could delay or preventtheir regulatory approval, limit the commercial desirability of an approved label or result in significant negative consequencesfollowing any marketing approval.The risk of failure of clinical development is high. For example, the vast majority of our in vivo data has been a result ofanimal testing, and we have only recently begun our first pilot study in humans. It is impossible to predict when or if this or anyplanned products will prove safe enough to receive regulatory approval. Undesirable side effects caused by NPS or any of ourplanned products could cause us or regulatory authorities to interrupt, delay or halt clinical trials. They could result in a morerestrictive label or the delay or denial of regulatory approval by the FDA or other comparable foreign regulatory authority.Additionally, if NPS or any of our planned products receive marketing approval but, we or others later identify undesirableside effects caused by such product, a number of potentially significant negative consequences could result, including:·we may be forced to recall such product and suspend the marketing of such product;·regulatory authorities may withdraw their approvals of such product;·regulatory authorities may require additional warnings on the label that could diminish the usage or otherwise limit thecommercial success of such products; 22 Table of Contents ·the FDA or other regulatory authorities may issue safety alerts, Dear Healthcare Provider letters, press releases or othercommunications containing warnings about such product;·the FDA may require the establishment or modification of Risk Evaluation Mitigation Strategies or a comparableforeign regulatory authority may require the establishment or modification of a similar strategy that may, for instance,restrict distribution of our products and impose burdensome implementation requirements on us;·we may be required to change the way the product is administered or conduct additional clinical trials;·we could be sued and held liable for harm caused to subjects or patients;·we may be subject to litigation or product liability claims; and·our reputation may suffer.Any of these events could prevent us from achieving or maintaining market acceptance of the particular planned product, ifapproved.Our business is dependent upon physicians adopting our NPS technology, and if we fail to obtain broad adoption, ourbusiness would be adversely affected.If we obtain regulatory approval for an NPS application or product, our success will depend on our ability to educatephysicians regarding the benefits of NPS, such as our PulseTx System, over existing treatment modalities and to persuade them toprescribe PulseTx System treatments for their patients. We do not know if NPS will be successful over the long term, and marketacceptance may be hindered if physicians are not presented with compelling data demonstrating the efficacy of our servicecompared to alternative treatments. Any studies we, or third parties, may conduct comparing our NPS technology with alternativetreatments may be expensive, time consuming or may not yield positive results. Additionally, adoption will be directly influencedby a number of financial factors, including the ability of providers to attract cash reimbursement from patients or to obtainsufficient reimbursement from third party commercial payors, and the Centers for Medicare & Medicaid Services, or CMS, for theprofessional services they provide in administering NPS treatments. The efficacy, safety, performance and cost-effectiveness of ourNPS technology, PulseTx System or other potential products based on NPS technology, on a stand-alone basis and relative tocompeting services, will determine the availability and level of reimbursement received by us and providers. If physicians do notadopt and prescribe our future products, we may never become profitable.We may find it difficult to enroll patients in our clinical trials. If we cannot enroll a sufficient number of eligible patientsto participate in the clinical trials, we may not be able to initiate or continue clinical trials, which could delay or preventdevelopment of our product candidates.Identifying and qualifying patients to participate in clinical trials of our product candidates is critical to our success. Thetiming of our clinical trials depends on the speed at which we can recruit patients to participate in testing our product candidatesas well as completion of required follow-up periods. In general, if patients are unwilling to participate in our trials because ofnegative publicity from adverse events in the life sciences industry or for other reasons, including competitive clinical trials forsimilar patient populations, the timeline for recruiting patients, conducting trials and obtaining regulatory approval of plannedproducts may be delayed. If there are delays in accumulating the required patients and patient data, there may be delays incompleting the trial. Further, if any of our clinical trial sites fail to comply with FDA-approved good clinical practices, we may beunable to use the data gathered at those sites. If our clinical investigators fail to carry out their contractual duties or regulatoryobligations or fail to meet expected deadlines, or if the quality or accuracy of the clinical data they obtain is compromised due totheir failure to adhere to our clinical protocols or for other reasons, our clinical trials may be delayed. These delays could result inincreased costs, delays in advancing our product development, delays in testing the effectiveness of our technology or terminationof the clinical trials altogether.Laboratory conditions differ from commercial conditions and field conditions, and the safety and effectiveness of our planned products may depend on the technique of the user.Observations and developments that may be achievable under laboratory circumstances may not be able to be replicated inbroader research and development phases, in commercial settings, or in the use of any of the planned products in the field. Furthermore, if commercialized, NPS will be administered by healthcare professionals and will require a degree of training andpractice to administer correctly. Treatment results achieved during the laboratory or in clinical trials conducted by us or otherinvestigators may not be representative of the results actually encountered during commercial use of our products due tovariability in administration technique. The training and skills of investigators in our clinical trials may not be representative ofthe training and skills of future product users, which could negatively affect treatment results. In addition, 23 Table of Contents there may be a selection bias in the patients and/or sites of administration chosen for any clinical trials that would positively affecttreatment results.Issues with our firmware and software may negatively affect the function of our devices. The safety and effectiveness of NPS-based treatments and therapies may depend, in part, on the function of firmware run bythe microprocessors embedded in the device and associated software. This firmware and software is proprietary to us. While wehave made efforts to test the firmware and software extensively, it is potentially subject to malfunction which in turn may harm apatient. Further, it may be vulnerable to physical break-ins, hackers, improper employee or contractor access, computer viruses,programming errors, or similar problems. Any of these might result in harm to a patient or the unauthorized release of confidentialmedical, business or other information of other persons or of ourselves.We may encounter manufacturing problems or delays that could result in lost revenue. Additionally, we currently rely onthird-party suppliers for critical materials needed to manufacture NPS devices such as the PulseTx System and relatedapplicators and, if we obtain regulatory approval, our planned products. Any problems experienced by these suppliers couldresult in a delay or interruption of their supply to us, and as a result, we may face delays in the development andcommercialization of planned products.We perform final assembly of our devices to support our current research and development activities at our facility inBurlingame, California and will be moving to a larger facility in Hayward, California. We believe that we currently have, and atour new facility, will continue to have, adequate manufacturing capacity for these purposes. However, if demand for our plannedproducts increases significantly, we will need to either expand our manufacturing capabilities or outsource to other manufacturers.We have no corporate experience in commercial-scale manufacturing of our planned products, and we currently rely upon third-party suppliers to manufacture and supply components for our NPS devices. The manufacture of these products in compliance withthe FDA’s regulations requires significant expertise and capital investment, including the development of advancedmanufacturing techniques and process controls. Manufacturers of medical device products often encounter difficulties inproduction, including difficulties with production costs and yields, quality control, quality assurance testing, shortages ofqualified personnel, as well as compliance with strictly enforced FDA requirements, other federal and state regulatoryrequirements, and foreign regulations.We currently purchase components for our NPS devices under purchase orders and do not have long-term contracts with mostof the suppliers of these materials. If suppliers were to delay or stop producing our components, or if the prices they charge us wereto increase significantly, or if they elected not to sell to us, we would need to identify other suppliers. We could experience delaysin manufacturing the devices while finding another acceptable supplier, which could impact our results of operations.We may not become commercially viable if our ultimate commercialized products or related treatments fail to obtain anadequate level of reimbursement by Medicare and other third party payers. We believe that the commercial viability of our potential devices and products and related treatments, and therefore ourcommercial success as a company, will be affected by the availability of government reimbursement and medical insurancecoverage and reimbursement for newly approved medical therapies, technologies and devices. Insurance coverage andreimbursement is not assured. It typically takes a period of use in the market place before coverage and reimbursement is granted, ifit is granted at all. In the United States and other jurisdictions in Europe and other regions, physicians and other healthcareproviders generally rely on insurance coverage and reimbursement for their revenues, therefore this is an important factor in theoverall commercialization plans of a proposed product and whether it will be accepted for use in the marketplace. Withoutinsurance coverage and reimbursement for our planned products, we would expect to earn only diminished revenues, if anyrevenues are earned.Medicare, Medicaid, health maintenance organizations and other third-party payers are increasingly attempting to containhealthcare costs by limiting both the scope of coverage and the level of reimbursement of new medical technologies and products,and as a result, they may not cover or provide adequate payment for the use of our planned products. In order to obtain satisfactoryreimbursement arrangements, we may have to agree to a fee or sales price lower than the fee or sales price we might otherwisecharge. Even if Medicare and other third-party payers decide to cover procedures involving our proposed devices and products, wecannot be certain that the reimbursement levels will be adequate. Accordingly, even if our planned products are approved forcommercial sale, unless government and other third-party payers provide adequate coverage and reimbursement for our devicesand products, some physicians may be discouraged from using them, and our sales would suffer. 24 Table of Contents Medicare reimburses for medical technologies and products in a variety of ways, depending on where and how the item isused. However, Medicare only provides reimbursement if CMS determines that the item should be covered and that the use of thedevice or product is consistent with the coverage criteria. A coverage determination can be made at the local level by the Medicareadministrative contractor, a private contractor that processes and pays claims on behalf of CMS for the geographic area where theservices were rendered, or at the national level by CMS through a national coverage determination. There are statutory provisionsintended to facilitate coverage determinations for new technologies, but it is unclear how these new provisions will beimplemented and it is not possible to indicate how they might apply to any of our proposed devices and products, as they are stillin the development stages. Coverage presupposes that the technology, device, or product has been cleared or approved by the FDAand further, that the coverage will be no broader than the approved intended uses of the device or product as approved or clearedby the FDA, but coverage can be narrower. A coverage determination may be so limited that relatively few patients will qualify fora covered use of a device or product.Obtaining a coverage determination, whether local or national, is a time-consuming, expensive and highly uncertainproposition, especially for a new technology, and inconsistent local determinations are possible. On average, Medicare coveragedeterminations for medical devices and products lag behind FDA approval. The Medicare statutory framework is also subject toadministrative rulings, interpretations and discretion that affect the amount and timing of reimbursement made under Medicare.Medicaid coverage determinations and reimbursement levels are determined on a state by state basis, because Medicaid, unlikeMedicare, is administered by the states under a state plan filed with the Secretary of the United States Department of Health andHuman Services (HHS). Medicaid generally reimburses at lower levels than Medicare. Moreover, Medicaid programs and privateinsurers are frequently influenced by Medicare coverage determinations.We work with outside scientists and their institutions in developing product candidates. These scientists may have othercommitments or conflicts of interest, which could limit our access to their expertise and harm our ability to leverage ourdiscovery platforms. We work with scientific advisors and collaborators at academic research institutions in connection with our productdevelopment. These scientists and collaborators are not our employees, but they serve as either independent contractors orresearchers under research agreements that we have with their sponsoring clinic, academic institution or research institution. Suchscientists and collaborators may have other commitments that would limit their availability to us. Although our scientific advisorsgenerally agree not to do competing work, if an actual or potential conflict of interest between their work for us and their work foranother entity arises, we may lose their services. It is also possible that some of our valuable proprietary knowledge may becomepublicly known through these scientific advisors if they breach their confidentiality agreements with us, which would causecompetitive harm to our business.Risks Related to Intellectual PropertyIf we or our licensors are unable to protect our/their intellectual property, then our financial condition, results ofoperations and the value of our technology and products could be adversely affected. Patents and other proprietary rights are essential to our business, and our ability to compete effectively with other companiesis dependent upon the proprietary nature of our technologies. We also rely upon trade secrets, know-how, continuingtechnological innovations and licensing opportunities to develop, maintain and strengthen our competitive position. We seek toprotect these, in part, through confidentiality agreements with certain employees, consultants and other parties. Our success willdepend in part on the ability of our licensors and us to obtain, to maintain (including making periodic filings and payments) andto enforce patent protection for the licensed intellectual property, in particular, those patents to which we have secured rights. We,and our licensors, may not successfully prosecute or continue to prosecute the patent applications which we have licensed. Even ifpatents are issued in respect of these patent applications, we or our licensors may fail to maintain these patents, may determine notto pursue litigation against entities that are infringing upon these patents, or may pursue such enforcement less aggressively thanwe ordinarily would for our own patents. Without adequate protection for the intellectual property that we own or license, othercompanies might be able to offer substantially identical products for sale, which could unfavorably affect our competitive businessposition and harm our business prospects. Even if issued, patents may be challenged, invalidated, or circumvented, which couldlimit our ability to stop competitors from marketing similar products or limit the length of term of patent protection that we mayhave for our products. 25 Table of Contents Litigation or third-party claims of intellectual property infringement or challenges to the validity of our patents wouldrequire us to use resources to protect our technology and may prevent or delay our development, regulatory approval orcommercialization of our product candidates. If we are the target of claims by third parties asserting that our products or intellectual property infringe upon the rights ofothers we may be forced to incur substantial expenses or divert substantial employee resources from our business. If successful,those claims could result in our having to pay substantial damages or could prevent us from developing one or more productcandidates. Further, if a patent infringement suit were brought against us or our collaborators, we or they could be forced to stop ordelay research, development, manufacturing or sales of the product or product candidate that is the subject of the suit.If we or our collaborators experience patent infringement claims, or if we elect to avoid potential claims others may be ableto assert, we or our collaborators may choose to seek, or be required to seek, a license from the third-party and would most likely berequired to pay license fees or royalties or both. These licenses may not be available on acceptable terms, or at all. Even if we orour collaborators were able to obtain a license, the rights may be nonexclusive, which would give our competitors access to thesame intellectual property. Ultimately, we could be prevented from commercializing a product, or be forced to cease some aspectof our business operations if, as a result of actual or threatened patent infringement claims, we or our collaborators are unable toenter into licenses on acceptable terms. This could harm our business significantly. The cost to us of any litigation or otherproceeding, regardless of its merit, even if resolved in our favor, could be substantial. Some of our competitors may be able to bearthe costs of such litigation or proceedings more effectively than we can because of their having greater financial resources.Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a material adverseeffect on our ability to compete in the marketplace. Intellectual property litigation and other proceedings may, regardless of theirmerit, also absorb significant management time and employee resources.If we fail to comply with our obligations in the agreements under which we license development or commercializationrights to products or technology from third-parties, we could lose license rights that are important to our business. We hold licenses from ODURF and EVMS and from AMI-USC to intellectual property relating to the sub-microsecondelectric field technology, as well as applicator design and configuration, and pulse generators in addition to the intellectualproperty that we own for these things. For the continuance of the license with ODURF and EVMS, Pulse Biosciences needs tocommence pursuing one or more applications with the FDA by December 15, 2018 and continue to comply with the variousobligations set forth in the license. If we fail to meet these obligations, the licensor will have the right to terminate the applicablelicense or modify certain terms of the license agreement. Generally, the loss of any one of our current licenses, or any other licensewe may acquire in the future, could harm our business, prospects, financial condition and results of operation.Our intellectual property rights will not necessarily provide us with competitive advantages.The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rightshave limitations, and may not adequately protect our business, or permit us to maintain our competitive advantage. The followingexamples are illustrative:·others may be able to make products that are similar to our product candidates but that are not covered by the claims ofthe patents that we own or have exclusively licensed;·others may independently develop similar or alternative technologies without infringing our intellectual propertyrights;·issued patents that we own or have exclusively licensed may not provide us with any competitive advantages, or maybe held invalid or unenforceable, as a result of legal challenges by our competitors;·we may obtain patents for certain products many years before we obtain marketing approval for products utilizing suchpatents, and because patents have a limited life, which may begin to run prior to the commercial sale of the relatedproduct, the commercial value of our patents may be limited;·our competitors might conduct research and development activities in countries where we do not have patent rightsand then use the information learned from such activities to develop competitive products for sale in our majorcommercial markets;·we may fail to develop additional proprietary technologies that are patentable; 26 Table of Contents ·the laws of certain foreign countries may not protect our intellectual property rights to the same extent as the laws ofthe United States, or we may fail to apply for or obtain adequate intellectual property protection in all the jurisdictionsin which we operate; and·the patents of others may have an adverse effect on our business, for example by preventing us from marketing one ormore of our product candidates for one or more indications.Any of the aforementioned threats to our competitive advantage could harm our business.If we are unable to protect the confidentiality of our proprietary information and know-how, the value of our technologyand products could be adversely affected. In addition to patented technology, we rely upon, among other things, unpatented proprietary technology, processes, tradesecrets and know-how. Any involuntary disclosure to or misappropriation by third-parties of our confidential or proprietaryinformation could enable competitors to duplicate or surpass our technological achievements, potentially eroding our competitiveposition in our market. We seek to protect confidential or proprietary information in part by confidentiality agreements with ouremployees, consultants and third-parties. While we require all of our employees, consultants, advisors and any third-parties whohave access to our proprietary know-how, information and technology to enter into confidentiality agreements, we cannot becertain that this know-how, information and technology will not be disclosed or that competitors will not otherwise gain access toour trade secrets or independently develop substantially equivalent information and techniques. These agreements may beterminated or breached, and we may not have adequate remedies for any such termination or breach. Furthermore, these agreementsmay not provide meaningful protection for our trade secrets and know-how in the event of unauthorized use or disclosure. To theextent that any of our staff were previously employed by other pharmaceutical, medical technology or biotechnology companies,those employers may allege violations of trade secrets and other similar claims in relation to their medical device developmentactivities for us.If we are unable to protect the intellectual property used in our products, others may be able to copy our innovations whichmay impair our ability to compete effectively in our markets. The strength of our patents involves complex legal and scientific questions and can be uncertain. Our patents or patentapplications may be challenged or our patent applications may fail to result in issued patents and our existing or future patentsmay be too narrow to prevent third-parties from developing or designing around our intellectual property and in that event we maylose competitive advantage and our business may suffer. Further, the patent applications that we license or have filed may fail toresult in issued patents. The claims may need to be amended. Even after amendment, a patent may not issue and in that event wemay not obtain the use of the intellectual property that we seek and may lose competitive advantage which could result in harm toour business.We may become involved in future lawsuits to protect or enforce our patents or the patents of our licensors, which could beexpensive, time consuming and unsuccessful. Competitors may infringe our patents or the patents of our licensors. To counter infringement or unauthorized use, we or ourlicensors may file infringement claims, which can be expensive and time consuming. In addition, in an infringement proceeding, acourt may decide that a patent of ours or of our licensors is not valid or is unenforceable, or may refuse to stop the other party fromusing the technology at issue on the grounds that our patents do not cover the technology in question. If we or any currentlicensors or future licensees or licensors with rights to prosecute, assert or defend patents related to our product candidates fail toappropriately prosecute and maintain patent protection for patents covering any of our product candidates, or if patents coveringany of our product candidates are asserted against infringers or defended against claims of invalidity or unenforceability in amanner which adversely affects such coverage, our ability to develop and commercialize any such product candidate may beadversely affected and we may not be able to prevent competitors from making, using and selling competing products. An adverseresult in any litigation or defense proceedings could put one or more of our patents at risk of being invalidated or interpretednarrowly and could put our patent applications at risk of not issuing.The United States Patent and Trademark Office may initiate interference proceedings to determine the priority of inventionsdescribed in or otherwise affecting our patents and patent applications or those of our collaborators or licensors. An unfavorableoutcome could require us to cease using the technology or to attempt to license rights to it from the prevailing party. Our businesscould be harmed if a prevailing party does not offer us a license on terms that are acceptable to us. Litigation or interferenceproceedings may fail and, even if successful, may result in substantial costs and distraction of our management and otheremployees. We may not be able to prevent, alone or with our licensors, misappropriation of our proprietary rights, particularly incountries where the laws may not protect those rights as fully as in the United States. 27 Table of Contents Confidentiality agreements with employees and third parties may not prevent unauthorized disclosure of trade secrets andother proprietary information, which would harm our competitive position.In addition to patents, we rely on trade secrets, technical know-how and proprietary information concerning our businessstrategy and product candidates in order to protect our competitive position, which are difficult to protect. As we collaborate withvarious third parties on the research and development of our planned products, we must, at times, share trade secrets with them. Inthe course of our research and development activities and our business activities, we rely on confidentiality agreements to protectour proprietary information. Such confidentiality agreements are used, for example, when we talk to vendors or potential strategiccollaborators. In addition, each of our employees and consultants is required to sign a confidentiality agreement and inventionassignment agreement upon joining our company. Our employees, consultants, contractors, business partners or outside scientificcollaborators might intentionally or inadvertently disclose our trade secret information in breach of these confidentialityagreements or our trade secrets may otherwise be misappropriated. Our collaborators might also have rights to publish data, and wemight fail to apply for patent protection prior to such publication. It is possible that a competitor will make use of suchinformation, and that our competitive position will be compromised. In addition, to the extent that our employees, consultants orcontractors use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resultingknow-how and inventions. Enforcing a claim that a third party illegally obtained and is using any of our trade secrets is expensiveand time consuming, and the outcome is unpredictable. In addition, courts outside the United States sometimes are less willingthan U.S. courts to protect trade secrets. Moreover, our competitors may independently develop equivalent knowledge, methodsand know-how, and our trade secrets cannot be enforced against such independently developed knowledge. If we cannot maintainthe confidentiality of our proprietary technology and other confidential information, then our ability to obtain patent protection orto protect our trade secret information would be jeopardized, which would adversely affect our competitive position.We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosedconfidential information of third parties or that our employees have wrongfully used or disclosed alleged trade secrets of theirformer employers.Although we seek to protect our ownership of intellectual property rights by ensuring that our agreements with ourindependent contractors, collaborators and other third parties with whom we do business include provisions requiring such partiesto assign rights in inventions to us, we may also be subject to claims that former employees, collaborators or other third partieshave an ownership interest in our patents or other intellectual property. We may be subject to ownership disputes in the futurearising, for example, from conflicting obligations of consultants or others who are involved in developing our product candidates.Litigation may be necessary to defend against these and other claims challenging inventorship or ownership. If we fail indefending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such asexclusive ownership of, or right to use, valuable intellectual property. Such an outcome could harm our business. Even if we aresuccessful in defending against such claims, litigation could result in substantial costs and be a distraction to management andother employees.We may not be able to protect our intellectual property rights throughout the world.Filing, prosecuting and defending patents on product candidates in all countries throughout the world would beprohibitively expensive, and our intellectual property rights in some countries outside the United States can be less extensive thanthose in the United States. In addition, the laws of some foreign countries do not protect intellectual property rights to the sameextent as federal and state laws in the United States. Consequently, we may not be able to prevent third parties from practicing ourinventions in all countries outside the United States, or from selling or importing products made using our inventions in and intothe United States or other jurisdictions. Competitors may use our technologies in jurisdictions where we have not obtained patentprotection to develop their own products and further, may export otherwise infringing products to territories where we have patentprotection, but enforcement is not as strong as that in the United States. These products may compete with our current or futureproduct candidates, if any, and our patents or other intellectual property rights may not be effective or sufficient to prevent themfrom competing.Many companies have encountered significant problems in protecting and defending intellectual property rights in foreignjurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement ofpatents, trade secrets and other intellectual property protection, particularly those relating to biotechnology products, which couldmake it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietaryrights generally. We believe this is caused by both the technical nature of the subject matter and a general enthusiasm for genericcompetition in developing countries, and is not a concern that is specific to any particular foreign jurisdiction. Proceedings toenforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from otheraspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications atrisk of not issuing and could provoke third parties to assert claims against 28 Table of Contents us. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not becommercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequateto obtain a significant commercial advantage from the intellectual property that we develop or license.We have not yet registered some of our trademarks in all of our potential markets, and failure to secure those registrationscould adversely affect our business.If we apply to register our trademarks in all of our potential markets, our applications may not be allowed for registration,and our registered trademarks may not be maintained or enforced. In addition, in the U.S. Patent and Trademark Office and incomparable agencies in many foreign jurisdictions, third parties are given an opportunity to oppose pending trademarkapplications and to seek to cancel registered trademarks. Opposition or cancellation proceedings may be filed against ourtrademarks, and our trademarks may not survive such proceedings. If we do not secure registrations for our trademarks, we mayencounter more difficulty in enforcing them against third parties than we otherwise would.Changes in patent law could diminish the value of patents in general, thereby impairing our ability to protect our existingand future products.Recent patent reform legislation could increase the uncertainties and costs surrounding the prosecution of patentapplications and the enforcement or defense of issued patents. In 2011, the Leahy-Smith America Invents Act, or the Leahy-SmithAct, was signed into law. The Leahy-Smith Act includes a number of significant changes to U.S. patent law. These includeprovisions that affect the way patent applications are prosecuted and also may affect patent litigation. These also includeprovisions that switched the United States from a “first-to-invent” system to a “first-to-file” system, allow third party submission ofprior art to the USPTO during patent prosecution and set forth additional procedures to attack the validity of a patent by theUSPTO administered post grant proceedings. Under a first-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 anotherinventor had made the invention earlier. The USPTO recently developed new regulations and procedures to govern administrationof 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, only became effective in 2013. Accordingly, it is not clear what, if any, impact the Leahy-Smith Act willhave on the operation of our business. The Leahy-Smith Act and its implementation could increase the uncertainties and costssurrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which couldhave a material adverse effect on our business, financial condition, results of operations and prospects.In addition, patent reform legislation may pass in the future that could lead to additional uncertainties and increased costssurrounding the prosecution, enforcement and defense of our patents and applications. Furthermore, the U.S. Supreme Court andthe U.S. Court of Appeals for the Federal Circuit have made, and will likely continue to make, changes in how the patent laws ofthe United States are interpreted. Similarly, foreign courts have made, and will likely continue to make, changes in how the patentlaws in their respective jurisdictions are interpreted. We cannot predict future changes in the interpretation of patent laws orchanges to patent laws that might be enacted into law by U.S. and foreign legislative bodies. Those changes may materially affectour patents or patent applications and our ability to obtain additional patent protection in the future.Risks Related to Government RegulationWe may never receive regulatory approval, including that from the FDA, for any of our planned products.We may never receive regulatory approvals, including from the FDA, for any potential therapies, devices or products in theUnited States or in any foreign market. Therefore, it is highly speculative as to any timing for our planned products to becommercialized. Investors need to take a long-term approach to an investment in our securities, as the commercial realization ofour technology is speculative and well in the future. 29 Table of Contents We will be subject to stringent domestic and foreign regulation in respect of any potential therapies, devices and products.Any unfavorable regulatory action may materially and adversely affect our future financial condition and business operationsand prospects. Our potential therapies, devices and products, further development activities and manufacturing and distribution, oncedeveloped and determined, will be subject to extensive, rigorous and ongoing regulation by numerous government agencies,including the FDA and similar foreign regulatory authorities. To varying degrees, each of these agencies monitors and enforces ourcompliance with laws and regulations governing the development, testing, manufacturing, labeling, marketing, distribution, andthe safety and effectiveness of our medical technology. The process of obtaining and maintaining marketing approval or clearancefrom the FDA and similar foreign regulatory authorities for new therapies, devices and products, or for enhancements, expansion ofthe indications or modifications to existing products, could: ·take a significant, indeterminate amount of time;·require the expenditure of substantial resources; ·involve rigorous pre-clinical and clinical testing, and possibly post-market surveillance;·involve modifications, repairs or replacements of our products;·require design changes of our products; ·result in limitations on the indicated uses of our products; and·result in our never being granted the regulatory approval we seek.If we experience any of these occurrences, our operations may suffer, we might experience harm to our competitive standingand result in further losses that adversely affect our financial condition. We will have ongoing responsibilities under FDA andinternational regulations, both before and after a product is approved and commercially released. Compliance with applicableregulatory requirements is subject to continual review and is monitored rigorously through periodic inspections. If an inspectionwere to conclude that we are not in compliance with applicable laws or regulations, or that any of our therapies or devices areineffective or pose an unreasonable health risk, the FDA or similar foreign regulatory authorities could ban such medical therapies,devices or products, detain or seize such devices or products, order a recall, repair, replacement, or refund of such devices orproducts, or require us to notify health professionals and others that the therapies, devices or products present unreasonable risks ofsubstantial harm to the public health. Additionally, the FDA or similar foreign regulatory authorities may impose other operatingrestrictions, enjoin and restrain certain violations of applicable law pertaining to therapies, devices and products and assess civil orcriminal penalties against our officers, employees, or us. The FDA and similar foreign regulatory authorities have been increasingits scrutiny of the industry and the government is expected to continue to scrutinize the industry closely with inspections andpossibly enforcement actions. Any adverse regulatory action, depending on its magnitude, may restrict us from effectivelymanufacturing, marketing and selling our therapies, devices and products. In addition, negative publicity and product liabilityclaims resulting from any adverse regulatory action could have a material adverse effect on our financial condition and results ofoperations. We will have to comply with complex statutes prohibiting fraud and abuse, and both we and physicians utilizing our planned products could be subject to significant penalties for noncompliance. There are many federal and state laws and regulations prohibiting fraud and abuse in the healthcare industry that can resultin significant criminal and civil penalties. These federal laws include: the anti-kickback statutes which prohibit certain businesspractices and relationships, including the payment or receipt of remuneration for the referral of patients whose care will be paid byMedicare or other federal healthcare programs; the physician self-referral prohibition, commonly referred to as the Stark Law; theanti-inducement law, which prohibits providers from offering anything to a Medicare or Medicaid beneficiary to induce thatbeneficiary to use items or services covered by either program; the Civil False Claims Act, which prohibits any person fromknowingly presenting or causing to be presented false or fraudulent claims for payment by the federal government, including theMedicare and Medicaid programs and the Civil Monetary Penalties Law, which authorizes the imposition of civil penaltiesadministratively for fraudulent or abusive acts. Sanctions for violating these federal laws include criminal and civil penalties that range from punitive sanctions, damageassessments, money penalties, imprisonment, denial of Medicare and Medicaid payments, or exclusion from the Medicare andMedicaid programs, or both. As federal and state budget pressures continue, federal and state administrative agencies may alsocontinue to escalate investigation and enforcement efforts to root out waste and to control fraud and abuse in governmentalhealthcare programs. Private enforcement of healthcare fraud has also increased, due in large part to amendments to the Civil FalseClaims Act in 1986 that were designed to encourage private persons to sue on behalf of the government. A violation of any ofthese federal and state fraud and abuse laws and regulations could have a material adverse effect on our liquidity and financialcondition. 30 Table of Contents To obtain the necessary device and marketing and manufacturing clearance or approval, as a pre-condition, we will haveto conduct various preclinical and clinical tests, which may be costly and time consuming, and may not provide results that willallow us to seek regulatory approval. The number of preclinical and clinical tests that will be required for regulatory clearance or approval varies depending onthe disease or condition to be treated, the method of treatment, the nature of the device, the jurisdiction in which we are seekingapproval and the applicable regulations. Regulatory agencies, including those in the United States, Canada, Europe and othercountries where medical devices and products are regulated, can delay, limit or deny approval of a product for many reasons. Forexample, regulatory agencies: ·may not deem a therapy, technology or device to be safe or effective;·may interpret data from preclinical and clinical testing differently than we do;·may not approve our manufacturing processes; ·may conclude that our device does not meet quality standards for durability, long-term reliability, biocompatibility,electromagnetic compatibility, or electrical safety; and·may change their approval policies or adopt new regulations.The FDA may make requests or suggestions regarding conduct of our clinical trials, resulting in an increased risk ofdifficulties or delays in obtaining regulatory approval in the US. Any of these occurrences could prove materially harmful to ouroperations and business.Even if a potential device or product ultimately is cleared or approved by the different regulatory authorities, it may becleared or approved only for narrow indications which may render it commercially less viable. Even if a potential device or product of ours is cleared or approved, it may not be cleared or approved for the indications thatare necessary or desirable for a successful commercialization. Our preference will be to obtain as broad an indication as possible foruse in connection with the particular disease or treatment for which it is designed. However, the final classification may be morelimited than we originally seek. The limitation on use may make the device or product commercially less viable and more difficult,if not impractical, to market. Therefore we may not obtain the revenues that we seek in respect of the proposed product, and we willnot be able to become profitable and provide an investment return to our investors. Even if we obtain clearance or approval to sell a potential product, we will be subject to ongoing requirements andinspections that could lead to the restriction, suspension or revocation of our clearance. We, as well as any potential collaborative partners such as manufacturers and distributors, will be required to adhere toapplicable FDA regulations regarding good manufacturing practice, which include testing, control, and documentationrequirements. We will be subject to similar regulations in foreign countries. Even if regulatory approval of a product is granted, theapproval may be subject to limitations on the indicated uses for which the product may be marketed or to the conditions ofapproval, or contain requirements for costly post-marketing testing and surveillance to monitor the safety or efficacy of theproduct. Ongoing compliance with good manufacturing practice and other applicable regulatory requirements is strictly enforcedin the United States through periodic inspections by state and federal agencies, including the FDA, and in internationaljurisdictions by comparable agencies. Failure to comply with regulatory requirements could result in, among other things, warningletters, fines, injunctions, civil penalties, recall or seizure of products, total or partial suspension of production, failure to obtainpremarket clearance or premarket approval for devices, withdrawal of approvals previously obtained, and criminal prosecution.The restriction, suspension or revocation of regulatory approvals or any other failure to comply with regulatory requirements willlimit our ability to operate and could increase our costs. Any failure or delay in completing clinical trials or studies for our therapies, devices and products and the expense ofthose trials may adversely affect our business. Preclinical studies, clinical trials and post-clinical monitoring and trials required to demonstrate the safety and efficacy ofour potential devices and products will be time consuming and expensive. If we must conduct additional clinical trials or otherstudies with respect to any of our proposed product candidates to those that are initially contemplated, if we are unable tosuccessfully complete any clinical trials or other studies, or if the results of these trials or studies are not positive or are onlymodestly positive, we may be delayed in obtaining marketing approval for the planned products, we may not be able to obtainmarketing approval, or we may obtain approval for indications that are not as broad as we seek. Our research and productdevelopment costs also will increase if we experience delays in testing or approvals. The completion of clinical trials for ourproposed therapies, devices and products could be delayed because of our inability to manufacture or obtain from 31 Table of Contents third-parties materials sufficient for use in preclinical studies and clinical trials; delays in patient enrollment and variability in thenumber and types of patients available for clinical trials; difficulty in maintaining contact with patients after treatment, resultingin incomplete data; poor effectiveness of proposed devices and products during clinical trials; unforeseen safety issues or sideeffects; and governmental or regulatory delays and changes in regulatory requirements and guidelines. If we incur significantdelays in our clinical trials, our competitors may be able to bring their products to market before we do, which could result inharming our ability to commercialize our planned products. If we experience any of these occurrences our business will bematerially harmed. Because we and one of our licensors have used federal funding in the development of certain aspects of our technology, thefederal government retains ‘march-in’ rights in connection with results derived from these grants. March-in rights give the federal government the right to grant to other entities, which may include competitors, licenses or totake a license for itself if the government funded the development of a patent. The march-in right applies to patents that have beenissued. The march-in right is intended to be used only if there is a threat to public health and safety that the owner of the patent isnot equipped to handle. The march-in right may also be used to remove the exclusive rights belonging to a patent holder if thepatent for which the government provided funding is not suitable for public use. If march-in rights are used by the government, theentities using the patent are required to pay royalties to the patent holder, which amount would be subject to negotiation. Becausefederal funding was used for some aspects of the company’s technology that will be the subject of some of our patents, thecompany could be subject to the march-in right and lose its exclusivity of those patents, and may suffer direct competition if anylicense is granted by the government under the march-in right to a competitor. Our employees, collaborators and other personnel may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements and insider trading.We are exposed to the risk of fraud or other misconduct by our employees, collaborators, vendors, principal investigators,consultants and commercial partners. Misconduct by these parties could include intentional failures to comply with theregulations of the FDA and similar foreign regulatory authorities, provide accurate information to the FDA and similar foreignregulatory authorities, comply with data privacy and security and healthcare fraud and abuse laws and regulations in the UnitedStates and abroad, report financial information or data accurately or disclose unauthorized activities to us. In particular, sales,marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to preventfraud, misconduct, kickbacks, self-dealing and other abusive practices. Additionally, laws regarding data privacy and security,including HIPAA, as amended by HITECH, as well as comparable laws in non-U.S. jurisdictions, may impose obligations withrespect to safeguarding the privacy, use, security and transmission of individually identifiable health information such as geneticmaterial.Various laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, salescommission, customer incentive programs and other business arrangements. Any misconduct could also involve the improper useof information obtained in the course of clinical trials, which could result in regulatory sanctions and cause harm to our reputation.We adopted a code of conduct applicable to all of our employees, but it is not always possible to identify and deter employeemisconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown orunmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from afailure to comply with these laws or regulations. If any such actions are instituted against us, and we are not successful indefending ourselves or asserting our rights, those actions could have a significant impact on our business, including theimposition of significant fines or other sanctions.Risks Related to Owning Our Common StockThe price of our common stock is expected to be volatile, and you may be unable to sell your shares at or above the priceyou paid to acquire them. The market price of our common stock has been volatile, and we expect it to continue to be volatile for the foreseeable futurein response to many risk factors listed in this section, and others beyond our control, including: 32 Table of Contents ·actual or anticipated fluctuations in our financial condition and operating results;·announcements by our customers, partners or suppliers relating directly or indirectly to our products, services ortechnologies;·announcements of technological innovations by us or our competitors;·overall conditions in our industry and market;·changes in laws or regulations applicable to our planned products;·announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures, capitalcommitments or achievement of significant milestones;·additions or departures of key personnel;·competition from existing products or new products that may emerge;·fluctuations in the valuation of companies perceived by investors to be comparable to us;·disputes or other developments related to proprietary rights, including patents, litigation matters or our ability toobtain intellectual property protection for our technologies;·announcement or expectation of additional financing efforts;·sales of our common stock by us or our stockholders;·stock price and volume fluctuations attributable to inconsistent trading volume levels of our shares;·reports, guidance and ratings issued by securities or industry analysts; and·general economic and market conditions.If any of the foregoing occurs, it may cause our stock price or trading volume to decline. Stock markets in general and themarket for companies in our industry in particular have experienced price and volume fluctuations that have affected and continueto affect the market prices of equity securities of many companies. These fluctuations often have been unrelated ordisproportionate to the operating performance of those companies. These broad market and industry fluctuations, as well asgeneral economic, political and market conditions such as recessions, interest rate changes or international currency fluctuations,may negatively impact the market price of our common stock. Investors may not realize any return on their investment in us andmay lose some or all of their investment. In the past, companies that have experienced volatility in the market price of their stockhave been subject to securities class action litigation. Securities litigation against us could result in substantial costs and divertour management’s attention from other business concerns, which could seriously harm our business.We do not know whether an active, liquid and orderly trading market will develop or be maintained for our common stockor what the market price of our common stock will be and as a result it may be difficult for you to sell your common stock.Prior to our initial public offering in May 2016, there was no public market for our common stock. Although our commonstock is listed on The NASDAQ Capital Market, the market for our shares has demonstrated varying levels of trading activity. As aresult of these and other factors, you may not be able to sell your common stock quickly or at or above the price paid to acquire thestock or at all. Further, an inactive market may also impair our ability to raise capital by selling additional common stock and mayimpair our ability to enter into strategic collaborations or acquire companies or products by using our common stock asconsideration.Control by our principal stockholders may limit your ability to influence the outcome of director elections and othertransactions requiring stockholder approval. A significant percentage of our outstanding stock is held by a limited number of investors. As a result, such persons will havesignificant influence over corporate actions requiring stockholder approval, including the following actions:·to elect or defeat the election of our directors;·to amend or prevent amendment of our articles of incorporation or bylaws;·to effect or prevent a merger, sale of assets or other corporate transaction; and·to control the outcome of any other matter submitted to our stockholders for vote. 33 Table of Contents Such persons’ stock ownership may discourage a potential acquirer from making a tender offer or otherwise attempting toobtain control of our company, which in turn could reduce our stock price or prevent our stockholders from realizing a premiumover our stock price.Management currently beneficially holds a small percentage of our common stock. Other than their positions as directorsand officers, and the restriction on the stockholders being able to call a special meeting limited to a majority of the outstandingshares, our management will not be able to greatly influence corporate actions requiring stockholder approval.We have incurred and will continue to incur costs as a result of operating as a public company and our management hasbeen and will be required to devote substantial time to public company compliance initiatives.As a public company, listed in the United States, we have incurred and will continue to incur significant legal, accountingand other expenses due to our compliance with regulations and disclosure obligations applicable to us, including compliance withthe Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, as well as rules implemented by the SEC and the NASDAQ. The SECand other regulators have continued to adopt new rules and regulations and make additional changes to existing regulations thatrequire our compliance.Stockholder activism, the current political environment, and the current high level of government intervention andregulatory reform may lead to substantial new regulations and disclosure obligations, which may lead to additional compliancecosts and impact, in ways we cannot currently anticipate, the manner in which we operate our business. Our management and otherpersonnel have and will continue to devote a substantial amount of time to these compliance programs and monitoring of publiccompany reporting obligations and, as a result of the new corporate governance and executive compensation related rules,regulations, and guidelines prompted by the Dodd-Frank Wall Street Reform and Protection Act, or the Dodd-Frank Act, andfurther regulations and disclosure obligations expected in the future, we will likely need to devote additional time and costs tocomply with such compliance programs and rules. New laws and regulations as well as changes to existing laws and regulationsaffecting public companies, including the provisions of the Sarbanes-Oxley Act of 2002, the Dodd-Frank Act, and rules adoptedby the SEC and NASDAQ, will likely result in increased costs to us as we respond to their requirements. We are currentlyevaluating and monitoring developments with respect to these rules and regulations, and we cannot predict or estimate the amountof additional costs we may incur or the timing of such costs.Furthermore, these and future rules and regulations could make it more difficult or more costly for us to obtain certain typesof insurance, including director and officer liability insurance, and we may be forced to accept reduced policy limits and coverageor incur substantially higher costs to obtain the same or similar coverage. The impact of these requirements could also make itmore difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as ourexecutive officers.We agreed in the underwriting agreement for our initial public offering to conduct a rights offering as a pre-condition tocertain future offers and sales of our common stock, which may hinder our ability to raise capital during the term of theprovision and because of the exceptions stockholders may not be offered the right to participate in future offerings. We agreed with one of the underwriters of our May 2016 initial public offering that for a period of up to five years after completion of our initial public offering, we will conduct offerings of our common stock so as to give the holders of our commonstock the ability to participate through a rights offering. There are several exceptions to this obligation, including (i) stockdividends and splits, (ii) exercises and conversions of outstanding securities, (iii) equity awards under a stockholder approved planwhich are authorized by the board of directors, (iv) merger, consolidation and combination transactions and business and assetacquisition transactions, (v) equity financings in any 12-month period that do not exceed both $2,500,000 in gross proceeds and5% of the then issued and outstanding shares of our common stock, and (vi) transactions which are approved by MDB CapitalGroup, LLC, one of the underwriters of the offering. Should any one of these exceptions be applicable to an offering, we would beable to proceed with the offering without first giving our current stockholders the right to participate. Although a rights offeringmay provide to the current stockholders the opportunity to maintain their ownership percentage, it may delay or disrupt anoffering of common stock or securities related to common stock. Rights offerings are typically held open for a period of 16 to 30days, after the required corporate actions and documentation, including a registration statement, are completed, which may rangefrom a few weeks to several months. Because a rights offering may not raise all the capital sought by a company, the company mayhave to structure the offering with over-subscription rights, standby purchasers, private placement agents and/or underwriters inorder to sell the offered and any additional securities in order to obtain the sought amount of capital. 34 Table of Contents We are an “emerging growth company” under the JOBS Act of 2012 and we cannot be certain if the reduced disclosurerequirements applicable to emerging growth companies will make our common stock less attractive to investors. We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, andwe may take advantage of certain exemptions from various reporting requirements that are applicable to other public companiesthat are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestationrequirements of section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in ourperiodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executivecompensation and stockholder approval of any golden parachute payments not previously approved. We cannot predict ifinvestors will find our common stock less attractive because we may rely on these exemptions. If some investors find our commonstock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be morevolatile. We will remain an “emerging growth company” for up to five years, although we will lose that status sooner if our revenuesexceed $1 billion, if we issue more than $1 billion in non-convertible debt in a three-year period, or if the market value of ourcommon stock that is held by non-affiliates exceeds $700 million as of any June 30.Because of the exemptions from various reporting requirements provided to us as an “emerging growth company,” we maybe less attractive to investors as an investment opportunity and it may be difficult for us to raise additional capital as and when weneed it. Investors may be unable to compare our business with other companies in our industry if they believe that our reporting isnot as transparent as other companies in our industry. If we are unable to raise additional capital as and when we need it, ourfinancial condition and results of operations may be materially and adversely affected.If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business,our share price and trading volume could decline.The trading market for our common stock will depend on the research and reports that securities or industry analysts publishabout us or our business. We do not have any control over these analysts. We currently have no analysts covering us and there canbe no assurance that analysts will cover us or provide favorable coverage. If one or more of the analysts who cover us downgradeour stock or change their opinion of our stock, our share price would likely decline. If one or more of these analysts cease coverageof our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause ourshare price or trading volume to decline.Sales of shares of our common stock may adversely affect the market for our common stock. If our stockholders, particularly our directors, executive officers and significant stockholders, sell, register for sale, orindicate an intent to sell, shares our common stock in the public market after the contractual lock-up agreements executed as partof our initial public offering and other legal restrictions on resale lapse, it may have a material adverse effect on the market price ofour common stock.We have not paid dividends in the past and have no plans to pay dividends. We plan to reinvest all of our earnings, to the extent we have earnings, into our product research and development. We donot plan to pay any cash dividends with respect to our securities in the foreseeable future. We cannot assure you that we would, atany time, generate sufficient surplus cash that would be available for distribution to the holders of our common stock as adividend. Therefore, you should not expect to receive cash dividends on our outstanding common stock.Our charter documents and Nevada law may inhibit a takeover that stockholders consider favorable. Provisions of our articles of incorporation and bylaws and applicable provisions of Nevada law may delay or discouragetransactions involving an actual or potential change in control or change in our management, including transactions in whichstockholders might otherwise receive a premium for their shares, or transactions that our stockholders might otherwise deem to bein their best interests. Some of the following provisions in our articles and bylaws that implement these are:·5,000,000 shares of “blank check” preferred stock, which may be issued at the discretion of the board of directors,without further approval of the stockholders;·no cumulative voting rights for the holders of common stock in the election of directors; and·vacancies in the board of directors may be filled by the affirmative vote of a majority of directors then in office, even ifless than a quorum. 35 Table of Contents The Revised Nevada Statutes also provide for restrictions on voting our equity securities in connection with unapprovedbusiness combinations and control shares, which we have not opted out of.These provisions may have the effect of entrenching our management team and may deprive you of the opportunity to sellyour shares to potential acquirers at a premium over prevailing prices. 36 Table of Contents Item 1B. Unresolved Staff Comments None. Item 2. Properties As of December 31, 2016, we leased approximately 4,300 square feet in Burlingame, California, where we house ourexecutive offices and research and development facilities. On January 25, 2017, we entered into a lease agreement for premises consisting of approximately 15,697 square feet inHayward, California. The premises will be used for our corporate headquarters and principal operating facility. The term of thislease is sixty-two months, commencing on the date that is the earlier of (1) the date upon which we commence business in thepremises or (2) the date upon which the premises is ready for occupancy as defined in the lease. We anticipate commencingbusiness in the premises in the third quarter of 2017. We have the right to extend this lease for five years upon written notice notmore than twelve months nor less than nine months prior to the expiration of the original lease term. We have the right to terminatethis lease if the landlord is unable to deliver the facility to us by December 1, 2017.We believe that our existing facilities, together with the new premises under the lease agreement entered into in January2017, will be sufficient to meet our needs in the foreseeable future. Item 3. Legal Proceedings.From time to time, we may be involved in a variety of claims, lawsuits, investigations and proceedings relating to securitieslaws, product liability, patent infringement, contract disputes and other matters relating to various claims that arise in the normalcourse of our business. In addition, third parties may, from time to time, assert claims against us in the form of letters and othercommunications. We currently believe that these ordinary course matters will not have a material adverse effect on our business;however, the results of litigation and claims are inherently unpredictable. Regardless of the outcome, litigation can have anadverse impact on us because of defense and settlement costs, diversion of management resources and other factors. Item 4. Mine Safety DisclosuresNot applicable. 37 Table of Contents Part II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity SecuritiesMarket InformationOur common stock is listed on The Nasdaq Capital Market and has been traded under the symbol “PLSE” since May 18,2016. Prior to that date, there was no established public trading market for our common stock. As a result, we have not set forthquarterly information with respect to the high and low prices for our common stock for the two most recent fiscal years. Thefollowing table sets forth the range of high and low closing sales prices per share for our common stock as reported on theNASDAQ from May 18, 2016 through December 31, 2016: 2016 High Low2nd Quarter $4.54 $4.08 3rd Quarter $6.43 $4.40 4th Quarter $6.50 $5.21 Holders of RecordAs of March 3, 2017, there were approximately 63 stockholders of record of our common stock. We believe the actualnumber of stockholders is greater than this number of record holders and includes stockholders who are beneficial owners, butwhose shares are held in “street” name by brokers and other nominees. This number of holders of record also does not includestockholders whose shares may be held in trust by other entities. Dividend PolicyWe have never declared or paid any cash dividend on our common stock and have no present plans to do so. We intend toretain earnings for use in the operation and expansion of our business. Sales of Unregistered Securities WarrantsDuring the year ended December 31, 2016, in connection with the closing of our IPO, we issued warrants ascompensation to the underwriters of our IPO to purchase a total 574,985 shares of our common stock at a price of $5.00per share. The warrants became exercisable 180 days after issuance and are exercisable for a period of five years. Thisissuance was undertaken in reliance upon the exemption that registration requirements available under Section 4(a)(2) ofthe Securities Act of 1933, as amended (the “Securities Act”).Stock OptionsDuring the year ended December 31, 2016, we issued 405,132 stock options at a weighted average exercise price of$4.44 under our 2015 Stock Incentive Plan which was adopted in August 2015. These issuances were undertaken inreliance upon the exemptions from registration requirements available under Rule 701 and Section 4(a)(2) of theSecurities Act.Private PlacementOn February 7, 2017, we entered into a securities purchase agreement (the “Purchase Agreement”) with Robert W.Duggan and Maky Zanganeh (the “Investors”), pursuant to which we, in a private placement, agreed to issue and sell tothe Investors an aggregate of 819,673 shares of our common stock, par value $0.001 per share, at a price per share of$6.10 (the “Shares”), for gross proceeds of approximately $5 million (the “Private Placement”).Pursuant to this Private Placement we sold the Shares to “accredited investors,” as that term is defined in theSecurities Act of 1933, in reliance on the exemption from registration afforded by Section 4(a)(2) of the Securities Act andRule 506 of Regulation D promulgated under the Securities Act and corresponding provisions of state 38 Table of Contents securities or “blue sky” laws. The Investors represented that they were acquiring the Shares for investment only and notwith a view towards, or for resale in connection with, the public sale or distribution thereof.Use of Proceeds from Public Offerings of Common StockOur IPO of common stock was effected through a Registration Statement on Form S-1 (File No. 333-208694), as amended,which was declared effective on May 13, 2016. Our IPO closed on May 23, 2016 and resulted in net proceeds of approximately$20.3 million, including proceeds from the exercise of the overallotment option granted to the underwriters, net of underwritingdiscounts and commissions and other offering costs. There has been no material change in the planned use of proceeds from ourIPO as described in our final prospectuses filed with the SEC on May 17, 2016 pursuant to Rule 424(b). 39 Table of Contents Performance GraphThe performance graph included in this Annual Report on Form 10-K shall not be deemed “filed” for purposes of Section 18of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference into any filing of PulseBiosciences, Inc. under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth byspecific reference in such filing.The following graph shows a comparison from May 18, 2016 (the date our common stock commenced trading on the NasdaqCapital Market through December 31, 2016 of the cumulative total return for our common stock, the Nasdaq Composite Index andthe Nasdaq Biotechnology Index. Such returns are based on historical results and are not intended to suggest future performance.Data for The Nasdaq Composite Index and the Nasdaq Biotechnology Index assume reinvestment of dividends. 40 Table of Contents Item 6. Selected Financial Data The following table sets forth selected financial data as of and for the periods indicated. The selected consolidatedbalance sheets as of December 31, 2016 and 2015, and the related consolidated statements of operations and comprehensive loss,stockholders’ equity and cash flows for the year ended December 31, 2016 and 2015, and for the period from May 19, 2014(inception) through December 31, 2014 are derived from our consolidated audited financial statements appearing in Item 8,“Financial Statements and Supplementary Data,” of this Annual Report on Form 10-K. Our historical results are not necessarilyindicative of the results to be expected for any future period. The following selected financial data should be read in conjunctionwith Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidatedfinancial statements and related notes included elsewhere in this Annual Report on Form 10-K. May 19, 2014 (inception) Years Ended through December 31, December 31,(in thousands, except per share amounts) 2016 2015 2014Revenue $ — $ — $ —Operating expenses: General and administrative 2,933 1,224 43 Research and development 5,988 2,578 26 Amortization of intangible assets 665 666 111 Costs of business acquisitions — — 120 Total operating expenses 9,586 4,468 300 Other income: Interest income 68 — —Total other income 68 — —Loss from operations, before income taxes (9,518) (4,468) (300)Income tax benefit — (1,657) (23)Net loss $(9,518) $(2,811) $(277) Net loss per share: Basic and diluted net loss per share $(0.86) $(0.37) $(0.11)Weighted average shares used to compute net loss per common share —basic and diluted 11,009 7,565 2,511 As of December 31, 2016 2015 2014Cash, cash equivalents and marketable investments $16,395 $3,606 $7,009 Working capital 15,647 3,337 6,866 Total assets 26,314 14,325 17,896 Total liabilities 1,016 660 1,821 Total stockholders' equity 25,298 13,665 16,074 41 Table of Contents Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsYou should read the following discussion and analysis of our financial condition and results of operations together with ourconsolidated financial statements and the related notes thereto included in Item 8 under the heading “Financial Statements andSupplementary Data”. Some of the information contained in this discussion and analysis or set forth elsewhere in this Form 10-K contains forward-looking statements that involve risks and uncertainties, including statements regarding our expectedfinancial results in future periods. The words “anticipates,” “believes,” “could,” “estimates,” “expects,” “intends,” “may,”“might,” “plans,” “projects,” “will,” “would,” and similar expressions are intended to identify forward-looking statements,although not all forward-looking statements contain these identifying words. We may not actually achieve the plans, intentionsor expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-lookingstatements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements that we make. You should read the “Risk Factors” section of this Form 10-K for a discussion of importantfactors that could cause actual results to differ materially from the results described in or implied by the forward-lookingstatements contained in the following discussion and analysis. We do not assume any obligation to update any forward-lookingstatements.OverviewWe are a clinical-stage medical technology company developing a non-thermal tissue treatment platform technology basedupon our proprietary Nano-Pulse Stimulation (“NPS”) technology and pursuing applications in oncology, dermatology, generaltissue treatment and veterinary medicine. NPS is a novel patented technology which leverages nano-second duration energypulses that have demonstrated effective local tumor control and the initiation of an adaptive immune response in pre-clinicalstudies. We are pursuing a number of clinical applications for NPS, including oncology, dermatology, aesthetics and otherminimally invasive applications where we believe NPS has the potential to compare favorably with current therapies andtreatments. We are currently conducting research and development activities in pursuit of commercial applications for our NPStechnology, but we have not yet commercialized or recognized revenue from our technology.Plan of OperationWe plan to establish ourselves as a medical technology company with a local, non-thermal, and drug-free treatment platformthat initiates cell death in targeted tissue by a process of cell signaling and also induces a systemic adaptive immune response tothe targeted tissue. In order to accomplish this, we plan to: ·Improve our technology by continuing our research and product development efforts. We expect to develop differentdevices to target different tissue types that will leverage the novel characteristics of our technology platform.·Further explore and understand the benefits of NPS with the objectives of broadening the currently planned cosmeticand therapeutic applications and identifying new applications. We anticipate that results of our clinical studies willenable us to recognize certain unmet medical needs that may be addressed by our technology.·Continue to protect and expand our intellectual property portfolio with respect to NPS technology, which we expectwill increase our ability to deter competitors and position our company for favorable licensing and partneringopportunities.·Partner with medical or biomedical device companies for certain applications which we anticipate may accelerateproduct development and acceptance into target market areas and allow us to gain the sales and marketing advantagesof the distribution infrastructure.Critical Accounting Policies and Use of EstimatesThe following discussion and analysis of financial condition and results of operations is based upon our consolidatedfinancial statements, which have been prepared in conformity with accounting principles generally accepted in the United Statesof America. Certain accounting policies and estimates are particularly important to the understanding of our financial position andresults of operations and require the application of significant judgment by management or can be materially affected by changesfrom period to period in economic factors or conditions that are outside of the company’s control. As a result, these issues aresubject to an inherent degree of uncertainty. In applying these policies, management uses its judgment to determine theappropriate assumptions to be used in the determination of certain estimates. Those estimates are based on our historicaloperations, future business plans and the projected financial results, the terms of existing contracts, trends in the industry andinformation available from other outside sources. 42 Table of Contents Long-Lived AssetsWe review long-lived assets, consisting of equipment and intangible assets, for impairment at each fiscal year end or whenevents or changes in circumstances indicate the carrying value of these assets may exceed their current fair values. Recoverabilityof assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted futurecash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, animpairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the assets.Assets to be disposed of are separately presented in the consolidated balance sheet and reported at the lower of the carryingamount or fair value less costs to sell, and are no longer depreciated.GoodwillWe record goodwill when the consideration paid in a business acquisition exceeds the fair value of the net tangible assetsand the identified intangible assets acquired. We review goodwill for impairment at least annually or whenever changes incircumstances indicate that the carrying value of the goodwill may not be recoverable.Stock-Based CompensationWe periodically issue stock options to officers, directors, employees and consultants for services rendered. Such issuancesvest and expire according to terms established at the issuance date. Stock-based payments to officers, directors and employees,including grants of employee stock options, are recognized in the financial statements based on their fair values. Stock optiongrants, which are generally time vested, are measured at the grant date fair value and charged to operations on a straight-line basisover the vesting period. We estimate the grant date fair value of stock options, using the Black-Scholes option-pricing model on astraight-line basis over the requisite service period of the award.The Black-Scholes option-pricing model requires the use of highly subjective assumptions which determine the fair value ofstock-based awards. The assumptions used in our option-pricing model represent management’s best estimates. These estimates arecomplex, involve a number of variables, uncertainties and assumptions and the application of management’s judgment, so thatthey are inherently subjective. If factors change and different assumptions are used, our stock-based compensation expense couldbe materially different in the future. These assumptions are estimated as follows:Risk-Free Interest Rate. We base the risk-free interest rate used in the Black-Scholes valuation model on the implied yieldbased on the U.S. Treasury yield curve in effect at the time of grant.Expected Term. The expected term represents the period that our stock-based awards are expected to be outstanding.Because of the limitations on the sale or transfer of our common stock as a privately held company before our IPO, we did notbelieve our historical exercise pattern was indicative of the pattern we would experience as a publicly traded company post IPO.We have consequently used the Staff Accounting Bulletin No. 110 (“SAB 110”) simplified method to calculate expected term,which is the average of the contractual term and vesting period. We plan to continue using the SAB 110 simplified method untilwe have sufficient trading history as a publicly traded company.Volatility. We determine the price volatility factor based on the historical volatilities of comparable public companies in asimilar industry. We intend to continue to consistently apply this process using the same or similar public companies until asufficient amount of historical information regarding the volatility of our own common stock share price becomes available, orunless circumstances change such that the identified companies are no longer similar to us, in which case, more suitable companieswhose share prices are publicly available would be utilized in the calculation.Dividend Yield. The expected dividend assumption is based on our current expectations about our anticipated dividendpolicy. We currently do not expect to issue any dividends.In addition to assumptions used in the Black-Scholes option-pricing model, we must also estimate a forfeiture rate tocalculate stock-based compensation for our awards. We will continue to use judgment in evaluating the assumptions related to ourstock-based compensation on a prospective basis. As we continue to accumulate additional data, we may have refinements to ourestimates, which could materially impact our future stock-based compensation expense.Income TaxesWe account for income taxes using the asset and liability method, whereby deferred tax assets and liability account balancesare determined based on differences between the financial reporting and tax bases of assets and liabilities, and are measured usingthe enacted rates and laws that will be in effect when the differences are expected to reverse. 43 Table of Contents We provide a valuation allowance to reduce its deferred tax assets to the amount that is more likely than not to be realized. Ifwe determine that we would be able to realize deferred tax assets in the future in excess of the recorded amount, an adjustment tothe deferred tax assets would be credited to operations in the period such determination was made. Likewise, should we determinethat we would not be able to realize all or part of its deferred tax assets in the future, an adjustment to the deferred tax assets wouldbe charged to operations in the period such determination was made.We account for uncertainties in income tax law under a comprehensive model for the financial statement recognition,measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns asprescribed by FASB Accounting Standards Codification (“ASC”) 740-10, “Accounting for Uncertainty in Income Taxes.” The taxeffects of a position are recognized only if it is “more-likely-than-not” to be sustained by the taxing authority as of the reportingdate. If the tax position is not considered “more-likely-than-not” to be sustained, then no benefits of the position are recognized. We are subject to U.S. federal income taxes and income taxes of various state tax jurisdictions. As our net operating losseshave yet to be utilized, previous tax years remain open to examination by federal authorities and other jurisdictions in which wecurrently operates or have operated in the past. We are not currently under examination by any tax authority.During 2014, we recorded deferred tax liabilities totaling $1.7 million reflecting the book and tax basis difference of therecorded intangible assets as the underlying intangible assets will be amortized to expense over their estimated useful lives butwill not be expensed for tax purposes. During 2015, operating losses incurred resulted in the realization of deferred tax assets thatexceeded deferred tax liabilities. The tax benefit recorded during 2015 reflects the benefit resulting from the deferred tax assets,partially offset by the net difference between the deferred tax liabilities and the valuation allowance recorded. The effect of thistreatment in 2015 resulted in the realization of a $1.7 million tax benefit and the elimination of the deferred tax liabilities.Segment and Geographical InformationWe operate and manage our business as one reportable and operating segment. Our Chief Executive Officer, who is the chiefoperating decision maker, reviews financial information on an aggregate basis for purposes of allocating resources and evaluatingfinancial performance. Primarily all of our long-lived assets are based in the United States.Components of Results of OperationsOperating ExpensesWe generally recognize operating expenses as they are incurred in two general categories, general and administrative costsand research and development costs, as well as non-cash amortization of intangible assets. Our operating expenses also includenon-cash components related to depreciation of equipment and stock-based compensation costs, which are allocated, asappropriate, to general and administrative costs and research and development costs.·General and administrative expenses consist of salaries and related expenses for executive, finance, legal, humanresources, information technology and administrative personnel, professional fees, insurance costs and other generalcorporate expenses. We expect general and administrative expenses to increase in the future as we hire personnel andincur additional costs to support the expansion of our research and development activities and our operation as apublic company, including higher legal, accounting, insurance, compliance, compensation and other costs.·Research and development expenses consist of salaries and related expenses and consulting costs related to the design,development and enhancement of our potential future products, prototypes material and devices, patent filing fees andcosts and rent, partially offset by grants received in support of specific research projects. We expect research anddevelopment costs to increase in the future as we develop next generation PulseTXTM systems and pursue commercialapplications of our NPS technology and expand our clinical programs. 44 Table of Contents Results of Operations Comparison of the Years ended December 31, 2016 and 2015Our consolidated statements of operations as discussed herein are presented below: Year Ended December 31, (in thousands) 2016 2015 $ ChangeRevenue $ — $ — $ —Operating expenses: General and administrative 2,933 1,224 1,709 Research and development 5,988 2,578 3,410 Amortization of intangible assets 665 666 (1)Total operating expenses 9,586 4,468 5,118 Other income: Interest income 68 — 68 Total other income 68 — 68 Loss from operations, before income taxes (9,518) (4,468) 5,050 Income tax benefit — (1,657) (1,657)Net loss $(9,518) $ (2,811) $6,707 General and AdministrativeGeneral and administrative expenses increased by $1,709,000 to $2,933,000 in 2016, from $1,224,000 in 2015. The increasewas due primarily to $908,000 of increased compensation costs, $277,000 of increased stock-based compensation expense,$219,000 of increased insurance costs, $151,000 of increased professional and consulting services, $58,000 of increased travelcosts and $62,000 of increased supplies. Compensation, including stock-based compensation costs, increased due to increasedheadcount. Insurance, professional and consulting services, travel costs and supplies increased primarily as a result of fees incurredin preparation for and operating as a public company. General and administrative expenses are expected to increase substantiallyduring 2017 reflecting the buildout of additional operational infrastructure to support the increased level of clinical anddevelopment activities, in addition to increased operational compliance activities.Research and DevelopmentResearch and development expenses increased by $3,410,000 to $5,988,000 in 2016, from $2,578,000 in 2015. The increasewas due primarily to $1,194,000 of increased consulting and outside services, $1,157,000 of increased prototype and developmentsupplies, $813,000 of increased compensation costs, $192,000 of increased stock-based compensation expense, $84,000 ofincreased intellectual property-related legal costs and $67,000 of increased facility costs, partially offset by $123,000 of decreasedsponsored research expenses. Consultant and outside services and prototype and development supplies increased due to increasedproduct development activities and the costs associated with manufacturing pre-production prototypes. Compensation, includingstock-based compensation costs, increased due to increased headcount. Facility costs increased as we expanded our researchfacility to support increased research and development activities during 2016 compared to the prior year. Sponsored researchexpenses decreased primarily due to higher grant funding provided in 2015 compared to 2016 related to the sponsored researchagreement entered into with Old Dominion University Research Foundation (“ODURF”). Intellectual property-related legal costsincreased as a result of ongoing research and development. Research and development expenses are expected to increasesubstantially during 2017 compared to 2016, as we expand our clinical study activities, continue development of our PulseTxsystems towards commercialization, and pursue regulatory clearance for our technology in one or more indications.Income Tax BenefitWe recognized an income tax benefit of $1,657,000 in 2015, due primarily to income tax benefit realized from deferred taxassets stemming from the net operating losses generated during 2015, net of the deferred tax liabilities as of December 31, 2015. 45 Table of Contents Comparison of the period from May 19, 2014 through December 31, 2014 and the year ended December 31, 2015Our consolidated statements of operations as discussed herein are presented below. May 19, 2014 (inception) Year Ended through December 31, December 31, (in thousands) 2015 2014 $ ChangeRevenue $ — $ — $ —Operating expenses: General and administrative 1,224 43 1,181 Research and development 2,578 26 2,552 Amortization of intangible assets 666 111 555 Costs of business acquisitions — 120 120 Total operating expenses 4,468 300 4,168 Other income: Interest income — — —Total other income — — —Loss from operations, before income taxes (4,468) (300) 4,168 Income tax benefit (1,657) (23) 1,634 Net loss $(2,811) $ (277) $2,534 The period from May 19, 2014 (inception) through November 6, 2014, was a period of limited activity for us, as we were inthe formation stage and capital raising stage, until we completed the acquisition of the businesses and the license of theintellectual property rights necessary for our business in November 2014.Year ended December 31, 2015The operating results for the year ended December 31, 2015, reflect the first full year of operational activities and theincreased development activities involving our proprietary technology, including sponsored research costs, in combination withthe establishment of general and administrative functions during the year. We expect both research and development and generaland administrative expenses to increase during 2016 reflecting continuation and expansion of activities commencing during2015.General and AdministrativeGeneral and administrative expenses totaled $43,000 and $1,224,000 for the period from May 19, 2014 (inception) toDecember 31, 2014 and the year ended December 31, 2015, respectively. Expenses incurred during 2014 consisted primarily ofnormal corporate formation and start-up legal costs, while in 2015 expenses reflect employee and board compensation expense of$733,000, professional and consulting services of $390,000 and other general expenses of $101,000. 2015 general andadministration expenses include $398,000 of stock-based compensation expense compared to no expense in 2014.Research and DevelopmentResearch and development expenses totaled $26,000 and $2,578,000 for the period from May 19, 2014 (inception toDecember 31, 2014 and the year ended December 31, 2015, respectively. Included in the expenses are National Institutes of Health(“NIH”) research grant revenues of $178,000 and $340,000 for 2014 and 2015, respectively. Expenses incurred during 2014 reflectcompensation, patent expense and sponsored research expenses, while in 2015 expenses reflect compensation of $962,000,sponsored research and related expenses of $697,000, patent related expenses of $397,000, lab supplies and equipment of$243,000, and $279,000 of general research and development expenses. 2015 research and development expense include $5,000of stock-based compensation compared to no expense in 2014.Amortization of Intangible AssetsAmortization of intangible assets reflects for the presented periods the respective portion of the twelve-year amortization ofthe acquired technology and licensed intangible assets. 46 Table of Contents Costs of Business AcquisitionsCosts of business acquisitions reflect relevant legal fees of $120,000 for the period from May 19, 2014 (inception) throughDecember 31, 2014.Income Tax BenefitWe recognized an income tax benefit of $23,000 and $1,657,000 for the period from May 19, 2014 (inception) to December31, 2014 and the year ended December 31, 2015 respectively. The income tax benefit realized during 2015 primarily reflects thedeferred tax assets stemming from the net operating losses generated during 2015, net of the deferred tax liabilities as ofDecember 31, 2015.Liquidity and Capital Resources To date, we have not generated any revenues from product sales, and management does not expect to generate revenues fromproduct sales for the next few years. Since inception, we have funded our business plan through the issuance of equity securitiesand grants from governmental agencies. Over the next few years, we intend to invest in research and development to developcommercially viable products and to assess the feasibility of potential future products. Additionally, we expect that our generaland administrative expenses will increase as we incur substantial incremental costs associated with being a public company.In May and June 2016, we completed our IPO from which we received total net proceeds of $20.3 million, includingproceeds from the exercise of the overallotment option granted to the underwriters, net of underwriting discounts and commissionsand other offering costs.In February 2017, we entered into a securities purchase agreement with Robert W. Duggan and Maky Zanganeh (the“Investors”), pursuant to which we, in this private placement, agreed to issue and sell to the Investors an aggregate of 819,673shares of our common stock at a price per share of $6.10 (the “Shares”) for gross proceeds of approximately $5 million (the “PrivatePlacement”). Our condensed consolidated statements of cash flows as discussed herein are presented below: May 19, 2014 (inception) Year Ended through December 31, December 31,(in thousands) 2016 2015 2014Net cash used in operating activities $(8,051) $(3,317) $(101)Net cash used in investing activities $(14,381) $(86) $(45)Net cash provided by financing activities $20,915 $ — $7,155 Net increase (decrease) in cash $(1,517) $(3,403) $7,009 At December 31, 2016, we had cash, cash equivalents and investments of $16.4 million. We believe that the net proceedsfrom our IPO and the Private Placement in February 2017 will be sufficient to fund our projected operating requirements for at leastthe next 12 months; however, we plan to raise additional capital in the future. These expectations are based on our currentoperating and financing plans which are subject to change. Until we are able to generate sustainable product revenues at profitablelevels, we expect to finance our future cash needs through public or private equity offerings, debt financings or corporatecollaboration and licensing arrangements. Such additional funds may not be available on terms acceptable to us or at all,particularly in light of recent market conditions. If we raise funds by issuing equity or equity-linked securities, the ownership ofour stockholders will be diluted and the holders of new equity securities may have priority rights over our existing stockholders. Ifadequate funds are not available, we may be required to curtail operations significantly or to obtain funds by entering intoagreements on unattractive terms. Our inability to raise capital could have a material adverse effect on our business, financialcondition and results of operations.Operating ActivitiesDuring 2016, we used cash of $8.1 million in operating activities. The difference between cash used in operating activitiesand net loss consisted primarily of stock-based compensation and depreciation and amortization, increased accrued expenses,partially offset by increased prepaid expenses and other current assets and deferred offering costs. 47 Table of Contents During 2015, we used cash of $3.3 million in operating activities. The difference between cash used in operating activitiesand net loss consisted primarily of depreciation and amortization and stock-based compensation, and changes in deferred incometaxes.Investing ActivitiesDuring 2016, we used cash of $14.4 million for investing activities for the purchase of investments and office and laboratoryequipment.During 2015, we used cash of $86,000 for investing activities for the purchase of office and laboratory equipment.Financing ActivitiesDuring 2016, cash provided from financing activities was $20.9 million due to the net proceeds received from our IPO, afterdeducting underwriting discounts and commissions and other offering costs. During 2015, we did not have any cash flows from financing activities.During the period from May 19, 2014 (inception) through December 31, 2014, we generated cash from financing activities of$8,000 from the issuance of our common stock to our founders and net proceeds of $7.1 million from the November 6, 2014common stock private placement, and $1,000 from the issuance of warrants to the placement agent.Contractual ObligationsFrank Reidy Research Center AgreementAs provided for in the license agreement with ODURF and EVMS, both of which are stockholders of our company, effectiveon November 6, 2014, we sponsored certain approved research activities at ODURF’s Frank Reidy Research Center under asponsored research agreement. In April 2016, the Company agreed to sponsor additional research under the SRA from April 2016to March 2017, for an aggregate amount of $1.0 million. As of December 31, 2016, there was $0.25 million of approved budgetremaining under this research agreement. Operating LeaseWe lease corporate offices and research facilities in Burlingame, California, under a lease expiring March 31, 2017, at amonthly cost of approximately $19,000.In January 2017, we entered into a new lease agreement (the “Lease”) for premises consisting of approximately 15,697rentable square feet located in Hayward, California (the “Premises”). The Premises will be used for our corporate headquarters andprincipal operating facility. The term of the Lease is sixty-two (62) months, commencing on the date that is the earlier of (i) thedate upon which we commence business in the Premises or (ii) the date upon which the Premises is “Ready for Occupancy” asdefined in the lease. Base monthly rent shall be abated for the first two (2) months of the Lease term and thereafter will be $42,400per month during the first year of the Lease term, with specified annual increases thereafter until reaching approximately $50,300per month during the last two (2) months of the Lease term. We are required to pay a refundable security deposit of approximately$101,000. The Landlord is obligated to provide us with improvement allowances in the amount of approximately $135.00 perrentable square foot of the Premises, which may be applied towards the costs of construction of the initial improvements in thePremises. We will be responsible for any such improvement costs in excess of the foregoing allowances. We may also be requiredto reimburse Landlord for certain expenses during the Lease term. We have the right to extend the Lease term by five (5) yearsupon written notice not more than twelve (12) months nor less than nine (9) months prior to the expiration of the original Leaseterm, with monthly payments equal to the “Fair Rental Value” as defined in the Lease. We also reserved the right to terminate theLease if the Landlord is unable to deliver the Premises to us by December 1, 2017. Assuming the Landlord delivers the Premises tous by December 1, 2017, the lease obligations as of December 31, 2016 for less than one year, one to three years, three to five yearsand more than five years is approximately $0.3 million, $1.1 million, $1.1 million and $0.3 million, respectively.Off-Balance Sheet ArrangementsAt December 31, 2016, we did not have any transactions, obligations or relationships that could be considered off-balancesheet arrangements. 48 Table of Contents JOBS Act Accounting ElectionUnder the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequentto the enactment of the JOBS Act until such time as those standards apply to private companies. We have irrevocably elected notto avail ourselves of this exemption from new or revised accounting standards and, therefore, will be subject to the same new orrevised accounting standards as other public companies that are not emerging growth companies.Trends, Events and UncertaintiesResearch and development of new technologies are, by their nature, unpredictable. Although we undertake developmentefforts with commercially reasonable diligence, there can be no assurance that the net proceeds from our financings will besufficient to enable us to develop our technology to the extent needed to generate future sales to sustain our operations. If we donot continue to have enough funds to sustain our operations, we will consider other options to continue our path tocommercialization of NPS, including, but not limited to, additional financing through follow-on stock offerings, debt financings,or co-development agreements and /or other alternatives.We cannot assure investors that our technology will be adopted or that we will ever achieve sustainable revenues sufficientto support our operations. Even if we are able to generate revenues, there can be no assurances that we will be able to achieveprofitability or positive operating cash flows. There can be no assurances that we will be able to secure additional financing in thefuture on acceptable terms or at all. If cash resources are insufficient to satisfy our ongoing cash needs, we would be required toscale back or discontinue our technology and product development programs, or obtain funds, if available, although there can beno assurances, through the sale, licensing or strategic alliances that could require us to relinquish rights to our technology andintellectual property, or to curtail, suspend or discontinue our operations entirely.Other than as discussed above and elsewhere in this Annual Report on Form 10-K, we are not currently aware of any trends,events or uncertainties that are likely to have a material effect on our financial condition in the near term, although it is possiblethat new trends or events may develop in the future that could have a material effect on our financial condition. 49 Table of Contents Item 7A. Quantitative and Qualitative Disclosures About Market Risk We are exposed to market risk in the ordinary course of our business. Market risk represents the risk of loss that may impactour financial position due to adverse changes in financial market prices and rates.Interest Rate and Market RiskOur exposure to interest rate and market risk is confined to our cash, cash equivalents and investments, all of which havematurities of less than three years. The goals of our investment policy are preservation of capital, fulfillment of liquidity needs andfiduciary control of our cash and investments. We also seek to maximize income from our investments without assumingsignificant risk. To achieve our goals, we maintain a portfolio of cash equivalents and investments in a variety of securities of highcredit quality. The securities in our investment portfolio are not leveraged, are classified as available-for-sale, and are, due to theirrelatively short-term nature, subject to minimal interest rate risk. We currently do not hedge interest rate exposure. Because of theshort-term maturities of our investments, we do not believe that a hypothetical 10% change in market interest rates would have anymaterial negative impact on the value of our investment portfolio.Foreign Exchange RiskThe majority of our expense and capital purchasing activities are transacted in U.S. dollars. We do not have any internationaloperations. We may incur foreign exchange gains or losses in the future. 50 Table of Contents Item 8. Financial Statements and Supplementary DataPULSE BIOSCIENCES, INC.Index to Consolidated Financial Statements Page NumberCONSOLIDATED FINANCIAL STATEMENTS ​Report of Independent Registered Public Accounting Firm 52​Consolidated Balance Sheets 53​Consolidated Statements of Operations and Comprehensive Loss 54​Consolidated Statements of Stockholders’ Equity 55​Consolidated Statements of Cash Flows 56​Notes to Consolidated Financial Statements57 51 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Board of Directors and Stockholders ofPulse Biosciences, Inc.We have audited the accompanying consolidated balance sheets of Pulse Biosciences, Inc. (as defined in Note 2 to theconsolidated financial statements) (the “Company”) as of December 31, 2016 and 2015, andthe related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for the yearsended December 31, 2016 and 2015, and for the period from May 19, 2014 (inception) through December 31, 2014. TheCompany’s management is responsible for these consolidated financial statements. Our responsibility is to express an opinion onthese consolidated financial statements based on our audits.We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged toperform, an audit of their internal control over financial reporting. Our audits included consideration ofinternal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, butnot for the purpose of expressing an opinion on the effectiveness of theCompany’s internal control over financial reporting. Accordingly, we express no such opinion. An audit alsoincludes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements,assessing the accounting principles used and significant estimates made by management, as well as evaluatingthe overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, thefinancial position of the Company as of December 31, 2016 and 2015, and the results of their operations and their cashflows for the years ended December 31, 2016 and 2015, and for the period from May 19, 2014 (inception) through December 31,2014, in conformity with accounting principles generally accepted in the United States of America./s/ Gumbiner Savett Inc.March 20, 2017Santa Monica, California 52 Table of Contents PULSE BIOSCIENCES, INC.Consolidated Balance Sheets(in thousands, except per share data) December 31, 2016 2015ASSETS Current assets: Cash and cash equivalents $2,089 $3,606 Marketable investments 14,306 —Prepaid expenses and other current assets 268 44 Deferred offering costs — 347 Total current assets 16,663 3,997 Equipment, net of accumulated depreciation 317 329 Intangible assets, net of accumulated amortization 6,543 7,208 Goodwill 2,791 2,791 Total assets $26,314 $14,325 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $265 $262 Accrued expenses 751 398 Total current liabilities 1,016 660 Commitments and contingencies Stockholders’ equity: Preferred stock, $0.001 par value;authorized – 5,000 shares; issued and outstanding – none — —Common stock, $0.001 par value;authorized – 45,000 shares; issued and outstanding – 13,315 shares and 7,565 shares at December 31, 2016 and 2015, respectively 13 8 Additional paid-in capital 37,898 16,745 Accumulated other comprehensive loss (7) —Accumulated deficit (12,606) (3,088)Total stockholders’ equity 25,298 13,665 Total liabilities and stockholders’ equity $26,314 $14,325 See accompanying notes to the consolidated financial statements. 53 Table of Contents PULSE BIOSCIENCES, INC.Consolidated Statements of Operations and Comprehensive Loss(in thousands, except per share data) May 19, 2014 (inception) Years Ended through December 31, December 31, 2016 2015 2014Revenue $ — $ — $ —Operating expenses: General and administrative 2,933 1,224 43 Research and development 5,988 2,578 26 Amortization of intangible assets 665 666 111 Costs of business acquisitions — — 120 Total operating expenses 9,586 4,468 300 Other income: Interest income 68 — —Total other income 68 — —Loss from operations, before income taxes (9,518) (4,468) (300)Income tax benefit — (1,657) (23)Net loss (9,518) (2,811) (277)Other comprehensive loss: Unrealized loss on available-for-sale securities, net of tax (7) — —Comprehensive loss $(9,525) $ (2,811) $ (277)Net loss per share Basic and diluted net loss per share $(0.86) $(0.37) $(0.11)Weighted average shares used to compute net loss per common share —basic and diluted 11,009 7,565 2,511 See accompanying notes to the consolidated financial statements. 54 Table of Contents PULSE BIOSCIENCES, INC.Consolidated Statements of Stockholders’ EquityPERIOD FROM MAY 19, 2014 (INCEPTION) THROUGH DECEMBER 31, 2014,AND THE YEARS ENDED DECEMBER 31, 2015 AND 2016(in thousands) Additional AccumulatedOther Total Common Stock Paid-in Comprehensive Accumulated Stockholders’ Shares Amount Capital Loss Deficit EquityCommon stock issued to founders 1,125 $1 $7 $ — $ — $8 Issuance of common stock in privateplacement, net of issuance costs of $853 2,996 3 7,144 — — 7,147 Common stock issued in connection with acquisition of businesses 2,027 2 5,409 — — 5,411 Common stock issued in connection with license agreement 1,417 2 3,783 — — 3,785 Net loss for the period from May 19, 2014 (inception) through December 31, 2014 — — — — (277) (277)Balance, December 31, 2014 7,565 $8 $16,343 $ — $(277) $16,074 Stock-based compensation expense — — 402 — — 402 Net loss — — — — (2,811) (2,811)Balance, December 31, 2015 7,565 $8 $16,745 $ — $(3,088) $13,665 Issuance of common stock upon initial publicoffering, net of issuance costs of $2,711 5,750 5 20,283 — — 20,288 Stock-based compensation expense — — 870 — — 870 Unrealized loss on marketable investments, netof tax — — — (7) — (7)Net loss — — — — (9,518) (9,518)Balance, December 31, 2016 13,315 $13 $37,898 $(7) $(12,606) $25,298 See accompanying notes to the consolidated financial statements. 55 Table of Contents PULSE BIOSCIENCES, INC.Consolidated Statements of Cash Flows(in thousands) May 19, 2014 (inception) Years Ended through December 31, December 31, 2016 2015 2014Cash flows from operating activities: Net loss $(9,518) $(2,811) $(277)Adjustments to reconcile net loss to net cash used in operating activities: Depreciation of equipment 94 51 6 Amortization of intangible assets 665 666 111 Stock-based compensation 870 402 —Net premium amortization on marketable investments 4 — —Change in deferred income taxes — (1,657) (23)Changes in operating assets and liabilities: Prepaid expenses and other current assets (135) (12) 12 Deferred offering costs (280) (347) —Accounts payable 3 125 29 Accrued expenses 246 305 58 Deferred grant revenue — (39) (17)Net cash used in operating activities (8,051) (3,317) (101)Cash flows from investing activities: Purchase of equipment (64) (86) (46)Cash acquired in connection with acquisition of businesses — — 1 Purchase of marketable investments (19,067) — —Maturities of marketable investments 4,750 — —Net cash used in investing activities (14,381) (86) (45)Cash flows from financing activities: Common stock issued to founders — — 8 Net proceeds from private placement — — 7,147 Proceeds from issuance of common stock from initial public offering, net ofissuance costs 20,915 — —Net cash provided by financing activities 20,915 — 7,155 Net increase (decrease) in cash (1,517) (3,403) 7,009 Cash and cash equivalents at beginning of period 3,606 7,009 —Cash and cash equivalents at end of period $2,089 $3,606 $7,009 Supplemental disclosure of noncash investing and financing activities: Reclassification of deferred offering costs to additional paid-in capital upon initialpublic offering $627 $ — $ —Fair value of common stock issued in connection with license agreement $ — $ — $3,785 Fair value of common stock issued in connection with acquisition of businesses $ — $ — $5,411 Equipment purchased in accrued expenses $18 $104 $ —See accompanying notes to the consolidated financial statements. 56 Table of Contents PULSE BIOSCIENCES, INC.Notes to Consolidated Financial Statements 1. Organization and Description of BusinessBusiness and Basis of PresentationPulse Biosciences, Inc., incorporated in Nevada on May 19, 2014, is a clinical-stage medical technologies companydeveloping commercial clinical applications for its proprietary Nano-Pulse Stimulation (“NPS”) technology. NPS is a novelpatented technology which leverages nano-second duration energy pulses that have demonstrated effective local tumor controland the initiation of an adaptive immune response in pre-clinical studies. The Company is pursuing a number of clinicalapplications for NPS, including human oncology, dermatology, aesthetics and other minimally invasive applications where NPS isbelieved to provide greater benefits compared to current therapies and treatments. Pulse Biosciences, Inc. is referred toindividually as “Pulse” and collectively with its wholly-owned subsidiaries as described below as the “Company” or “PulseBiosciences, Inc.” The Company’s corporate office and research facility are located in Burlingame, California.The Company’s activities are subject to significant risks and uncertainties, including the need for additional capital. TheCompany has not yet commenced any revenue-generating operations, does not have any cash flows from operations, and will needto raise additional capital to finance its operations. However, there can be no assurances that the Company will be able to obtainadditional financing on acceptable terms and in the amounts necessary to fully fund its operating requirements.Initial Public OfferingOn May 13, 2016, the Company’s registration statement on Form S-1 (File No. 333-208694), as amended (the “RegistrationStatement”), relating to its initial public offering (“IPO”) was declared effective by the Securities and Exchange Commission(“SEC”) and closed on May 23, 2016, whereby the Company sold 5,000,000 shares of common stock at $4.00 per share. The sharesbegan trading on the NASDAQ Capital Market under the trading symbol “PLSE” on May 18, 2016. On June 21, 2016, theunderwriters exercised their overallotment option to purchase an additional 749,846 shares of the Company’s common stock at$4.00 per share. The Company received net proceeds of approximately $20.3 million from the IPO, including proceeds from theexercise of the overallotment option granted to the underwriters, net of underwriting discounts and commissions and other offeringcosts. 2. Summary of Significant Accounting Policies Principles of ConsolidationThe accompanying consolidated financial statements are prepared in accordance with accounting principles generallyaccepted in the United States (“U.S. GAAP”) and include the financial statements of Pulse and its wholly-owned subsidiaries,BioElectroMed Corp. (“BEM”) and NanoBlate Corp. (“NB”), since their date of acquisition on November 6, 2014. ThelioPulse,Inc. (“TPI”), which was acquired on November 6, 2014, was merged into Pulse subsequent to its acquisition and ceased to exist as aseparate entity. Intercompany balances and transactions have been eliminated in consolidation.Use of EstimatesThe preparation of financial statements in conformity with U.S. GAAP requires management to make estimates andassumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, disclosure of contingent assetsand liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reportingperiod. Actual amounts could differ from those estimates. Concentration of Credit RiskFinancial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cashequivalents and investments. The Company places its cash equivalents and investments with high credit quality financialinstitutions and, by policy, limits the amounts invested with any one financial institution or issuer. Deposits held with banks mayexceed the amount of insurance provided on such deposits. The Company has not experienced any losses since inception. 57 Table of Contents Fair Value of Financial InstrumentsThe Company believes the carrying amounts of its financial instruments, including cash equivalents, prepaid expenses andother current assets, accounts payable and accrued expenses, approximate fair value due to the short-term nature of suchinstruments.Cash, Cash Equivalents and Marketable InvestmentsThe Company considers all highly liquid investments purchased with an original maturity of three months or less to be cashequivalents. The Company has designated all marketable investments as available-for-sale and therefore, such marketableinvestments are reported at fair value, with unrealized gains and losses recognized in accumulated other comprehensive income(loss) (“OCI”) in stockholders’ equity. The cost of marketable securities is adjusted for the amortization of premiums and discountsto expected maturity. Premium and discount amortization is included in other income, net. Realized gains and losses, as well asinterest income, on available-for-sale securities are also included in other income, net. The Company includes all of its available-for-sale securities in current assets.All of the Company’s marketable investments are subject to a periodic impairment review. The Company recognizes animpairment charge when a decline in the fair value of its marketable investments below the cost basis is judged to be other-than-temporary. Factors considered in determining whether a loss is temporary include the length of time and extent to which themarketable investments fair value has been less than the cost basis, the financial condition and near-term prospects of the investee,extent of the loss related to credit of the issuer, the expected cash flows from the security, the Company’s intent to sell the securityand whether or not the Company will be required to sell the security before the recovery of its amortized cost. During the yearended December 31 2016, the Company did not recognize any impairment charges on its investments as it is more likely than notthat the Company will recover their amortized cost basis upon sale or maturity. The Company did not hold investment securities atany time during the prior year.Deferred and Capitalized Offering CostsCosts incurred in connection with ongoing equity financing activities, consisting primarily of legal, accounting and otherprofessional fees, are deferred until the related financing is either completed or abandoned. Costs related to completed equityfinancings are charged directly to additional paid-in capital. Costs related to abandoned financings are charged to operations.EquipmentEquipment is recorded at cost and depreciated on a straight-line basis over their estimated useful lives, ranging from three tofive years.Intangible AssetsThe Company’s intangible assets consist of acquired patents and licenses, which are being amortized over their estimateduseful lives of twelve years.Long-Lived AssetsThe Company reviews long-lived assets, consisting of equipment and intangible assets, for impairment during each fiscalyear or when events or changes in circumstances indicate the carrying value of these assets may exceed their current fair values.Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimatedundiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimatedfuture cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fairvalue of the assets. Assets to be disposed of are separately presented in the consolidated balance sheet and reported at the lower ofthe carrying amount or fair value less costs to sell, and are no longer depreciated. The Company has not historically recorded anyimpairment to its long-lived assets. In the future, if events or market conditions affect the estimated fair value to the extent that along-lived asset is impaired, the Company will adjust the carrying value of these long-lived assets in the period in which theimpairment occurs. For the years ended December 31, 2016, 2015 and the period from May 19, 2014 (inception) throughDecember 31, 2014, the Company had not deemed any long-lived assets as impaired, and was not aware of the existence of anyindicators of impairment at such dates. 58 Table of Contents GoodwillThe Company records goodwill when the consideration paid in a business acquisition exceeds the fair value of the nettangible assets and the identified intangible assets acquired. The Company reviews goodwill for impairment at least annually orwhenever changes in circumstances indicate that the carrying value of the goodwill may not be recoverable. For the years endedDecember 31, 2016, 2015 and the period from May 19, 2014 (inception) through December 31, 2014, the Company had notdeemed the value of goodwill as impaired, and was not aware of the existence of any indicators of impairment at such dates.Stock-Based CompensationThe Company periodically issues stock options to officers, directors, employees and consultants for services rendered. Suchissuances vest and expire according to terms established at the issuance date.Stock-based payments to officers, directors and employees, including grants of employee stock options, are recognized inthe financial statements based on their grant date fair values. Stock option grants, which are generally time vested, are measured atthe grant date fair value and charged to operations on a straight-line basis over the vesting period. The fair value of stock optionsis determined utilizing the Black-Scholes option-pricing model, which is affected by several variables, including the risk-freeinterest rate, the expected dividend yield, the life of the equity award, the exercise price of the stock option as compared to the fairvalue of the common stock on the grant date, and the estimated volatility of the common stock over the term of the equity award.The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. The Company estimatesvolatility based on the average historical volatilities of comparable public companies in a similar industry. The expected dividendyield is based on the current yield at the grant date; the Company has never declared or paid dividends and has no plans to do sofor the foreseeable future. As permitted by Staff Accounting Bulletin No. 107, due to the Company’s lack of history and optionactivity, management utilizes the simplified method to estimate the expected term of options at the date of grant. Prior to theCompany’s IPO, the fair value of common stock was determined by reference to either recent or anticipated cash transactionsinvolving the sale of the Company’s common stock.Stock options issued to non-employees as compensation for services provided to the Company are accounted for based uponthe estimated fair value of the stock option. Management utilizes the Black-Scholes option-pricing model to determine the fairvalue of the stock options issued by the Company. The Company recognizes this expense over the period in which the services areprovided.The Company recognizes the fair value of stock-based compensation costs in general and administrative costs and inresearch and development costs, as appropriate, in the Company’s consolidated statements of operations. The Company issues newshares to satisfy stock option exercises.Research GrantsResearch grants are generally funded and paid through governmental, institutional, educational or research organizations.Grants received from agencies of the federal government are subject to federal regulation as to how the Company conducts itsresearch activities, and the Company is required to comply with the respective research agreement terms relating to those grants.Amounts received under research grants are nonrefundable, regardless of the success of the underlying research project, to theextent that such amounts are expended in accordance with the approved grant project. The Company is permitted to draw downthe research grants after incurring the related expenses. Amounts received under research grants are offset against the relatedresearch and development costs in the Company’s consolidated statement of operations as the costs are incurred.Research and Development CostsResearch and development costs consist primarily of compensation costs, fees paid to consultants and outside serviceproviders and organizations (including research institutes at universities), development prototypes, patent fees and costs, and otherexpenses relating to the acquisition, design, development and testing of the Company’s product candidates. Research anddevelopment costs incurred by the Company are expensed as incurred, unless the achievement of milestones, the completion ofcontracted work, or other information indicates that a different expensing schedule is more appropriate. 59 Table of Contents Patent CostsThe Company is the owner of numerous domestic and foreign patents. Due to the significant uncertainty associated with thesuccessful development of one or more commercially viable products based on the Company’s research efforts and any relatedpatent applications, patent costs not related to acquired patents, including patent-related legal fees, filing fees and other costs,including internally generated costs, are expensed as incurred. During the years ended December 31, 2016 and 2015 patent coststotaled $0.5 million and $0.4 million, respectively. During the period from May 19, 2014 (inception) through December 31, 2014,patent costs were $26,000. Patent costs are included in research and development costs in the consolidated statements ofoperations and comprehensive loss.Income TaxesThe Company accounts for income taxes under an asset and liability approach for financial accounting and reporting forincome taxes. Accordingly, the Company recognizes deferred tax assets and liabilities for the expected impact of differencesbetween the financial statements and the tax basis of assets and liabilities.The Company records a valuation allowance to reduce its deferred tax assets to the amount that is more likely than not to berealized. In the event the Company determines that it would be able to realize its deferred tax assets in the future in excess of itsrecorded amount, an adjustment to the deferred tax assets would be credited to operations in the period such determination wasmade. Likewise, should the Company determine that it would not be able to realize all or part of its deferred tax assets in the future,an adjustment to the deferred tax assets would be charged to operations in the period such determination was made.The Company is subject to U.S. federal income taxes and income taxes of various state tax jurisdictions. As the Company’snet operating losses have yet to be utilized, previous tax years remain open to examination by federal authorities and otherjurisdictions in which the Company currently operates or has operated in the past. The Company is not currently underexamination by any tax authority.The Company accounts for uncertainties in income tax law under a comprehensive model for the financial statementrecognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income taxreturns as prescribed by U.S. GAAP. The tax effects of a position are recognized only if it is “more-likely-than-not” to be sustainedby the taxing authority as of the reporting date. If the tax position is not considered “more-likely-than-not” to be sustained, thenno benefits of the position are recognized. At December 31, 2016 and 2015, the Company had not recorded any liability foruncertain tax positions. The Company includes interest and penalties related to uncertain tax positions as a component of incometax expense.Comprehensive LossComprehensive loss consists of net loss and unrealized gains or losses on available-for-sale investments. The Companydisplays comprehensive loss and its components as part of the consolidated statements of operations and comprehensive loss.Net Loss per ShareThe Company’s basic net loss per share is calculated by dividing the net loss by the weighted average number of shares ofcommon stock outstanding for the period. Diluted net loss per share is computed by giving effect to all potential dilutive commonstock equivalents outstanding for the period. For purposes of this calculation, options to purchase common stock and commonstock warrants are considered common stock equivalents. Potential common shares that have an anti-dilutive effect (i.e., those thatincrease income per share or decrease loss per share) are excluded from the calculation of diluted net loss per share.Basic and diluted net loss per common share is the same for all periods presented because all warrants and stock optionsoutstanding are anti-dilutive.The following outstanding stock options and warrants to purchase common stock were excluded from the computation ofdiluted net loss per share for the periods presented because including them would have had an anti-dilutive effect: 60 Table of Contents May 19, 2014(inception)Years EndedthroughDecember 31,December 31,201620152014Common stock warrants874,610 299,625 299,625 Common stock options1,229,355 875,221 —Total2,103,965 1,174,846 299,625 Segment and Geographical InformationThe Company operates and manages its business as one reportable and operating segment. The Company’s Chief ExecutiveOfficer, who is the chief operating decision maker, reviews financial information on an aggregate basis for purposes of allocatingresources and evaluating financial performance. All of the Company’s long-lived assets are based in the United States.Recently Adopted StandardsIn August 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Updates (“ASU”) No.2014-15, Presentation of Financial Statements – Going Concern Disclosure of Uncertainties About an Entity’s Ability toContinue as a Going Concern, which requires management to evaluate whether there are conditions or events that raise substantialdoubt about an entity’s ability to continue as a going concern and to provide disclosures when certain criteria are met. Theguidance is effective for annual periods beginning after December 15, 2016 and interim reporting periods starting in the firstquarter of 2017. The Company adopted this standard as of December 31, 2016.Recent Accounting PronouncementsDuring May 2014, the Financial Accounting Standards Board (“FASB”) issued (“ASU”) No. 2014-09, Revenue fromContracts with Customers. This updated standard will replace most existing revenue recognition guidance in U.S. GAAP when itbecomes effective and permits the use of either the retrospective or cumulative effect transition method. In August 2015, the FASBissued an update to defer the effective date of this update by one year. This updated standard becomes effective for the Companyin the first quarter of fiscal year 2018, but allows the Company to adopt the standard one year earlier if it so chooses. In March2016, the FASB issued updates to this guidance to clarify the implementation guidance on principal versus agent considerations.In April 2016, the FASB issued guidance to clarify aspects related to identifying performance obligations and the licensingimplementation guidance. In May 2016, the FASB issued guidance to clarify the implementation on narrow scope improvementsand practical expedients. The Company is currently evaluating the impact of adopting these standards.During February 2016, the FASB issued ASU No. 2016-02, Leases, which amends the existing accounting standards forleases. The new standard requires lessees to record a right-of-use asset and a corresponding lease liability on the balance sheet(with the exception of short-term leases). For lessees, leases will continue to be classified as either operating or financing in theincome statement. This ASU becomes effective for the Company in the first quarter of fiscal year 2019 and early adoption ispermitted. This ASU is required to be applied with a modified retrospective approach and requires application of the new standardat the beginning of the earliest comparative period presented. The Company generally does not finance purchases of equipment orother capital, but does lease its facilities. While the Company is continuing to assess all potential impacts of this standard, itexpects that most of its lease commitments will be subject to the updated standard and recognized as lease liabilities and right-of-use assets upon adoption.During March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-based Payment Accounting. ThisASU simplifies the accounting for share-based payment transactions, including the income tax consequences, classification ofawards as either equity or liabilities, and classification on the statement of cash flows. This ASU requires that excess tax benefitsand deficiencies be recognized as income tax benefit or expense in the income statement. The Company currently plans toimplement this ASU as required in the first quarter of fiscal year 2017. The Company does not expect the adoption of this ASU tohave a significant impact on its financial position. 61 Table of Contents During June 2016, the FASB issued ASU 2016-13, Financial Instruments — Measurement of Credit Losses on FinancialInstruments, which requires measurement and recognition of expected credit losses for financial assets held. ASU 2016-13 iseffective for the Company beginning January 1, 2020. The Company is currently evaluating the impact of adopting this standard.During January 2017, the FASB issued ASU 2017-04, Intangibles — Goodwill and Other (Topic 350): Simplifying theAccounting for Goodwill Impairment, which simplifies the accounting for goodwill impairment. This ASU removes Step 2 of thegoodwill impairment test, which requires hypothetical purchase price allocation. A goodwill impairment will now be the amountby which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The new guidancealso requires disclosure of the amount of goodwill at reporting units with zero or negative carrying amounts. ASU 2017-04 iseffective for the Company beginning January 1, 2020. Early adoption is permitted for any impairment tests performed after January1, 2017. The Company is currently evaluating the impact of adopting this standard. 3. Fair Value of Financial InstrumentsThe authoritative guidance with respect to fair value established a fair value hierarchy that prioritizes the inputs to valuationtechniques used to measure fair value into three levels, and requires that assets and liabilities carried at fair value be classified anddisclosed in one of three categories, as presented below.Level 1 - Observable inputs such as quoted prices in active markets for an identical asset or liability that the Company hasthe ability to access as of the measurement date. Financial assets and liabilities utilizing Level 1 inputs include active-exchangetraded securities and exchange-based derivatives.Level 2 - Inputs, other than quoted prices included within Level 1, which are directly observable for the asset or liability orindirectly observable through corroboration with observable market data. Financial assets and liabilities utilizing Level 2 inputsinclude fixed income securities, non-exchange based derivatives, mutual funds, and fair-value hedges.Level 3 - Unobservable inputs in which there is little or no market data for the asset or liability which requires the reportingentity to develop its own assumptions. Financial assets and liabilities utilizing Level 3 inputs include infrequently-traded,non-exchange-based derivatives and commingled investment funds, and are measured using present value pricing models.The Company determines the level in the fair value hierarchy within which each fair value measurement falls in its entirety,based on the lowest level input that is significant to the fair value measurement in its entirety. In determining the appropriatelevels, the Company performs an analysis of the assets and liabilities at each reporting period end.The Company classifies its investments in money market funds within Level 1 of the fair value hierarchy because they arevalued using bank balances or quoted market prices. The Company classifies its Level 2 instruments based on market pricing andother observable inputs. The Company did not classify any of its investments within Level 3 of the fair value hierarchy.The following table sets forth the fair value of the Company’s financial assets measured on a recurring basis as of December31, 2016 (in thousands): December 31, 2016Assets Classification Level 1 Level 2 Level 3 TotalMoney market funds Cash and cash equivalents $1,726 $— $— $1,726 Corporate bonds Investments — 13,289 — 13,289 Asset-backed security Investments — 1,017 — 1,017 Total assets measured at fair value $1,726 $14,306 $— $16,032 The Company did not have any financial assets measured on a recurring basis as of December 31, 2015. The Company didnot have any financial liabilities measured on a recurring basis as of December 31, 2016 and 2015.During the year ended December 31, 2016, the Company did not record any impairment charges related to its marketableinvestments. There were no transfers between Level 1, Level 2 or Level 3 assets reported at fair value on a recurring basis and thevaluation techniques used did not change compared to the Company’s established practice. 62 Table of Contents 4. EquipmentEquipment consisted of the following (in thousands): December 31, 2016 2015Laboratory equipment $425 $356 Software 20 10 Furniture, fixtures and equipment 17 20 462 386 Less: Accumulated depreciation (145) (57) $317 $329 Depreciation expense for the years ended December 31, 2016, 2015 and the period from May 19, 2014 (inception) toDecember 31, 2014 was $94,000, $51,000 and $6,000, respectively. 5. Intangible Assets Intangible assets consisted of the following (in thousands): December 31, 2016 2015Acquired patents and licenses $7,985 $7,985 Less: Accumulated amortization (1,442) (777) $6,543 $7,208 A schedule of the amortization of intangible assets for the five years ending December 31, 2017 through 2021 and thereafteris as follows (in thousands): Year Ending December 31: 2017 $665 2018 666 2019 665 2020 666 2021 665 Thereafter 3,216 $6,543 6. Accrued ExpensesAccrued expenses consisted of the following (in thousands): December 31, 2016 2015Professional fees $285 $84 Compensation expense 261 34 Other 205 40 Offering costs — 240 $751 $398 63 Table of Contents 7. Stockholders’ Equity and Stock-Based CompensationPreferred StockThe Company has authorized a total of 5,000,000 shares of preferred stock, par value $0.001 per share, none of which wereoutstanding at December 31, 2016 and 2015. The Company’s Board of Directors has the authority to issue preferred stock and todetermine the rights, preferences, privileges, and restrictions, including voting rights, without any further vote or action by theCompany’s stockholders.Common StockThe Company has authorized a total of 45,000,000 shares of common stock, par value $0.001 per share.In conjunction with the incorporation of the Company, 1,125,000 shares of common stock were issued to its foundingstockholders, which consisted of MDB Capital Group, LLC and its affiliated persons, for cash consideration of $8,000.During November 2014, the Company sold 2,996,253 shares of common stock in a private placement to accredited investorsfor $2.67 per share, resulting in gross cash proceeds of $8.0 million. Direct costs of the private placement consisted of a 10%placement agent fee to MDB Capital Group, LLC and its designees, of $0.8 million and related legal fees and reimbursableexpenses of $54,000. In conjunction with this private placement, the Company issued warrants to MDB Capital Group, LLC andits designees for a consideration of $1,000. The placement agent warrants had a fair value of $0.6 million, calculated pursuant tothe Black-Scholes option-pricing model, as described below. Issuance costs of the private placement, net of the considerationreceived from MDB Capital Group, LLC of $1,000, aggregated $0.9 million and were charged directly to additional paid-incapital.During November 2014, the Company issued an aggregate of 3,444,198 shares of common stock valued at $9.2 million toacquire businesses and intellectual property license rights.During May 2016, the Company completed an IPO whereby it sold 5,749,846 shares of the Company’s common stock at$4.00 as described in Note 1.Common Stock WarrantsDuring the year ended December 31, 2016, in connection with the closing of the Company’s initial public offering, theCompany issued warrants as compensation to the underwriters of its initial public offering to purchase a total 574,985 shares of iscommon stock at a price of $5.00 per share. The warrants became exercisable 180 days after issuance and are exercisable for aperiod of five years. These warrants were valued pursuant to the Black-Scholes option-pricing model at $1.4 million, based on thefollowing assumptions: fair value of common stock – $4.12 to $4.27 per share; risk free interest rate: 1.22% – 1.38%; expectedvolatility – 80%; expected dividend yield – 0%; and expected term – 5 years. In conjunction with the private placement of common stock during November 2014 at $2.67 per share, the Company issuedwarrants to the placement agent to purchase 299,625 shares of common stock, exercisable at issuance for a period of seven years at$2.67 per share. The placement agent warrants have standard anti-dilution protections and cashless exercise rights. The placementagent warrants have piggy-back registration rights commencing on the date that the Company became a reporting company underthe Securities Exchange Act of 1934, as amended, and for a period of seven years thereafter, and a one-time demand registrationright commencing six months after the date that the Company became a reporting company under the Securities Exchange Act of1934, as amended, and for a period of 54 months thereafter. 64 Table of Contents A summary of warrant activity for the year ended December 31, 2016 is presented below: Weighted Average Weighted Remaining Number of Average Contractual Shares Exercise Price Life (in Years)Warrants outstanding at December 31, 2015 299,625 $2.67 5.85 Issued 574,985 5.00 Exercised — — Expired/terminated — — Warrants outstanding and exercisable at December 31, 2016 874,610 $4.20 4.53 The intrinsic value of exercisable in-the-money stock warrants was approximately $2.0 million as of December 31, 2016.Stock OptionsDuring August 2015, the Company adopted the 2015 Stock Incentive Plan (the “2015 Plan”) and reserved 1,134,818 sharesof common stock for issuance under the 2015 Plan, including stock options and restricted or performance stock awards. The 2015Plan is administered by the Compensation Committee of the Company’s Board of Directors. Eligible participants in the 2015 Planinclude the Company’s employees, officers and directors, and any person who has a business relationship with the Company.Options issued under the 2015 Plan may have a term of up to ten years and may have variable vesting provisions. New hire grantsgenerally vest 25% upon the first anniversary of the grant and 1/12 quarterly thereafter, over the subsequent twelve quarters.Grants issued to existing employees generally vest quarterly over four years.During the year ended December 31, 2015, prior to the adoption of the 2015 Plan, all of the stock optionsgranted to directors were at an exercise price of $2.67 per share, the same price as the common shares sold in theNovember 2014 private placement. Pursuant to an employment agreement with Darrin Uecker, the Company’sPresident and Chief Executive Officer (the “Executive”), the Company agreed to issue to the Executive, uponconsummation of the proposed IPO, an additional stock option equal to 3% of the Company’s fully dilutedshares of common stock outstanding after taking into account the shares to be issued in the IPO exercisable atthe IPO per share price. On October 5, 2016, the Executive offered, and the Company accepted, to forgo receiptof such grant until such time the Company’s shareholders approve a new equity incentive plan or an increase inthe number of shares available under the existing plan. In exchange for the Executive’s forgoing receipt of thepost-IPO option grant, the Company agreed to amend the Executive’s employment agreement (the“Amendment”) so that the Executive will receive (i) an option grant to purchase 187,286 shares of theCompany’s common stock, which is a number of shares equal to the number of shares he would have beenentitled to receive upon completion of the IPO, and (ii) a restricted stock grant equal in value to (A) thedifference between the exercise price previously agreed to for the post-IPO option grant, which was $4.00 pershare, and the exercise price on the date of the deferral grant, multiplied by (B) 187,286. In the event of achange of control that precedes the aforementioned option grant while the Executive is still an employee of theCompany, the Executive would be entitled to receive a cash bonus equal to the consideration the Executivewould have received as a holder of 187,286 vested options to purchase the Company’s common stock at anexercise price of $4.00 per share.A summary of stock option activity for the year ended December 31, 2016 is presented below: Weighted Weighted Average Average Remaining Number of Exercise Contractual Shares Price Life (in Years)Stock options outstanding at December 31, 2015 875,221 $3.51 7.8 Issued 405,132 4.44 Exercised — — Expired/terminated (50,998) 3.57 Stock options outstanding at December 31, 2016 1,229,355 $3.82 Vested and expected to vest at December 31, 2016 1,229,355 $3.82 7.6 Stock options exercisable at December 31, 2016 354,855 $3.34 6.0 65 Table of Contents The exercise prices of stock options outstanding and exercisable are as follows at December 31, 2016: Options Outstanding Options Exercisable​ Weighted average ​Numberremaining contractualWeighted average NumberWeighted averageExercise Priceoutstandinglife (in years)exercise price vestedexercise price$2.67302,620 3.3$ 2.67 176,528 $ 2.67$4.00 - $4.28692,335 8.94.02 178,327 4.00 $4.67 - $4.68234,400 9.64.68 — -1,229,355 7.6$ 3.82 354,855 $ 3.34The intrinsic value of exercisable in-the-money stock options at December 31, 2016 was approximately $1.1 million.The fair value of option awards was estimated using the Black-Scholes option-pricing model utilizing the followingassumptions: May 19, 2014 (inception) Years Ended through December 31, December 31, 2016 2015 2014Expected term in years 6.08 3.5 - 6.25 —Expected volatility 80% 89% - 90% —Risk-free interest rate 1.16%-1.45% 0.88% - 1.89% —Dividend yield — — —The fair value of the stock options granted during the years ended December 31, 2016 and 2015, calculated pursuant to theBlack-Scholes option-pricing model, was $1.2 million and $3.1 million, respectively.Total stock-based compensation expense consisted of the following (in thousands): May 19, 2014 (inception) Years Ended through December 31, December 31, 2016 2015 2014General and administrative $674 $397 $ —Research and development 196 5 —Total stock-based compensation expense $870 $402 $ —At December 31, 2016, there was $2.4 million of unrecognized compensation cost related to unvested stock-basedcompensation arrangements, which is expected to be recognized over a weighted average period of 2.84 years. 8. Research Grants and AgreementsResearch GrantsThe Company’s subsidiary, BEM, was acquired by Pulse in November 2014. BEM had received grants from the NationalCancer Institute of the National Institutes of Health (the “NIH”), including grants from the NIH Small Business InnovationResearch (“SBIR”) Program, to conduct research and develop devices that will provide health benefits utilizing bioelectrictechnology. At the time of the acquisition, BEM had an active research grant under the SBIR Program for a project entitled“EndoPulse System for Endoscopic Ultrasound-Guided Therapy of Pancreatic Carcinoma.” This research project was completedduring the year ended December 31, 2015. During the period from May 19, 2014 (inception) through December 31, 2014 and forthe year ended December 31, 2015, the Company received research grant funding of $0.2 million and $0.3 million,respectively. The Company has not subsequently pursued additional grants.Sponsored Research AgreementThe Company sponsors research activities performed by ODURF’s Frank Reidy Center. ODURF is compensated by theCompany for its conduct of each study in accordance with the budget and payment terms set forth in the applicable task 66 Table of Contents order. During the years ended December 31, 2016 and 2015, the Company agreed to sponsor $1.0 million and $1.2 million,respectively, during the subsequent 12-month period. The principal investigator may transfer funds with the budget as neededwithout the Company’s approval so long as the obligations of ODURF under the task order and statement of work remainunchanged and unimpaired. During the year ended December 31, 2016 and 2015, the Company incurred $0.9 million and $1.0million, respectively, of costs pursuant to various task orders. 9. Income Taxes The income tax provision for the year ended December 31, 2016 was $0. The income tax provision for the year endedDecember 31, 2015 and the period from May 19, 2014 (inception) through December 31, 2014 was a benefit of $1.7 million and$23,000, respectively. The prior years’ tax benefits resulted from the realization of deferred tax assets related principally to theCompany’s net operating loss for the year ended December 31, 2015, offset by deferred tax liability created based upon thedifference in the value for book and tax purposes of certain acquired technology assets, which are considered temporary incometax differences under purchase accounting. A full valuation allowance is provided against the Company’s remaining deferred taxassets.Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets andliabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of theCompany’s deferred tax assets at December 31, 2016 and 2015 are summarized below (in thousands): December 31, 2016 2015Technology $(1,449) $(1,630)Temporary differences 312 103 Credits 639 198 Net operating loss carryforwards 5,121 1,590 Total deferred tax assets 4,623 261 Valuation allowance (4,623) (261)Net deferred tax assets $ — $ —In assessing the potential realization of deferred tax assets, management considers whether it is more likely than not thatsome portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon theCompany attaining future taxable income during the periods in which those temporary differences become deductible. AtDecember 31, 2016 and 2015, management was unable to determine that it was more likely than not that the Company’s deferredtax assets will be realized, and has therefore recorded an appropriate valuation allowance against deferred tax assets at such dates.The Company’s effective tax rate is different from the federal statutory tax rate of 35% due primarily to net losses thatreceive no tax benefit as a result of a valuation allowance recorded for such losses.Presented below is the reconcilement of the difference between the tax rate computed by applying the U.S. federal statutorytax rate and the effective tax rate for the years ended December 31, 2016, 2015 and for the period from May 19, 2014 throughDecember 31, 2014: May 19, 2014 (inception) Years Ended through December 31, December 31, 2016 2015 2014U.S. federal statutory tax rate (35.0)% (35.0)% (35.0)%Valuation allowance 42.0 % 4.0 % 16.0 %Permanent differences 2.0 % 1.0 % 15.0 %State tax benefit and other (9.0)% (7.0)% (4.0)%Effective tax rate —% (37.0)% (8.0)%At December 31, 2016, the Company had federal and California state net operating loss carryforwards of approximately$11.7 million and $11.5 million, respectively. The federal and state net operating loss carryforwards will begin to expire after2032. At December 31, 2016, the Company had approximately $0.4 million and $0.4 million of federal and 67 Table of Contents California R&D credits, respectively. The federal R&D credits begin to expire after 2035 and the California R&D credits have anindefinite carryforward period.These net operating loss carryforward and research and development credit amounts have full valuation allowances againstthem due to the remoteness of their expected utilization. While the Company has not performed a formal analysis of theavailability of these operating loss carryforwards at December 31, 2016 under Internal Revenue Code Sections 382 and 383,management expects that the Company’s ability to use its net operating loss carryforwards may be limited in future periods.The Company’s activity related to unrecognized tax benefits are summarized below (in thousands): December 31, 2016 2015Balance, January 1, 2016 $66 $ —Gross increases - tax positions in prior periods — —Gross decreases - tax positions in prior periods — —Gross increases - tax position in current period 147 66 Settlements — —Lapses in statutes of limitations — —Balance, December 31, 2016 $213 $66 Although it is reasonably possible that certain unrecognized tax benefits may increase or decrease within the next twelvemonths due to tax examination changes, settlement activities, expirations of statute of limitations, or the impact on recognitionand measurement considerations related to the results of published tax cases or other similar activities, the Company does notanticipate any significant changes to unrecognized tax benefits over the next twelve months. During the years ended December 31,2016, 2015 and the period from May 19, 2014 to December 31, 2014, no interest or penalties were required to be recognizedrelated to unrecognized tax benefits. Although the Company is not under examination, the tax years for 2014 and forward aresubject to examination by United States tax authorities. 10. Related Party TransactionsMDB Capital Group, LLC (“MDB”) provided investment banking, executive recruiting and intellectual propertymanagement services to the Company. Furthermore, provisions of the Company’s investment banking agreement with MDBsurvive the June 2016 termination of the agreement for a period of two years and MDB retains significant rights under the 2016IPO underwriting agreement with respect to the Company’s future financing alternatives for up to five years. The Company’sChairman, Robert Levande, is a Senior Managing Director of MDB.In connection with the Company’s 2016 IPO (Note 1), the underwriting syndicate led by MDB received $1.8 million inunderwriting discounts, $0.2 million in unaccountable expense reimbursements and warrants valued in the aggregate of $1.4million.In addition, during the period from May 19, 2014 (inception) to December 31, 2014 (Note 7), MDB received cash placementagent fees of $0.8 million and the Company issued warrants to purchase 299,625 shares of common stock for a consideration of$1,000, exercisable for seven years at $2.67 per share, to MDB Capital Group, LLC and its designees.During the year ended December 31, 2016, the Company incurred non-financing related expenses charged by MDB of$100,000 for services rendered with respect to intellectual property related services. Similarly, during the year ended December 31,2015, the Company incurred expenses charged by MDB comprised of: $49,000 for services rendered with respect to executivesearch activities related to the hiring of the Company’s Chief Executive Officer and the appointment of one director, $42,000 foroffering related expenses and $26,000 for intellectual property related services.Gary Schuman, the Chief Financial Officer of MDB, was also the acting Chief Financial Officer of the Company and wascompensated at a monthly rate of $4,000 from November 1, 2014 to December 31, 2015, reflecting an aggregate charge to generaland administrative expenses of $48,000 and $8,000 for the year ended December 31, 2015 and the period from May 19, 2014(inception) through December 31, 2014, respectively.At December 31, 2016, accounts payable and accrued expenses did not include any amounts payable to MDB. At December31, 2015, included in accounts payable and accrued expenses is an amount of $58,000 payable to MDB for their 68 Table of Contents expenses incurred relating to the Company’s planned IPO, which were recorded as deferred offering costs, and patent relatedservices. 11. Commitments and ContingenciesOperating LeasesThe Company leases its corporate offices and research facilities in Burlingame, California, under an operating lease expiringMarch 31, 2017 at a monthly cost of approximately $19,000. In January 2017, the Company entered into a new lease agreement for premises consisting of approximately fifteen thousandsix hundred ninety-seven (15,697) rentable square feet located in Hayward, California. See Note 14.During the years ended December 31, 2016, 2015 and the period from May 19, 2014 (inception) through December 31,2014, rent expense, including common area maintenance charges, was $0.2 million, $0.2 million and $19,000, respectively. 12. Employee Benefit PlansThe Company sponsors a defined contribution plan under which it may make discretionary contributions. The Company didnot make any employer matching contributions to this plan during the years ended December 31, 2016, 2015 or the period fromMay 19, 2014 (inception) through December 31, 2014. 13. Selected Quarterly Financial Data (Unaudited)The following table provides the selected quarterly financial data for the years ended December 31, 2016 and 2015 (inthousands, except per share data): Quarter Ended 2016 2015 December31, September30, June 30, March 31, December31, September30, June 30, March 31,Revenue $ — $ — $ — $ — $ — $ — $ — $ —Operating expenses: General and administrative 870 893 642 528 417 408 243 156 Research and development 1,806 1,739 1,453 990 951 659 547 421 Amortization of intangibleassets 167 166 166 166 167 167 166 166 Total operating expenses 2,843 2,798 2,261 1,684 1,535 1,234 956 743 Other income: Interest income 34 31 3 — — — — —Total other income 34 31 3 — — — — —Loss from operations, beforeincome taxes (2,809) (2,767) (2,258) (1,684) (1,535) (1,234) (956) (743)Income tax benefit — — — — (518) (483) (357) (299)Net loss (2,809) (2,767) (2,258) (1,684) (1,017) (751) (599) (444)Other comprehensive loss: Unrealized gain (loss) onavailable-for-sale securities,net of tax: 1 (8) — — — — — —Comprehensive loss $(2,808) $ (2,775) $ (2,258) $ (1,684) $(1,017) $ (751) $ (599) $ (444)Net loss per share Basic and diluted net loss pershare $(0.21) $(0.21) $(0.23) $(0.22) $(0.13) $(0.10) $(0.08) $(0.06)Weighted average shares usedto compute net loss percommon share — basic anddiluted 13,315 13,315 9,791 7,565 7,565 7,565 7,565 7,565 69 Table of Contents 14. Subsequent EventsLease AgreementIn January 2017, the Company entered into a new lease agreement (the “Lease”) for premises consisting of approximatelyfifteen thousand six hundred ninety-seven (15,697) rentable square feet located in Hayward, California (the “Premises”). The Premises will be used for the Company’s corporate headquarters and principal operating facility. The term of the Lease issixty-two (62) months, commencing on the date that is the earlier of (i) the date upon which the Company commences business inthe Premises or (ii) the date upon which the Premises is “Ready for Occupancy” as defined in the Lease. Base monthly rent shall beabated for the first two (2) months of the Lease term and thereafter will be $42,400 per month during the first year of the Leaseterm, with specified annual increases thereafter until reaching approximately $50,300 per month during the last two (2) months ofthe Lease term. The Company is required to pay a refundable security deposit of approximately $101,000. The Landlord isobligated to provide the Company with improvement allowances in the amount of approximately $135.00 per rentable square footof the Premises, which may be applied towards the costs of construction of the initial improvements in the Premises. The Companywill be responsible for any such improvement costs in excess of the foregoing allowances. The Company is required to reimburseLandlord for certain expenses during the Lease term. The Company has the right to extend the Lease term by five (5) years upon written notice not more than twelve (12)months nor less than nine (9) months prior to the expiration of the original Lease term, with monthly payments equal tothe “Fair Rental Value” as defined in the Lease. The Company has also reserved the right to terminate the Lease if theLandlord is unable to deliver the facility to the Company by December 1, 2017. Assuming the Landlord delivers thefacility to us by December 1, 2017, as of December 31, 2016, the lease obligations for less than one year, one to threeyears, three to five years and more than five years is approximately $0.3 million, $1.1 million, $1.1 million and $0.3million, respectively.Private PlacementOn February 7, 2017, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with Robert W.Duggan and Maky Zanganeh (the “Investors”), pursuant to which the Company, in a private placement, agreed to issue and sell tothe Investors an aggregate of 819,673 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”),at a price per share of $6.10 (the “Shares”), for gross proceeds of approximately $5 million (the “Private Placement”).In connection with the Private Placement, the Company has granted certain registration rights to the Investors, pursuant towhich, among other things, the Company will prepare and file with the Securities and Exchange Commission a registrationstatement to register for resale the Shares on or prior to July 31, 2017. 70 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. Item 9A. Controls and ProceduresEvaluation of Disclosure Controls and ProceduresOur management, including our Chief Executive Officer and our Chief Financial Officer, conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e)under the Exchange Act of 1934, as amended, as of the end of the period covered by this Annual Report on Form 10-K. Based onthis evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls andprocedures were not effective at the reasonable level of assurance due to a material weakness in internal control over financialreporting.In connection with the audit of our financial statements as of and for the year ended December 31, 2016, we identified amaterial weakness in our internal control over financial reporting. The material weakness related to a lack of effective controls toadequately restrict access and segregate duties. Specifically, due to the limited number of staff in our accounting function, certainpersonnel had the ability to prepare and post journal entries without a qualified independent review performed by someonewithout this ability. Upon identifying this material weakness, we performed additional procedures to evaluate the impact on thefinancial statements. Based on these procedures, we believe the material weakness did not result in any material misstatements toour financial statements. However, this material weakness could result in a misstatement of our accounts or disclosures that wouldresult in a material misstatement of our financial statements that would not be prevented or detected. We are implementingmeasures designed to improve our internal control over financial reporting to remediate this material weakness, including thefollowing:·We are evaluating our accounting system access rights so that there are accounting personnel without journal entryaccess who can perform review activities.·We are formalizing our internal control documentation and strengthening supervisory reviews by our management.·We are in the process of adding additional accounting personnel and will be segregating duties amongst accountingpersonnel.We cannot assure you that the measures we have taken to date, and are continuing to implement, will be sufficient toremediate the material weakness we have identified or avoid potential future material weaknesses. If the steps we take do notcorrect the material weakness in a timely manner, we will be unable to conclude that we maintain effective internal control overfinancial reporting. Accordingly, there could continue to be a reasonable possibility that a material misstatement of our financialstatements would not be prevented or detected on a timely basis.Management’s Annual Report on Internal Control Over Financial ReportingThis Annual Report on Form 10-K does not include a report of management's assessment regarding internal control overfinancial reporting or an attestation report from our independent registered public accounting firm due to a transition periodestablished by rules of the SEC for newly public companies. Changes in Internal Control over Financial ReportingThere were no changes in our internal controls over financial reporting identified in management’s evaluation pursuant toRules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended December 31, 2016 that materiallyaffected, or are reasonably likely to materially affect, our internal control over financial reporting. 71 Table of Contents Inherent Limitations on Effectiveness of ControlsOur management does not expect that our disclosure controls and procedures or our internal control over financial reportingwill prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable,not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect thefact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of theinherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues andinstances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-makingcan be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented bythe individual acts of some persons, by collusion of two or more people or by management override of the controls. The design ofany system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be noassurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls maybecome inadequate because of changes in conditions, or the degree of compliance with 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 not bedetected. Item 9B. Other InformationNone. 72 Table of Contents Part III Item 10. Directors, Executive Officers and Corporate GovernanceInformation responsive to this item is incorporated herein by reference to our definitive proxy statement with respect to our2017 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year covered by thisAnnual Report on Form 10-K. Item 11. Executive CompensationInformation responsive to this item is incorporated herein by reference to our definitive proxy statement with respect to our2017 Annual Meeting of Stockholder to be filed with the SEC within 120 days after the end of the fiscal year covered by thisAnnual Report on Form 10-K. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersInformation responsive to this item is incorporated herein by reference to our definitive proxy statement with respect to our2017 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year covered by thisAnnual Report on Form 10-K. Item 13. Certain Relationships and Related Transactions, and Director IndependenceInformation responsive to this item is incorporated herein by reference to our definitive proxy statement with respect to our2017 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year covered by thisAnnual Report on Form 10-K. Item 14. Principal Accounting Fees and ServicesInformation responsive to this item is incorporated herein by reference to our definitive proxy statement with respect to our2017 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year covered by thisAnnual Report on Form 10-K. 73 Table of Contents Part IV Item 15. Exhibits, Financial Statement Schedules(a) The following documents are filed as part of, or incorporated by reference into, this Annual Report on Form 10-K: 1. Financial Statements: See Item 8 of this Annual Report on Form 10-K. 2. Financial Statement Schedules: All schedules are omitted because they are not required, are not applicable or theinformation is included in the consolidated financial statements or notes thereto. 3. Exhibits: We have filed, or incorporated by reference into this Annual Report on Form 10-K, the exhibits listed on theaccompanying Exhibit Index immediately following the signature page of this Annual Report on Form 10-K. (b) Exhibits: See Item 15(a)(3) above. (c) Financial Statement Schedules: See Item 15(a)(2) above. 74 Table of Contents Signatures Pursuant to the requirements of the Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has dulycaused this report to be signed on its behalf by the undersigned, thereunto duly authorized. PULSE BIOSCIENCES, INC. Date: March 20, 2017 By:/s/ BRIAN B. DOW Brian B. Dow Chief Financial Officer, Senior Vice President of Financeand Administration, Secretary and Treasurer(Principal Financial and Principal Accounting Officer) POWER OF ATTORNEYKNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes andappoints Darrin R. Uecker and Brian B. Dow, jointly and severally, as his true and lawful attorney-in-fact and agent, with fullpower of substitution, each with power to act alone, to sign and execute on behalf of the undersigned any and all amendments tothis Annual Report on Form 10-K, and to perform any acts necessary in order to file the same, with all exhibits thereto and otherdocuments in connection therewith with the Securities and Exchange Commission, granting unto said attorney-in-fact and agentfull power and authority to do and perform each and every act and thing requested and necessary to be done in connectiontherewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that saidattorney-in-fact and agent, or their or his or her substitutes, shall do or cause to be done by virtue hereof.Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons onbehalf of the Registrant in the capacities and on the dates indicated. ArnSignature Title Date /s/ Darrin R. Uecker Darrin R. UeckerPresident, Chief Executive Officer and Director(Principal Executive Officer)March 20, 2017/s/ Brian B. Dow Brian B. DowChief Financial Officer, Senior Vice President ofFinance and Administration, Secretary and Treasurer(Principal Financial and Principal AccountingOfficer)March 20, 2017/s/ Robert M. Levande Robert M. LevandeDirectorMarch 20, 2017 /s/ Robert Greenberg, M.D. Robert Greenberg, M.D.DirectorMarch 20, 2017/s/ Mitchell Levinson Mitchell LevinsonDirectorMarch 20, 2017/s/ Maky Zanganeh Maky Zanganeh DirectorMarch 20, 2017 75 Table of Contents Exhibit Index ExhibitIncorporation by ReferenceNumberExhibit Description FormFile No.Exhibit(s)Filing Date1.1Form of Underwriting AgreementS-1333-2086941.1May 3, 20163.1Articles of Incorporation of the Registrant, as amended on December8, 2015S-1333-2086943.1December 22,20153.2Amended and Restated Bylaws of Pulse Biosciences, Inc.8-K001-377443.1February 10,20174.1Specimen Certificate representing shares of common stock ofRegistrantS-1333-2086944.1March 7, 20164.2Form of Warrant dated November 9, 2014 issued to MDB CapitalGroup, LLCS-1333-2086944.2December 22,20154.3Form of Underwriters' WarrantS-1333-2086944.3March 28, 201610.1*Lease for facilities at 3955 Point Eden Way, Hayward, California,dated January 26, 201710.2Eighth Amendment to Lease Agreement - ARE-819/863 Mitten Road,LLC and the Registrant10-Q001-3774410.1August 10, 201610.3#License Agreement among Old Dominion University ResearchFoundation, Eastern Virginia Medical School and the RegistrantS-1333-20869410.12May 3, 201610.4Amendments No. 1 to License Agreement among Old DominionUniversity Research Foundation, Eastern Virgina Medical School andthe RegistrantS-1333-20869410.13March 7, 201610.5#License Agreement among Univeristy of Southern California, TheAlfred Mann Institute and the RegistrantS-1333-20869410.14May 3, 201610.6#Amendment No. 1 to the License Agreement among University ofSouthern California, The Alfred Mann Institute and the RegistrantS-1333-20869410.15May 3, 201610.7Securities Purchase Agreement, dated February 7, 2017, by andbetween Pulse Biosciences, Inc. and certain purchasers8-K001-3774410.1February 10,201710.82015 Stock Incentive PlanS-1333-20869410.2December 22,201510.9Form of Director Option Agreement, not issued under the 2015 StockIncentive PlanS-1333-20869410.3December 22,201510.10+Employment Agreement between Dr. Richard Nuccitelli and theRegistrantS-1333-20869410.8December 22,201510.11+Executive Employment Agreement between Darrin R. Uecker and theRegistrantS-1333-20869410.9December 22,201510.12+Amendment to Employment Agreement between Darrin R. Ueckerand Pulse Biosciences, Inc. dated October 5, 20168-K001-3774410.10October 11, 201610.13+Executive Employment Agreement between Brian B. Dow and theRegistrantS-1333-20869410.14December 22,201510.14+Form of At-Will Employment, Confidential Information, InventionAssignment, and Arbitration Agreement for EmployeesS-1333-20869410.10December 22,201510.15Engagement Agreement dated September 15, 2014 between MDBCapital Group LLC and the RegistrantS-1333-20869410.4December 22,201510.16Form of Securities Purchase Agreement dated November 6, 2014,among the purchasers of common stock and the RegistrantS-1333-20869410.5December 22,201510.17Form of Registration Rights Agreement dated November 6, 2014,among the purchasers of common stock and the RegistrantS-1333-20869410.6December 22,201510.18Form of Registration Rights Agreement dated November 6, 2014,among the holders of placement warrants and the RegistrantS-1333-20869410.7December 22,201521.1*List of Subsidiaries 76 Table of Contents 31.1Certification of Chief Executive Officer pursuant to Section 302 ofthe Sarbanes-Oxley Act of 2002. 31.2Certification of Chief Financial Officer pursuant to Section 302 of theSarbanes-Oxley Act of 2002. 32.1*Certification of the Chief Executive and Chief Financial Officerspursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C.Section 1350).101.INSXBRL Instance Document101.SCHXBRL Taxonomy Extension Schema Document101.CALXBRL Taxonomy Extension Calculation Linkbase Document101.DEFXBRL Taxonomy Extension Definition Linkbase Document101.LABXBRL Taxonomy Extension Label Linkbase Document101.PREXBRL Taxonomy Extension Presentation Linkbase Document* Filed herewith+ Indicates a management contract or compensatory plan orarrangement.# Portions of this exhibit (indicated by asterisks) have been omittedpusuant to a grant of confidential treatment. 77BRITANNIA POINT EDENLEASEThis Lease (the "Lease"), dated as of the date set forth in Section 1 of the Summary of Basic Lease Information (the"Summary"), below, is made by and between HAYWARD POINT EDEN I LIMITED PARTNERSHIP, a Delaware limitedpartnership ("Landlord"), and PULSE BIOSCIENCES, INC., a Nevada corporation ("Tenant").SUMMARY OF BASIC LEASE INFORMATIONTERMS OF LEASEDESCRIPTION 1.Date: January 26 , 2017 2.Premises (Article 1). 2.1Building:3955 Point Eden Way Hayward, California 94545 Containing 60,158 rentable square feet of space 2.2Premises:Approximately 15,697 rentable square feet of space in the Building, asfurther set forth in Exhibit A to the Lease. 3.Lease Term (Article 2). 3.1Length of Term:Approximately five (5) years and two (2) months. 3.2Lease Commencement Date: The earlier to occur of (i) the date upon which Tenant first commences toconduct business in the Premises, and (ii) the date upon which thePremises is "Ready for Occupancy," as that term is set forth in the WorkLetter attached as Exhibit B to this Lease, which Lease CommencementDate is anticipated to be May 1, 2017. Lease Expiration Date:The last day of the sixty-second (62nd) full calendar month of the LeaseTerm. 8377633.2 (8383465.1)-1-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] 4.Base Rent (Article 3): Lease YearAnnualizedBase RentMonthlyInstallmentof Base RentApproximateMonthly BaseRent per RentableSquare Foot​1$508,582.80$42,381.90$2.70​2$526,383.20$43,865.27$2.79​3$544,806.61$45,400.55$2.89​4$563,874.84$46,989.57$2.99​5$583,610.46$48,634.21$3.10​6 (through LeaseExpiration Date)$604,036.83$50,336.40$3.21*Note: Tenant shall have no obligation to pay any Base Rent for the Premises attributable to the first two (2) full calendar monthsof the Lease Term (the "Base Rent Abatement Period"); provided, however, Tenant shall be required to pay Tenant's Share ofDirect Expenses attributable to such period, as well as for all utilities and other services.5.Tenant Improvement Allowance(Exhibit B):An amount equal to $2,119,095.00 per rentable square foot of thePremises (i.e., $135.00 based upon 15,697 rentable square feet in thePremises). 6.Tenant's Share (Article 4):26.1%. 7.Permitted Use (Article 5):The Premises shall be used only for general office, research anddevelopment, engineering, lab scale manufacturing, assembly, vivarium,laboratory, storage and/or warehouse uses, including, but not limited to,administrative offices and other lawful uses reasonably related to orincidental to such specified uses, all (i) consistent with first class lifesciences projects in Hayward, California ("First Class Life SciencesProjects"), and (ii) in compliance with, and subject to, applicable lawsand the terms of this Lease. 8.Security Deposit (Article 21):$100,672.80. 9.Parking (Article 28):3.5 unreserved parking spaces for every 1,000 rentable square feet of thePremises, subject to the terms of Article 28 of the Lease.8377633.2 (8383465.1)-2-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] 10.Address of Tenant (Section 29.18):849 Mitten Road, Suite 104 Burlingame, CA 94010 Attention: Chief Financial Officer (Prior to Lease Commencement Date) and The Premises Attention: Chief Financial Officer (After Lease Commencement Date) 11.Address of Landlord (Section 29.18):See Section 29.18 of the Lease. 12.Brokers (Section 29.24):Savills Studley San Jose and CBRE, Inc. 8377633.2 (8383465.1)-3-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] 1.PREMISES, BUILDING, PROJECT, AND COMMON AREAS1.1Premises, Building, Project and Common Areas.1.1.1The Premises. Landlord hereby leases to Tenant and Tenant hereby leases from Landlordthe premises set forth in Section 2.2 of the Summary (the "Premises"). The outline of the Premises is set forth in Exhibit A attached hereto. The outline of the "Building" and the "Project," as those terms are defined in Section 1.1.2 below, are furtherdepicted on the Site Plan attached hereto as Exhibit A-1. The parties hereto agree that the lease of the Premises is upon andsubject to the terms, covenants and conditions herein set forth, and Tenant covenants as a material part of the consideration forthis Lease to keep and perform each and all of such terms, covenants and conditions by it to be kept and performed and that thisLease is made upon the condition of such performance. The parties hereto hereby acknowledge that the purpose of Exhibit A isto show the approximate location of the Premises only, and such Exhibit is not meant to constitute an agreement, representationor warranty as to the construction of the Premises, the precise area thereof or the specific location of the "Common Areas," as thatterm is defined in Section 1.1.3, below, or the elements thereof or of the accessways to the Premises or the "Project," as that termis defined in Section 1.1.2, below. Except as specifically set forth in this Lease and in the Tenant Work Letter attached hereto asExhibit B (the "Tenant Work Letter"), Landlord shall not be obligated to provide or pay for any improvement work or servicesrelated to the improvement of the Premises. Tenant also acknowledges that neither Landlord nor any agent of Landlord hasmade any representation or warranty regarding the condition of the Premises, the Building or the Project or with respect to thesuitability of any of the foregoing for the conduct of Tenant's business, except as specifically set forth in this Lease and theTenant Work Letter. Landlord shall deliver the Premises to Tenant in good, vacant, broom clean condition, and otherwise in thesame condition as of the date of this Lease, in compliance with all Applicable Laws, with the roof water-tight and shall cause theplumbing, electrical systems, fire sprinkler system, lighting, and all other building systems serving the Premises in goodoperating condition and repair on or before the Lease Commencement Date, or such earlier date as Landlord and Tenantmutually agree. Landlord will be responsible at its sole cost for causing the exterior of the Building, the existing Buildingentrances, and all exterior Common Areas (including required striping and handicapped spaces in the parking areas) to be incompliance with Applicable Laws, to the extent required to allow the legal occupancy of the Premises or completion of theTenant Improvements.1.1.2The Building and The Project. The Premises constitutes a portion of the building set forthin Section 2.1 of the Summary (the "Building"). The Building is part of an office/laboratory project currently known as"Britannia Point Eden." The term "Project," as used in this Lease, shall mean (i) the Building and the Common Areas, (ii) theland (which is improved with landscaping, parking facilities and other improvements) upon which the Building and theCommon Areas are located, (iii) the other office/laboratory buildings located at Britannia Point Eden, and the land upon whichsuch adjacent office/laboratory buildings are located, and (iv) at Landlord's discretion, any additional real property, areas, land,buildings or other improvements added thereto outside of the Project (provided that any such additions do not increaseTenant’s obligations under this Lease).1.1.3Common Areas. Tenant shall have the non-exclusive right to use in common with othertenants in the Project, and subject to the rules and regulations referred to in Article 5 of this Lease, those portions of the Projectwhich are provided, from time to time, for use in common by Landlord, Tenant and any other tenants of the Project (such areas,together with such other portions of the Project designated by Landlord, in its discretion, are collectively referred to herein asthe "Common Areas"). Landlord shall maintain and operate the Common Areas, including all sprinkler and other systemsserving the Common Areas, in a first class manner, and the use thereof shall be subject to such rules, regulations and restrictionsas Landlord may reasonably make from time to time. Landlord reserves the right to close temporarily, make alterations oradditions to, or change the location of elements of the Project and the Common Areas, provided that in connection therewithLandlord will use commercially reasonable efforts to minimize any interference with Tenant's use of and access to the Premisesand parking areas.1.2Rentable Square Feet of Premises. The rentable square footage of the Premises is hereby deemed to be as setforth in Section 2.2 of the Summary, and shall not be subject to measurement or adjustment during the Lease Term. 8377633.2 (8383465.1)-4-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] 2.LEASE TERM; OPTION TERM2.1Lease Term. The terms and provisions of this Lease shall be effective as of the date of this Lease. The term ofthis Lease (the "Lease Term") shall be as set forth in Section 3.1 of the Summary, shall commence on the date set forth inSection 3.2 of the Summary (the "Lease Commencement Date"), and shall terminate on the date set forth in Section 3.3 of theSummary (the "Lease Expiration Date") unless this Lease is sooner terminated as hereinafter provided. For purposes of thisLease, the term "Lease Year" shall mean each consecutive twelve (12) month period during the Lease Term. At any time duringthe Lease Term, Landlord may deliver to Tenant a notice in the form as set forth in Exhibit C, attached hereto, as a confirmationonly of the information set forth therein, which Tenant shall execute and return to Landlord within five (5) business days ofreceipt thereof. Notwithstanding the foregoing, if Landlord has not delivered possession of the Premises in the conditionrequired by Section 1.1.1, above, (1) on or before September 1, 2017, then, as Tenant’s sole remedy for such delay, the dateTenant is otherwise obligated to commence payment of rent shall be delayed by one day for each day that the delivery date isdelayed beyond such date, or (2) December 1, 2017, then, Tenant shall also have the right to terminate this Lease by writtennotice thereof to Landlord, whereupon any monies previously paid by Tenant to Landlord shall be reimbursed to Tenant. Theforegoing dates shall be extended to the extent of any delays in delivery of possession caused by (i) Tenant Delay, as providedin Section 1(j) of the Tenant Work Letter, or (ii) war, terrorism, acts of God, natural disaster, civil unrest, governmental strike orarea-wide or industry-wide labor disputes, inability to obtain services, labor, or materials or reasonable substitutes therefor, ordelays due to utility companies that are not the result of any action or inaction of Landlord (provided that any such delay in thisitem (ii) shall not extend any such date by more than ninety (90) days).2.2Option Term.2.2.1Option Right. Landlord hereby grants the Tenant originally named in this Lease (the“Original Tenant”), and any assignee of Original Tenant's entire interest in the Lease that has been approved in accordancewith the terms of Article 14, below (a “Permitted Assignee”), one (1) option to extend the Lease Term for a period of five (5)years (the “Option Term”). Such option to extend shall be exercisable only by written notice delivered by Tenant to Landlordnot more than twelve (12) months nor less than nine (9) months prior to the expiration of the initial Lease Term, stating thatTenant is thereby irrevocably exercising its option to lease the Premises during the Option Term, provided that the followingconditions (the "Option Conditions") are satisfied: (i) as of the date of delivery of such notice, Tenant is not in default under thisLease, after the expiration of any applicable notice and cure period; (ii) Tenant has not previously been in default under thisLease, after the expiration of any applicable notice and cure period, more than twice in the twelve (12) month period prior to thedate of Tenant's attempted exercise; and (iii) the Lease then remains in full force and effect. Landlord may, at Landlord's option,exercised in Landlord's sole and absolute discretion, waive any of the Option Conditions in which case the option, if otherwiseproperly exercised by Tenant, shall remain in full force and effect. Upon the proper exercise of such option to extend, andprovided that Tenant satisfies all of the Option Conditions (except those, if any, which are waived by Landlord), the LeaseTerm, shall be extended for a period of five (5) years. The rights contained in this Section 2.2 shall be personal to OriginalTenant and any Permitted Assignee (and not any other assignee, sublessee or “Transferee,” as that term is defined in Section14.1, below, of Tenant’s interest in this Lease). In the event that Tenant fails to timely and appropriately exercise its option toextend the Lease Term in accordance with the terms of this Section 2.2, then such option shall automatically terminate and shallbe of no further force or effect.2.2.2Option Rent. The Base Rent payable by Tenant during the Option Term (the "OptionRent") shall be equal to the "Fair Rental Value," as that term is defined below, for the Premises as of the commencement date ofthe Option Term. The "Fair Rental Value," as used in this Lease, shall be equal to the annual rent per rentable square foot(including additional rent and considering any "base year" or "expense stop" applicable thereto), including all escalations, atwhich tenants (pursuant to leases consummated within the twelve (12) month period preceding the first day of the Option Term),are leasing non-sublease, non-encumbered, non- equity space which is not significantly greater or smaller in size than thesubject space, with a comparable level of improvements (excluding any property that Tenant would be allowed to remove fromthe Premises at the termination of the Lease), for a comparable lease term, in an arm's length transaction, which comparablespace is located in the "Comparable Buildings," as that term is defined in this Section 2.2.2, below (transactions satisfying theforegoing criteria shall be known as the "Comparable Transactions"), taking into consideration the following8377633.2 (8383465.1)-5-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] concessions (the "Concessions"): (a) rental abatement concessions, if any, being granted such tenants in connection with suchcomparable space; (b) tenant improvements or allowances provided or to be provided for such comparable space, and taking intoaccount the value, if any, of the existing improvements in the subject space (other than improvements installed by Tenant atTenant's sole cost and expense), such value to be based upon the age, condition, design, quality of finishes and layout of theimprovements and the extent to which the same can be utilized for the Permitted Use by user other than Tenant; and (c) otherreasonable monetary concessions being granted such tenants in connection with such comparable space. The Concessions shallbe reflected in the effective rental rate (which effective rental rate shall take into consideration the total dollar value of suchConcessions as amortized on a straight-line basis over the applicable term of the Comparable Transaction (in which case suchConcessions evidenced in the effective rental rate shall not be granted to Tenant)) payable by Tenant. The term “ComparableBuildings” shall mean the Building and those other buildings which are comparable to the Building in terms of age (based uponthe date of completion of construction or major renovation of the building), quality of construction, level of services andamenities, size and appearance, and located in First Class Life Sciences Project in Hayward, California and the surroundingcommercial area.2.2.3Determination of Option Rent. In the event Tenant timely and appropriately exercises itsoption to extend the Lease Term, Landlord shall notify Tenant of Landlord's determination of the Option Rent on or before thedate that is thirty (30) days following Landlord's receipt of the Option Exercise Notice. If Tenant, on or before the date which isten (10) business days following the date upon which Tenant receives Landlord's determination of the Option Rent, in goodfaith objects to Landlord's determination of the Option Rent, then Landlord and Tenant shall attempt to agree upon the OptionRent using their best good-faith efforts. If Landlord and Tenant fail to reach agreement within ten (10) business days followingTenant's objection to the Option Rent (the "Outside Agreement Date"), then Tenant shall have the right to withdraw its exerciseof the option by delivering written notice thereof to Landlord within five (5) days thereafter, in which event Tenant's right toextend the Lease pursuant to this Section 2.2 shall be of no further force or effect. If Tenant does not withdraw its exercise of theextension option, each party shall thereafter make a separate determination of the Option Rent, within ten (10) days of theOutside Agreement Date, and such determinations shall be submitted to arbitration in accordance with Sections 2.2.3.1 through2.2.3.8, below. If Tenant fails to object to Landlord's determination of the Option Rent within the time period set forth herein,then Tenant shall be deemed to have accepted Landlord's determination of Option Rent.2.2.3.1Landlord and Tenant shall each appoint one arbitrator who shall be a realestate appraiser who shall have been active over the five (5) year period ending on the date of such appointment in the appraisal,of other class A life sciences buildings located in Hayward, California. Each such arbitrator shall be appointed within twenty(20) days after the Outside Agreement Date. Landlord and Tenant may consult with their selected arbitrators prior toappointment and may select an arbitrator who is favorable to their respective positions. The arbitrators so selected by Landlordand Tenant shall be deemed "Advocate Arbitrators."2.2.3.2The two (2) Advocate Arbitrators so appointed shall be specificallyrequired pursuant to an engagement letter within ten (10) days of the date of the appointment of the last appointed AdvocateArbitrator to agree upon and appoint a third arbitrator ("Neutral Arbitrator") who shall be qualified under the same criteria setforth hereinabove for qualification of the two Advocate Arbitrators, except that neither the Landlord or Tenant or either parties'Advocate Arbitrator may, directly or indirectly, consult with the Neutral Arbitrator prior or subsequent to his or herappointment. The Neutral Arbitrator shall be retained via an engagement letter jointly prepared by Landlord's counsel andTenant’s counsel.2.2.3.3The three arbitrators shall, within thirty (30) days of the appointment ofthe Neutral Arbitrator, reach a decision as to whether the parties shall use Landlord's or Tenant's submitted Option Rent, andshall notify Landlord and Tenant thereof. The determination of the arbitrators shall be limited solely to the issue of whetherLandlord's or Tenant's submitted Option Rent is the closest to the actual Option Rent, taking into account the requirements ofSection 2.2.2 of this Lease, as determined by the arbitrators.2.2.3.4The decision of the majority of the three arbitrators shall be bindingupon Landlord and Tenant.8377633.2 (8383465.1)-6-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] 2.2.3.5If either Landlord or Tenant fails to appoint an Advocate Arbitratorwithin twenty (20) days after the Outside Agreement Date, then either party may petition the presiding judge of the SuperiorCourt of Alameda County to appoint such Advocate Arbitrator subject to the criteria in Section 2.2.3.1 of this Lease, or if he orshe refuses to act, either party may petition any judge having jurisdiction over the parties to appoint such Advocate Arbitrator.2.2.3.6If the two (2) Advocate Arbitrators fail to agree upon and appoint theNeutral Arbitrator within ten (10) business days after the appointment of the last appointed Advocate Arbitrator, then eitherparty may petition the presiding judge of the Superior Court of Alameda County to appoint the Neutral Arbitrator, subject tocriteria in Section 2.2.3.2 of this Lease, or if he or she refuses to act, either party may petition any judge having jurisdiction overthe parties to appoint such arbitrator.2.2.3.7The cost of the arbitration shall be paid by Landlord and Tenant equally.2.2.3.8In the event that the Option Rent shall not have been determinedpursuant to the terms hereof prior to the commencement of the Option Term, Tenant shall be required to pay the Option Rentinitially provided by Landlord to Tenant, and upon the final determination of the Option Rent, the payments made by Tenantshall be reconciled with the actual amounts of Option Rent due, and the appropriate party shall make any correspondingpayment to the other party.3.BASE RENT Tenant shall pay, without prior notice or demand, to Landlord or Landlord's agent at the managementoffice of the Project, or, at Landlord's option, at such other place as Landlord may from time to time designate in writing, by acheck for currency which, at the time of payment, is legal tender for private or public debts in the United States of America, baserent ("Base Rent") as set forth in Section 4 of the Summary, payable in equal monthly installments as set forth in Section 4 of theSummary in advance on or before the first day of each and every calendar month during the Lease Term, without any setoff ordeduction whatsoever. The Base Rent for the third (3rd) full month of the Lease Term shall be paid at the time of Tenant'sexecution of this Lease. If any Rent payment date (including the Lease Commencement Date) falls on a day of the month otherthan the first day of such month or if any payment of Rent is for a period which is shorter than one month, the Rent for anyfractional month shall accrue on a daily basis for the period from the date such payment is due to the end of such calendarmonth or to the end of the Lease Term at a rate per day which is equal to 1/365 of the applicable annual Rent. All otherpayments or adjustments required to be made under the terms of this Lease that require proration on a time basis shall beprorated on the same basis.4.ADDITIONAL RENT4.1General Terms.4.1.1Direct Expenses; Additional Rent. In addition to paying the Base Rent specified in Article3 of this Lease, Tenant shall pay during the Lease Term "Tenant's Share" of the annual "Direct Expenses," as those terms aredefined in Sections 4.2.6 and 4.2.2 of this Lease, respectively, allocable to the Building as described in Section 4.3. Suchpayments by Tenant, together with any and all other amounts payable by Tenant to Landlord pursuant to the terms of thisLease, are hereinafter collectively referred to as the "Additional Rent", and the Base Rent and the Additional Rent are hereincollectively referred to as "Rent." All amounts due under this Article 4 as Additional Rent shall be payable for the same periodsand in the same manner as the Base Rent. Without limitation on other obligations of Tenant which survive the expiration of theLease Term, the obligations of Tenant to pay the Additional Rent provided for in this Article 4 shall survive the expiration ofthe Lease Term.4.1.2Triple Net Lease. Landlord and Tenant acknowledge that, to the extent provided in thisLease, it is their intent and agreement that this Lease be a "TRIPLE NET" lease and that as such, the provisions contained inthis Lease are intended to pass on to Tenant or reimburse Landlord for the costs and expenses reasonably associated with thisLease, the Building and the Project, and Tenant's operation therefrom to the extent provided in this Lease. To the extent suchcosts and expenses payable by Tenant cannot be charged directly to, and paid by, Tenant, such costs and expenses shall be paidby Landlord but reimbursed by Tenant as Additional Rent. 8377633.2 (8383465.1)-7-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] 4.2Definitions of Key Terms Relating to Additional Rent. As used in this Article 4, the following terms shallhave the meanings hereinafter set forth:4.2.1Intentionally Deleted.4.2.2"Direct Expenses" shall mean "Operating Expenses" and "Tax Expenses."4.2.3"Expense Year" shall mean each calendar year in which any portion of the Lease Termfalls, through and including the calendar year in which the Lease Term expires, provided that Landlord, upon notice to Tenant,may change the Expense Year from time to time to any other twelve (12) consecutive month period, and, in the event of anysuch change, Tenant's Share of Direct Expenses shall be equitably adjusted for any Expense Year involved in any such change.4.2.4"Operating Expenses" shall mean all expenses, costs and amounts of every kind and naturewhich Landlord pays or accrues during any Expense Year because of or in connection with the ownership, management,maintenance, security, repair, replacement, restoration or operation of the Project, or any portion thereof. Without limiting thegenerality of the foregoing, Operating Expenses shall specifically include any and all of the following: (i) the cost of supplyingall utilities, the cost of operating, repairing and maintaining the utility, telephone, mechanical, sanitary, storm drainage, andelevator systems, and the cost of maintenance and service contracts in connection therewith; (ii) the cost of licenses, certificates,permits and inspections and the cost of contesting any governmental enactments which are reasonably likely to increaseOperating Expenses during the Lease Term, and the costs incurred in connection with a governmentally mandatedtransportation system management program or similar program; (iii) the cost of all insurance carried by Landlord in connectionwith the Project and Premises as reasonably determined by Landlord; (iv) the cost of landscaping, relamping, and all supplies,tools, equipment and materials used in the operation, repair and maintenance of the Project, or any portion thereof; (v) the costof parking area operation, repair, restoration, and maintenance; (vi) management and/or incentive fees, consulting fees, legalfees and accounting fees, of all contractors and consultants in connection with the management, operation, maintenance andrepair of the Project; (vii) payments under any equipment rental agreements; (viii) subject to item (f), below, wages, salaries andother compensation and benefits, including taxes levied thereon, of all persons engaged in the operation, maintenance andsecurity of the Project; (ix) costs under any easement pertaining to the sharing of costs by the Project; (x) operation, repair,maintenance and replacement of all systems and equipment and components thereof of the Project; (xi) the cost of janitorial,alarm, security and other services, replacement of wall and floor coverings, ceiling tiles and fixtures in Common Areas,maintenance and replacement of curbs and walkways, repair to roofs and re-roofing; (xii) amortization (including commerciallyreasonable interest on the unamortized cost) over such period of time as Landlord shall reasonably determine, of the cost ofacquiring or the rental expense of personal property used in the maintenance, operation and repair of the Project, or any portionthereof; (xiii) the cost of capital improvements or other costs incurred in connection with the Project (A) which are intended toeffect economies in the operation or maintenance of the Project, or any portion thereof, or to reduce current or future OperatingExpenses or to enhance the safety or security of the Project or its occupants, (B) which are required to comply with present oranticipated conservation programs, (C) which are replacements or modifications of nonstructural items located in the CommonAreas required to keep the Common Areas in good order or condition, or (D) which are required under any governmental law orregulation; provided, however, notwithstanding anything to the contrary herein, that any capital expenditure shall be amortized(including reasonable interest on the amortized cost) over the reasonable useful life of such capital item before being includedin Operating Expenses; (xiv) costs, fees, charges or assessments imposed by, or resulting from any mandate imposed onLandlord by, any federal, state or local government for fire and police protection, trash removal, community services, or otherservices which do not constitute "Tax Expenses" as that term is defined in Section 4.2.5, below; and (xv) payments under anyeasement, license, operating agreement, declaration, restrictive covenant, or instrument pertaining to the sharing of costs by theBuilding, including, without limitation, any covenants, conditions and restrictions affecting the property, and reciprocaleasement agreements affecting the property, any parking licenses, and any agreements with transit agencies affecting theProperty (collectively, "Underlying Documents"). Notwithstanding the foregoing, for purposes of this Lease, OperatingExpenses shall not, however, include:(a)costs, including legal fees, space planners' fees, advertising and promotionalexpenses (except as otherwise set forth above), and brokerage fees incurred in connection with the original 8377633.2 (8383465.1)-8-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] construction or development, or original or future leasing of the Project, and costs, including permit, license andinspection costs, incurred with respect to the installation of tenant improvements made for new tenants initiallyoccupying space in the Project after the Lease Commencement Date or incurred in renovating or otherwise improving,decorating, painting or redecorating vacant space for tenants or other occupants of the Project (excluding, however,such costs relating to any common areas of the Project or parking facilities);(b)except as set forth in items (xii), (xiii), and (xiv) above, depreciation, interest andprincipal payments on mortgages and other debt costs, if any, penalties and interest;(c)costs for which the Landlord is reimbursed by any tenant or occupant of the Projector by insurance by its carrier or any tenant's carrier or by anyone else, electric power costs for which any tenant directlycontracts with the local public service company and costs of utilities and services provided to other tenants that are notprovided to Tenant;(d)any bad debt loss, rent loss, or reserves for bad debts or rent loss or other reserves tothe extent not used in the same year;(e)costs associated with the operation of the business of the partnership or entitywhich constitutes the Landlord, as the same are distinguished from the costs of operation of the Project (which shallspecifically include, but not be limited to, accounting costs associated with the operation of the Project). Costsassociated with the operation of the business of the partnership or entity which constitutes the Landlord include costsof partnership accounting and legal matters, costs of defending any lawsuits with any mortgagee (except as the actionsof the Tenant may be in issue), costs of selling, syndicating, financing, mortgaging or hypothecating any of theLandlord's interest in the Project, and costs incurred in connection with any disputes between Landlord and itsemployees, between Landlord and Project management, or between Landlord and other tenants or occupants;(f)the wages and benefits of any employee who does not devote substantially all of hisor her employed time to the Project unless such wages and benefits are prorated to reflect time spent on operating andmanaging the Project vis-a-vis time spent on matters unrelated to operating and managing the Project; provided, that inno event shall Operating Expenses for purposes of this Lease include wages and/or benefits attributable to personnelabove the level of Project manager;(g)amount paid as ground rental for the Project by the Landlord;(h)except for a property management fee not to exceed three percent (3%) of grossrevenues, overhead and profit increment paid to the Landlord, and any amounts paid to the Landlord or to subsidiariesor affiliates of the Landlord for services in the Project to the extent the same exceeds the costs of such services renderedby qualified, first-class unaffiliated third parties on a competitive basis;(i)any compensation paid to clerks, attendants or other persons in commercialconcessions operated by the Landlord (other than as direct reimbursement for costs which, if incurred directly byLandlord, would properly be included in Operating Expenses);(j)rentals and other related expenses incurred in leasing air conditioning systems,elevators or other equipment which if purchased the cost of which would be excluded from Operating Expenses as acapital cost, except equipment not affixed to the Project which is used in providing engineering, janitorial or similarservices and, further excepting from this exclusion such equipment rented or leased to remedy or ameliorate anemergency condition in the Project;(k)all items and services for which Tenant or any other tenant in the Projectreimburses Landlord or which Landlord provides selectively to one or more tenants (other than Tenant) withoutreimbursement;(l)any costs expressly excluded from Operating Expenses elsewhere in this Lease;8377633.2 (8383465.1)-9-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] (m)rent for any office space occupied by Project management personnel;(n)costs arising from the gross negligence or willful misconduct of Landlord or itsagents, employees or contractors in connection with this Lease;(o)costs incurred to comply with laws relating to the removal or remediation ofhazardous material (as defined under applicable law), and any costs of fines or penalties relating to the presence ofhazardous material, in each case to the extent not brought into the Building or Premises by Tenant or any TenantParties;(p)costs to correct any construction defect in the Project or to remedy any violation ofa covenant, condition, restriction, underwriter’s requirement or law that exists as of the Lease Commencement Date;(q)capital costs occasioned by casualties or condemnation;(r)legal fees, accountants’ fees (other than normal bookkeeping expenses) and otherexpenses incurred in connection with disputes of tenant or other occupants of the Project or associated with theenforcement of the terms of any leases with tenants or the defense of Landlord’s title to or interest in the Project or anypart thereof;(s)costs incurred due to a violation by Landlord or any other tenant of the Project ofthe terms and conditions of a lease; and(t)self-insurance retentions.4.2.5Taxes.4.2.5.1"Tax Expenses" shall mean all federal, state, county, or localgovernmental or municipal taxes, fees, charges or other impositions of every kind and nature, whether general, special, ordinaryor extraordinary (including, without limitation, real estate taxes, general and special assessments, transit taxes, leasehold taxesor taxes based upon the receipt of rent, including gross receipts or sales taxes applicable to the receipt of rent, unless required tobe paid by Tenant, personal property taxes imposed upon the fixtures, machinery, equipment, apparatus, systems andequipment, appurtenances, furniture and other personal property used in connection with the Project, or any portion thereof),which shall be paid or accrued during any Expense Year (without regard to any different fiscal year used by such governmentalor municipal authority) because of or in connection with the ownership, leasing and operation of the Project, or any portionthereof.4.2.5.2Tax Expenses shall include, without limitation: (i) Any tax on the rent,right to rent or other income from the Project, or any portion thereof, or as against the business of leasing the Project, or anyportion thereof; (ii) Any assessment, tax, fee, levy or charge in addition to, or in substitution, partially or totally, of anyassessment, tax, fee, levy or charge previously included within the definition of real property tax; (iii) Any assessment, tax, fee,levy, or charge allocable to or measured by the area of the Premises or the Rent payable hereunder, including, withoutlimitation, any business or gross income tax or excise tax with respect to the receipt of such rent, or upon or with respect to thepossession, leasing, operating, management, maintenance, alteration, repair, use or occupancy by Tenant of the Premises, or anyportion thereof; and (iv) Any assessment, tax, fee, levy or charge, upon this transaction or any document to which Tenant is aparty, creating or transferring an interest or an estate in the Premises or the improvements thereon.4.2.5.3Any costs and expenses (including, without limitation, reasonableattorneys' and consultants' fees) incurred in attempting to protest, reduce or minimize Tax Expenses shall be included in TaxExpenses in the Expense Year such expenses are incurred. Tax refunds shall be credited against Tax Expenses and refunded toTenant regardless of when received, based on the Expense Year to which the refund is applicable, provided that in no eventshall the amount to be refunded to Tenant for any such Expense Year exceed the total amount paid by Tenant as AdditionalRent under this Article 4 for such Expense Year. If Tax Expenses for any8377633.2 (8383465.1)-10-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] period during the Lease Term or any extension thereof are increased after payment thereof for any reason, including, withoutlimitation, error or reassessment by applicable governmental or municipal authorities, Tenant shall pay Landlord upon demandTenant's Share of any such increased Tax Expenses. Notwithstanding anything to the contrary contained in this Section 4.2.5,there shall be excluded from Tax Expenses (i) all excess profits taxes, franchise taxes, gift taxes, capital stock taxes, inheritanceand succession taxes, transfer taxes, estate taxes, federal and state income taxes, and other taxes to the extent applicable toLandlord's net income (as opposed to rents, receipts or income attributable to operations at the Project), (ii) any items included asOperating Expenses, (iii) any items paid by Tenant under Section 4.5 of this Lease, (iv) assessments in excess of the amountwhich would be payable if such assessment expense were paid in installments over the longest permitted term, (v) taxes imposedon land and improvements other than the Project and (vi) tax increases resulting from the improvement of any of the Project forthe sole use of other occupants.4.2.6"Tenant's Share" shall mean the percentage set forth in Section 6 of the Summary.4.3Allocation of Direct Expenses. The parties acknowledge that the Building is a part of a multi- buildingproject and that the costs and expenses incurred in connection with the Project (i.e., the Direct Expenses) should be sharedbetween the Building and the other buildings in the Project. Accordingly, as set forth in Section 4.2 above, Direct Expenses(which consist of Operating Expenses and Tax Expenses) are determined annually for the Project as a whole, and a portion of theDirect Expenses, which portion shall be determined by Landlord on an equitable basis, shall be allocated to the Building (asopposed to other buildings in the Project). Such portion of Direct Expenses allocated to the Building shall include all DirectExpenses attributable solely to the Building and a pro rata portion of the Direct Expenses attributable to the Project as a whole,and shall not include Direct Expenses attributable solely to other buildings in the Project.4.4Calculation and Payment of Additional Rent. Commencing on the Lease Commencement Date, Tenantshall pay to Landlord, in the manner set forth in Section 4.4.1, below, and as Additional Rent, Tenant's Share of Direct Expensesfor each Expense Year during the Lease Term.4.4.1Statement of Actual Direct Expenses and Payment by Tenant. Landlord shall give toTenant within five (5) months following the end of each Expense Year (provided that Landlord agrees to utilize commerciallyreasonable efforts to deliver such Statement to Tenant as soon as practicable following the end of each Expense Year), astatement (the "Statement") which shall state the Direct Expenses incurred or accrued for such preceding Expense Year, andwhich shall indicate the amount of Tenant's Share of Direct Expenses. Upon receipt of the Statement for each Expense Yearcommencing or ending during the Lease Term, Tenant shall pay, with its next installment of Base Rent due that is at least thirty(30) days thereafter, the full amount of Tenant's Share of Direct Expenses for such Expense Year, less the amounts, if any, paidduring such Expense Year as "Estimated Direct Expenses," as that term is defined in Section 4.4.2, below, and if Tenant paidmore as Estimated Direct Expenses than the actual Tenant's Share of Direct Expenses, Tenant shall receive a credit in the amountof Tenant's overpayment against Rent next due under this Lease. The failure of Landlord to timely furnish the Statement for anyExpense Year shall not prejudice Landlord or Tenant from enforcing its rights under this Article 4. Even though the Lease Termhas expired and Tenant has vacated the Premises, when the final determination is made of Tenant's Share of Direct Expenses forthe Expense Year in which this Lease terminates, Tenant shall immediately pay to Landlord such amount, and if Tenant paidmore as Estimated Direct Expenses than the actual Tenant's Share of Direct Expenses, Landlord shall, within thirty (30) days,deliver a check payable to Tenant in the amount of the overpayment. The provisions of this Section 4.4.1 shall survive theexpiration or earlier termination of the Lease Term. Notwithstanding the immediately preceding sentence, Tenant shall not beresponsible for Tenant’s Share of any Direct Expenses attributable to any Expense Year which are first billed to Tenant morethan two (2) calendar years after the earlier of the expiration of the applicable Expense Year or the Lease Expiration Date,provided that in any event Tenant shall be responsible for Tenant’s Share of Direct Expenses levied by any governmentalauthority or by any public utility companies at any time following the Lease Expiration Date which are attributable to anyExpense Year (provided that Landlord delivers Tenant a bill for such amounts within two (2) years following Landlord’s receiptof the bill therefor).4.4.2Statement of Estimated Direct Expenses. In addition, Landlord shall give Tenant a yearlyexpense estimate statement (the "Estimate Statement") which shall set forth Landlord's reasonable estimate 8377633.2 (8383465.1)-11-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] (the "Estimate") of what the total amount of Direct Expenses for the then-current Expense Year shall be and the estimatedTenant's Share of Direct Expenses (the "Estimated Direct Expenses"). Landlord shall utilize commercially reasonable efforts todeliver such Estimate Statement within five (5) months following the end of each Expense Year. The failure of Landlord totimely furnish the Estimate Statement for any Expense Year shall not preclude Landlord from enforcing its rights to collect anyEstimated Direct Expenses under this Article 4, nor shall Landlord be prohibited from revising any Estimate Statement orEstimated Direct Expenses theretofore delivered to the extent necessary. Thereafter, Tenant shall pay, with its next installmentof Base Rent due that is at least thirty (30) days thereafter, a fraction of the Estimated Direct Expenses for the then-currentExpense Year (reduced by any amounts paid pursuant to the last sentence of this Section 4.4.2). Such fraction shall have as itsnumerator the number of months which have elapsed in such current Expense Year, including the month of such payment, andtwelve (12) as its denominator. Until a new Estimate Statement is furnished (which Landlord shall have the right to deliver toTenant at any time), Tenant shall pay monthly, with the monthly Base Rent installments, an amount equal to one-twelfth (1/12)of the total Estimated Direct Expenses set forth in the previous Estimate Statement delivered by Landlord to Tenant.4.5Taxes and Other Charges for Which Tenant Is Directly Responsible. Tenant shall be liable for and shallpay ten (10) days before delinquency, taxes levied against Tenant's equipment, furniture, fixtures and any other personalproperty located in or about the Premises. If any such taxes on Tenant's equipment, furniture, fixtures and any other personalproperty are levied against Landlord or Landlord's property or if the assessed value of Landlord's property is increased by theinclusion therein of a value placed upon such equipment, furniture, fixtures or any other personal property and if Landlord paysthe taxes based upon such increased assessment, which Landlord shall have the right to do regardless of the validity thereof butonly under proper protest if requested by Tenant, Tenant shall upon demand repay to Landlord the taxes so levied againstLandlord or the proportion of such taxes resulting from such increase in the assessment, as the case may be.4.6Landlord's Books and Records. Within one hundred twenty (120) days after receipt by Tenant of aStatement, if Tenant disputes the amount of Additional Rent set forth in the Statement, a member of Tenant's financedepartment, or an independent certified public accountant (which accountant is a member of a nationally recognizedaccounting firm and is not working on a contingency fee basis) ("Tenant's Accountant"), designated and paid for by Tenant,may, after reasonable notice to Landlord and at reasonable times, inspect Landlord's records with respect to the Statement atLandlord's offices, provided that there is no existing Event of Default and Tenant has paid all amounts required to be paid underthe applicable Estimate Statement and Statement, as the case may be. In connection with such inspection, Tenant and Tenant'sagents must agree in advance to follow Landlord's reasonable rules and procedures regarding inspections of Landlord's records,and shall execute a commercially reasonable confidentiality agreement regarding such inspection. Tenant's failure to disputethe amount of Additional Rent set forth in any Statement within one hundred twenty (120) days of Tenant's receipt of suchStatement shall be deemed to be Tenant's approval of such Statement and Tenant, thereafter, waives the right or ability todispute the amounts set forth in such Statement. If after such inspection, Tenant still disputes such Additional Rent, adetermination as to the proper amount shall be made, at Tenant's expense, by an independent certified public accountant (the"Accountant") selected by Landlord and subject to Tenant's reasonable approval; provided that if such Accountant determinesthat Direct Expenses were overstated by more than five percent (5%), then the cost of the Accountant and the cost of suchdetermination shall be paid for by Landlord, and Landlord shall reimburse Tenant for the cost of the Tenant's Accountant(provided that such cost shall be a reasonable market cost for such services). Tenant hereby acknowledges that Tenant's soleright to inspect Landlord's books and records and to contest the amount of Direct Expenses payable by Tenant shall be as setforth in this Section 4.6, and Tenant hereby waives any and all other rights pursuant to applicable law to inspect such books andrecords and/or to contest the amount of Direct Expenses payable by Tenant.5.USE OF PREMISES5.1Permitted Use. Tenant shall use the Premises solely for the Permitted Use set forth in Section 7 of theSummary and Tenant shall not use or permit the Premises or the Project to be used for any other purpose or purposes whatsoeverwithout the prior written consent of Landlord, which may be withheld in Landlord's sole discretion. 8377633.2 (8383465.1)-12-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] 5.2Prohibited Uses. Tenant further covenants and agrees that Tenant shall not use or permit any person orpersons to use, the Premises or any part thereof for any use or purpose in violation of the laws of the United States of America,the State of California, or the ordinances, regulations or requirements of the local municipal or county governing body or otherlawful authorities having jurisdiction over the Project) including, without limitation, any such laws, ordinances, regulations orrequirements relating to hazardous materials or substances, as those terms are defined by applicable laws now or hereafter ineffect. Landlord shall have the right to impose reasonable, nondiscriminatory and customary rules and regulations regarding theuse of the Project that do not unreasonably interfere with Tenant’s use of the Premises, as reasonably deemed necessary byLandlord with respect to the orderly operation of the Project, and Tenant shall comply with such reasonable rules andregulations. Tenant shall not do or permit anything to be done in or about the Premises which will in any way obstruct orinterfere with the rights of other tenants or occupants of the Building, or injure or annoy them or use or allow the Premises to beused for any improper, unlawful or objectionable purpose, nor shall Tenant cause, maintain or permit any nuisance in, on orabout the Premises. Tenant shall comply with, and Tenant's rights and obligations under the Lease and Tenant's use of thePremises shall be subject and subordinate to, all recorded easements, covenants, conditions, and restrictions now or hereafteraffecting the Project, so long as the same do not unreasonably interfere with Tenant’s use of the Premises or parking rights ormaterially increase Tenant’s obligations or decrease Tenant’s rights under this Lease.5.3Hazardous Materials.5.3.1Tenant's Obligations.5.3.1.1Prohibitions. As a material inducement to Landlord to enter into thisLease with Tenant, Tenant has fully and accurately completed Landlord’s Pre-Leasing Environmental Exposure Questionnaire(the “Environmental Questionnaire”), which is attached as Exhibit E. Tenant agrees that except for those chemicals ormaterials, and their respective quantities, specifically listed on the Environmental Questionnaire (as the same may be updatedfrom time to time as provided below), neither Tenant nor Tenant’s employees, contractors and subcontractors of any tier, entitieswith a contractual relationship with Tenant (other than Landlord), or any entity acting as an agent or sub-agent of Tenant(collectively, "Tenant's Agents") will produce, use, store or generate any "Hazardous Materials," as that term is defined below,on, under or about the Premises, nor cause any Hazardous Material to be brought upon, placed, stored, manufactured, generated,blended, handled, recycled, used or "Released," as that term is defined below, on, in, under or about the Premises. If anyinformation provided to Landlord by Tenant on the Environmental Questionnaire, or otherwise relating to informationconcerning Hazardous Materials is intentionally false, incomplete, or misleading in any material respect, the same shall bedeemed a default by Tenant under this Lease. Upon Landlord's request, or in the event of any material change in Tenant's use ofHazardous Materials in the Premises, Tenant shall deliver to Landlord an updated Environmental Questionnaire at least once ayear. Tenant shall notify Landlord prior to using any Hazardous Materials in the Premises not described on the initialEnvironmental Questionnaire, and, to the extent such use would, in Landlord's reasonable judgment, cause a material increase inthe risk of liability compared to the uses previously allowed in the Premises, such additional use shall be subject to Landlord'sprior consent, which may be withheld in Landlord’s reasonable discretion. Tenant shall not install or permit Tenant's Agents toinstall any underground storage tank on the Premises. For purposes of this Lease, "Hazardous Materials" means all flammableexplosives, petroleum and petroleum products, waste oil, radon, radioactive materials, toxic pollutants, asbestos,polychlorinated biphenyls (“PCBs”), medical waste, chemicals known to cause cancer or reproductive toxicity, pollutants,contaminants, hazardous wastes, toxic substances or related materials, including without limitation any chemical, element,compound, mixture, solution, substance, object, waste or any combination thereof, which is or may be hazardous to humanhealth, safety or to the environment due to its radioactivity, ignitability, corrosiveness, reactivity, explosiveness, toxicity,carcinogenicity, infectiousness or other harmful or potentially harmful properties or effects, or defined as, regulated as orincluded in, the definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,” or “toxic substances” underany Environmental Laws. For purposes of this Lease, "Release" or "Released" or "Releases" shall mean any release, deposit,discharge, emission, leaking, spilling, seeping, migrating, injecting, pumping, pouring, emptying, escaping, dumping,disposing, or other movement of Hazardous Materials into the environment. Landlord acknowledges that Tenant may be usingfume hoods in the Premises and that emissions of Hazardous Materials into the air in compliance with all Environmental Lawsshall not be considered Releases. 8377633.2 (8383465.1)-13-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] 5.3.1.2Notices to Landlord. Tenant shall notify Landlord in writing as soon aspossible but in no event later than five (5) days after (i) the occurrence of any actual, alleged or threatened Release of anyHazardous Material in, on, under, from, about or in the vicinity of the Premises (whether past or present), regardless of the sourceor quantity of any such Release, or (ii) Tenant becomes aware of any regulatory actions, inquiries, inspections, investigations,directives, or any cleanup, compliance, enforcement or abatement proceedings (including any threatened or contemplatedinvestigations or proceedings) relating to or potentially affecting the Premises, or (iii) Tenant becomes aware of any claims byany person or entity relating to any Hazardous Materials in, on, under, from, about or in the vicinity of the Premises, whetherrelating to damage, contribution, cost recovery, compensation, loss or injury. Collectively, the matters set forth in clauses (i), (ii)and (iii) above are hereinafter referred to as “Hazardous Materials Claims”. Tenant shall promptly forward to Landlord copiesof all orders, notices, permits, applications and other communications and reports in connection with any Hazardous MaterialsClaims. Additionally, Tenant shall promptly advise Landlord in writing of Tenant’s discovery of any occurrence or conditionon, in, under or about the Premises that could subject Tenant or Landlord to any liability, or restrictions on ownership,occupancy, transferability or use of the Premises under any "Environmental Laws," as that term is defined below. Tenant shallnot enter into any legal proceeding or other action, settlement, consent decree or other compromise with respect to anyHazardous Materials Claims without first notifying Landlord of Tenant’s intention to do so and affording Landlord theopportunity to join and participate, as a party if Landlord so elects, in such proceedings and in no event shall Tenant enter intoany agreements which are binding on Landlord or the Premises without Landlord’s prior written consent. Landlord shall havethe right to appear at and participate in, any and all legal or other administrative proceedings concerning any HazardousMaterials Claim. For purposes of this Lease, “Environmental Laws” means all applicable present and future laws relating to theprotection of human health, safety, wildlife or the environment, including, without limitation, (i) all requirements pertaining toreporting, licensing, permitting, investigation and/or remediation of emissions, discharges, Releases, or threatened Releases ofHazardous Materials, whether solid, liquid, or gaseous in nature, into the air, surface water, groundwater, or land, or relating tothe manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling of Hazardous Materials; and(ii) all requirements pertaining to the health and safety of employees or the public. Environmental Laws include, but are notlimited to, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 USC § 9601, et seq., theHazardous Materials Transportation Authorization Act of 1994, 49 USC § 5101, et seq., the Solid Waste Disposal Act, asamended by the Resource Conservation and Recovery Act of 1976, and Hazardous and Solid Waste Amendments of 1984, 42USC § 6901, et seq., the Federal Water Pollution Control Act, as amended by the Clean Water Act of 1977, 33 USC § 1251, etseq., the Clean Air Act of 1966, 42 USC § 7401, et seq., the Toxic Substances Control Act of 1976, 15 USC § 2601, et seq., theSafe Drinking Water Act of 1974, 42 USC §§ 300f through 300j, the Occupational Safety and Health Act of 1970, as amended,29 USC § 651 et seq., the Oil Pollution Act of 1990, 33 USC § 2701 et seq., the Emergency Planning and Community Right-To-Know Act of 1986, 42 USC § 11001 et seq., the National Environmental Policy Act of 1969, 42 USC § 4321 et seq., the FederalInsecticide, Fungicide and Rodenticide Act of 1947, 7 USC § 136 et seq., California Carpenter-Presley-Tanner HazardousSubstance Account Act, California Health & Safety Code §§ 25300 et seq., Hazardous Materials Release Response Plans andInventory Act, California Health & Safety Code, §§ 25500 et seq., Underground Storage of Hazardous Substances provisions,California Health & Safety Code, §§ 25280 et seq., California Hazardous Waste Control Law, California Health & Safety Code,§§ 25100 et seq., and any other state or local law counterparts, as amended, as such applicable laws, are in effect as of the LeaseCommencement Date, or thereafter adopted, published, or promulgated.5.3.1.3Releases of Hazardous Materials. If any Release of any HazardousMaterial in, on, under, from or about the Premises shall occur at any time during the Lease by Tenant or Tenant’s Agents, inaddition to notifying Landlord as specified above, Tenant, at its own sole cost and expense, shall (i) immediately comply withany and all reporting requirements imposed pursuant to any and all Environmental Laws, (ii) provide a written certification toLandlord indicating that Tenant has complied with all applicable reporting requirements, (iii) take any and all necessaryinvestigation, corrective and remedial action in accordance with any and all applicable Environmental Laws, utilizing anenvironmental consultant approved by Landlord, all in accordance with the provisions and requirements of this Section 5.3,including, without limitation, Section 5.3.4, and (iv) take any such additional investigative, remedial and corrective actions asLandlord shall in its reasonable discretion deem necessary such that the Premises are remediated to the condition existing priorto such Release.8377633.2 (8383465.1)-14-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] 5.3.1.4Indemnification.5.3.1.4.1In General. Without limiting in any way Tenant’sobligations under any other provision of this Lease, Tenant shall be solely responsible for and shall protect, defend, indemnifyand hold the Landlord Parties harmless from and against any and all claims, judgments, losses, damages, costs, expenses,penalties, enforcement actions, taxes, fines, remedial actions, liabilities (including, without limitation, actual attorneys’ fees,litigation, arbitration and administrative proceeding costs, expert and consultant fees and laboratory costs) including, withoutlimitation, consequential damages and sums paid in settlement of claims, which arise during or after the Lease Term, whetherforeseeable or unforeseeable, that arise during or after the Lease Term in whole or in part, foreseeable or unforeseeable, directlyor indirectly arising out of or attributable to the Release of Hazardous Materials in, on, under or about the Premises by Tenant orTenant's Agents.5.3.1.4.2Limitations. Notwithstanding anything in Section5.3.1.4, above, to the contrary, Tenant's indemnity of Landlord as set forth in Section 5.3.1.4, above, shall not be applicable toclaims based upon Hazardous Materials not Released by Tenant or Tenant’s Agents.5.3.1.4.3Landlord Indemnity. Under no circumstance shallTenant be liable for, and Landlord shall indemnify, defend, protect and hold harmless Tenant and Tenant's Agents from andagainst, all losses, costs, claims, liabilities and damages (including attorneys’ and consultants’ fees) arising out of anyHazardous Materials that exist in, on or about the Project as of the date hereof, or Hazardous Material Released by Landlord orany Landlord Parties. Landlord shall provide Tenant with any environmental reports relating to the Project in Landlord’simmediate possession. The provision of such reports shall be for informational purposes only, and Landlord does not make anyrepresentation or warranty as to the correctness or completeness of any such reports.5.3.1.5Compliance with Environmental Laws. Without limiting the generalityof Tenant’s obligation to comply with applicable laws as otherwise provided in this Lease, Tenant shall, at its sole cost andexpense, comply with all Environmental Laws related to the use of Hazardous Materials by Tenant and Tenant’s Agents. Tenantshall obtain and maintain any and all necessary permits, licenses, certifications and approvals appropriate or required for theuse, handling, storage, and disposal of any Hazardous Materials used, stored, generated, transported, handled, blended, orrecycled by Tenant on the Premises. Landlord shall have a continuing right, without obligation, to require Tenant to obtain, andto review and inspect any and all such permits, licenses, certifications and approvals, together with copies of any and allHazardous Materials management plans and programs, any and all Hazardous Materials risk management and pollutionprevention programs, and any and all Hazardous Materials emergency response and employee training programs respectingTenant’s use of Hazardous Materials. Upon request of Landlord, Tenant shall deliver to Landlord a narrative descriptionexplaining the nature and scope of Tenant’s activities involving Hazardous Materials and showing to Landlord’s satisfactioncompliance with all Environmental Laws and the terms of this Lease.5.3.2Assurance of Performance.5.3.2.1Environmental Assessments In General. Landlord may, but shall not berequired to, engage from time to time such contractors as Landlord determines to be appropriate (and which are reasonablyacceptable to Tenant) to perform environmental assessments of a scope reasonably determined by Landlord (an"Environmental Assessment") to ensure Tenant’s compliance with the requirements of this Lease with respect to HazardousMaterials.5.3.2.2Costs of Environmental Assessments. All costs and expenses incurredby Landlord in connection with any such Environmental Assessment initially shall be paid by Landlord; provided that if anysuch Environmental Assessment shows that Tenant has failed to comply with the provisions of this Section 5.3, then all of thecosts and expenses of such Environmental Assessment shall be reimbursed by Tenant as Additional Rent within thirty (30) daysafter receipt of written demand therefor.5.3.3Tenant’s Obligations upon Surrender. At the expiration or earlier termination of theLease Term, Tenant, at Tenant’s sole cost and expense, shall: (i) cause an Environmental Assessment of the8377633.2 (8383465.1)-15-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] Premises to be conducted in accordance with Section 15.3; (ii) cause all Hazardous Materials brought onto the Premises byTenant or Tenant’s Agents to be removed from the Premises and disposed of in accordance with all Environmental Laws and asnecessary to allow the Premises to be used for the purposes allowed as of the date of this Lease; and (iii) cause to be removed allcontainers installed or used by Tenant or Tenant’s Agents to store any Hazardous Materials on the Premises, and cause to berepaired any damage to the Premises caused by such removal.5.3.4Clean-up.5.3.4.1Environmental Reports; Clean-Up. If any written report, including anyreport containing results of any Environmental Assessment (an “Environmental Report”) shall indicate (i) the presence of anyHazardous Materials as to which Tenant has a removal or remediation obligation under this Section 5.3, and (ii) that as a resultof same, the investigation, characterization, monitoring, assessment, repair, closure, remediation, removal, or other clean-up (the“Clean-up”) of any Hazardous Materials is required, Tenant shall immediately prepare and submit to Landlord within thirty (30)days after receipt of the Environmental Report a comprehensive plan, subject to Landlord’s written approval, specifying theactions to be taken by Tenant to perform the Clean-up so that the Premises are restored to the conditions required by this Lease.Upon Landlord’s approval of the Clean-up plan, Tenant shall, at Tenant’s sole cost and expense, without limitation on anyrights and remedies of Landlord under this Lease, immediately implement such plan with a consultant reasonably acceptable toLandlord and proceed to Clean-Up Hazardous Materials in accordance with all applicable laws. If, within thirty (30) days afterreceiving a copy of such Environmental Report, Tenant fails either (a) to complete such Clean-up, or (b) with respect to anyClean-up that cannot be completed within such thirty-day period, fails to proceed with diligence to prepare the Clean-up planand complete the Clean-up as promptly as practicable, then Landlord shall have the right, but not the obligation, and withoutwaiving any other rights under this Lease, to carry out any Clean-up recommended by the Environmental Report or required byany governmental authority having jurisdiction over the Premises, and recover all of the costs and expenses thereof from Tenantas Additional Rent, payable within ten (10) days after receipt of written demand therefor.5.3.4.2No Rent Abatement. Tenant shall continue to pay all Rent due oraccruing under this Lease during any Clean-up, and shall not be entitled to any reduction, offset or deferral of any Base Rent orAdditional Rent due or accruing under this Lease during any such Clean-up.5.3.4.3Surrender of Premises. Tenant shall complete any Clean-up prior tosurrender of the Premises upon the expiration or earlier termination of this Lease. Tenant shall obtain and deliver to Landlord aletter or other written determination from the overseeing governmental authority confirming that the Clean-up has beencompleted in accordance with all requirements of such governmental authority and that no further response action of any kindis required for the unrestricted use of the Premises (“Closure Letter”). Upon the expiration or earlier termination of this Lease,Tenant shall also be obligated to close all permits obtained in connection with Hazardous Materials used by Tenant or Tenant’sAgents in accordance with applicable laws.5.3.4.4Failure to Timely Clean-Up. Should any Clean-up for which Tenant isresponsible not be completed, or should Tenant not receive the Closure Letter and any governmental approvals required underEnvironmental Laws in conjunction with such Clean-up prior to the expiration or earlier termination of this Lease, then,commencing on the later of the termination of this Lease and three (3) business days after Landlord's delivery of notice of suchfailure and that it elects to treat such failure as a holdover, Tenant shall be liable to Landlord as a holdover tenant (as moreparticularly provided in Article 16) until Tenant has fully complied with its obligations under this Section 5.3.5.3.5Confidentiality. Unless compelled to do so by applicable law, Tenant agrees that Tenantshall not disclose, discuss, disseminate or copy any information, data, findings, communications, conclusions and reportsregarding the environmental condition of the Premises to any Person (other than Tenant’s consultants, attorneys, propertymanagers, employees, shareholders and potential and actual investors, lenders, business and merger partners, subtenants andassignees that have a need to know such information), including any governmental authority, without the prior written consentof Landlord. In the event Tenant reasonably believes that disclosure is compelled by applicable law, it shall provide Landlordten (10) days’ advance notice of disclosure of confidential information so that Landlord may attempt to obtain a protectiveorder. Tenant may additionally release such 8377633.2 (8383465.1)-16-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] information to bona fide prospective purchasers or lenders, subject to any such parties’ written agreement to be bound by theterms of this Section 5.3.5.3.6Copies of Environmental Reports. Within thirty (30) days of receipt thereof, Tenant shallprovide Landlord with a copy of any and all environmental assessments, audits, studies and reports regarding Tenant’s activitieswith respect to the Premises, or ground water beneath the Land, or the environmental condition or Clean-up thereof. Tenantshall be obligated to provide Landlord with a copy of such materials without regard to whether such materials are generated byTenant or prepared for Tenant, or how Tenant comes into possession of such materials.5.3.7Intentionally Omitted.5.3.8Signs, Response Plans, Etc. Tenant shall be responsible for posting on the Premises anysigns required under applicable Environmental Laws with respect to the use of Hazardous Materials by Tenant or Tenant’sAgents. Tenant shall also complete and file any business response plans or inventories required by any applicable laws. Tenantshall concurrently file a copy of any such business response plan or inventory with Landlord.5.3.9Survival. Each covenant, agreement, representation, warranty and indemnification madeby Tenant set forth in this Section 5.3 shall survive the expiration or earlier termination of this Lease and shall remain effectiveuntil all of Tenant’s obligations under this Section 5.3 have been completely performed and satisfied.6.SERVICES AND UTILITIES6.1In General. Tenant will be responsible, at its sole cost and expense, for the furnishing of all services andutilities to the Premises, including, but not limited to heating, ventilation and air-conditioning, electricity, water, telephone,janitorial and interior Building security services. To the extent that any utilities (including without limitation, electricity, gas,sewer and water) to the Building are not separately metered to the Premises, then Tenant shall pay to Landlord, within thirty(30) days after billing, an equitable portion of the Building utility costs, based on Tenant's proportionate use thereof.6.1.1All utilities (including without limitation, electricity, gas, sewer and water) to the Buildingwhich are separately metered at the Premises shall be paid directly by Tenant to the applicable utility provider.6.1.2Landlord shall not provide janitorial services for the Premises. Tenant shall be solelyresponsible for performing all janitorial services and other cleaning of the Premises, all in compliance with applicable laws. Thejanitorial and cleaning of the Premises shall be adequate to maintain the Premises in a manner consistent with First Class LifeSciences Projects.Tenant shall cooperate fully with Landlord at all times and abide by all reasonable regulations and requirements thatLandlord may reasonably prescribe for the proper functioning and protection of the HVAC, electrical, mechanical and plumbingsystems. Provided that Landlord agrees to provide and maintain and keep in continuous service utility connections to the Project,including electricity, water and sewage connections, Landlord shall have no obligation to provide any services or utilities to theBuilding, including, but not limited to heating, ventilation and air-conditioning, electricity, water, telephone, janitorial andinterior Building security services.6.2Interruption of Use. Tenant agrees that Landlord shall not be liable for damages, by abatement of Rent orotherwise, for failure to furnish or delay in furnishing any service (including telephone and telecommunication services), or forany diminution in the quality or quantity thereof, when such failure or delay or diminution is occasioned, in whole or in part, bybreakage, repairs, replacements, or improvements, by any strike, lockout or other labor trouble, by inability to secure electricity,gas, water, or other fuel at the Building or Project after reasonable effort to do so, by any riot or other dangerous condition,emergency, accident or casualty whatsoever, by act or default of Tenant or other parties, or by any other cause; and such failuresor delays or 8377633.2 (8383465.1)-17-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] diminution shall never be deemed to constitute an eviction or disturbance of Tenant's use and possession of the Premises orrelieve Tenant from paying Rent or performing any of its obligations under this Lease. Notwithstanding the foregoing, Landlordmay be liable for damages to the extent caused by the negligence or willful misconduct of Landlord or the Landlord Parties,provided that Landlord shall not be liable under any circumstances for injury to, or interference with, Tenant's business,including, without limitation, loss of profits, however occurring, through or in connection with or incidental to a failure tofurnish any of the services or utilities as set forth in this Article 6.6.3Energy Performance Disclosure Information. Tenant hereby acknowledges that Landlord may be requiredto disclose certain information concerning the energy performance of the Building pursuant to California Public ResourcesCode Section 25402.10 and the regulations adopted pursuant thereto (collectively the “Energy Disclosure Requirements”).Tenant hereby acknowledges prior receipt of the Data Verification Checklist, as defined in the Energy Disclosure Requirements(the “Energy Disclosure Information”), and agrees that Landlord has timely complied in full with Landlord’s obligationsunder the Energy Disclosure Requirements. Tenant acknowledges and agrees that (i) Landlord makes no representation orwarranty regarding the energy performance of the Building or the accuracy or completeness of the Energy DisclosureInformation, (ii) the Energy Disclosure Information is for the current occupancy and use of the Building and that the energyperformance of the Building may vary depending on future occupancy and/or use of the Building, and (iii) Landlord shall haveno liability to Tenant for any errors or omissions in the Energy Disclosure Information. If and to the extent not prohibited byapplicable laws, Tenant hereby waives any right Tenant may have to receive the Energy Disclosure Information, including,without limitation, any right Tenant may have to terminate this Lease as a result of Landlord’s failure to disclose suchinformation. Further, Tenant hereby releases Landlord from any and all losses, costs, damages, expenses and/or liabilitiesrelating to, arising out of and/or resulting from the Energy Disclosure Requirements, including, without limitation, anyliabilities arising as a result of Landlord’s failure to disclose the Energy Disclosure Information to Tenant prior to the executionof this Lease. Tenant’s acknowledgment of the AS-IS condition of the Premises pursuant to the terms of this Lease shall bedeemed to include the energy performance of the Building. Tenant further acknowledges that pursuant to the Energy DisclosureRequirements, Landlord may be required in the future to disclose information concerning Tenant’s energy usage to certain thirdparties, including, without limitation, prospective purchasers, lenders and tenants of the Building (the “Tenant Energy UseDisclosure”). Tenant hereby (A) consents to all such Tenant Energy Use Disclosures, and (B) acknowledges that Landlord shallnot be required to notify Tenant of any Tenant Energy Use Disclosure. Further, Tenant hereby releases Landlord from any andall losses, costs, damages, expenses and liabilities relating to, arising out of and/or resulting from any Tenant Energy UseDisclosure. The terms of this Section 6.3 shall survive the expiration or earlier termination of this Lease.7.REPAIRS7.1Tenant Repair Obligations. Tenant shall, throughout the Term, at its sole cost and expense, maintain, repairor replace as required, the Premises in a good standard of maintenance, repair and replacement as required, and in good andsanitary condition, all in accordance with the standards of First Class Life Sciences Projects, except for the Landlord RepairObligations, whether or not such maintenance, repair, replacement or improvement is required in order to comply withapplicable Laws ("Tenant's Repair Obligations"), including without limitation, all electrical facilities and equipment,including lighting fixtures, lamps, fans and any exhaust equipment and systems, electrical motors and all other appliances andequipment of every kind and nature located in the Premises; all communications systems serving the Premises; all of Tenant'ssecurity systems in or about or serving the Premises; Tenant's signage; interior demising walls and partitions (includingpainting and wall coverings), equipment and floors. Tenant shall additionally be responsible, at Tenant’s sole cost and expense,to furnish all expendables, including light bulbs, paper goods and soaps, used in the Premises.7.2Landlord Repair Obligations. Landlord shall be responsible, as a part of Operating Expenses, for repairs toand routine maintenance of the Building including without limitation: (1) exterior windows, window frames, window casements(including the repairing, resealing, cleaning and replacing of exterior windows); (2) exterior doors, door frames and doorclosers; (3) the Building (as opposed to the Premises) and Project plumbing, sewer, drainage, electrical, fire protection, lifesafety and security systems and equipment, existing heating, ventilation and air-conditioning ("HVAC") systems, and all othermechanical and HVAC systems and equipment (collectively, the "Building Systems"), (4) the exterior glass, exterior walls,foundation and roof of the Building, the 8377633.2 (8383465.1)-18-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] structural portions of the floors of the Building, including, without limitation, any painting, sealing, patching andwaterproofing of exterior walls, and (5) repairs to the elevator in the Building and underground utilities, except to the extentthat any such repairs are required due to the negligence or willful misconduct of Tenant (the "Landlord Repair Obligations");provided, however, that if such repairs are due to the negligence or willful misconduct of Tenant, Landlord shall neverthelessmake such repairs at Tenant's expense, or, if covered by Landlord's insurance, Tenant shall only be obligated to pay anydeductible in connection therewith. Costs expended by Landlord in connection with the Landlord Repair Obligations shall beincluded in Operating Expenses to the extent allowed pursuant to the terms of Article 4, above. Landlord shall cooperate withTenant to enforce any warranties that Landlord holds that could reduce Tenant's maintenance obligations under this Lease.Tenant hereby waives any and all rights under and benefits of subsection 1 of Section 1932 and Sections 1941 and 1942 of theCalifornia Civil Code or under any similar law, statute, or ordinance now or hereafter in effect.7.3Tenant's Right to Make Repairs. Notwithstanding any provision to the contrary contained in this Lease, ifTenant provides written notice to Landlord of an event or circumstance which requires the action of Landlord under this Leasewith respect to repair and/or maintenance required in the Premises, including repairs to the portions of the Building locatedwithin the Premises that are Landlord’s responsibility under Section 7.4 (the “Base Building”), which event or circumstancewith respect to the Base Building materially and adversely affects the conduct of Tenant’s business from the Premises, andLandlord fails to commence corrective action within a reasonable period of time, given the circumstances, after the receipt ofsuch notice, but in any event not later than thirty (30) days after receipt of said notice (unless Landlord’s obligation cannotreasonably be performed within thirty (30) days, in which event Landlord shall be allowed additional time as is reasonablynecessary to perform the obligation so long as Landlord begins performance within the initial thirty (30) days and diligentlypursues performance to completion), or, in the event of an Emergency (as defined below), not later than five (5) business daysafter receipt of such notice, then Tenant shall have the right to undertake such actions as may be reasonably necessary to makesuch repairs if Landlord thereafter fails to commence corrective action within five (5) business days following Landlord's receiptof a second written notice from Tenant specifying that Tenant will undertake such actions if Landlord fails to timely do so(provided that such notice shall include the following language in bold, capitalized text: "IF LANDLORD FAILS TOCOMMENCE THE REPAIRS DESCRIBED IN THIS LETTER WITHIN FIVE (5) BUSINESS DAYS FROM LANDLORD'SRECEIPT OF THIS LETTER, TENANT WILL PERFORM SUCH REPAIRS AT LANDLORD'S EXPENSE"; provided,however, that in no event shall Tenant undertake any actions that could materially or adversely affect the Base Building.Notwithstanding the foregoing, in the event of an Emergency, no second written notice shall be required as long as Tenantadvises Landlord in the first written notice of Tenant's intent to perform such Emergency repairs if Landlord does not commencethe same within such five (5) business day period, utilizing the language required in second notices. If such action was requiredunder the terms of this Lease to be taken by Landlord and was not commenced by Landlord within such five (5) business dayperiod and thereafter diligently pursued to completion, then Tenant shall be entitled to prompt reimbursement by Landlord ofthe reasonable out-of-pocket third-party costs and expenses actually incurred by Tenant in taking such action. If Tenantundertakes such corrective actions pursuant to this Section 7.3, then (a) the insurance and indemnity provisions set forth in thisLease shall apply to Tenant's performance of such corrective actions, (b) Tenant shall proceed in accordance with all applicablelaws, (c) Tenant shall retain to perform such corrective actions only such reputable contractors and suppliers as are duly licensedand qualified, (d) Tenant shall effect such repairs in a good and workmanlike and commercially reasonable manner, (e) Tenantshall use new or like new materials, and (f) Tenant shall take reasonable efforts to minimize any material interference or impacton the other tenants and occupants of the Building. Promptly following completion of any work taken by Tenant pursuant tothe terms of this Section 7.5, Tenant shall deliver a detailed invoice of the work completed, the materials used and the costsrelating thereto, and Landlord shall reimburse Tenant the amounts expended by Tenant in connection with such work, providedthat Landlord shall have the right to reasonably object if Landlord claims that such action did not have to be taken by Landlordpursuant to the terms of this Lease or that the charges are excessive (in which case Landlord shall pay the amount it contendswould not have been excessive). For purposes of this Section 7.5, an "Emergency" shall mean an event threatening immediateand material danger to people located in the Building or immediate, material damage to the Building, Base Building, orcreating a realistic possibility of an immediate and material interference with, or immediate and material interruption of amaterial aspect of Tenant's business operations. 8377633.2 (8383465.1)-19-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] 8.ADDITIONS AND ALTERATIONS8.1Landlord's Consent to Alterations. Tenant may not make any improvements, alterations, additions orchanges to the Premises or any mechanical, plumbing or HVAC facilities or systems pertaining to the Premises (collectively, the"Alterations") without first procuring the prior written consent of Landlord to such Alterations, which consent shall berequested by Tenant not less than ten (10) business days prior to the commencement thereof, and which consent shall not beunreasonably withheld by Landlord, provided it shall be deemed reasonable for Landlord to withhold its consent to anyAlteration which adversely affects the structural portions or the systems or equipment of the Building or is visible from theexterior of the Building. Notwithstanding the foregoing, Tenant shall be permitted to make Alterations following ten (10)business days’ notice to Landlord (as to Alterations costing more than $10,000 only), but without Landlord's prior consent, tothe extent that such Alterations (i) do not affect the building systems or equipment (other than minor changes such as adding orrelocating electrical outlets and thermostats), (ii) are not visible from the exterior of the Building, and (iii) cost less than$50,000.00 for a particular job of work. The construction of the Tenant Improvements to the Premises shall be governed by theterms of the Tenant Work Letter and not the terms of this Article 8.8.2Manner of Construction. Landlord may impose, as a condition of its consent to any and all Alterations orrepairs of the Premises or about the Premises, such requirements as Landlord in its reasonable discretion may deem desirable,including, but not limited to, the requirement that upon Landlord's request, Tenant shall, at Tenant's expense, remove suchAlterations upon the expiration or any early termination of the Lease Term. Tenant shall construct such Alterations and performsuch repairs in a good and workmanlike manner, in conformance with any and all applicable federal, state, county or municipallaws, rules and regulations and pursuant to a valid building permit, issued by the city in which the Building is located (or otherapplicable governmental authority). Tenant shall not use (and upon notice from Landlord shall cease using) contractors,services, workmen, labor, materials or equipment that, in Landlord's reasonable judgment, would disturb labor harmony with theworkforce or trades engaged in performing other work, labor or services in or about the Building or the Common Areas. Uponcompletion of any Alterations, Tenant shall deliver to Landlord final lien waivers from all contractors, subcontractors andmaterialmen who performed such work. In addition to Tenant's obligations under Article 9 of this Lease, upon completion ofany Alterations, Tenant agrees to cause a Notice of Completion to be recorded in the office of the Recorder of the County inwhich the Project is located in accordance with Section 3093 of the Civil Code of the State of California or any successorstatute, and Tenant shall deliver to the Project construction manager a reproducible copy of the "as built" drawings of theAlterations as well as all permits, approvals and other documents issued by any governmental agency in connection with theAlterations.8.3Payment for Improvements. In connection with any Alterations that affect the Building systems (other thanminor changes such as adding or relocating electrical outlets and thermostats), or which have a cost in excess of $100,000,Tenant shall reimburse Landlord for Landlord's reasonable, actual, out-of-pocket costs and expenses actually incurred inconnection with Landlord's review of such work.8.4Construction Insurance. In addition to the requirements of Article 10 of this Lease, in the event that Tenantmakes any Alterations, prior to the commencement of such Alterations, Tenant shall provide Landlord with evidence thatTenant or Tenant's contractor carries "Builder's All Risk" insurance (to the extent that the cost of such work shall exceed$50,000) in an amount approved by Landlord covering the construction of such Alterations, and such other insurance asLandlord may reasonably require, it being understood and agreed that all of such Alterations shall be insured by Landlordpursuant to Article 10 of this Lease immediately upon completion thereof. In addition, Tenant's contractors and subcontractorsshall be required to carry (i) Commercial General Liability Insurance in an amount approved by Landlord, with Landlord, and,at Landlord's option, Landlord's property manager and project manager, as additional insureds in an amount approved byLandlord, and otherwise in accordance with the requirements of Article 10 of this Lease, and (ii) workers compensationinsurance. In connection with Alterations with a cost in excess of $250,000, Landlord may, in its discretion, require Tenant toobtain a lien and completion bond or some alternate form of security satisfactory to Landlord in an amount sufficient to ensurethe lien-free completion of such Alterations and naming Landlord as a co-obligee.8.5Landlord's Property. All Alterations, improvements, fixtures, equipment and/or appurtenances which maybe installed or placed in or about the Premises, from time to time, shall be at the sole cost of Tenant and8377633.2 (8383465.1)-20-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] all Alterations and improvements, shall be and become the property of Landlord and remain in place at the Premises followingthe expiration or earlier termination of this Lease. Notwithstanding the foregoing, Landlord may, by written notice to Tenantgiven at the time it consents to an Alteration, require Tenant, at Tenant's expense, to remove any Alterations within the Premisesand to repair any damage to the Premises and Building caused by such removal. If Tenant fails to complete such removal and/orto repair any damage caused by the removal of any Alterations, Landlord may do so and may charge the cost thereof to Tenant.Tenant hereby protects, defends, indemnifies and holds Landlord harmless from any liability, cost, obligation, expense or claimof lien in any manner relating to the installation, placement, removal or financing of any such Alterations, improvements,fixtures and/or equipment in, on or about the Premises, which obligations of Tenant shall survive the expiration or earliertermination of this Lease. Notwithstanding the foregoing, except to the extent the same are paid for by the Tenant ImprovementAllowance, the items set forth in Exhibit F attached hereto (the "Tenant's Property") shall at all times be and remain Tenant'sproperty. Exhibit F may be updated from time to time by agreement of the parties. Tenant may remove the Tenant's Propertyfrom the Premises at any time, provided that Tenant repairs all damage caused by such removal. Landlord shall have no lien orother interest in the Tenant's Property.9.COVENANT AGAINST LIENS Tenant shall keep the Project and Premises free from any liens or encumbrancesarising out of the work performed, materials furnished or obligations incurred by or on behalf of Tenant, and shall protect,defend, indemnify and hold Landlord harmless from and against any claims, liabilities, judgments or costs (including, withoutlimitation, reasonable attorneys' fees and costs) arising out of same or in connection therewith. Except as to Alterations as towhich no notice is required under the second sentence of Section 8.1, Tenant shall give Landlord notice at least ten (10)business days prior to the commencement of any such work on the Premises (or such additional time as may be necessary underapplicable laws) to afford Landlord the opportunity of posting and recording appropriate notices of non- responsibility (to theextent applicable pursuant to then applicable laws). Tenant shall remove any such lien or encumbrance by bond or otherwisewithin ten (10) business days after notice by Landlord, and if Tenant shall fail to do so, Landlord may pay the amount necessaryto remove such lien or encumbrance, without being responsible for investigating the validity thereof.10.INSURANCE10.1Indemnification and Waiver. Except as provided in Section 10.5 or to the extent due to the negligence,willful misconduct or violation of this Lease by Landlord or the Landlord Parties, Tenant hereby assumes all risk of damage toproperty in, upon or about the Premises from any cause whatsoever (including, but not limited to, any personal injuries resultingfrom a slip and fall in, upon or about the Premises) and agrees that Landlord, its partners, subpartners and their respectiveofficers, agents, servants, employees, lenders, any property manager and independent contractors (collectively, "LandlordParties") shall not be liable for, and are hereby released from any responsibility for, any damage either to person or property orresulting from the loss of use thereof, which damage is sustained by Tenant or by other persons claiming through Tenant.Tenant shall indemnify, defend, protect, and hold harmless the Landlord Parties from any and all claims, loss, cost, damage,injury, expense and liability (including without limitation court costs and reasonable attorneys' fees) incurred in connectionwith or arising from any cause in or on the Premises (including, but not limited to, a slip and fall), any acts, omissions ornegligence of Tenant or of any person claiming by, through or under Tenant, or of the contractors, agents, servants, employees,invitees, guests or licensees of Tenant or any such person, in, on or about the Project or any breach of the terms of this Lease,either prior to, during, or after the expiration of the Lease Term, provided that the terms of the foregoing indemnity and releaseshall not apply to the negligence or willful misconduct of Landlord or its agents, employees, contractors, licensees or invitees,or Landlord's violation of this Lease. Should Landlord be named as a defendant in any suit brought against Tenant inconnection with or arising out of Tenant's occupancy of the Premises, Tenant shall pay to Landlord its costs and expensesincurred in such suit, including without limitation, its actual professional fees such as reasonable appraisers', accountants' andattorneys' fees. Notwithstanding anything to the contrary in this Lease, Landlord shall not be released or indemnified from, andshall indemnify, defend, protect and hold harmless Tenant from, all losses, damages, liabilities, claims, attorneys’ fees, costs andexpenses arising from the gross negligence or willful misconduct of Landlord or its agents, contractors, licensees or invitees, ora violation of Landlord’s obligations or representations under this Lease. The provisions of this Section 10.1 shall survive theexpiration or sooner termination of this Lease with respect to any claims or liability arising in connection with any eventoccurring prior to such expiration or termination.8377633.2 (8383465.1)-21-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] 10.2Tenant's Compliance With Landlord's Property Insurance. Landlord shall insure the Building, TenantImprovements and any Alterations during the Lease Term against loss or damage under an "all risk" property insurance policy.Such coverage shall be in such amounts, from such companies, and on such other terms and conditions, as Landlord may fromtime to time reasonably determine. Additionally, at the option of Landlord, such insurance coverage may include the risks ofearthquakes and/or flood damage and additional hazards, a rental loss endorsement and one or more loss payee endorsements infavor of the holders of any mortgages or deeds of trust encumbering the interest of Landlord in the Building or the ground orunderlying lessors of the Building, or any portion thereof. The costs of such insurance shall be included in Operating Expenses,subject to the terms of Section 4.2.4. Tenant shall, at Tenant's expense, comply with all insurance company requirementspertaining to the use of the Premises. If Tenant's conduct or use of the Premises causes any increase in the premium for suchinsurance policies then Tenant shall reimburse Landlord for any such increase. Tenant, at Tenant's expense, shall comply withall rules, orders, regulations or requirements of the American Insurance Association (formerly the National Board of FireUnderwriters) and with any similar body. Notwithstanding anything to the contrary in this Lease, Tenant shall not be required tocomply with or cause the Premises to comply with any laws, rules, regulations or insurance requirements requiring theconstruction of alterations unless such compliance is necessitated solely due to Tenant's particular use of the Premises.10.3Tenant's Insurance. Tenant shall maintain the following coverages in the following amounts during theLease Term (except Tenant shall carry the insurance described in Section 10.3.1 during any period in which it enters thePremises).10.3.1Commercial General Liability Insurance on an occurrence form covering the insuredagainst claims of bodily injury and property damage (including loss of use thereof) arising out of Tenant's operations, andcontractual liabilities including a contractual coverage for limits of liability (which limits may be met together with umbrellaliability insurance) of not less than:Bodily Injury and $4,000,000 each occurrenceProperty Damage Liability$4,000,000 annual aggregate Personal Injury Liability$4,000,000 annual aggregate10.3.2Property Insurance covering all office furniture, business and trade fixtures, office and labequipment, free-standing cabinet work, movable partitions, merchandise and all other items of Tenant's property on the Premisesinstalled by, for, or at the expense of Tenant. Such insurance shall be written on an "all risks" of physical loss or damage basis,for the full replacement cost value (subject to reasonable deductible amounts) new without deduction for depreciation of thecovered items and in amounts that meet any co-insurance clauses of the policies of insurance and shall include coverage fordamage or other loss caused by fire or other peril including, but not limited to, vandalism and malicious mischief, theft, waterdamage (excluding flood), including sprinkler leakage, bursting or stoppage of pipes, and explosion, and providing businessinterruption coverage for a period of ninety(90) days.10.3.3Business Income Interruption for ninety (90) days plus Extra Expense insurance in suchamounts as will reimburse Tenant for actual direct or indirect loss of earnings attributable to the risks outlined in Section 10.3.2above.10.3.4Worker's Compensation and Employer's Liability or other similar insurance pursuant to allapplicable state and local statutes and regulations. The policy shall include a waiver of subrogation in favor of Landlord, itsemployees, Lenders and any property manager or partners.10.4Form of Policies. The minimum limits of policies of insurance required of Tenant under this Lease shall inno event limit the liability of Tenant under this Lease. Such insurance shall (i) name Landlord, its subsidiaries and affiliates, itsproperty manager (if any) and any other party the Landlord so specifies, as an additional insured on the liability insurance,including Landlord's managing agent, if any; (ii) be issued by an insurance company having a rating of not less than A-:VII inBest's Insurance Guide or which is otherwise 8377633.2 (8383465.1)-22-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] acceptable to Landlord and authorized to do business in the State of California; and (iv) be primary insurance as to all claimsthereunder and provide that any insurance carried by Landlord is excess and is non-contributing with any insurance required ofTenant. Tenant shall not cause said insurance to be canceled or coverage changed unless thirty (30) days' prior written noticeshall have been given to Landlord and any mortgagee of Landlord (unless such cancellation is the result of non-payment ofpremiums, in which case not less than five (5) days' notice shall be provided). Tenant shall deliver said policy or policies orcertificates thereof to Landlord on or before the Lease Commencement Date and at least ten (10) days before the expiration datesthereof. In the event Tenant shall fail to procure such insurance, or to deliver such policies or certificate, Landlord may, at itsoption, procure such policies for the account of Tenant, and the cost thereof shall be paid to Landlord within five (5) days afterdelivery to Tenant of bills therefor.10.5Subrogation. Landlord and Tenant hereby agree to look solely to, and seek recovery only from, theirrespective insurance carriers in the event of a property or business interruption loss to the extent that such coverage is agreed tobe provided hereunder, notwithstanding the negligence of either party. Notwithstanding anything to the contrary in this Lease,the parties each hereby waive all rights and claims against each other for such losses, and waive all rights of subrogation of theirrespective insurers. The parties agree that their respective insurance policies do now, or shall, contain the waiver of subrogation.10.6Additional Insurance Obligations. Tenant shall carry and maintain during the entire Lease Term, at Tenant'ssole cost and expense, increased amounts of the insurance required to be carried by Tenant pursuant to this Article 10 and suchother reasonable types of insurance coverage and in such reasonable amounts covering the Premises and Tenant's operationstherein, as may be reasonably requested by Landlord or Landlord's lender, but in no event in excess of the amounts and types ofinsurance then being required by landlords of buildings comparable to and in the vicinity of the Building.11.DAMAGE AND DESTRUCTION11.1Repair of Damage to Premises by Landlord. Tenant shall promptly notify Landlord of any damage to thePremises resulting from fire or any other casualty. If the Premises or any Common Areas serving or providing access to thePremises shall be damaged by fire or other casualty, Landlord shall promptly and diligently, subject to reasonable delays forinsurance adjustment or other matters beyond Landlord's reasonable control, and subject to all other terms of this Article 11,restore the Premises and such Common Areas. Such restoration shall be to substantially the same condition of the Premises andthe Common Areas prior to the casualty, except for modifications required by zoning and building codes and other laws or anyother modifications to the Common Areas deemed desirable by Landlord, which are consistent with the character of the Project,provided that access to the Premises shall not be materially impaired. Landlord shall not be liable for any inconvenience orannoyance to Tenant or its visitors, or injury to Tenant's business resulting in any way from such damage or the repair thereof;provided however, that if such fire or other casualty shall have damaged the Premises or Common Areas necessary to Tenant'soccupancy, and the damaged portions of the Premises are not occupied by Tenant as a result thereof, then during the time and tothe extent the Premises are unfit for occupancy, the Rent shall be abated in proportion to the ratio that the amount of rentablesquare feet of the Premises which is unfit for occupancy for the purposes permitted under this Lease bears to the total rentablesquare feet of the Premises.11.2Landlord's Option to Repair. Notwithstanding the terms of Section 11.1 of this Lease, Landlord may electnot to rebuild and/or restore the Premises, Building and/or Project, and instead terminate this Lease, by notifying Tenant inwriting of such termination within sixty (60) days after the date of discovery of the damage, such notice to include a terminationdate giving Tenant sixty (60) days to vacate the Premises, but Landlord may so elect only if the Building shall be damaged byfire or other casualty or cause, and one or more of the following conditions is present: (i) in Landlord's reasonable judgment,repairs cannot reasonably be completed within one (1) year after the date of discovery of the damage (when such repairs aremade without the payment of overtime or other premiums); (ii) the damage is due to a risk that Landlord is not required to insureunder this Lease, and the cost of restoration exceed five percent (5%) of the replacement cost of the Building (unless Tenantagrees to pay any uninsured amount in excess of such five percent (5%)); or (iii) the damage occurs during the last twelve (12)months of the Lease Term and will take more than sixty (60) days to restore; provided, however, that if Landlord does not electto terminate this Lease pursuant to Landlord's termination right as provided above, and the repairs cannot, in8377633.2 (8383465.1)-23-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] the reasonable opinion of Landlord, be completed within seven (7) months after the date of discovery of the damage (or are notin fact completed within eight (8) months after the date of discovery of the damage), Tenant may elect, no earlier than sixty (60)days after the date of the damage and not later than ninety (90) days after the date of such damage, or within thirty (30) daysafter such repairs are not timely completed, to terminate this Lease by written notice to Landlord effective as of the datespecified in the notice, which date shall not be less than thirty (30) days nor more than sixty (60) days after the date such noticeis given by Tenant.11.3Waiver of Statutory Provisions. The provisions of this Lease, including this Article 11, constitute anexpress agreement between Landlord and Tenant with respect to any and all damage to, or destruction of, all or any part of thePremises, the Building or the Project, and any statute or regulation of the State of California, including, without limitation,Sections 1932(2) and 1933(4) of the California Civil Code, with respect to any rights or obligations concerning damage ordestruction in the absence of an express agreement between the parties, and any other statute or regulation, now or hereafter ineffect, shall have no application to this Lease or any damage or destruction to all or any part of the Premises, the Building or theProject.12.NONWAIVER No provision of this Lease shall be deemed waived by either party hereto unless expressly waivedin a writing signed thereby. The waiver by either party hereto of any breach of any term, covenant or condition herein containedshall not be deemed to be a waiver of any subsequent breach of same or any other term, covenant or condition herein contained.The subsequent acceptance of Rent hereunder by Landlord shall not be deemed to be a waiver of any preceding breach byTenant of any term, covenant or condition of this Lease, other than the failure of Tenant to pay the particular Rent so accepted,regardless of Landlord's knowledge of such preceding breach at the time of acceptance of such Rent. No acceptance of a lesseramount than the Rent herein stipulated shall be deemed a waiver of Landlord's right to receive the full amount due, nor shallany endorsement or statement on any check or payment or any letter accompanying such check or payment be deemed anaccord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord's right to recover thefull amount due. No receipt of monies by Landlord from Tenant after the termination of this Lease shall in any way alter thelength of the Lease Term or of Tenant's right of possession hereunder, or after the giving of any notice shall reinstate, continueor extend the Lease Term or affect any notice given Tenant prior to the receipt of such monies, it being agreed that after theservice of notice or the commencement of a suit, or after final judgment for possession of the Premises, Landlord may receiveand collect any Rent due, and the payment of said Rent shall not waive or affect said notice, suit or judgment.13.CONDEMNATION If the whole or any part of the Premises shall be taken by power of eminent domain orcondemned by any competent authority for any public or quasi-public use or purpose, or if any adjacent property or street shallbe so taken or condemned, or reconfigured or vacated by such authority in such manner as to require the use or reconstruction ofany part of the Premises, or if Landlord shall grant a deed or other instrument in lieu of such taking by eminent domain orcondemnation, Landlord shall have the option to terminate this Lease effective as of the date possession is required to besurrendered to the authority. Tenant shall not because of such taking assert any claim against Landlord or the authority for anycompensation because of such taking and Landlord shall be entitled to the entire award or payment in connection therewith,except that Tenant shall have the right to file any separate claim available to Tenant for any taking of Tenant's personalproperty and fixtures belonging to Tenant and removable by Tenant upon expiration of the Lease Term pursuant to the terms ofthis Lease, for moving expenses, for the unamortized value of any improvements paid for by Tenant and for the Lease “bonusvalue”, so long as such claims are payable separately to Tenant. All Rent shall be apportioned as of the date of such termination.If any part of the Premises shall be taken, and this Lease shall not be so terminated, the Rent shall be proportionately abated.Tenant hereby waives any and all rights it might otherwise have pursuant to Section 1265.130 of The California Code ofCivil Procedure. Notwithstanding anything to the contrary contained in this Article 13, in the event of a temporary taking of allor any portion of the Premises for a period of one hundred and eighty (180) days or less, then this Lease shall not terminate butthe Base Rent and the Additional Rent shall be abated for the period of such taking in proportion to the ratio that the amount ofrentable square feet of the Premises taken bears to the total rentable square feet of the Premises. Landlord shall be entitled toreceive the entire award made in connection with any such temporary taking. 8377633.2 (8383465.1)-24-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] 14.ASSIGNMENT AND SUBLETTING14.1Transfers. Tenant shall not, without the prior written consent of Landlord, assign, mortgage, pledge,hypothecate, encumber, or permit any lien to attach to, or otherwise transfer, this Lease or any interest hereunder, permit anyassignment, or other transfer of this Lease or any interest hereunder by operation of law, sublet the Premises or any part thereof,or enter into any license or concession agreements or otherwise permit the occupancy or use of the Premises or any part thereofby any persons other than Tenant and its employees and contractors (all of the foregoing are hereinafter sometimes referred tocollectively as "Transfers" and any person to whom any Transfer is made or sought to be made is hereinafter sometimes referredto as a "Transferee"). If Tenant desires Landlord's consent to any Transfer, Tenant shall notify Landlord in writing, which notice(the "Transfer Notice") shall include (i) the proposed effective date of the Transfer, which shall not be less than thirty (30) daysnor more than one hundred eighty (180) days after the date of delivery of the Transfer Notice, (ii) a description of the portion ofthe Premises to be transferred (the "Subject Space"), (iii) all of the terms of the proposed Transfer and the consideration therefor,including calculation of the "Transfer Premium", as that term is defined in Section 14.3 below, in connection with suchTransfer, the name and address of the proposed Transferee, and a copy of all existing executed and/or proposed documentationpertaining to the proposed Transfer, and (iv) current financial statements of the proposed Transferee certified by an officer,partner or owner thereof, and any other information reasonably required by Landlord which will enable Landlord to determinethe financial responsibility, character, and reputation of the proposed Transferee, nature of such Transferee's business andproposed use of the Subject Space. Any Transfer made without Landlord's prior written consent shall, at Landlord's option, benull, void and of no effect, and shall, at Landlord's option, constitute a default by Tenant under this Lease. Whether or notLandlord consents to any proposed Transfer, Tenant shall pay Landlord's reasonable review and processing fees, as well as anyreasonable professional fees (including, without limitation, attorneys', accountants', architects', engineers' and consultants' fees)incurred by Landlord (not to exceed $3,500 in the aggregate for any particular Transfer), within thirty (30) days after writtenrequest by Landlord.14.2Landlord's Consent. Landlord shall not unreasonably withhold or delay its consent to any proposedTransfer of the Subject Space to the Transferee on the terms specified in the Transfer Notice and shall respond to Tenant’sconsent request within forty-five (45) days following receipt of such request and the documentation required by this Lease inconnection therewith. Without limitation as to other reasonable grounds for withholding consent, the parties hereby agree thatit shall be reasonable under this Lease and under any applicable law for Landlord to withhold consent to any proposed Transferwhere one or more of the following apply:14.2.1The Transferee is of a character or reputation or engaged in a business which is notconsistent with the quality of the Building or the Project;14.2.2The Transferee is either a governmental agency or instrumentality thereof;14.2.3The Transferee is not a party of reasonable financial worth and/or financial stability inlight of the responsibilities to be undertaken in connection with the Transfer on the date consent is requested; or14.2.4The proposed Transfer would cause a violation of another lease for space in the Project, orwould give an occupant of the Project a right to cancel its lease.If Landlord consents to any Transfer pursuant to the terms of this Section 14.2 (and does not exercise any recapturerights Landlord may have under Section 14.4 of this Lease), Tenant may within six (6) months after Landlord's consent, but notlater than the expiration of said six-month period, enter into such Transfer of the Premises or portion thereof, upon substantiallythe same terms and conditions as are set forth in the Transfer Notice furnished by Tenant to Landlord pursuant to Section 14.1 ofthis Lease, provided that if there are any changes in the terms and conditions from those specified in the Transfer Notice such thatLandlord would initially have been entitled to refuse its consent to such Transfer under this Section 14.2, Tenant shall againsubmit the Transfer to Landlord for its approval and other action under this Article 14 (including Landlord's right of recapture, ifany, under Section 14.4 of this Lease). Notwithstanding anything to the contrary in this Lease, if Tenant or any proposedTransferee claims that Landlord has unreasonably withheld or delayed its consent under Section 14.2 or otherwise has breachedor acted unreasonably under this Article 14, their sole remedies shall be a suit for contract damages8377633.2 (8383465.1)-25-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] (other than damages for injury to, or interference with, Tenant's business including, without limitation, loss of profits, howeveroccurring) or declaratory judgment and an injunction for the relief sought, and Tenant hereby waives all other remedies,including, without limitation, any right at law or equity to terminate this Lease, on its own behalf and, to the extent permittedunder all applicable laws, on behalf of the proposed Transferee.14.3Transfer Premium. If Landlord consents to a Transfer, as a condition thereto which the parties hereby agreeis reasonable, Tenant shall pay to Landlord fifty percent (50%) of any "Transfer Premium," as that term is defined in thisSection 14.3, received by Tenant from such Transferee. "Transfer Premium" shall mean all rent, additional rent or otherconsideration payable by such Transferee in connection with the Transfer in excess of the Rent and Additional Rent payable byTenant under this Lease during the term of the Transfer on a per rentable square foot basis if less than all of the Premises istransferred, and after deduction of (i) any costs of improvements made to the Subject Space in connection with such Transfer, (ii)brokerage commissions paid in connection with such Transfer, and (iii) reasonable legal fees incurred in connection with suchTransfer. "Transfer Premium" shall also include, but not be limited to, key money, bonus money or other cash considerationpaid by Transferee to Tenant in connection with such Transfer, and any payment in excess of fair market value for servicesrendered by Tenant to Transferee or for assets, fixtures, inventory, equipment, or furniture transferred by Tenant to Transferee inconnection with such Transfer. The determination of the amount of Landlord's applicable share of the Transfer Premium shall bemade on a monthly basis as rent or other consideration is received by Tenant under the Transfer.14.4Landlord's Option as to Subject Space. Notwithstanding anything to the contrary contained in this Article14, in the event Tenant contemplates a Transfer other than to a Permitted Transferee which, together with all prior Transfers thenremaining in effect, would cause fifty percent (50%) or more of the Premises to be Transferred for more than fifty percent (50%)of the then remaining Lease Term (taking into account any extension of the Lease Term which has irrevocably exercised byTenant), Tenant shall give Landlord notice (the "Intention to Transfer Notice") of such contemplated Transfer (whether or notthe contemplated Transferee or the terms of such contemplated Transfer have been determined). The Intention to Transfer Noticeshall specify the portion of and amount of rentable square feet of the Premises which Tenant intends to Transfer in the subjectTransfer (the "Contemplated Transfer Space"), the contemplated date of commencement of the Contemplated Transfer (the"Contemplated Effective Date"), and the contemplated length of the term of such contemplated Transfer. Thereafter, Landlordshall have the option, by giving written notice to Tenant within thirty (30) days after receipt of any Intention to Transfer Notice,to recapture the Contemplated Transfer Space. Such recapture shall cancel and terminate this Lease with respect to suchContemplated Transfer Space as of the Contemplated Effective Date. In the event of a recapture by Landlord, if this Lease shallbe canceled with respect to less than the entire Premises, the Rent reserved herein shall be prorated on the basis of the number ofrentable square feet retained by Tenant in proportion to the number of rentable square feet contained in the Premises, and thisLease as so amended shall continue thereafter in full force and effect, and upon request of either party, the parties shall executewritten confirmation of the same. If Landlord declines, or fails to elect in a timely manner, to recapture such ContemplatedTransfer Space under this Section 14.4, then, subject to the other terms of this Article 14, for a period of nine (9) months (the"Nine Month Period") commencing on the last day of such thirty (30) day period, Landlord shall not have any right to recapturethe Contemplated Transfer Space with respect to any Transfer made during the Nine Month Period, provided that any suchTransfer is substantially on the terms set forth in the Intention to Transfer Notice, and provided further that any such Transfershall be subject to the remaining terms of this Article 14. If such a Transfer is not so consummated within the Nine MonthPeriod (or if a Transfer is so consummated, then upon the expiration of the term of any Transfer of such Contemplated TransferSpace consummated within such Nine Month Period), Tenant shall again be required to submit a new Intention to TransferNotice to Landlord with respect any contemplated Transfer, as provided above in this Section 14.4. Tenant shall not be requiredto provide a separate Intention to Transfer Notice and Tenant’s request for Landlord’s consent to a Transfer shall satisfyTenant’s obligations in this Section 14.4.14.5Effect of Transfer. If Landlord consents to a Transfer, (i) the terms and conditions of this Lease shall in noway be deemed to have been waived or modified, (ii) such consent shall not be deemed consent to any further Transfer by eitherTenant or a Transferee, (iii) Tenant shall deliver to Landlord, promptly after execution, an original executed copy of alldocumentation pertaining to the Transfer in form reasonably acceptable to Landlord, (iv) Tenant shall furnish upon Landlord'srequest a complete statement, certified by an independent certified public accountant, or Tenant's chief financial officer, settingforth in detail the computation of any Transfer Premium8377633.2 (8383465.1)-26-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] Tenant has derived and shall derive from such Transfer, and (v) no Transfer relating to this Lease or agreement entered into withrespect thereto, whether with or without Landlord's consent, shall relieve Tenant or any guarantor of the Lease from any liabilityunder this Lease, including, without limitation, in connection with the Subject Space. Landlord or its authorized representativesshall have the right at all reasonable times to audit the books, records and papers of Tenant relating to any Transfer, and shallhave the right to make copies thereof. If the Transfer Premium respecting any Transfer shall be found understated, Tenant shall,within thirty (30) days after demand, pay the deficiency, and if understated by more than two percent (2%), Tenant shall payLandlord's costs of such audit.14.6Additional Transfers. For purposes of this Lease, the term "Transfer" shall also include if Tenant is apartnership, the withdrawal or change, voluntary, involuntary or by operation of law, of fifty percent (50%) or more of thepartners, or transfer of fifty percent (50%) or more of partnership interests, within a twelve (12)-month period, or the dissolutionof the partnership without immediate reconstitution thereof.14.7Occurrence of Default. Any Transfer hereunder shall be subordinate and subject to the provisions of thisLease, and if this Lease shall be terminated during the term of any Transfer, Landlord shall have the right to: (i) treat suchTransfer as cancelled and repossess the Subject Space by any lawful means, or (ii) require that such Transferee attorn to andrecognize Landlord as its landlord under any such Transfer. If Tenant shall be in default under this Lease, Landlord is herebyirrevocably authorized, as Tenant's agent and attorney-in-fact, to direct any Transferee to make all payments under or inconnection with the Transfer directly to Landlord (which Landlord shall apply towards Tenant's obligations under this Lease)until such default is cured. Such Transferee shall rely on any representation by Landlord that Tenant is in default hereunder,without any need for confirmation thereof by Tenant. Upon any assignment, the assignee shall assume in writing all obligationsand covenants of Tenant thereafter to be performed or observed under this Lease. No collection or acceptance of rent byLandlord from any Transferee shall be deemed a waiver of any provision of this Article 14 or the approval of any Transferee or arelease of Tenant from any obligation under this Lease, whether theretofore or thereafter accruing. In no event shall Landlord'senforcement of any provision of this Lease against any Transferee be deemed a waiver of Landlord's right to enforce any term ofthis Lease against Tenant or any other person. If Tenant's obligations hereunder have been guaranteed, Landlord's consent toany Transfer shall not be effective unless the guarantor also consents to such Transfer.14.8Non-Transfers. Notwithstanding anything to the contrary contained in this Article 14, (i) an assignment orsubletting of all or a portion of the Premises to an affiliate of Tenant (an entity which is controlled by, controls, or is undercommon control with, Tenant), (ii) an assignment of the Premises to an entity which acquires all or substantially all of the assetsor interests (partnership, stock or other) of Tenant, (iii) an assignment of the Premises to an entity which is the resulting entity ofa merger or consolidation of Tenant with another entity, or (iv) a change of Control or the sale of corporate shares of capitalstock in Tenant in connection with a private financing or public offering of Tenant's stock on a nationally-recognized stockexchange (collectively, a "Permitted Transferee"), shall not be deemed a Transfer under this Article 14, provided that (A)Tenant notifies Landlord of any such assignment or sublease and promptly supplies Landlord with any documents orinformation requested by Landlord regarding such assignment or sublease or such affiliate, (B) such assignment or subleaseis not a subterfuge by Tenant to avoid its obligations under this Lease, (C) such Permitted Transferee shall be of a character andreputation consistent with the quality of the Building, and (D) such Permitted Transferee described in subpart (ii) or (iii) aboveshall have a tangible net worth (not including goodwill as an asset) computed in accordance with generally acceptedaccounting principles ("Net Worth") at least equal to the Net Worth of Tenant on the day immediately preceding the effectivedate of such assignment or sublease. An assignee of Tenant's entire interest that is also a Permitted Transferee may also beconsidered a "Permitted Assignee". "Control," as used in this Section 14.8, shall mean the ownership, directly or indirectly, ofat least fifty-one percent (51%) of the voting securities of, or possession of the right to vote, in the ordinary direction of itsaffairs, of at least fifty-one percent (51%) of the voting interest in, any person or entity. No such permitted assignment orsubletting shall serve to release Tenant from any of its obligations under this Lease.15.SURRENDER OF PREMISES; OWNERSHIP AND REMOVAL OF TRADE FIXTURES15.1Surrender of Premises. No act or thing done by Landlord or any agent or employee of Landlord during theLease Term shall be deemed to constitute an acceptance by Landlord of a surrender of the Premises8377633.2 (8383465.1)-27-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] unless such intent is specifically acknowledged in writing by Landlord. The delivery of keys to the Premises to Landlord or anyagent or employee of Landlord shall not constitute a surrender of the Premises or effect a termination of this Lease, whether ornot the keys are thereafter retained by Landlord, and notwithstanding such delivery Tenant shall be entitled to the return ofsuch keys at any reasonable time upon request until this Lease shall have been properly terminated. The voluntary or othersurrender of this Lease by Tenant, whether accepted by Landlord or not, or a mutual termination hereof, shall not work a merger,and at the option of Landlord shall operate as an assignment to Landlord of all subleases or subtenancies affecting the Premisesor terminate any or all such sublessees or subtenancies.15.2Removal of Tenant Property by Tenant. Upon the expiration of the Lease Term, or upon any earliertermination of this Lease, Tenant shall, subject to the provisions of this Article 15, quit and surrender possession of the Premisesto Landlord in as good order and condition as when Tenant took possession and as thereafter improved by Landlord and/orTenant, reasonable wear and tear, damage caused by casualty, repairs required as a result of condemnation, and repairs which arespecifically made the responsibility of Landlord hereunder excepted. Upon such expiration or termination, Tenant shall,without expense to Landlord, remove or cause to be removed from the Premises all debris and rubbish, and such items offurniture, equipment, free-standing cabinet work, movable partitions (but not demountable walls) and other articles of personalproperty owned by Tenant or installed or placed by Tenant at its expense in the Premises, and such similar articles of any otherpersons claiming under Tenant, as Landlord may, in its sole discretion, require to be removed, and Tenant shall repair at its ownexpense all damage to the Premises and Building resulting from such removal.15.3Environmental Assessment. In connection with its surrender of the Premises, Tenant shall submit toLandlord, at least fifteen (15) days prior to the expiration date of this Lease (or in the event of an earlier termination of thisLease, as soon as reasonably possible following such termination), an environmental Assessment of the Premises by a competentand experienced environmental engineer or engineering firm reasonably satisfactory to Landlord (pursuant to a contractapproved by Landlord and providing that Landlord can rely on the Environmental Assessment). If such EnvironmentalAssessment reveals that remediation or Clean-up is required under any Environmental Laws that Tenant is responsible for underthis Lease, Tenant shall submit a remediation plan prepared by a recognized environmental consultant and shall be responsiblefor all costs of remediation and Clean-up, as more particularly provided in Section 5.3, above.15.4Condition of the Building and Premises Upon Surrender. In addition to the above requirements of thisArticle 15, upon the expiration of the Lease Term, or upon any earlier termination of this Lease, Tenant shall, surrender thePremises and Building with Tenant having complied with all of Tenant’s obligations under this Lease, including those relatingto improvement, repair, maintenance, compliance with law, testing and other related obligations of Tenant set forth in Article 7of this Lease. In the event that the Building and Premises shall be surrendered in a condition which does not comply with theterms of this Section 15.4, because Tenant failed to comply with its obligations set forth in Lease, then following thirty (30)days’ notice to Tenant, during which thirty (30) day period Tenant shall have the right to cure such noncompliance, Landlordshall be entitled to expend all reasonable costs in order to cause the same to comply with the required condition upon surrenderand Tenant shall immediately reimburse Landlord for all such costs upon notice and, commencing on the later of thetermination of this Lease and three (3) business days after Landlord’s delivery of notice of such failure and that it elects to treatsuch failure as a holdover, Tenant shall be deemed during the period that Tenant or Landlord, as the case may be, performobligations relating to the Surrender Improvements to be in holdover under Article 16 of this Lease.16.HOLDING OVER If Tenant holds over after the expiration of the Lease Term or earlier termination thereof, withthe express or implied consent of Landlord, such tenancy shall be from month-to-month only, and shall not constitute a renewalhereof or an extension for any further term. If Tenant holds over after the expiration of the Lease Term of earlier terminationthereof, without the express or implied consent of Landlord, such tenancy shall be deemed to be a tenancy by sufferance only,and shall not constitute a renewal hereof or an extension for any further term. In either case, Base Rent shall be payable at amonthly rate equal to one hundred fifty percent (150%) of the Base Rent applicable during the last rental period of the LeaseTerm under this Lease. Such month-to-month tenancy or tenancy by sufferance, as the case may be, shall be subject to everyother applicable term, covenant and agreement contained herein. Nothing contained in this Article 16 shall be construed asconsent by Landlord to any holding over by Tenant, and Landlord expressly reserves the right to require Tenant to surrenderpossession of the8377633.2 (8383465.1)-28-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] Premises to Landlord as provided in this Lease upon the expiration or other termination of this Lease. The provisions of thisArticle 16 shall not be deemed to limit or constitute a waiver of any other rights or remedies of Landlord provided herein or atlaw. If Tenant fails to surrender the Premises upon the termination or expiration of this Lease, in addition to any other liabilitiesto Landlord accruing therefrom, Tenant shall protect, defend, indemnify and hold Landlord harmless from all loss, costs(including reasonable attorneys' fees) and liability resulting from such failure, including, without limiting the generality of theforegoing, any claims made by any succeeding tenant founded upon such failure to surrender and any lost profits to Landlordresulting therefrom.17.ESTOPPEL CERTIFICATES Within ten (10) business days following a request in writing by Landlord, Tenantshall execute, acknowledge and deliver to Landlord an estoppel certificate, which, as submitted by Landlord, shall besubstantially in the form of Exhibit D, attached hereto (or such other form as may be reasonably required by any prospectivemortgagee or purchaser of the Project, or any portion thereof), indicating therein any exceptions thereto that may exist at thattime, and shall also contain any other information reasonably requested by Landlord or Landlord's mortgagee or prospectivemortgagee. Any such certificate may be relied upon by any prospective mortgagee or purchaser of all or any portion of theProject. Tenant shall execute and deliver whatever other instruments may be reasonably required for such purposes. At any timeduring the Lease Term, in connection with a sale or financing of the Building by Landlord, Landlord may require Tenant toprovide Landlord with its most recent annual financial statement and annual financial statements of the preceding two (2) years.Such statements shall be prepared in accordance with generally accepted accounting principles and, if such is the normalpractice of Tenant, shall be audited by an independent certified public accountant. Landlord shall hold such statementsconfidential. Failure of Tenant to timely execute, acknowledge and deliver such estoppel certificate or other instruments shallconstitute an acceptance of the Premises and an acknowledgment by Tenant that statements included in the estoppel certificateare true and correct, without exception.18.SUBORDINATION Landlord hereby represents and warrants to Tenant that the Project is not currently subjectto any ground lease, or to the lien of any mortgage or deed of trust. This Lease shall be subject and subordinate to all futureground or underlying leases of the Building or Project and to the lien of any mortgage, trust deed or other encumbrances now orhereafter in force against the Building or Project or any part thereof, if any, and to all renewals, extensions, modifications,consolidations and replacements thereof, and to all advances made or hereafter to be made upon the security of such mortgagesor trust deeds, unless the holders of such mortgages, trust deeds or other encumbrances, or the lessors under such ground lease orunderlying leases, require in writing that this Lease be superior thereto. The subordination of this Lease to any such futureground or underlying leases of the Building or Project or to the lien of any mortgage, trust deed or other encumbrances, shall besubject to Tenant's receipt of a commercially reasonable subordination, non-disturbance, and attornment agreement in favor ofTenant. Tenant covenants and agrees in the event any proceedings are brought for the foreclosure of any such mortgage or deedin lieu thereof (or if any ground lease is terminated), to attorn, without any deductions or set-offs whatsoever, to the lienholderor purchaser or any successors thereto upon any such foreclosure sale or deed in lieu thereof (or to the ground lessor), if sorequested to do so by such purchaser or lienholder or ground lessor, and to recognize such purchaser or lienholder or groundlessor as the lessor under this Lease, provided such lienholder or purchaser or ground lessor shall agree to accept this Lease andnot disturb Tenant's occupancy, so long as Tenant timely pays the rent and observes and performs the terms, covenants andconditions of this Lease to be observed and performed by Tenant. Landlord's interest herein may be assigned as security at anytime to any lienholder. Tenant shall, within ten (10) days of request by Landlord, execute such further instruments or assurancesas Landlord may reasonably deem necessary to evidence or confirm the subordination or superiority of this Lease to any suchmortgages, trust deeds, ground leases or underlying leases. Tenant waives the provisions of any current or future statute, rule orlaw which may give or purport to give Tenant any right or election to terminate or otherwise adversely affect this Lease and theobligations of the Tenant hereunder in the event of any foreclosure proceeding or sale.19.DEFAULTS; REMEDIES19.1Events of Default. The occurrence of any of the following shall constitute a default of this Lease by Tenant:19.1.1Any failure by Tenant to pay any Rent or any other charge required to be paid under thisLease, or any part thereof, when due unless such failure is cured within five (5) business days after notice; or 8377633.2 (8383465.1)-29-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] 19.1.2Except where a specific time period is otherwise set forth for Tenant's performance in thisLease, in which event the failure to perform by Tenant within such time period shall be a default by Tenant under this Section19.1.2, any failure by Tenant to observe or perform any other provision, covenant or condition of this Lease to be observed orperformed by Tenant where such failure continues for thirty (30) days after written notice thereof from Landlord to Tenant;provided that if the nature of such default is such that the same cannot reasonably be cured within a thirty (30) day period,Tenant shall not be deemed to be in default if it diligently commences such cure within such period and thereafter diligentlyproceeds to rectify and cure such default; or19.1.3Abandonment or vacation of all or a substantial portion of the Premises by Tenant whileTenant is in default under the Lease; or19.1.4The failure by Tenant to observe or perform according to the provisions of Articles 5, 14,17 or 18 of this Lease where such failure continues for more than five (5) business days after notice from Landlord.19.2Remedies Upon Default. Upon the occurrence of any event of default by Tenant, Landlord shall have, inaddition to any other remedies available to Landlord at law or in equity (all of which remedies shall be distinct, separate andcumulative), the option to pursue any one or more of the following remedies, each and all of which shall be cumulative andnonexclusive, without any notice or demand whatsoever.19.2.1Terminate this Lease, in which event Tenant shall immediately surrender the Premises toLandlord, and if Tenant fails to do so, Landlord may, without prejudice to any other remedy which it may have for possession orarrearages in rent, enter upon and take possession of the Premises and expel or remove Tenant and any other person who may beoccupying the Premises or any part thereof, without being liable for prosecution or any claim or damages therefor; and Landlordmay recover from Tenant the following:(i)The worth at the time of award of the unpaid rent which has been earned at the timeof such termination; plus(ii)The worth at the time of award of the amount by which the unpaid rent which wouldhave been earned after termination until the time of award exceeds the amount of such rental loss that Tenant provescould have been reasonably avoided; plus(iii)The worth at the time of award of the amount by which the unpaid rent for thebalance of the Lease Term after the time of award exceeds the amount of such rental loss that Tenant proves could havebeen reasonably avoided; plus(iv)Any other amount necessary to compensate Landlord for all the detrimentproximately caused by Tenant's failure to perform its obligations under this Lease or which in the ordinary course ofthings would be likely to result therefrom, specifically including but not limited to, in each case to the extent allocableto the remaining Lease Term, brokerage commissions and advertising expenses incurred to obtain a new tenant,expenses of remodeling the Premises or any portion thereof for a new tenant, whether for the same or a different use, andany special concessions made to obtain a new tenant; and(v)At Landlord's election, such other amounts in addition to or in lieu of the foregoingas may be permitted from time to time by applicable law.The term "rent" as used in this Section 19.2 shall be deemed to be and to mean all sums of every nature required to bepaid by Tenant pursuant to the terms of this Lease, whether to Landlord or to others. As used in Sections 19.2.1(i) and (ii), above,the "worth at the time of award" shall be computed by allowing interest at the rate set forth in Article 25 of this Lease, but in nocase greater than the maximum amount of such interest permitted by law. As used in Section 19.2.1(iii) above, the "worth at thetime of award" shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of SanFrancisco at the time of award plus one percent (1%).8377633.2 (8383465.1)-30-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] 19.2.2Landlord shall have the remedy described in California Civil Code Section 1951.4 (lessormay continue lease in effect after lessee's breach and abandonment and recover rent as it becomes due, if lessee has the right tosublet or assign, subject only to reasonable limitations). Accordingly, if Landlord does not elect to terminate this Lease onaccount of any default by Tenant, Landlord may, from time to time, without terminating this Lease, enforce all of its rights andremedies under this Lease, including the right to recover all rent as it becomes due.19.2.3Landlord shall at all times have the rights and remedies (which shall be cumulative witheach other and cumulative and in addition to those rights and remedies available under Sections 19.2.1 and 19.2.2, above, orany law or other provision of this Lease), without prior demand or notice except as required by applicable law, to seek anydeclaratory, injunctive or other equitable relief, and specifically enforce this Lease, or restrain or enjoin a violation or breach ofany provision hereof.19.3Subleases of Tenant. If Landlord elects to terminate this Lease on account of any default by Tenant, as setforth in this Article 19, Landlord shall have the right to terminate any and all subleases, licenses, concessions or otherconsensual arrangements for possession entered into by Tenant and affecting the Premises or may, in Landlord's sole discretion,succeed to Tenant's interest in such subleases, licenses, concessions or arrangements. In the event of Landlord's election tosucceed to Tenant's interest in any such subleases, licenses, concessions or arrangements, Tenant shall, as of the date of noticeby Landlord of such election, have no further right to or interest in the rent or other consideration receivable thereunder.19.4Efforts to Relet. No re-entry, repairs, maintenance, changes, alterations and additions, appointment of areceiver to protect Landlord's interests hereunder, or any other action or omission by Landlord shall be construed as an electionby Landlord to terminate this Lease or Tenant's right to possession, or to accept a surrender of the Premises, nor shall sameoperate to release Tenant in whole or in part from any of Tenant's obligations hereunder, unless express written notice of suchintention is sent by Landlord to Tenant.20.COVENANT OF QUIET ENJOYMENT Landlord covenants that Tenant, on paying the Rent, charges for servicesand other payments herein reserved and on keeping, observing and performing all the other terms, covenants, conditions,provisions and agreements herein contained on the part of Tenant to be kept, observed and performed, shall, during the LeaseTerm, peaceably and quietly have, hold and enjoy the Premises subject to the terms, covenants, conditions, provisions andagreements hereof without interference by any persons lawfully claiming by or through Landlord. The foregoing covenant is inlieu of any other covenant express or implied.21.SECURITY DEPOSIT Within five (5) business days following Tenant's execution of this Lease, Tenant shalldeposit with Landlord a security deposit (the "Security Deposit") in the amount set forth in Section 8 of the Summary, assecurity for the faithful performance by Tenant of all of its obligations under this Lease. If Tenant defaults with respect to anyprovisions of this Lease, including, but not limited to, the provisions relating to the payment of Rent, the removal of propertyand the repair of resultant damage, Landlord may, without notice to Tenant, but shall not be required to apply all or any part ofthe Security Deposit for the payment of any Rent or any other sum in default and Tenant shall, upon demand therefor, restorethe Security Deposit to its original amount. Any unapplied portion of the Security Deposit shall be returned to Tenant, or, atLandlord's option, to the last assignee of Tenant's interest hereunder, within sixty (60) days following the expiration of theLease Term. Tenant shall not be entitled to any interest on the Security Deposit. Tenant hereby irrevocably waives andrelinquishes any and all rights, benefits, or protections, if any, Tenant now has, or in the future may have, under Section 1950.7of the California Civil Code, any successor statute, and all other provisions of law, now or hereafter in effect, which (i)establishes the time frame by which a landlord must refund a security deposit under a lease, and/or (ii) provides that a landlordmay claim from a security deposit only those sums reasonably necessary to remedy defaults in the payment of rent, to repairdamage caused by a tenant or to clean the subject premises. Tenant acknowledges and agrees that (a) any statutory time framesfor the return of a security deposit are superseded by the express period identified in this Article 21, above, and (b) rather thanbe so limited, Landlord may claim from the Security Deposit (1) any and all sums expressly identified in this Article 21, above,and (2) any additional sums reasonably necessary to compensate Landlord for any and all losses or damages caused by Tenant'sdefault of this Lease, including, but not limited to, all damages or rent due upon termination of Lease pursuant to Section1951.2 of the California Civil Code.8377633.2 (8383465.1)-31-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] 22.COMMUNICATIONS AND COMPUTER LINE Tenant may install, maintain, replace, remove or use anycommunications or computer wires and cables serving the Premises (collectively, the "Lines"), provided that Tenant shall obtainLandlord's prior written consent, use an experienced and qualified contractor approved in writing by Landlord, and comply withall of the other provisions of Articles 7 and 8 of this Lease. Tenant shall pay all costs in connection therewith. Landlord reservesthe right, upon notice to Tenant prior to the expiration or earlier termination of this Lease, to require that Tenant, at Tenant'ssole cost and expense, remove any Lines located in or serving the Premises prior to the expiration or earlier termination of thisLease.23.SIGNS23.1Exterior Signage. Subject to Landlord's prior written approval, which shall not be unreasonably withheld,conditioned or delayed, and provided all signs are in keeping with the quality, design and style of the Building and Project,Tenant, at its sole cost and expense, may install (i) identification signage on the existing monument sign located at the exteriorof the Project, and (ii) on the Building at the door/window level of the Building (i.e., Tenant does not have rights to rooftop,eyebrow or other similar signage rights), including at the entrance to the Building, as well as any internal directional and lobbyidentification signage and directory (collectively, "Tenant Signage"); provided, however, in no event shall Tenant's Signageinclude an "Objectionable Name," as that term is defined in Section 23.3, of this Lease. All such signage shall be subject toTenant's obtaining all required governmental approvals. All permitted signs shall be maintained by Tenant at its expense in afirst-class and safe condition and appearance. Upon the expiration or earlier termination of this Lease, Tenant shall remove all ofits signs at Tenant's sole cost and expense. The graphics, materials, color, design, lettering, lighting, size, illumination,specifications and exact location of Tenant's Signage (collectively, the "Sign Specifications") shall be subject to the priorwritten approval of Landlord, which approval shall not be unreasonably withheld, conditioned or delayed, and shall beconsistent and compatible with the quality and nature of the Project. Tenant hereby acknowledges that, notwithstandingLandlord's approval of Tenant's Signage, Landlord has made no representation or warranty to Tenant with respect to theprobability of obtaining all necessary governmental approvals and permits for Tenant's Signage. In the event Tenant does notreceive the necessary governmental approvals and permits for Tenant's Signage, Tenant's and Landlord's rights and obligationsunder the remaining terms of this Lease shall be unaffected.23.2Objectionable Name. Tenant's Signage shall not include a name or logo which relates to an entity which isof a character or reputation, or is associated with a political faction or orientation, which is inconsistent with the quality of theProject, or which would otherwise reasonably offend a landlord of the Comparable Buildings (an "Objectionable Name"). Theparties hereby agree that the following name, or any reasonable derivation thereof, shall be deemed not to constitute anObjectionable Name: "Pulse Biosciences, Inc.."23.3Prohibited Signage and Other Items. Any signs, notices, logos, pictures, names or advertisements which areinstalled and that have not been separately approved by Landlord may be removed without notice by Landlord at the soleexpense of Tenant. Any signs, window coverings, or blinds (even if the same are located behind the Landlord-approved windowcoverings for the Building), or other items visible from the exterior of the Premises or Building, shall be subject to the priorapproval of Landlord, in its sole discretion.24.COMPLIANCE WITH LAW Tenant shall not do anything or suffer anything to be done in or about the Premisesor the Project which will in any way conflict with any law, statute, ordinance or other governmental rule, regulation orrequirement now in force or which may hereafter be enacted or promulgated (“Applicable Laws”). At its sole cost and expense,Tenant shall promptly comply with all such governmental measures. Should any standard or regulation now or hereafter beimposed on Landlord or Tenant by a state, federal or local governmental body charged with the establishment, regulation andenforcement of occupational, health or safety standards for employers, employees, landlords or tenants, then Tenant agrees, atits sole cost and expense, to comply promptly with such standards or regulations. Tenant shall be responsible, at its sole costand expense, to make all alterations to the Building and Premises as are required to comply with the governmental rules,regulations, requirements or standards described in this Article 24. The judgment of any court of competent jurisdiction or theadmission of Tenant in any judicial action, regardless of whether Landlord is a party thereto, that Tenant has violated any ofsaid governmental measures, shall be conclusive of that fact as between Landlord and Tenant. For purposes of Section 1938 ofthe California Civil Code, Landlord hereby discloses to Tenant, and Tenant hereby8377633.2 (8383465.1)-32-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] acknowledges, that the Project, Building and Premises have not undergone inspection by a Certified Access Specialist (CASp).As required by Section 1938(e) of the California Civil Code, Landlord hereby states as follows: "A Certified Access Specialist(CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicableconstruction-related accessibility standards under state law. Although state law does not require a CASp inspection of thesubject premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASpinspection of the subject premises for the occupancy or potential occupancy of the lessee or tenant, if requested by the lessee ortenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of thefee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction-relatedaccessibility standards within the premises." In furtherance of the foregoing, Landlord and Tenant hereby agree as follows: (a)any CASp inspection requested by Tenant shall be conducted, at Tenant's sole cost and expense, by a CASp approved inadvance by Landlord; and (b) pursuant to Article 24 below, but subject to Section 10.2 above, Tenant, at its cost, is responsiblefor making any repairs within the Premises to correct violations of construction-related accessibility standards; and, if anythingdone by or for Tenant in its use or occupancy of the Premises shall require repairs to the Building (outside the Premises) tocorrect violations of construction-related accessibility standards, then Tenant shall, at Landlord's option, either perform suchrepairs at Tenant's sole cost and expense or reimburse Landlord upon demand, as Additional Rent, for the cost to Landlord ofperforming such repairs. Tenant’s obligations under this Article 24 are subject to the limitation in Section 10.2 above.25.LATE CHARGES If any installment of Rent or any other sum due from Tenant shall not be received by Landlordor Landlord's designee within five (5) business days after Tenant's receipt of written notice from Landlord that said amount isdelinquent then Tenant shall pay to Landlord a late charge equal to five percent (5%) of the overdue amount plus anyreasonable attorneys' fees incurred by Landlord by reason of Tenant's failure to pay Rent and/or other charges when duehereunder. The late charge shall be deemed Additional Rent and the right to require it shall be in addition to all of Landlord'sother rights and remedies hereunder or at law and shall not be construed as liquidated damages or as limiting Landlord'sremedies in any manner. In addition to the late charge described above, any Rent or other amounts owing hereunder which arenot paid within ten (10) days after Tenant’s receipt of written notice that said amount is delinquent shall bear interest from thedate when due until paid at a rate per annum equal to the lesser of (i) the annual "Bank Prime Loan" rate cited in the FederalReserve Statistical Release Publication G.13(415), published on the first Tuesday of each calendar month (or such othercomparable index as Landlord and Tenant shall reasonably agree upon if such rate ceases to be published) plus four (4)percentage points, and (ii) the highest rate permitted by applicable law.26.LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT26.1Landlord's Cure. All covenants and agreements to be kept or performed by Tenant under this Lease shall beperformed by Tenant at Tenant's sole cost and expense and without any reduction of Rent, except to the extent, if any, otherwiseexpressly provided herein. If Tenant shall fail to perform any obligation under this Lease, and such failure shall continue inexcess of the time allowed under Section 19.1.2, above, unless a specific time period is otherwise stated in this Lease, Landlordmay, but shall not be obligated to, make any such payment or perform any such act on Tenant's part without waiving its rightsbased upon any default of Tenant and without releasing Tenant from any obligations hereunder.26.2Tenant's Reimbursement. Except as may be specifically provided to the contrary in this Lease, Tenant shallpay to Landlord, upon delivery by Landlord to Tenant of statements therefor: (i) sums equal to expenditures reasonably madeand obligations incurred by Landlord in connection with the remedying by Landlord of Tenant's defaults pursuant to theprovisions of Section 26.1; (ii) sums equal to all losses, costs, liabilities, damages and expenses referred to in Article 10 of thisLease; and (iii) subject to Section 29.21, sums equal to all expenditures made and obligations incurred by Landlord incollecting or attempting to collect the Rent or in enforcing or attempting to enforce any rights of Landlord under this Lease orpursuant to law, including, without limitation, all reasonable legal fees and other amounts so expended. Tenant's obligationsunder this Section 26.2 shall survive the expiration or sooner termination of the Lease Term.27.ENTRY BY LANDLORD Landlord reserves the right at all reasonable times and upon reasonable notice toTenant (except in the case of an Emergency) to enter the Premises to (i) inspect them; (ii) show the8377633.2 (8383465.1)-33-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] Premises to prospective purchasers, or to current or prospective mortgagees, ground or underlying lessors or insurers or, duringthe last nine (9) months of the Lease Term, to prospective tenants; (iii) post notices of nonresponsibility (to the extentapplicable pursuant to then applicable law); or (iv) repair the Premises or the Building, or for structural repairs to the Building orthe Building's systems and equipment as provided under the Lease. Landlord may make any such entries without the abatementof Rent, except as otherwise provided in this Lease, and may take such reasonable steps as required to accomplish the statedpurposes. In an Emergency, Landlord shall have the right to use any means that Landlord may deem proper to open the doors inand to the Premises. Any entry into the Premises by Landlord in the manner hereinbefore described shall not be deemed to be aforcible or unlawful entry into, or a detainer of, the Premises, or an actual or constructive eviction of Tenant from any portion ofthe Premises. Landlord shall use commercially reasonable efforts to minimize any interference with Tenant's use of or access tothe Premises in connection with any such entry, and shall comply with Tenant's reasonable security measures, including thatTenant may require that Landlord be accompanied by an employee of Tenant during any such entry into the Premises byLandlord (except in the event of an emergency in which case no escort shall be required); provided, however, that in no eventshall the unavailability of such escort at the time that Landlord is permitted to enter the Premises delay Landlord's entry into thePremises as permitted hereunder. Landlord shall hold confidential any information regarding Tenant’s business that it may learnas a result of such entry.28.TENANT PARKING Tenant shall have the right, without the payment of any parking charge or fee (other than as areimbursement of operating expenses to the extent allowed pursuant to the terms or Article 4 of this Lease, above), commencingon the Lease Commencement Date, to use the amount of parking set forth in Section 9 of the Summary, in the on-site parkinglot and garage which serves the Building. Tenant shall abide by all reasonable rules and regulations which are prescribed fromtime to time for the orderly operation and use of the parking facility where the parking passes are located (including any stickeror other identification system established by Landlord and the prohibition of vehicle repair and maintenance activities in theparking facilities), and shall cooperate in seeing that Tenant's employees and visitors also comply with such rules andregulations. Tenant's use of the Project parking facility shall be at Tenant's sole risk and Tenant acknowledges and agrees thatLandlord shall have no liability whatsoever for damage to the vehicles of Tenant, its employees and/or visitors, or for otherpersonal injury or property damage or theft relating to or connected with the parking rights granted herein or any of Tenant's, itsemployees' and/or visitors' use of the parking facilities. Landlord shall not over subscribe parking. Landlord shall usecommercially reasonable efforts to prevent the occupants of neighboring buildings from parking in the lot serving the Buildingand to prevent other tenants in the Building from using more than their share of the parking spaces.29.MISCELLANEOUS PROVISIONS29.1Terms; Captions. The words "Landlord" and "Tenant" as used herein shall include the plural as well as thesingular. The necessary grammatical changes required to make the provisions hereof apply either to corporations or partnershipsor individuals, men or women, as the case may require, shall in all cases be assumed as though in each case fully expressed. Thecaptions of Articles and Sections are for convenience only and shall not be deemed to limit, construe, affect or alter the meaningof such Articles and Sections.29.2Binding Effect. Subject to all other provisions of this Lease, each of the covenants, conditions andprovisions of this Lease shall extend to and shall, as the case may require, bind or inure to the benefit not only of Landlord andof Tenant, but also of their respective heirs, personal representatives, successors or assigns, provided this clause shall not permitany assignment by Tenant contrary to the provisions of Article 14 of this Lease.29.3No Air Rights. No rights to any view or to light or air over any property, whether belonging to Landlord orany other person, are granted to Tenant by this Lease. If at any time any windows of the Premises are temporarily darkened orthe light or view therefrom is obstructed by reason of any repairs, improvements, maintenance or cleaning in or about theProject, the same shall be without liability to Landlord and without any reduction or diminution of Tenant's obligations underthis Lease.29.4Modification of Lease. Should any current or prospective mortgagee or ground lessor for the Building orProject require a modification of this Lease, which modification will not cause an increased cost or expense to Tenant or in anyother way materially and adversely change the rights and obligations of Tenant 8377633.2 (8383465.1)-34-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] hereunder or interfere with Tenant’s use of the Premises, then and in such event, Tenant agrees that this Lease may be somodified and agrees to execute whatever documents are reasonably required therefor and to deliver the same to Landlord withinten (10) business days following a request therefor. At the request of Landlord or any mortgagee or ground lessor, Tenant agreesto execute a short form of Lease and deliver the same to Landlord within ten (10) business days following the request therefor.29.5Transfer of Landlord's Interest. Tenant acknowledges that Landlord has the right to transfer all or anyportion of its interest in the Project or Building and in this Lease, and Tenant agrees that in the event of any such transfer,Landlord shall automatically be released from all liability under this Lease and Tenant agrees to look solely to such transfereefor the performance of Landlord's obligations hereunder accruing after the date of transfer provided such transferee shall havefully assumed and agreed in writing to be liable for all obligations of this Lease to be performed by Landlord, including thereturn of any Security Deposit, and Tenant shall attorn to such transferee.29.6Prohibition Against Recording. Except as provided in Section 29.4 of this Lease, neither this Lease, nor anymemorandum, affidavit or other writing with respect thereto, shall be recorded by Tenant or by anyone acting through, under oron behalf of Tenant.29.7Landlord's Title. Landlord's title is and always shall be paramount to the title of Tenant. Nothing hereincontained shall empower Tenant to do any act which can, shall or may encumber the title of Landlord.29.8Relationship of Parties. Nothing contained in this Lease shall be deemed or construed by the parties heretoor by any third party to create the relationship of principal and agent, partnership, joint venturer or any association betweenLandlord and Tenant.29.9Payment under Protest. If Tenant in good faith disputes any amounts billed by Landlord, other than (i) BaseRent, (ii) Tenant's Share of Direct Expenses (as to which Tenant may exercise its rights under Section 4.6, above), Tenant maymake payment of such amounts under protest, and reserve all of its rights with respect to such amounts (the "DisputedAmounts"). Landlord and Tenant shall meet and confer to discuss the Disputed Amounts and attempt, in good faith, to resolvethe particular dispute. If, despite such good faith efforts, Landlord and Tenant are unable to reach agreement regarding theDisputed Amounts, either party may submit the matter to binding arbitration under the JAMS Streamlined Arbitration Rules &Procedures. The non-prevailing party, as determined by JAMS, will be responsible to pay all fees and costs incurred inconnection with the JAMS procedure, as well as all other costs and expenses, including reasonable attorneys' fees, incurred bythe prevailing party. This Section 29.9 shall not apply to claims relating to Landlord's exercise of any unlawful detainer rightspursuant to California law or rights or remedies used by Landlord to gain possession of the Premises or terminate Lessee's rightof possession to the Premises.29.10Time of Essence. Time is of the essence with respect to the performance of every provision of this Lease inwhich time of performance is a factor.29.11Partial Invalidity. If any term, provision or condition contained in this Lease shall, to any extent, beinvalid or unenforceable, the remainder of this Lease, or the application of such term, provision or condition to persons orcircumstances other than those with respect to which it is invalid or unenforceable, shall not be affected thereby, and each andevery other term, provision and condition of this Lease shall be valid and enforceable to the fullest extent possible permitted bylaw.29.12No Warranty. In executing and delivering this Lease, Tenant has not relied on any representations,including, but not limited to, any representation as to the amount of any item comprising Additional Rent or the amount of theAdditional Rent in the aggregate or that Landlord is furnishing the same services to other tenants, at all, on the same level or onthe same basis, or any warranty or any statement of Landlord which is not set forth herein or in one or more of the exhibitsattached hereto.8377633.2 (8383465.1)-35-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] 29.13Landlord Exculpation. The liability of Landlord or the Landlord Parties to Tenant for any default byLandlord under this Lease or arising in connection herewith or with Landlord's operation, management, leasing, repair,renovation, alteration or any other matter relating to the Project or the Premises shall be limited solely and exclusively to anamount which is equal to the lesser of (a) the interest of Landlord in the Project or (b) the equity interest Landlord would have inthe Project if the Project were encumbered by third-party debt in an amount equal to eighty percent (80%) of the value of theProject (as such value is determined by Landlord), including any rental, condemnation, sales and insurance proceeds receivedby Landlord or the Landlord Parties in connection with the Project, Building or Premises. No Landlord Parties (other thanLandlord) shall have any personal liability therefor, and Tenant hereby expressly waives and releases such liability on behalf ofitself and all persons claiming by, through or under Tenant. The limitations of liability contained in this Section 29.13 shallinure to the benefit of Landlord's and the Landlord Parties' present and future partners, beneficiaries, officers, directors, trustees,shareholders, agents and employees, and their respective partners, heirs, successors and assigns. Under no circumstances shallany present or future partner of Landlord (if Landlord is a partnership), or trustee or beneficiary (if Landlord or any partner ofLandlord is a trust), have any liability for the performance of Landlord's obligations under this Lease. Notwithstanding anycontrary provision herein, neither Landlord nor the Landlord Parties shall be liable under any circumstances for injury ordamage to, or interference with, Tenant's business, including but not limited to, loss of profits, loss of rents or other revenues,loss of business opportunity, loss of goodwill or loss of use, in each case, however occurring, or loss to inventory, scientificresearch, scientific experiments, laboratory animals, products, specimens, samples, and/or scientific, business, accounting andother records of every kind and description kept at the premises and any and all income derived or derivable therefrom.29.14Entire Agreement. It is understood and acknowledged that there are no oral agreements between the partieshereto affecting this Lease and this Lease constitutes the parties' entire agreement with respect to the leasing of the Premises andsupersedes and cancels any and all previous negotiations, arrangements, brochures, agreements and understandings, if any,between the parties hereto or displayed by Landlord to Tenant with respect to the subject matter thereof, and none thereof shallbe used to interpret or construe this Lease. None of the terms, covenants, conditions or provisions of this Lease can be modified,deleted or added to except in writing signed by the parties hereto.29.15Right to Lease. Landlord reserves the absolute right to effect such other tenancies in the Project as Landlordin the exercise of its sole business judgment shall determine to best promote the interests of the Building or Project. Tenant doesnot rely on the fact, nor does Landlord represent, that any specific tenant or type or number of tenants shall, during the LeaseTerm, occupy any space in the Building or Project.29.16Force Majeure. Any prevention, delay or stoppage due to strikes, lockouts, labor disputes, acts of God, actsof war, terrorist acts, inability to obtain services, labor, or materials or reasonable substitutes therefor, governmental actions,civil commotions, fire or other casualty, 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 thisLease (collectively, a "Force Majeure"), notwithstanding anything to the contrary contained in this Lease, shall excuse theperformance of such party for a period equal to any such prevention, delay or stoppage and, therefore, if this Lease specifies atime period for performance of an obligation of either party, that time period shall be extended by the period of any delay insuch party's performance caused by a Force Majeure, provided, however, the foregoing delays shall not apply to Tenant’stermination rights hereunder.29.17Intentionally Omitted.29.18Notices. All notices, demands, statements, designations, approvals or other communications (collectively,"Notices") given or required to be given by either party to the other hereunder or by law shall be in writing, shall be (A) sent byUnited States certified or registered mail, postage prepaid, return receipt requested ("Mail"), (B) delivered by a nationallyrecognized overnight courier, or (C) delivered personally. Any Notice shall be sent, transmitted, or delivered, as the case maybe, to Tenant at the appropriate address set forth in Section 10 of the Summary, or to such other place as Tenant may from timeto time designate in a Notice to Landlord, or to Landlord at the addresses set forth below, or to such other places as Landlordmay from time to time designate in a Notice to Tenant. Any Notice will be deemed given (i) three (3) business days after the dateit is posted if sent by Mail, (ii) the date the overnight courier delivery is made, or (iii) the date personal delivery is made. As ofthe date8377633.2 (8383465.1)-36-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] of this Lease, any Notices to Landlord must be sent, transmitted, or delivered, as the case may be, to the following addresses:Hayward Point Eden I Limited Partnership c/o HCP, Inc.3760 Kilroy Airport Way, Suite 300 Long Beach,CA 90806-2473Attn: Legal Department with a copyto:HCP Life Science Estates 950 TowerLane, Suite 1650Foster City, CA 94404Attention: Jonathan M. Bergschneider andAllen Matkins Leck Gamble Mallory & Natsis LLP 1901 Avenue ofthe Stars, Suite 1800Los Angeles, California 90067 Attention: Anton N.Natsis, Esq.29.19Joint and Several. If there is more than one tenant, the obligations imposed upon Tenant under this Leaseshall be joint and several.29.20Authority. If Tenant is a corporation, trust or partnership, Tenant hereby represents and warrants that Tenantis a duly formed and existing entity qualified to do business in the State of California and that Tenant has full right andauthority to execute and deliver this Lease and that each person signing on behalf of Tenant is authorized to do so.29.21Attorneys' Fees. In the event that either Landlord or Tenant should bring suit for the possession of thePremises, for the recovery of any sum due under this Lease, or because of the breach of any provision of this Lease or for anyother relief against the other, then all costs and expenses, including reasonable attorneys' fees, incurred by the prevailing partytherein shall be paid by the other party, which obligation on the part of the other party shall be deemed to have accrued on thedate of the commencement of such action and shall be enforceable whether or not the action is prosecuted to judgment.29.22Governing Law; WAIVER OF TRIAL BY JURY. This Lease shall be construed and enforced inaccordance with the laws of the State of California. IN ANY ACTION OR PROCEEDING ARISING HEREFROM, LANDLORDAND TENANT HEREBY CONSENT TO (I) THE JURISDICTION OF ANY COMPETENT COURT WITHIN THE STATE OFCALIFORNIA, (II) SERVICE OF PROCESS BY ANY MEANS AUTHORIZED BY CALIFORNIA LAW, AND (III) IN THEINTEREST OF SAVING TIME AND EXPENSE, TRIAL WITHOUT A JURY IN ANY ACTION, PROCEEDING ORCOUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER OR THEIR SUCCESSORS INRESPECT OF ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS LEASE, THE RELATIONSHIP OFLANDLORD AND TENANT, TENANT'S USE OR OCCUPANCY OF THE PREMISES, AND/OR ANY CLAIM FOR INJURY ORDAMAGE, OR ANY EMERGENCY OR STATUTORY REMEDY. IN THE EVENT LANDLORD COMMENCES ANYSUMMARY PROCEEDINGS OR ACTION FOR NONPAYMENT OF BASE RENT OR ADDITIONAL RENT, TENANT SHALLNOT INTERPOSE ANY COUNTERCLAIM OF ANY NATURE OR DESCRIPTION (UNLESS SUCH COUNTERCLAIM SHALLBE MANDATORY) IN ANY SUCH PROCEEDING OR ACTION, BUT SHALL BE RELEGATED TO AN INDEPENDENTACTION AT LAW.8377633.2 (8383465.1)-37-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] 29.23Submission of Lease. Submission of this instrument for examination or signature by Tenant does notconstitute a reservation of, option for or option to lease, and it is not effective as a lease or otherwise until execution anddelivery by both Landlord and Tenant.29.24Brokers. Landlord and Tenant hereby warrant to each other that they have had no dealings with any realestate broker or agent in connection with the negotiation of this Lease, excepting only the real estate brokers or agents specifiedin Section 12 of the Summary (the "Brokers"), and that they know of no other real estate broker or agent who is entitled to acommission in connection with this Lease. Each party agrees to indemnify and defend the other party against and hold the otherparty harmless from any and all claims, demands, losses, liabilities, lawsuits, judgments, costs and expenses (including withoutlimitation reasonable attorneys' fees) with respect to any leasing commission or equivalent compensation alleged to be owingon account of any dealings with any real estate broker or agent, other than the Brokers, occurring by, through, or under theindemnifying party. The terms of this Section 29.24 shall survive the expiration or earlier termination of the Lease Term.29.25Independent Covenants. This Lease shall be construed as though the covenants herein between Landlordand Tenant are independent and not dependent and Tenant hereby expressly waives the benefit of any statute to the contraryand agrees that if Landlord fails to perform its obligations set forth herein, Tenant shall not be entitled to make any repairs orperform any acts hereunder at Landlord's expense or to any setoff of the Rent or other amounts owing hereunder againstLandlord.29.26Project or Building Name, Address and Signage. Landlord shall have the right at any time to change thename and/or address of the Project or Building (and Landlord shall reimburse Tenant its actual, reasonable costs incurred as aresult of such change, if any) and, subject to Section 23.1, to install, affix and maintain any and all signs on the exterior and onthe interior of the Project or Building as Landlord may, in Landlord's sole discretion, desire. Tenant shall not use the name ofthe Project or Building or use pictures or illustrations of the Project or Building in advertising or other publicity or for anypurpose other than as the address of the business to be conducted by Tenant in the Premises, without the prior written consent ofLandlord.29.27Counterparts. This Lease may be executed in counterparts with the same effect as if both parties hereto hadexecuted the same document. Both counterparts shall be construed together and shall constitute a single lease.29.28Good Faith. Except (i) for matters for which there is a standard of consent or discretion specifically set forthin this Lease; (ii) matters which could have an adverse effect on the Building Structure or the Building Systems, or which couldaffect the exterior appearance of the Building, or (iii) matters covered by Article 4 (Additional Rent), or Article 19 (Defaults;Remedies) of this Lease (collectively, the “Excepted Matters”), any time the consent of Landlord or Tenant is required, suchconsent shall not be unreasonably withheld or delayed, and, except with regard to the Excepted Matters, whenever this Leasegrants Landlord or Tenant the right to take action, exercise discretion, establish rules and regulations or make an allocation orother determination, Landlord and Tenant shall act reasonably and in good faith.29.29Development of the Project.29.29.1Subdivision. Landlord reserves the right to subdivide all or a portion of the buildings andCommon Areas, so long as the same does not interfere with Tenant’s use of or access to the Premises or Tenant’s parking rights.Tenant agrees to execute and deliver, upon demand by Landlord and in the form requested by Landlord, any additionaldocuments needed to conform this Lease to the circumstances resulting from a subdivision and any all maps in connectiontherewith, so long as the same does not increase Tenant’s obligations or decrease Tenant’s rights under this Lease.Notwithstanding anything to the contrary set forth in this Lease, the separate ownership of any buildings and/or Common Areasby an entity other than Landlord shall not affect the calculation of Direct Expenses or Tenant's payment of Tenant's Share ofDirect Expenses.29.29.2Construction of Property and Other Improvements. Tenant acknowledges that portionsof the Project may be under construction following Tenant's occupancy of the Premises, and that such construction may result inlevels of noise, dust, obstruction of access, etc. which are in excess of that present in a8377633.2 (8383465.1)-38-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] fully constructed project. Tenant hereby waives any and all rent offsets or claims of constructive eviction which may arise inconnection with such construction, so long as the same does not interfere with Tenant’s use of or access to the Premises orTenant’s parking rights.29.30No Violation. Tenant hereby warrants and represents that neither its execution of nor performance under thisLease shall cause Tenant to be in violation of any agreement, instrument, contract, law, rule or regulation by which Tenant isbound, and Tenant shall protect, defend, indemnify and hold Landlord harmless against any claims, demands, losses, damages,liabilities, costs and expenses, including, without limitation, reasonable attorneys' fees and costs, arising from Tenant's breachof this warranty and representation.29.31Transportation Management. Tenant shall fully comply with all present or future programs required byapplicable laws intended to manage parking, transportation or traffic in and around the Project and/or the Building and inconnection therewith, Tenant shall take responsible action for the transportation planning and management of all employeeslocated at the Premises by working directly with Landlord, any governmental transportation management organization or anyother transportation-related committees or entities. Such programs may include, without limitation: (i) restrictions on thenumber of peak-hour vehicle trips generated by Tenant; (ii) increased vehicle occupancy; (iii) implementation of an in-houseridesharing program and an employee transportation coordinator; (iv) working with employees and any Project, Building orarea-wide ridesharing program manager; (v) instituting employer-sponsored incentives (financial or in-kind) to encourageemployees to rideshare; and (vi) utilizing flexible work shifts for employees.8377633.2 (8383465.1)-39-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be executed the day and date first abovewritten.LANDLORD: TENANT: HAYWARD POINT EDEN I LIMITED PARTNERSHIP, PULSE BIOSCIENCES, INC., a Delaware limited partnership a Nevada corporation By:HCP Estates USA Inc., By:/s/ Brian B. Dow a Delaware corporation, its General Partner Brian B, Dow Print Name By:/s/ Jonathan M. Bergschneder Jonathan M. Bergschneider Its:Senior Vice President and Chief Senior Managing Director Financial Officer By: Print name Its: 8377633.2 (8383465.1)-40-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] EXHIBIT ABRITANNIA POINT EDENOUTLINE OF PREMISES 8377633.2 (8383465.1)EXHIBIT A-1-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] EXHIBIT A-1BRITANNIA POINT EDENPROJECT SITE PLAN 8377633.2 (8383465.1)EXHIBIT A-1-1-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] EXHIBIT BBRITANNIA POINT EDENTENANT WORK LETTER1.Defined Terms. As used in this Tenant Work Letter, the following capitalized terms have the followingmeanings:(a)Approved TI Plans: Plans and specifications prepared by the applicable Architect for theTenant Improvements and approved by Landlord and Tenant in accordance with Paragraph 2 of this Tenant Work Letter,subject to further modification from time to time to the extent provided in and in accordance with such Paragraph 2.(b)Architect: The architect reasonably and mutually selected by Landlord and Tenant, withrespect to any Tenant Improvements which Landlord is to cause to be constructed pursuant to this Tenant Work Letter.(c)Tenant Change Request: See definition in Paragraph 2(c)(ii) hereof.(d)Final TI Working Drawings: See definition in Paragraph 2(a) hereof.(e)General Contractor: The general contractor reasonably selected by Landlord with respectto Landlord's TI Work as provided in Section 2(c) below. Tenant shall have no right to direct or control such GeneralContractor.(f)Landlord's TI Work: Any Tenant Improvements which Landlord is to construct or installpursuant to this Tenant Work Letter or by mutual agreement of Landlord and Tenant from time to time.(g)Project Manager. Project Management Advisors, Inc., or any other project managerdesignated by Landlord in its reasonable discretion from time to time to act in a supervisory, oversight, project management orother similar capacity on behalf of Landlord in connection with the design and/or construction of the Tenant Improvements.(h)Punch List Work: Minor corrections of construction or decoration details, and minormechanical adjustments, that are required in order to cause any applicable portion of the Tenant Improvements or Landlord’sWork as constructed to conform to the Approved TI Plans or this Tenant Work Letter in all material respects and that do notmaterially interfere with Tenant's use or occupancy of the Building and the Premises.(i)Substantial Completion Certificate: See definition in Paragraph 3(a) hereof.(j)Tenant Delay: Any of the following types of delay in the completion of construction ofLandlord's TI Work (but in each instance, only to the extent that any of the following has actually and proximately causedsubstantial completion of Landlord's TI Work to be delayed):(i)Any delay resulting from Tenant's failure to furnish, in a timely manner,information reasonably requested by Landlord or by Landlord's Project Manager in connection with the design or constructionof Landlord's TI Work, or from Tenant's failure to approve in a timely manner any matters requiring approval by Tenant;(ii)Any delay resulting from Tenant Change Requests initiated by Tenant,including any delay resulting from the need to revise any drawings or obtain further governmental approvals as a result of anysuch Tenant Change Request; or 8377633.2 (8383465.1)EXHIBIT B-1-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] (iii)Any delay caused by Tenant (or Tenant's contractors, agents or employees)materially interfering with the performance of Landlord's TI Work, provided that Landlord shall have given Tenant promptnotice of such material interference and, before the first time a Tenant Delay is deemed to have occurred as a result of suchdelay, such interference has continued for more than twenty-four (24) hours after Tenant’s receipt of such notice.(k)Tenant Improvements: The improvements to or within the Building shown on theApproved TI Plans from time to time and to be constructed by Landlord pursuant to the Lease and this Tenant Work Letter. Theterm "Tenant Improvements" does not include the improvements existing in the Building and Premises at the date of executionof the Lease.(l)Unavoidable Delays: Delays due to acts of God, acts of public agencies, labor disputes,strikes, fires, freight embargoes, inability (despite the exercise of due diligence) to obtain supplies, materials, fuels or permits, orother causes or contingencies (excluding financial inability) beyond the reasonable control of Landlord or Tenant, asapplicable. Landlord shall use commercially reasonable efforts to provide Tenant with prompt notice of any UnavoidableDelays.(m)Capitalized terms not otherwise defined in this Tenant Work Letter shall have thedefinitions set forth in the Lease.2.Plans and Construction. Landlord and Tenant shall comply with the procedures set forth in this Paragraph 2in preparing, delivering and approving matters relating to the Tenant Improvements.(a)Approved Plans and Working Drawings for Tenant Improvements. Tenant shall promptlyand diligently work with the Architect to cause to be prepared and delivered to Landlord for approval (which approval shall notbe unreasonably withheld, conditioned or delayed by Landlord) proposed schematic plans and outline specifications for theTenant Improvements. Following mutual approval of such proposed schematic plans and outline specifications by Landlord andby Tenant (as so approved, the “Approved Schematic Plans”), Tenant shall then work with the Architect to cause to beprepared, promptly and diligently (assuming timely delivery by Landlord of any information and decisions required to befurnished or made by Landlord in order to permit preparation of final working drawings, all of which information and decisionsLandlord will deliver promptly and with reasonable diligence), and delivered to Landlord for approval (which approval shallnot be unreasonably withheld, conditioned or delayed by Landlord) final detailed working drawings and specifications for theTenant Improvements, including (without limitation) any applicable life safety, mechanical, electrical and plumbing workingdrawings and final architectural drawings (collectively, “Final TI Working Drawings”), which Final TI Working Drawingsshall substantially conform to the Approved Schematic Plans. Upon receipt from Tenant of proposed schematic plans andoutline specifications, proposed Final TI Working Drawings, any other plans and specifications, or any revisions or resubmittalsof any of the foregoing, as applicable, Landlord shall promptly and diligently (and in all events within 10 business days afterreceipt in the case of an initial submittal of schematic plans and outline specifications or proposed Final TI Working Drawings,and within 7 business days after receipt in the case of any other plans and specifications or any revisions or resubmittals of anyof the foregoing) either approve such proposed schematic plans and outline specifications or proposed Final TI WorkingDrawings, as applicable, or set forth in writing with particularity any changes necessary to bring the aspects of such proposedschematic plans and outline specifications or proposed Final TI Working Drawings into a form which will be reasonablyacceptable to Landlord. Upon approval of the Final TI Working Drawings by Landlord and Tenant, the Final TI WorkingDrawings shall constitute the “Approved TI Plans,” superseding (to the extent of any inconsistencies) any inconsistent featuresof the previously existing Approved Schematic Plans. Tenant shall respond to any request for information or approval of plansor drawings from Landlord or Architect within five (5) business days.(b)Cost of Improvements. “Cost of Improvement” shall mean, with respect to any item orcomponent for which a cost must be determined in order to allocate such cost, or an increase in such cost, to Tenant pursuant tothis Tenant Work Letter, the sum of the following (unless otherwise agreed in writing by Landlord and Tenant with respect toany specific item or component or any category of items or components): (i) all sums paid to contractors or subcontractors forlabor and materials furnished in connection with construction of such item or component; (ii) all costs, expenses, payments, feesand charges (other than penalties) paid to or at the direction of any city, county or other governmental or quasi-governmentalauthority or agency which are required to be paid in8377633.2 (8383465.1)EXHIBIT B-2-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] order to obtain all necessary governmental permits, licenses, inspections and approvals relating to construction of such item orcomponent; (iii) engineering and architectural fees for services rendered in connection with the design and construction of suchitem or component (including, but not limited to, the Architect for such item or component and an electrical engineer,mechanical engineer, structural engineer and civil engineer, if applicable); (iv) sales and use taxes; (v) testing and inspectioncosts; (vi) the cost of power, water and other utility facilities and the cost of collection and removal of debris required inconnection with construction of such item or component; (vii) costs for builder’s risk insurance; and (viii) all other “hard” and“soft” costs incurred in the construction of such item or component in accordance with the Approved TI Plans (if applicable)and this Tenant Work Letter; provided that the Cost of Improvements shall not include any internal or third-party costs incurredby Landlord except as provided in Section 2(e).(c)Construction of Landlord's TI Work. Following completion of the Approved TI Plans,Landlord shall apply for and use reasonable efforts to obtain the necessary permits and approvals to allow construction of allTenant Improvements. Upon receipt of such permits and approvals, Landlord shall, at Tenant's expense (subject to Landlord'spayment of the Tenant Improvement Allowance), construct and complete the Tenant Improvements substantially in accordancewith the Approved TI Plans, subject to Unavoidable Delays and Tenant Delays (if any). Such construction of the TenantImprovements shall be performed in a neat, good and workmanlike manner, free of defects, using new materials and equipmentof good quality, and shall materially conform to all applicable laws, rules, regulations, codes, ordinances, requirements,covenants, conditions and restrictions applicable thereto in force at the time such work is completed. Landlord shall cause CodyBrock, Landmark Builders and up to one (1) other additional potential general contractor reasonably and mutually agreed uponto bid on general conditions and fee for construction of the Tenant Improvements and provide an estimate for the direct cost ofthe Tenant Improvements. All bids will be opened together with Landlord selecting the general contractor to construct theTenant Improvements, subject to the reasonable approval of Tenant. Tenant shall also have the right to approve allsubcontractors engaged by the General Contractor, which subcontractors shall be competitively bid and which approval shallnot be unreasonably withheld, conditioned or delayed. Landlord shall enter into a stipulated sum or guaranteed maximum priceconstruction contract with the General Contractor in the amount of the construction costs approved by Landlord and Tenant.(d)Changes.(i)If Landlord determines at any time that changes in the Final TI WorkingDrawings or in any other aspect of the Approved TI Plans relating to any item of Landlord's TI Work are required as a result ofapplicable law or governmental requirements, or are required at the insistence of any other third party whose approval may berequired with respect to the Tenant Improvements, or are required as a result of unanticipated conditions encountered in thecourse of construction, then Landlord shall promptly (A) advise Tenant of such circumstances and (B) at Tenant's sole cost andexpense, subject to Landlord's payment of the Tenant Improvement Allowance, cause revised Final TI Working Drawings to beprepared by the Architect and submitted to Tenant, for Tenant's approval, which shall not be unreasonably withheld. Failure ofTenant to deliver to Landlord written notice of disapproval and specification of such required changes on or before anydeadline reasonably specified by Landlord (which shall not be less than three (3) business days after delivery thereof to Tenant)shall constitute and be deemed to be a Tenant Delay to the extent Landlord is delayed in completing Landlord’s TI Work.(ii)If Tenant at any time desires any changes, alterations or additions to theFinal TI Working Drawings, Tenant shall submit a detailed written request to Landlord specifying such changes, alterations oradditions (a "Tenant Change Request"). Upon receipt of any such request, Landlord shall promptly notify Tenant of (A)whether the matters proposed in the Tenant Change Request are approved by Landlord (which approval shall not beunreasonably withheld, conditioned or delayed by Landlord), (B) Landlord's estimate of the number of days of delay, if any,which shall be caused in the construction of the Tenant Improvements by such Tenant Change Request if implemented(including, without limitation, delays due to the need to obtain any revised plans or drawings and any governmental approvals),and (C) Landlord's estimate of the increase, if any, which shall occur in the cost of design, permitting, project management andconstruction of the Tenant Improvements affected by such Tenant Change Request if such Tenant Change Request isimplemented (including, but not limited to, any costs of compliance with laws or governmental regulations that becomeapplicable because of the implementation of the Tenant Change Request). If Landlord approves the Tenant Change Requestand Tenant notifies Landlord in writing, within three (3) business days after receipt of such notice from Landlord, of Tenant'sapproval of the Tenant8377633.2 (8383465.1)EXHIBIT B-3-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] Change Request (including the estimated delays and cost increases, if any, described in Landlord's notice), then Landlord shallcause such Tenant Change Request to be implemented and Tenant shall be responsible for all actual costs or cost increasesresulting from or attributable to the implementation of the Tenant Change Request, and any delays resulting therefrom shall bedeemed to be a Tenant Delay (subject to Landlord's payment of the Tenant Improvement Allowance). If Tenant fails to notifyLandlord in writing of Tenant's approval of such Tenant Change Request within said three (3) business day period, then suchTenant Change Request shall be deemed to be withdrawn and shall be of no further effect.(e)Project Management. Unless and until revoked by Landlord by written notice delivered toTenant, Landlord hereby (i) delegates to Project Manager the authority to exercise all approval rights, supervisory rights andother rights or powers of Landlord under this Tenant Work Letter with respect to the design and construction of the TenantImprovements, and (ii) requests that Tenant work with Project Manager with respect to any logistical or other coordinationmatters arising in the course of construction of the Tenant Improvements, including monitoring Tenant's compliance with itsobligations under this Tenant Work Letter and under the Lease with respect to the design and construction of the TenantImprovements. Tenant acknowledges the foregoing delegation and request, and agrees to cooperate reasonably with ProjectManager as Landlord's representative pursuant to such delegation and request. Fees and charges of Project Manager for suchservices shall be at Tenant's sole expense, subject to Landlord's payment of the Tenant Improvement Allowance. Such fees shallnot exceed an amount equal the product of (A) 2.9% and (B) the amount of the Tenant Improvement Allowance which Tenantelects to utilize; provided that in the event Tenant elects to utilize any Tenant Funds pursuant to the terms of Section 4(b)below, such fees to the Project Manager shall increase by an amount equal to the product of (A) 2.0% and (B) the amount of theTenant Funds which Tenant elects to utilize.3.Completion.(a)When Landlord receives written certification from Architect that construction of the TenantImprovements has been completed in accordance with the Approved TI Plans (except for Punch List Work), Landlord shallprepare and deliver to Tenant a certificate signed by both Landlord and Architect (the "Substantial Completion Certificate") (i)certifying that the construction of the Tenant Improvements has been substantially completed in a good and workmanlikemanner in accordance with the Approved TI Plans in all material respects, subject only to completion of Punch List Work, andspecifying the date of that completion, and (ii) certifying that the Tenant Improvements comply in all material respects with alllaws, rules, regulations, codes, ordinances, requirements, covenants, conditions and restrictions applicable thereto at the time ofsuch delivery. Upon receipt by Tenant of the Substantial Completion Certificate and tender of possession of the Premises byLandlord to Tenant, and receipt of any certificate of occupancy or its legal equivalent, or other required sign-offs from anyapplicable governmental authority, allowing the legal occupancy of the Premises, the Tenant Improvements will be deemeddelivered to Tenant and "Ready for Occupancy" for all purposes of the Lease (subject to Landlord's continuing obligations withrespect to any Punch List Work, and to any other express obligations of Landlord under the Lease or this Tenant Work Letterwith respect to such Tenant Improvements).(b)Immediately prior to delivery of the Substantial Completion Certificate for the TenantImprovements in the Building, Project Manager or other representatives of Landlord shall conduct one or more "walkthroughs"of the Building with Tenant and Tenant's representatives, to identify any items of Punch List Work that may require correctionand to prepare a joint punch list reflecting any such items, following which Landlord shall diligently complete the Punch ListWork reflected in such joint punch list. The Punch List Work shall be attached to the Substantial Completion Certificate, andshall not include damage caused by Tenant or any of Tenant’s agents in connection with any work performed by Tenant in thePremises, or required as a result of Tenant’s move-in to the Premises. At any time within thirty (30) days after delivery of suchSubstantial Completion Certificate, Tenant shall be entitled to submit one or more lists to Landlord supplementing such jointpunch list by specifying any additional items of Punch List Work to be performed on the applicable Tenant Improvementsconstituting, and upon receipt of such list(s), Landlord shall diligently complete such additional Punch List Work. Promptlyafter Landlord provides Tenant with the Substantial Completion Certificate and completes all applicable Punch List Work forthe Building, Landlord shall cause the recordation of a Notice of Completion (as defined in the California Civil Code) withrespect to the Tenant Improvements.8377633.2 (8383465.1)EXHIBIT B-4-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] (c)All construction, product and equipment warranties and guaranties obtained by Landlordwith respect to the Tenant Improvements shall, to the extent reasonably obtainable, include a provision that such warranties andguaranties shall also run to the benefit of Tenant, and Landlord shall cooperate with Tenant in a commercially reasonablemanner to assist in enforcing all such warranties and guaranties for the benefit of Tenant.(d)Notwithstanding any other provisions of this Tenant Work Letter or of the Lease, ifLandlord is delayed in substantially completing any of the Tenant Improvements as a result of any Tenant Delay, and if theLease Commencement Date is being determined under clause (ii) of Section 3.2 of the Lease Summary, then notwithstandingany other provision of the Lease to the contrary, then the Premises shall be deemed to have been Ready for Occupancy on thedate the Premises would have been Ready for Occupancy absent such Tenant Delay.4.Payment of Costs.(a)Tenant Improvement Allowance. Subject to any restrictions, conditions or limitationsexpressly set forth in this Tenant Work Letter or in the Lease or as otherwise expressly provided by mutual written agreement ofLandlord and Tenant, the cost of construction of the Tenant Improvements shall be paid or reimbursed by Landlord up to amaximum amount equal to $2,119,095.00 (the "Tenant Improvement Allowance"), which amount is being made available byLandlord to be applied towards the Cost of Improvements for the construction of the Tenant Improvements in the Premises.Tenant shall be responsible, at its sole cost and expense, for payment of the entire Cost of Improvements of the TenantImprovements in excess of the Tenant Improvement Allowance, including (but not limited to) any costs or cost increasesincurred as a result of delays (unless caused by Landlord), governmental requirements or unanticipated conditions (unlesscaused by Landlord), and for payment of any and all costs and expenses relating to any alterations, additions, improvements,furniture, furnishings, equipment, fixtures and personal property items which are not eligible for application of TenantImprovement Allowance funds under the restrictions expressly set forth below in this paragraph, but Tenant shall be entitled touse or apply the entire Tenant Improvement Allowance toward the Cost of Improvements of the Tenant Improvements (subjectto any applicable restrictions, conditions, limitations, reductions or charges set forth in the Lease or in this Tenant Work Letter)prior to being required to expend any of Tenant’s own funds for the Tenant Improvements. The funding of the TenantImprovement Allowance shall be made on a monthly basis or at other convenient intervals mutually approved by Landlord andTenant and in all other respects shall be based on such commercially reasonable disbursement conditions and procedures asLandlord, Project Manager and Landlord’s lender (if any) may reasonably prescribe. Notwithstanding the foregoing provisions,under no circumstances shall the Tenant Improvement Allowance or any portion thereof be used or useable by Tenant for anymoving or relocation expenses of Tenant, or for any Cost of Improvement (or any other cost or expense) associated with anymoveable furniture or trade fixtures, personal property or any other item or element which, under the applicable provisions ofthe Lease, will not become Landlord’s property and remain with the Building upon expiration or termination of the Lease.Notwithstanding anything to the contrary herein, the Tenant Improvements shall not include (and Landlord shall be solelyresponsible for and the Tenant Improvement Allowance shall not be used for) the following: (a) costs incurred due to thepresence of any Hazardous Materials, if any, but with respect to removal and remediation of any such Hazardous Materials, onlyto the extent such removal or remediation is required by Applicable Laws enforced as of the date of this Lease for improvementsin the Premises generally (as opposed to the specific Tenant Improvements) and to the extent the same required in order to allowTenant to obtain a certificate of occupancy or its legal equivalent, for the Premises for the Permitted Use assuming a normal andcustomary occupancy density;(b) costs to bring the Project into compliance with Applicable Laws to the extent required inorder to allow Tenant to obtain a certificate of occupancy or its legal equivalent, for the Premises for the Permitted Useassuming a normal and customary office occupancy density; (c) construction costs in excess of the contract amount stated in thecontract with the General Contractor, as approved by Tenant (not to be unreasonably withheld), except for increases set forth inchange orders approved by Tenant; (d) wages, labor and overhead for overtime and premium time unless approved by Tenant(which approval shall not be unreasonably withheld, conditioned or delayed); (e) attorneys' fees incurred in connection withnegotiation of construction contracts, and attorneys' fees, experts' fees and other costs in connection with disputes with thirdparties; (f) interest and other costs of financing construction costs; (g) costs incurred as a consequence construction defects ordefault by a contractor; (h) costs as a consequence of casualties; (i) penalties and late charges attributable to Landlord’s failureto pay construction costs, and (j) costs due to compliance with any soil management plan for the Project or its appendices 8377633.2 (8383465.1)EXHIBIT B-5-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] (b) Tenant Funds. For additional funds required to complete the cost of the work, that are in excess of orelected by the Tenant to be used in place of the Tenant Improvement Allowance, the Additional TI Allowance, these shall beconsidered "Tenant Funds." The total cost to construct the Tenant Improvements as managed by Landlord and the ProjectManager under this Work Letter shall be the "Project Budget." The Landlord understands that at the time of the agreed uponGuaranteed Maximum Price (GMP), the Tenant Funds amount is an estimate and exact costs will not be known until projectcloseout. The Tenant is required, at the time of agreement of the GMP, to provide a purchase order to the Landlord for the fullestimated amount of the Tenant Funds, provided that Tenant shall not be required to make payment, if any, until the close out ofthe project and a true up of costs are provided to Tenant. In the event the Tenant Funds at project closeout are less than theamount agreed upon within the Project Budget, the Landlord will only bill the Tenant for the Tenant Funds that have beenutilized. In the event the Tenant Funds exceed the amount agreed upon within the Project Budget, through added scopechanges, the Tenant shall provide additional purchases orders to the Landlord, which will be included in the Tenant ChangeRequest process that the Landlord’s representative administers.5.No Agency. Nothing contained in this Tenant Work Letter shall make or constitute Tenant as the agent ofLandlord.6.Tenant Access. Provided that Tenant and its agents do not interfere with Contactor’s work in the Buildingand the Premises (including by the use of non-union vendors without prior coordination with Landlord), Contractor andLandlord shall allow Tenant access to the Premises at least thirty (30) days prior to the Substantial Completion of theLandlord’s TI Work without payment of Rent for the purpose of Tenant installing equipment or fixtures (including Tenant’sdata and telephone equipment) in the Premises and preparing the Premises for occupancy and access any time after Leaseexecution for site visits needed for planning (as reasonably scheduled with Landlord). Prior to Tenant’s entry into the Premisesas permitted by the terms of this Section 6, Tenant shall submit a schedule to Landlord and Contractor, for their approval, whichschedule shall detail the timing and purpose of Tenant’s entry. Tenant shall hold Landlord harmless from and indemnify,protect and defend Landlord against any loss or damage to the Building or Premises and against injury to any persons caused byTenant’s actions pursuant to this Section 6.7.Miscellaneous. All references in this Tenant Work Letter to a number of days shall be construed to refer tocalendar days, unless otherwise specified herein. In all instances where Landlord's or Tenant's approval is required, if no writtennotice of disapproval is given within the applicable time period, at the end of that period Landlord or Tenant shall be deemed tohave given approval (unless the provision requiring Landlord's or Tenant's approval expressly states that non-response isdeemed to be a disapproval or withdrawal of the pending action or request, in which event such express statement shall becontrolling over the general statement set forth in this sentence) and the next succeeding time period shall commence. If anyitem requiring approval is disapproved by Landlord or Tenant (as applicable) in a timely manner, the procedure for preparationof that item and approval shall be repeated. Landlord hereby acknowledges that Tenant shall not be required to restore theinitial Tenant Improvements constructed in the Premises pursuant to the terms of this Tenant Work Letter upon the terminationof the Lease.8.Time Deadlines. Tenant shall use commercially reasonable, good faith, efforts and all due diligence to cooperatewith the Architect, General Contractor and Landlord to complete all phases of the construction drawings set forth in this TenantWork Letter and the permitting process and to receive the permits as soon as possible after the execution of this Lease. Theapplicable dates for approval of items, plans and drawings as described in this Tenant Work Letter are set forth and furtherelaborated upon in Schedule 1 to this Exhibit B attached hereto (the "Time Deadlines"), attached hereto. Tenant agrees toutilize commercially reasonable efforts to comply with the Time Deadlines. 8377633.2 (8383465.1)EXHIBIT B-6-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] SCHEDULE 1 TO EXHIBIT BTIME DEADLINES[ATTACHED] 8377633.2 (8383465.1)SCHEDULE 1 TOEXHIBIT B-1-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] EXHIBIT CBRITANNIA POINT EDENNOTICE OF LEASE TERM DATESRe: Lease dated _____________, 20__ between _____________, a _____________ (“Landlord”), and _____________, a _____________ (“Tenant”) concerning Suite ____ on floor(s) of the building located at __________________________, California.Gentlemen:In accordance with the Lease (the "Lease"), we wish to advise you and/or confirm as follows:1.The Lease Term shall commence on or has commenced on_____________for a term of_____________ending on_____________.2.Rent commenced to accrue on_____________, in the amount of_____________.3.If the Lease Commencement Date is other than the first day of the month, the first billing will contain a prorata adjustment. Each billing thereafter, with the exception of the final billing, shall be for the full amount ofthe monthly installment as provided for in the Lease.4.Your rent checks should be made payable to_____________at_____________.5.The exact number of rentable/usable square feet within the Premises is_____________square feet.6.Tenant's Share as adjusted based upon the exact number of usable square feet within the Premises is_____%."Landlord":___________________________________.a _________________________________By: _______________________________ Its: _____________________________By: _______________________________ Its: _____________________________ 8377633.2 (8383465.1)EXHIBIT C-1-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] Agreed to and Accepted asof__________, 20 ."Tenant":___________________________________.a _________________________________By: _______________________________ Its: _____________________________ 8377633.2 (8383465.1)EXHIBIT C-2-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] EXHIBIT DBRITANNIA POINT EDENFORM OF TENANT'S ESTOPPEL CERTIFICATEThe undersigned as Tenant under that certain Lease (the "Lease") made and entered into as of ________, 20 by andbetween_____________ as Landlord, and the undersigned as Tenant, for Premises consisting of a portion of thebuilding located at__________________________, California, certifies as follows:1.Attached hereto as Exhibit A is a true and correct copy of the Lease and all amendments and modificationsthereto. The documents contained in Exhibit A represent the entire agreement between the parties as to the Premises.2.The undersigned currently occupies the Premises described in the Lease, the Lease Term commencedon_____________, and the Lease Term expires on____________, and the undersigned has no option to terminate or cancelthe Lease or to purchase all or any part of the Premises, the Building and/or the Project, except as expressly set forth in theLease.3.Base Rent became payable on_____________.4.The Lease is in full force and effect and has not been modified, supplemented or amended in any way exceptas provided in Exhibit A.5.Tenant has not transferred, assigned, or sublet any portion of the Premises nor entered into any license orconcession agreements with respect thereto except as follows:6.Tenant shall not modify the documents contained in Exhibit A without the prior written consent ofLandlord's mortgagee.7.All monthly installments of Base Rent, all Additional Rent and all monthly installments of estimatedAdditional Rent have been paid when due through_____________. The current monthly installment of Base Rent is$__________________.8.To Tenant’s actual knowledge, without inquiry, all conditions of the Lease to be performed by Landlordnecessary to the enforceability of the Lease have been satisfied and Landlord is not in default thereunder. In addition, theundersigned has not delivered any notice to Landlord regarding a default by Landlord thereunder. The Lease does not requireLandlord to provide any rental concessions or to pay any leasing brokerage commissions except as expressly set forth therein.9.No rental has been paid more than thirty (30) days in advance and no security has been deposited withLandlord except as provided in the Lease. Neither Landlord, nor its successors or assigns, shall in any event be liable orresponsible for, or with respect to, the retention, application and/or return to Tenant of any security deposit paid to any priorlandlord of the Premises, whether or not still held by any such prior landlord, unless and until the party from whom the securitydeposit is being sought, whether it be a lender, or any of its successors or assigns, has actually received for its own account, aslandlord, the full amount of such security deposit. 8377633.2 (8383465.1)EXHIBIT D-1-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] 10.To Tenant’s actual knowledge, without inquiry, as of the date hereof, there are no existing defenses or offsets,or, to the undersigned's knowledge, claims or any basis for a claim, that the undersigned has against Landlord.11.If Tenant is a corporation or partnership, Tenant hereby represents and warrants that Tenant is a duly formedand existing entity qualified to do business in California and that Tenant has full right and authority to execute and deliver thisEstoppel Certificate and that each person signing on behalf of Tenant is authorized to do so.12.There are no actions pending against the undersigned under the bankruptcy or similar laws of the UnitedStates or any state.13.Tenant is in full compliance with all federal, state and local laws, ordinances, rules and regulations affectingits use of the Premises, including, but not limited to, those laws, ordinances, rules or regulations relating to hazardous or toxicmaterials. Tenant has never permitted its agents, employees or contractors to engage in the generation, manufacture, treatment,use, storage, disposal or discharge of any hazardous, toxic or dangerous waste, substance or material in, on, under or about theProject or the Premises or any adjacent premises or property in violation of any federal, state or local law, ordinance, rule orregulation.14.To the undersigned's knowledge, all tenant improvement work to be performed by Landlord under the Leasehas been completed in accordance with the Lease and has been accepted by the undersigned and all reimbursements andallowances due to the undersigned under the Lease in connection with any tenant improvement work have been paid in full. Allwork (if any) in the common areas required by the Lease to be completed by Landlord has been completed and all parkingspaces required by the Lease have been furnished and/or all parking ratios required by the Lease have been met.The undersigned acknowledges that this Estoppel Certificate may be delivered to Landlord or to a prospectivemortgagee or prospective purchaser, and acknowledges that said prospective mortgagee or prospective purchaser will be relyingupon the statements contained herein in making the loan or acquiring the property of which the Premises are a part and thatreceipt by it of this certificate is a condition of making such loan or acquiring such property.Executed at_____________on the_____________day of_____________, 20 .“Tenant”___________________________________.a _________________________________By: _______________________________ Its: _____________________________By: _______________________________ Its: _____________________________ 8377633.2 (8383465.1)EXHIBIT D-2-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] EXHIBIT EBRITANNIA POINT EDENENVIRONMENTAL QUESTIONNAIREENVIRONMENTAL QUESTIONNAIREFOR COMMERCIAL AND INDUSTRIAL PROPERTIESTenant Name:Lease Address:Lease Type (check correct box – right click to properties):☐☐Primary Lease/Lessee ☐☐Sublease from: Instructions: The following questionnaire is to be completed by the Lessee representative with knowledge of the plannedoperations for the specified building/location. Please print clearly and attach additional sheets as necessary.1.0PROCESS INFORMATIONDescribe planned site use, including a brief description of manufacturing processes and/or pilot plants plannedfor this site, if any.2.0HAZARDOUS MATERIALS – OTHER THAN WASTEWill (or are) non-waste hazardous materials be/being used or stored at this site? If so, continue with the nextquestion. If not, go to Section 3.0.2.1Are any of the following materials handled on the Property? ☐ Yes ☐ No[A material is handled if it is used, generated, processed, produced, packaged, treated, stored, emitted,discharged, or disposed.] If YES, check (right click to properties) the applicable correct FireCode hazard categories below.Combustible dusts/fibersExplosivesFlammable liquidsCombustible liquids (e.g., oils)Compressed gas - inertFlammable solids/pyrophoricsCryogenic liquids - inertCompressed gas -flammable/pyrophoricOrganic peroxidesCryogenic liquids - flammableCompressed gas - oxidizingOxidizers - solid or liquidCryogenic liquids - oxidizingCompressed gas - toxicReactives - unstable or waterreactiveCorrosives - solid or liquidCompressed gas - corrosiveToxics - solid or liquid2-2.For all materials checked in Section 2.1 above, please list the specific material(s), use(s), and quantitiesof each used or stored on the site in the table below; or attach a separate inventory. NOTE: Ifproprietary, the constituents need not be named but the hazard information and volumes are required.8377633.2 (8383465.1)EXHIBIT E-1-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] ChemicalSizeof Containers Used& StoredQuantityMaterial/ ChemicalPhysicalState (Solid,Liquid, orGas) Container Size Number ofContainers Used &Stored Total QuantityUnits (poundsfor solids,gallons or litersfor liquids, &2-3.Describe the planned storage area location(s) for the materials in Section 2-2 above. Include site mapsand drawings as appropriate.2-4.Other hazardous materials. Check below (right click to properties) if applicable. NOTE: If either of the latter 8377633.2 (8383465.1)EXHIBIT E-2-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] two are checked (BSL-3 and/or radioisotope/radiation), be advised that not all lease locations/cities or leaseagreements allow these hazards; and if either of these hazards are planned, additional information will berequired with copies of oversight agency authorizations/licenses as they become available.Risk Group2/Biosafety Level-2BiohazardsRisk Group3/Biosafety Level-3BiohazardsRadioisotopes/Radiation3.0HAZARDOUS WASTE (i.e., REGULATED CHEMICAL WASTE)Are (or will) hazardous wastes (be) generated? ☐ Yes ☐ NoIf YES, continue with the next question. If not, skip this section and go to section 4.0.3.1Are or will any of the following hazardous (CHEMICAL) wastes generated, handled, or disposed of(where applicable and allowed) on the property?LiquidsProcess sludgesPCBsSolidsMetalswastewater3-2.List and estimate the quantities of hazardous waste identified in Question 3-1 above. HAZARDOUS (CHEMICAL)WASTE GENERATED SOURCEWASTE TYPE APPROX.MONTHLYQUANTITYwith units DISPOSITION [e.g., off-sitelandfill, incineration, fuelblending scrapmetal; wastewaterneutralization (onsite or off-site)] RCRAlisted(federal)Non-RCRA(Calif-orniaONLY orrecycle) ☐☐ ☐☐ ☐☐ ☐☐ ☐☐ 3-3.Waste characterization by: Process knowledge ☐ EPA lab analysis ☐ Both ☐3-4.Please include name, location, and permit number (e.g. EPA ID No.) for transporter and disposalfacility if applicable. Attach separate pages as necessary. If not yet known, write “TBD.”Hazardous WasteTransporter/Disposal Facility Name Facility LocationTransporter (T) orDisposal (D)Facility Permit Number 3-5.Are pollution controls or monitoring employed in the process to prevent or minimize the release of wastesinto the environment? NOTE: This does NOT mean fume hoods; examples include air scrubbers, cyclones,carbon or HEPA filters at building exhaust fans, sedimentation tanks, pH neutralization systems forwastewater, etc.☐ Yes ☐ NoIf YES, please list/describe: 8377633.2 (8383465.1)EXHIBIT E-3-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] 4.0OTHER REGULATED WASTE (i.e., REGULATED BIOLOGICAL WASTE, referred to as“Medical Waste” in California)4-1. Will (or do) you generate medical waste? ☐ Yes ☐ No If NO, skip to Section 5.0.4-2.Check the types of waste that will be generated, all of which fall under the California Medical WasteAct:Contaminated sharps (i.e., ifcontaminated with ≥ RiskGroup 2 materials)Animal carcassesPathology waste known orsuspected to be contaminated with≥ Risk Group 2 pathogens)Red bag biohazardous waste(i.e., with ≥ Risk Group 2materials) for autoclavingHuman or non-human primateblood, tissues, etc. (e.g.,clinical specimens)Trace Chemotherapeutic Wasteand/or Pharmaceutical waste NOTotherwise regulated as RCRAchemical waste4-3.What vendor will be used for off-site autoclaving and/or incineration?4-5.Do you have a Medical Waste Permit for this site? Yes No, not required.☐ No, but an application will be submitted.5.0UNDERGROUND STORAGE TANKS (USTS) & ABOVEGROUND STORAGE TANKS (ASTS)5-1.Are underground storage tanks (USTs), aboveground storage tanks (ASTs), or associated pipelines used for thestorage of petroleum products, chemicals, or liquid wastes present on site (lease renewals) or required for plannedoperations (new tenants)? ☐ Yes ☐ NoNOTE: If you will have your own diesel emergency power generator, then you will have at least one AST![NOTE: If a backup generator services multiple tenants, then the landlord usually handles the permits.]If NO, skip to section 6.0. If YES, please describe capacity, contents, age, type of the USTs orASTs, as well any associated leak detection/spill prevention measures. Please attach additionalpages if necessary.UST orAST Capacity(gallons) Contents YearInstalled Type (Steel, Fiberglass, etc.)Associated Leak Detection /Spill Prevention Measures**NOTE: The following are examples of leak detection / spill prevention measures: integrity testing,inventory reconciliation, leak detection system, overfill spill protection, secondary containment,cathodic protection.5-2.Please provide copies of written tank integrity test results and/or monitoring documentation, if available.5-3.Is the UST/AST registered and permitted with the appropriate regulatory agencies? ☐ Yes ☐ No, not yetIf YES, please attach a copy of the required permit(s). See Section 7-1 for the oversight agencies that issuepermits, with the exception of those for diesel emergency power generators which are permitted by the localAir Quality District (Bay Area Air Quality Management District = BAAQMD; or San Diego Air PollutionControl District = San Diego APCD).5-4.If this Questionnaire is being completed for a lease renewal, and if any of the USTs/ASTs have leaked, 8377633.2 (8383465.1)EXHIBIT E-4-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] please state the substance released, the media(s) impacted (e.g., soil, water, asphalt, etc.), the actions taken,and all remedial responses to the incident.5-5.If this Questionnaire is being completed for a lease renewal, have USTs/ASTs been removed from theProperty?☐ Yes ☐ NoIf YES, please provide any official closure letters or reports and supporting documentation (e.g., analyticaltest results, remediation report results, etc.).5-6.For Lease renewals, are there any above or below ground pipelines on site used to transfer chemicals orwastes?☐ Yes ☐ NoFor new tenants, are installations of this type required for the planned operations? ☐ Yes ☐ No If YES to either question in this section 5-6, please describe.6.0ASBESTOS CONTAINING BUILDING MATERIALSPlease be advised that an asbestos survey may have been performed at the Property. If provided, please review theinformation that identifies the locations of known asbestos containing material or presumed asbestos containingmaterial. All personnel and appropriate subcontractors should be notified of the presence of these materials, and informednot to disturb these materials. Any activity that involves the disturbance or removal of these materials must be done by anappropriately trained individual/contractor.7.0OTHER REGULATORY PERMITS/REQUIREMENTS7-1.Does the operation have or require an industrial wastewater permit to discharge into the local NationalPollutant Discharge Elimination System (NPDES)? [Example: This applies when wastewater fromequipment cleaning is routed through a pH neutralization system prior to discharge into the sanitary orlab sewer for certain pharmaceutical manufacturing wastewater; etc.] Permits are obtained from theregional sanitation district that is treating wastewater.☐ Yes ☐ No , but one will be prepared and submitted to the Landlord property managementcompany.If so, please attach a copy of this permit or provide it later when it has been prepared.7-2.Has a Hazardous Materials Business Plan (HMBP) been developed for the site and submitted via the State ofCalifornia Electronic Reporting System (CERS)? [NOTE: The trigger limits for having to do this are ≥ 200cubic feet if any one type of compressed gas(except for carbon dioxide and inert simple asphyxiant gases,which have a higher trigger limit of ≥ 1,000 cubic feet); ≥ 55 gallons if any one type of hazardous chemicalliquid; and ≥500 pounds of any one type of hazardous chemical solid. So a full-sixe gas cylinder and a 260-liter of liquid nitrogen are triggers! Don’t forget the diesel fuel in a backup emergency generator if thediesel tank size is ≥ 55 gallons and it is permitted under the tenant (rather than under the landlord).] NOTE:Each local Certified Unified Program Agency (CUPA) in California governs the HMBP process so start there.Examples: the CUPA for cities in San Mateo County is the County Environmental Health Department; theCUPA for the City of Hayward, CA is the Hayward Fire Department; the CUPA for Mountain View is theMountain View Fire Department; and, the CUPA for San Diego is the County of San Diego HazardousMaterials Division (HMD),☐ Yes ☐ No, not required. ☐ No, but one will be prepared and submitted, and a copy will be provided 8377633.2 (8383465.1)EXHIBIT E-5-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] to the landlord property management company.If one has been completed, please attach a copy. Continue to provide updated versions as they are completed.This is a legal requirement in that State law requires that the owner/operator of a business located on leased orrented real property shall notify, in writing, the owner of the property that the business is subject to and is incompliance with the Hazardous Materials Business Plan requirements (Health and Safety Code Chapter 6.95Section 25505.1).7-3.NOTE: Please be advised that if you are involved in any tenant improvements that require a construction permit,you will be asked to provide the local city with a Hazardous Materials Inventory Statement (HMIS) to ensure thatyour hazardous chemicals fall within the applicable Fire Code fire control area limits for the applicableconstruction occupancy of the particular building. The HMIS will include much of the information listed inSection 2-2. Neither the landlord nor the landlord’s property management company expressly warrants that theinventory provided in Section 2-2 will necessarily meet the applicable California Fire Code fire control area limitsfor building occupancy, especially in shared tenant occupancy situations. It is the responsibility of the tenant toensure that a facility and site can legally handle the intended operations and hazardous materials desired/ neededfor its operations, but the landlord is happy to assist in this determination when possible.CERTIFICATIONI am familiar with the real property described in this questionnaire. By signing below, I represent and warrantthat the answers to the above questions are complete and accurate to the best of my knowledge. I also understandthat Lessor will rely on the completeness and accuracy of my answers in assessing any environmental liabilityrisks associated with the property.Signature: _________________________________________________Name: ____________________________________________________Title: _____________________________________________________Date: ________________Telephone: _________________ 8377633.2 (8383465.1)EXHIBIT E-6-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] EXHIBIT FTENANT'S PROPERTYThe following items, to the extent (i) not purchased with the Tenant Improvement Allowance, and (ii) not tied into the BaseBuilding systems, shall be deemed "Tenant's Property":1.All moveable furniture and equipment that is not "built-in".2.Moveable lab casework (other than "built-in" lab casework), including moveable lab benches.3.Servers, server racks and back-up batteries.4.Furniture.5.Portable fume hoods.6.Biosafety cabinets.7.Stand-alone freezers, ice makers, autoclave, portable glass wash and incubators. 8377633.2 (8383465.1)EXHIBIT F-1-Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] LEASEBRITANNIA POINT EDENHAYWARD POINT EDEN I LIMITED PARTNERSHIP,a Delaware limited partnership, asLandlord,andPULSE BIOSCIENCES, INC.,a Nevada corporation, as Tenant. 8377633.2 (8383465.1) Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] TABLE OF CONTENTSPage1.PREMISES, BUILDING, PROJECT, AND COMMON AREAS52.LEASE TERM; OPTION TERM63.BASE RENT64.ADDITIONAL RENT65.USE OF PREMISES116.SERVICES AND UTILITIES167.REPAIRS178.ADDITIONS AND ALTERATIONS179.COVENANT AGAINST LIENS1910.INSURANCE1911.DAMAGE AND DESTRUCTION2112.NONWAIVER2213.CONDEMNATION2314.ASSIGNMENT AND SUBLETTING2315.SURRENDER OF PREMISES; OWNERSHIP AND REMOVAL OF TRADE FIXTURES2616.HOLDING OVER2717.ESTOPPEL CERTIFICATES2718.SUBORDINATION2819.DEFAULTS; REMEDIES2820.COVENANT OF QUIET ENJOYMENT3021.SECURITY DEPOSIT3022.COMMUNICATIONS AND COMPUTER LINE3023.SIGNS3024.COMPLIANCE WITH LAW3125.LATE CHARGES3126.LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT3227.ENTRY BY LANDLORD3228.TENANT PARKING3229.MISCELLANEOUS PROVISIONS32EXHIBITSAOUTLINE OF PREMISESBTENANT WORK LETTERCFORM OF NOTICE OF LEASE TERM DATESDFORM OF TENANT'S ESTOPPEL CERTIFICATEEENVIRONMENTAL QUESTIONNAIREFTENANT'S PROPERTY 8377633.2 (8383465.1)(i)Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] INDEXPage(s)Accountant13Advocate Arbitrators7Alterations21Applicable Laws38Base Building20Base Rent7Brokers43Building4Building Systems20Common Areas4Comparable Buildings6Comparable Transactions6Concessions6Contemplated Effective Date28Contemplated Transfer Space28Direct Expenses8Disputed Amounts41Emergency21Environmental Assessment16Estimate12Estimate Statement12Estimated Direct Expenses12Excepted Matters44Expense Year8Force Majeure42Hazardous Materials14Intention to Transfer Notice28Landlord1Landlord Parties23Landlord Repair Obligations20Lease1Lease Commencement Date5Lease Expiration Date5Lease Term5Lease Year5Lines37Mail42Net Worth29Neutral Arbitrator7Nine Month Period28Notices42Objectionable Name38Operating Expenses8Option Conditions5Option Rent5Outside Agreement Date6Permitted Transferee29Premises4Project,4Security Deposit34 8377633.2 (8383465.1)(ii)Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] Page(s)Sign Specifications38Statement12Subject Space27Summary.1Tax Expenses11Tenant1Tenant Work Letter4Tenant's Accountant13Tenant's Property22Tenant's Repair Obligations19Tenant's Share11Transfer Notice27Transferee27Transfers278377633.2 (8383465.1)(iii)Hayward Point Eden I Limited Partnership[Britannia Point Eden][Pulse Biosciences, Inc.] Exhibit 21.1 List of SubsidiariesSubsidiaryJurisdiction of IncorporationOwnership PositionNanoblate Corp., a Delaware CorporationDelaware100%BioElectroMed Corp., a California CorporationCalifornia100%Exhibit 31.1CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TOSECURITIES EXCHANGE ACT RULES 13a-14(a) and 15d-14(a), AS ADOPTED PURSUANTTO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002I, Darrin R. Uecker, President and Chief Executive Officer, certify that:1.I have reviewed this Annual Report on Form 10-K of Pulse Biosciences, Inc.;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material factnecessary to make the statements made, in light of the circumstances under which such statements were made, not misleadingwith 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 allmaterial respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periodspresented in this report;4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls andprocedures (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 designedunder our supervision, to ensure that material information relating to the registrant, including its consolidatedsubsidiaries, is made known to us by others within those entities, particularly during the period in which this report isbeing prepared;b)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report ourconclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by thisreport based on such evaluation; andc)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during theregistrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that hasmaterially affected, or is reasonably likely to materially affect, the registrant’s internal control over financialreporting; and5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control overfinancial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or personsperforming the equivalent functions):a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reportingwhich are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financialinformation; andb)Any fraud, whether or not material, that involves management or other employees who have a significant role in theregistrant’s internal control over financial reporting. Date: March 20, 2017By:/s/ Darrin R. Uecker Darrin R. Uecker President and Chief Executive Officer (Principal Executive Officer) Exhibit 31.2CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TOSECURITIES EXCHANGE ACT RULES 13a-14(a) and 15d-14(a), AS ADOPTED PURSUANTTO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002I, Brian B. Dow, Chief Financial Officer, certify that:1.I have reviewed this Annual Report on Form 10-K of Pulse Biosciences, Inc.;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material factnecessary to make the statements made, in light of the circumstances under which such statements were made, not misleadingwith 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 allmaterial respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periodspresented in this report;4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls andprocedures (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 designedunder our supervision, to ensure that material information relating to the registrant, including its consolidatedsubsidiaries, is made known to us by others within those entities, particularly during the period in which this report isbeing prepared;b)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report ourconclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by thisreport based on such evaluation; andc)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during theregistrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that hasmaterially affected, or is reasonably likely to materially affect, the registrant’s internal control over financialreporting; and5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control overfinancial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or personsperforming the equivalent functions):a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reportingwhich are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financialinformation; andb)Any fraud, whether or not material, that involves management or other employees who have a significant role in theregistrant’s internal control over financial reporting.Date: March 20, 2017By:/s/ Brian B. Dow Brian B. Dow Chief Financial Officer and Senior Vice President ofFinance and Administration, Secretary and Treasurer (Principal Financial and Principal Accounting Officer) Exhibit 32.1CERTIFICATIONS PURSUANT TO18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002In connection with the Annual Report of Pulse Biosciences, Inc. (the “Company”) on Form 10-K for the fiscal yearended December 31, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of theundersigned certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,that to the best of his knowledge:(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results ofoperations of the Company.4Date: March 20, 2017 /s/ Darrin R. Uecker Darrin R. Uecker President and Chief Executive Officer (Principal Executive Officer) 4 /s/ Brian B. Dow Brian B. Dow Chief Financial Officer, Senior Vice President of Financeand Administration, Secretary and Treasurer (Principal Financial and Principal Accounting Officer) This certification is deemed furnished and not filed with the Securities and Exchange Commission and is not to beincorporated by reference into any filing of Pulse Biosciences, Inc. under the Securities Act of 1933, as amended, or the SecuritiesExchange Act of 1934, as amended, whether made before or after the date of this report, irrespective of any general incorporationlanguage contained in such filing.

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