Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read together with the unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q, as well as our audited financial statements and notes thereto as of and for the year ended December 31, 2025 and the related Management's Discussion and Analysis of Financial Condition and Results of Operations included in our final prospectus filed with the Securities and Exchange Commission ("SEC") pursuant to Rule 424(b) under the Securities Act of 1933, as amended (the "Securities Act") on April 17, 2026 (the "Prospectus") that forms a part of the Company's Registration Statement on Form S-1 (File No. 333-294697) (the "Registration Statement"). This discussion and analysis contains forward-looking statements that involve risks and uncertainties. Factors that could cause or contribute to those differences include, but are not limited to, those identified below and those discussed in the section titled "Risk Factors" in Part II, Item 1A of this Quarterly Report on Form 10-Q. See also the section titled "Special Note Regarding Forward-Looking Statements." Additionally, our historical results are not necessarily indicative of the results that may be expected in any future period. Amounts are presented in U.S. dollars. Unless the context otherwise requires, all references in this section to the "Company", "Alamar", "we" "our" or "us" refers to the business of Alamar Biosciences, Inc. and its subsidiary.

Overview

We are a commercial-stage proteomics company establishing a gold standard in protein detection and analysis. Our proprietary NULISA technology was purpose-built to address the limitations of existing proteomics tools by detecting protein biomarkers at extremely low concentrations in non-invasive biological fluids, such as blood, with ultra-high sensitivity, high specificity, flexible multiplexing, broad dynamic range and seamless automation. We refer to this combination of features as "Precision Proteomics," and believe it fills a critical gap in the field of advanced proteomics, enabling researchers to establish the relationship between incremental changes in multiplexed protein biomarkers and the clinically meaningful differences in health, disease and drug therapy. Our integrated platform consists of proprietary instruments, consumables and analytical software that is designed to provide scientists with an end-to-end solution to precisely and consistently measure from one to hundreds of low-abundance and difficult-to-detect biomarkers across the continuum of discovery, translational research and ultimately diagnostics.

We commercially launched our proprietary instrument, the ARGO HT System in January 2024 and have already experienced rapid adoption, with more than 300 customers across 25 countries and a cumulative installed base of over 100 instruments with an average annual pull-through greater than $400,000 per instrument for the year ended December 31, 2025. We define average annual consumable pull-through per instrument as the total consumables revenue in the given period divided by the average instrument installed base during that period. We calculate the average instrument installed base for a given period using the instrument installed base as of the last day of the prior period and the instrument installed base as of the last day of the given period.

We are also developing a second instrument as part of our IVD platform, called the ARGO HT/DX instrument, for which we intend to provide a submission to the FDA for marketing authorization in 2027. The robust performance of our platform is further evidenced in over 100 scientific publications since our commercial launch. Our customers include top global research and academic institutions, biopharmaceutical companies, contract research organizations and service labs. We have also established multiple multi-million dollar collaborations with renowned research foundations to help support the development of our ARGO HT/DX instrument and the discovery of biomarkers in neurodegenerative disease.

We are a trusted partner to our customers, with a market reputation built on our deep understanding of, and ability to address, their evolving needs. For the three months ended March 31, 2026, 56% of our sales revenue was generated from academic institutions, 39% was generated from biopharmaceutical companies and 4% was generated from distributors.

We sell our products primarily through our direct sales channels in North America, Europe, and China, which together account for the majority of our revenue. In addition, we have established distribution agreements in Australia, portions of Eastern Europe, India, Japan, Singapore and South Korea. Our products are currently sold for research use only. For the three months ended March 31, 2026, 62% of sales were from the Americas region, 29% was from the Europe and in the Middle East & Africa ("EMEA") region and 9% was from the Asia-Pacific ("APAC").

We devote a significant portion of our resources to research and development. Our research and development efforts focus on developing new panels of assays to target an expanding menu of protein targets; improving the performance of our existing assays and software; developing new ARGO instrument solutions, including the ARGO HT/DX instrument, for which we intend to provide a submission to the FDA for marketing authorization in 2027; enhancing and expanding the capabilities of the ARGO HT instrument; developing integrated software and workflows across multiple solutions that work with our instruments; and evaluating new technologies.

To date, we have funded our operations primarily through sales of our instruments and consumable products, the issuance of convertible preferred stock and common stock, convertible note financings and debt financings. In April 2026, we completed our IPO of 12,937,500 shares of our common stock (which includes the exercise in full of the underwriters' option to purchase an additional 1,687,500 shares of common stock), at a price to the public of $17.00 per share. Our gross proceeds from the IPO were $219.9 million and the net proceeds amounted to $197.8 million, after deducting underwriting discounts and commissions and estimated offering expenses incurred by us.

Since our inception in 2018, we have incurred net losses each year. Net losses were $21.3 million and $7.7 million in the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, we had an accumulated deficit of $190.1 million and unrestricted cash and cash equivalents of $64.6 million. Substantially all of our net losses have resulted from costs incurred in connection with our research and development efforts and, to a lesser extent, from selling, general and administrative costs associated with our operations. We expect to continue to incur significant expenses and operating losses in the near term as we invest in the continued growth of our business to include increasing headcount required to develop, sell, and support our platforms, scale our technology platform and introduce new products and services, protect and defend our intellectual property and potentially acquire new businesses or technologies. In addition, we expect to continue to incur additional costs associated with operating as a public company, including significant legal, audit, accounting, regulatory and tax-related services associated with maintaining compliance with exchange listing and SEC requirements, director and officer liability insurance costs, investor and public relations costs, and other expenses that we did not incur as a private company.

Key business metrics

We regularly review a number of operating and financial metrics, including the following key business metrics, to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions. We believe that these metrics are representative of our current business; however, we anticipate these may change or may be substituted for additional or different metrics as our business evolves and as we introduce new products.

Our products are used by leading research and academic institutions, biopharmaceutical companies, contract research organizations and service labs around the globe. We believe the instrument installed base is one of the indicators of our ability to drive customer adoption of our products.

We define the instrument installed base as the cumulative number of ARGO instruments placed with customers since inception, whether they are being sold, or to a much smaller extent, leased or loaned to the customers. Our instrument installed base grew from 36 as of December 31, 2024 to 102 as of December 31, 2025. Our goal is to continue to grow the instrument installed base and we expect to evaluate and report changes to our instrument installed base on an annual basis.

Key factors affecting our performance

We believe that our financial performance has been and in the foreseeable future will continue to be primarily driven by the following factors. While each of these factors presents significant opportunities for our business, they also pose important challenges that we must successfully address in order to sustain our growth and improve our results of

operations. Our ability to successfully address the factors below is subject to various risks and uncertainties, including those described in the section titled "Risk Factors."

Instrument sales

Our financial performance has been, and is expected to continue to be, significantly influenced by the rate of sales of our ARGO HT instruments. Management views instrument sales as a key measure of current business performance and an important leading indicator of future consumables revenue. We expect instrument sales to grow as we deepen penetration in existing markets and expand into new markets, including through the introduction of new instruments, features and solutions, and new assays to run on the platform.

We plan to drive instrument sales growth through several strategies, including expanding our global sales organization, introducing new instruments, and continuing to enhance the underlying technology and applications that support life sciences research, as well as entering into new disease markets. We regularly solicit customer feedback and focus our research and development efforts on enhancing the ARGO HT instrument, expanding its application capabilities to address evolving customer needs, and developing new versions of the ARGO instrumentation and software. We believe these enhancements support increased adoption of our instruments and drive recurring consumables sales. In addition, we are developing future instruments designed to support the full continuum of discovery, translational research, and diagnostics, which we believe will expand our addressable market and increase utilization among customers, if approved.

We leverage our TAP Services to demonstrate the differentiated value of our technology. Our sales process can vary significantly based on customer type and experience with proteomics and immunoassays. In many cases, the sales process includes proof-of-concept studies conducted through TAP Services and the generation of analytical data prior to an instrument purchase. While the use of TAP Services often reinforces the sensitivity and specificity advantages of our technology and supports instrument adoption, it can also extend the overall sales cycle. Sales cycles for institutional customers may further vary based on factors such as research stage, familiarity with our products, prior purchasing history, and system adoption strategies. As a result of this variability, we have experienced, and expect to continue to experience, period-to-period fluctuations in instrument sales.

Consumables revenue

We regularly evaluate trends in recurring consumables revenue based on our product portfolio, customer base, and our understanding of how customers use our products. Consumables revenue and the relative contribution of individual consumable products may vary from quarter to quarter. These fluctuations may result from several factors, including the introduction of enhanced features and additional solutions.

As our installed base of instruments grows, we expect consumables revenue to increase in absolute terms and to become an increasingly significant contributor to our overall revenue over time.

We expect our consumables pull-through per instrument to fluctuate as our installed base expands. Expansion into new markets with less experienced users, or into smaller labs with less funding, could reduce average pull-through. We could also experience higher pull-through during periods when customers conduct large cohort projects.

Seasonality

Since the introduction of our platform, we have experienced sequential period revenue growth. However, in future periods we expect our instruments and consumables purchasing patterns to be impacted by our customers' funding and budget cycles, which could create seasonal purchasing patterns. For example, a significant portion of our customers rely on government funding and research grants, and certain customers have budget cycles that typically expire at year-end. As a result, we expect our customer base may exhibit higher instrument purchases and consumables pull-through per instrument in the fourth quarter compared to the first three quarters of the year. We also expect in

future periods that the first quarter revenue may be less than the quarter preceding it, or the fourth quarter of the prior fiscal year.

Services revenue

While a smaller percentage of revenue compared to our product revenue, an important portion of our business is our service-related offerings. We derive services revenue from (i) our TAP services for customers looking to evaluate the benefits and (ii) service contracts for maintenance and repair of our ARGO HT instruments. Our maintenance and repair contracts are offered generally for a 12-month period and extend the one-year limited warranty for the ARGO HT System. Revenue is recognized as the services are rendered over the contract term beginning after the one-year limited warranty. We expect that our maintenance and repair services revenue to grow as the initial warranty period expires and as our instrument installed base grows. As our platform continues to gain increased adoption and the number of publications covering our products increase, we expect that our TAP services grow at a slower rate than other areas of our business.

Revenue mix and gross margin

Our revenue is derived from sales of our instruments, consumables and services. There will be fluctuations in mix between these offerings from period to period impacting both revenue and gross margin. As our instrument installed base grows, we expect consumables revenue to continue to become a larger percentage of revenue.

The list prices of our consumables vary by product. Future instrument and consumable selling prices and gross margins may fluctuate due to a variety of factors, including the manufacturing costs of such products, the introduction by others of competing products and solutions, and tariffs. We aim to mitigate downward pressure on our average selling prices by increasing the value proposition offered by the performance of our instruments and consumables, primarily by, for example, expanding the applications for our instruments, increasing the quantity and quality of data that can be obtained using our consumables, and improving the user experience.

In the near term, as we expect increased demand for our products, we expect to increase costs for the expansion of manufacturing, warehousing and product distribution facilities which could negatively impact on our gross margins as we add capacity in advance of full utilization. In addition to the impact of competing products entering the market, the future margin profiles of our instruments and consumables and any royalties, may impact our gross margins.

Continued investment in growth

Our significant revenue growth has been driven by rapid innovation and the strong adoption of our offerings by customers. We intend to continue making targeted investments to drive revenue growth and scale our operations, and as a result, we expect related expenses to increase.

We have invested, and will continue to invest, substantially in our manufacturing capabilities and commercial infrastructure. The expansion of our Fremont, California facilities has supported these efforts by providing additional manufacturing, research and development, and general office space.

We also plan to increase investment in research and development by hiring employees with the scientific and technical expertise needed to enhance existing products and bring new products to market. These investments are expected to result in higher research and development expenses and increased stock-based compensation. In addition, we plan to expand our sales and marketing activities and expect general and administrative expenses and stock-based compensation to increase as we support our growth and operate as a publicly traded company. We expect full-year total stock-based compensation charges for 2026 to be in the range of $13 million to $15 million.

While fluctuations in cost of revenue, operating expenses, and capital expenditures may result in short-term adverse impacts on our results of operations and cash flows, we believe these investments are critical to supporting our long-term growth and scalability.

Components of results of operations

Revenue

We generate revenue primarily from the sale of our ARGO HT instrument and associated consumables. We also derive service revenue from our TAP, which provides customers with the opportunity to ship samples to be tested at our lab using either NULISA multiplex or single-plex assays, and analytical reports are delivered via an electronic file, often prior to instrument purchase, and from the sale of instrument maintenance contracts, which extend support beyond the standard one-year warranty period. For the portion of sales denominated in foreign currencies, our revenue is subject to fluctuation based on the foreign currency in which our products are sold, principally for sales denominated in euros.

Revenue from instruments is generally recognized upon delivery and consumables are generally recognized upon shipment. Revenue from consumables is largely driven by the size of our instrument installed base and the volume of consumables sold per instrument. Revenue from TAP services is recognized when analytical results are delivered to the customer. Maintenance contract revenue is recognized ratably over the contract term, with the coverage beginning after the expiration of the standard one-year warranty period.

Cost of revenue

Cost of revenue primarily consists of manufacturing costs incurred in the production process including personnel and related costs, third party manufacturing costs, costs of component materials, labor and overhead, packaging and delivery costs, royalty payments and allocated costs including facilities and information technology. We plan to hire additional employees as well as expand our manufacturing, warehousing and product distribution facilities, including increasing manufacturing automation to support our growth. In addition, cost of revenue includes warranty costs, provisions for slow-moving and obsolete inventory, personnel and related costs, and component costs incurred in connection with our obligations under our instrument service agreements. We expect cost of revenue to increase in absolute dollars in future periods.

Gross profit and gross margin

Gross profit is calculated as revenue less cost of revenue. Gross margin is gross profit expressed as a percentage of revenue. Our gross profit in future periods will depend on a variety of factors, including: market conditions that may impact our pricing; sales mix changes among consumables, instruments and services; product mix changes between established products and new products; excess and obsolete inventories; royalties; our cost structure for manufacturing operations relative to volume and changes in product design; and product warranty obligations.

Operating expenses

Our operating expenses consist of (i) research and development and (ii) selling, general and administrative expenses.

Research and development

Research and development expense primarily consists of personnel and related costs, laboratory supplies, allocated costs including facilities and information technology, equipment maintenance, independent contractor costs, and prototype and materials expenses.

We plan to continue to invest in our research and development efforts, including hiring additional employees, to enhance existing products and develop new products. We expect allocated facilities costs to increase as we grow the size of our research and development facilities in Fremont, California. We expect research and development expense will increase substantially in absolute dollars in future periods.

Selling, general and administrative

Selling, general and administrative expense primarily consists of costs related to the selling and marketing of our products, including sales incentives and advertising expenses and costs associated with our finance, accounting, legal,

human resources and administrative personnel. Related costs associated with these functions, such as attorney and accounting fees, recruiting services, administrative services, insurance, public relations and communication activities, marketing programs and trade show appearances, travel, customer service costs and allocated costs including facilities and information technology, are also included in selling, general and administrative expenses.

We expect to incur additional selling, general and administrative expenses due to continued investment in our sales, marketing and customer service efforts to support the anticipated growth of our business. We also expect increased infrastructure costs, as well as increased costs for accounting, human resources, legal, insurance, investor relations and other costs associated with operating as a public company. We expect to continue our hiring, in the United States as well as internationally, in all these areas in line with the continued growth of our business. We also expect allocated facilities costs to increase as we expand our facilities in Fremont, California. We expect selling, general and administrative expenses to increase substantially in absolute dollars in future periods.

Interest income, net

Interest income, net primarily includes interest earned from our investments. Results can vary based on investment balances and prevailing interest rates.

Interest expense

Interest expense consists of interest on our outstanding debt. See the subsection titled "-Liquidity and capital resources" below.

Loss on remeasurement of convertible notes

Loss on remeasurement of convertible notes consists of losses resulting from the convertible notes which are measured at fair value on a recurring basis. For additional details refer to "Note 7 - Financing arrangements".

Other expense, net

Other expense, net consists primarily of foreign currency gains and losses related to exchange rate fluctuations affecting international operations. These expenses can fluctuate based on market conditions and currency volatility.

Results of operations

Comparison of the three months ended March 31, 2026 and 2025

Our results of operations for each of the periods indicated are summarized in the table below:

N/M - Not meaningful
(1) - Includes stock-based compensation expense as follows:

Revenue

Revenue was $26.0 million in the three months ended March 31, 2026 compared to $13.1 million in the three months ended March 31, 2025. Product revenue, which is comprised of instrument revenue and consumables revenue, increased by $12.2 million, or 133%, to $21.3 million in the three months ended March 31, 2026, compared to $9.2 million in the three months ended March 31, 2025. Instrument revenue increased by $3.2 million, or 78%, primarily due to the increase of the number of instruments delivered. Consumables revenue increased by $9.0 million, or 178%, due to increased demand for our multiplex panel kits which was driven by growth of our instrument installed base. A portion of the increase was also attributable to a slight increase in the average selling price of our consumables.

Service and other revenue increased by $0.8 million, or 20%, to $4.7 million in the three months ended March 31, 2026, compared to $3.9 million in the three months ended March 31, 2025. The increase was primarily due to increased TAP services, including services to develop custom assays, as well as higher volumes of instrument maintenance service agreements.

Cost of revenue

Cost of revenue was $11.6 million in the three months ended March 31, 2026 compared to $6.7 million in the three months ended March 31, 2025. Cost of product revenue increased by $4.4 million, or 83%, to $9.8 million in the three months ended March 31, 2026, compared to $5.4 million in the three months ended March 31, 2025. The increase was primarily driven by increased sales volume of both instruments and consumables, partially offset by realization of manufacturing efficiencies as consumable production has scaled.

Cost of service and other revenue increased by $0.4 million, or 33%, to $1.8 million in the three months ended March 31, 2026, compared to $1.3 million in the three months ended March 31, 2025. The increase was primarily due to an increase in TAP services and services provided under instrument maintenance service agreements.

Gross profit and gross margin

Gross profit was $14.5 million in the three months ended March 31, 2026, compared to $6.4 million in the three months ended March 31, 2025. Gross margin was 56% in the three months ended March 31, 2026, compared to 49% in the three months ended March 31, 2025. The increase in gross margin was primarily attributable to the realization of manufacturing efficiencies for consumables due to larger production volumes, higher average selling prices for both instruments and consumables, and a change in product mix (with a greater proportion of revenue derived from consumables, which have higher gross margins than instruments).

Operating expenses

Research and development

Research and development expense increased by $4.7 million, or 57%, to $13.0 million in the three months ended March 31, 2026, compared to $8.3 million in the three months ended March 31, 2025. The increase was primarily attributable to an increase in lab supply costs to expand our consumable product offerings, as well as 55% increase in

personnel headcount, which resulted in higher compensation-related costs and higher consulting costs associated with technology and product development.

Selling, general and administrative

Selling, general and administrative expense increased by $7.1 million, or 108%, to $13.8 million in the three months ended March 31, 2026, compared to $6.6 million in the three months ended March 31, 2025. The increase was primarily attributable to a 69% increase in personnel headcount which resulted in higher compensation-related costs associated with the growth of our sales, marketing and support teams as well as other functions and increased professional services costs for legal and accounting services.

Interest income, net

Interest income, net decreased by $0.2 million, or 31%, to $0.5 million in the three months ended March 31, 2026, compared to $0.8 million in the three months ended March 31, 2025. The decrease was primarily attributable to lower average invested balances throughout the periods, as funds were utilized to support operating activities as well as a decrease in market interest rates.

Interest expense

Interest expense increased by $0.2 million, or 385%, to $0.2 million in the three months ended March 31, 2026, compared to less than $0.1 million in the three months ended March 31, 2025. The increase was primarily attributable to the Company's term loan balance of $10.0 million outstanding under the amended SVB Loan Agreement during the three months ended March 31, 2026, which was drawn in September 2025.

Loss on remeasurement of convertible notes

Loss on remeasurement of convertible notes was $8.6 million in the three months ended March 31, 2026. The loss was due to the increase in the fair value of the convertible notes issued during the three months ended March 31, 2026 resulting from increased proximity to our IPO.

Other (expense) income, net

Changes in other (expense) income, net are primarily driven by realized and unrealized gains from foreign currency rate measurement fluctuations.

Liquidity and capital resources

As of March 31, 2026, we had $64.6 million in unrestricted cash and cash equivalents, $4.9 million in restricted cash, and access to a total of up to $50.0 million of unused committed term loan facility and undrawn revolver balance with Silicon Valley Bank, a division of First Citizens Bank ("SVB"), subject to certain conditions. Management believes that our cash and cash equivalents at March 31, 2026 and the proceeds from our IPO will be sufficient to fund our current operating plans and meet our anticipated obligations for at least the next 12 months.

Since inception, our principal sources of liquidity have been proceeds from the sale of our equity securities, revenue from sales of our products and services, and, to a lesser extent, borrowings from loan facilities. As of March 31, 2026, we had an accumulated deficit of $190.1 million, attributable to ongoing operating losses as business activities expanded toward commercialization.

On July 11, 2024, we entered into a loan and security agreement with SVB which permitted us to draw term loan advances of up to an aggregate sum of $35.0 million under Tranche A and Tranche B. This amount remained undrawn until the agreement was amended in September 2025. On September 19, 2025, we entered into an amendment to the SVB Loan Agreement (the "Amendment"), which modified the availability, maturity, and certain other terms of the loan facility. As a result of the Amendment, the total borrowing capacity increased to $75.0 million, consisting of a $10.0 million revolving line of credit and up to three tranches of term loan borrowings: Tranche 1, up to $35.0 million

available through June 30, 2027, Tranche 2, up to $15.0 million available through June 30, 2027 if we have achieved at least $40.0 million in revenue on a trailing six month basis on or prior to December 31, 2026, and an uncommitted accordion of $15.0 million we may request through June 30, 2028 subject to SVB's discretion. These borrowings on the Term Loan are also conditional on maintaining ongoing covenant compliance. Borrowings on the line of credit are also subject to a borrowing base limitation of 85% of our eligible accounts receivable. Upon signing the Amendment, we borrowed $10.0 million under the loan facility as required and issued a warrant to purchase 28,685 shares of our Class B common stock to SVB. Borrowings under the SVB Loan Agreement mature on June 1, 2029 or on June 1, 2030 if certain revenue and compliance criteria are met, and the revolver matures on September 19, 2028. Additional details of the SVB Loan Agreement are included in Note 7 - Financing arrangements to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

On January 8, 2026, we issued unsecured convertible loan notes (the "Convertible Notes") to certain investors in an aggregate principal amount of $56.5 million. Upon the closing of our IPO, the Convertible Notes automatically converted into 3,910,025 shares of the Company's common stock.

On April 20, 2026, we completed our IPO and received net proceeds of $197.8 million after deducting underwriter commissions and discounts and estimated offering expenses incurred by the Company.

Future funding requirements

We expect to continue incurring substantial operating losses in the near term as we invest in research and development, manufacturing, and the continued commercialization of our platform and NULISA technology, including the ARGO HT instrument as well as development of the ARGO HT/DX instrument. As of March 31, 2026, we had $64.6 million in unrestricted cash and cash equivalents, as well as an unused committed term loan facility and undrawn revolver balance totaling up to $50.0 million with SVB, subject to certain conditions. While management believes that our cash and cash equivalents at March 31, 2026 and the proceeds from our IPO will fund our current operating plans and meet our anticipated obligations for at least the next 12 months, substantial additional capital may be required to support longer-term growth and operational objectives.

Our future capital requirements will depend on various factors, including, but not limited to, the continued scaling efforts for the ARGO HT System and consumables; research and development activities for next-generation technologies, portfolio expansion, and future clinical studies; regulatory costs related to our ARGO HT/DX system and any other future instruments we develop, including seeking any regulatory approvals; general operational expenditures including personnel, facilities, and systems infrastructure; and potential debt service or repayment obligations on our term loan facility.

As of March 31, 2026, contractual obligations for operating leases totaled $47.0 million as further described in Note 10 - Leases to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

We may seek to raise additional capital through public or private equity offerings, additional debt financing, or via strategic collaborations, partnerships, or other arrangements with third parties. The availability and terms of future financing will depend on a variety of factors, including general economic and market conditions, our operating performance, and investor interest. Additional funding may not be available on acceptable terms, if at all. If we are unable to obtain adequate financing when needed, we may be forced to delay, reduce the scope of, or eliminate certain development programs, commercialization efforts, or other aspects of our business.

Raising additional funds through equity offerings may result in dilution to our stockholders, while debt or other financing could involve covenants or obligations that restrict our business operations. Until we can generate sufficient revenue from product sales, if at all, we expect to finance our operations primarily through existing cash reserves and additional capital-raising activities. Management continues to monitor liquidity needs closely and will adapt capital strategy as needed to ensure alignment with both near- and long-term business objectives.

Cash flows

The following table summarizes our cash flows for each of the periods presented:

Operating activities

Net cash used in operating activities was $20.3 million in the three months ended March 31, 2026. This was primarily due to a net loss of $21.3 million, adjusted for non-cash items, including loss on remeasurement of convertible notes of $8.6 million, depreciation and amortization expense of $1.2 million, and stock-based compensation expense of $1.5 million. Net cash used in operating activities also reflected net cash outflows of $11.4 million from changes in operating assets and liabilities associated with higher levels of working capital necessary to support the growth of our operations. This was primarily the result of an increase in accounts receivable of $6.9 million due to our sales growth, an increase in prepaid expenses and other current assets of $2.0 million, an increase in inventory of $1.3 million, a decrease in operating lease liabilities of $1.1 million, and a decrease in accrued expenses and other liabilities of $1.2 million. These decreases in cash flows were partially offset by an increase in accounts payable of $1.3 million.

Net cash used in operating activities was $13.1 million in the three months ended March 31, 2025. This was primarily due to a net loss of $7.7 million, adjusted for non-cash items, including depreciation and amortization expense of $0.8 million, net accretion and amortization of premiums and discounts on investments of $0.2 million, non-cash operating lease costs of $0.5 million and stock-based compensation expense of $0.6 million. Net cash used in operating activities also reflected net cash outflows of $7.1 million from changes in operating assets and liabilities associated with higher levels of working capital necessary to support the growth in our operations. This was primarily the result of a decrease in accrued expenses and other current liabilities of $5.0 million, an increase in inventory of $2.4 million, an increase in accounts receivable of $0.5 million. These decreases in cash flows were partially offset by an increase in accounts payable of $0.6 million.

Investing activities

Net cash used in investing activities was $0.8 million in the three months ended March 31, 2026. This was primarily due to purchases of property and equipment of $0.6 million and capitalized software development costs of $0.2 million.

Net cash provided by investing activities was $17.0 million in the three months ended March 31, 2025. This was primarily due to maturities of short-term investments of $18.0 million, partially offset by purchases of property and equipment of $0.6 million and capitalized software development costs of $0.4 million.

Financing activities

Net cash provided by financing activities was $55.8 million in the three months ended March 31, 2026. This was primarily due to proceeds from our Convertible Notes of $56.5 million and proceeds from issuance of common stock

upon exercise of stock options of $1.8 million, partially offset by payment of deferred offering costs of $2.2 million and payment of third-party debt issuance costs of $0.3 million.

Net cash provided by financing activities was $0.2 million in the three months ended March 31, 2025, and consisted primarily of proceeds from issuance of common stock upon exercise of stock options of $0.2 million.

Critical accounting estimates

Management's discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions and any such differences may be material.

There have been no material changes to our critical accounting estimates from those described in the section titled "Management's discussion and analysis of financial condition and results of operations - Critical accounting estimates" included in the Prospectus, except that from the effectiveness date of the Registration Statement, we have a publicly traded stock price and no longer require common stock valuations.

Emerging growth company and smaller reporting company status

We are an "emerging growth company" as defined in the JOBS Act. For as long as we remain an "emerging growth company", we may take advantage of reduced reporting requirements that are otherwise applicable to public companies. These provisions include, but are not limited to: (i) not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act; (ii) reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements; and (iii) exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and any golden parachute payments not previously approved. Accordingly, the information contained in our financial statements may be different than the information you receive from other public companies in which you hold stock.

In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of some accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period, and therefore, we are not subject to the same requirements to adopt new or revised accounting standards as other public companies that are not emerging growth companies; however, we may adopt certain new or revised accounting standards early. We may use these provisions until the last day of our fiscal year following the fifth anniversary of the completion of our IPO. However, if certain events occur prior to the end of such five-year period, including if we become a "large accelerated filer," our annual gross revenues exceed $1.235 billion or we issue more than $1.0 billion of non-convertible debt in any three-year period, we will cease to be an emerging growth company prior to the end of such five-year period.

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