Annual Report for Fiscal Year Ending 12-31, 2025 (Form 10-K)

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

You should read the following discussion and analysis of our financial condition and results of operations together with the information presented in our financial statements and the related notes included in this Annual Report on Form 10-K. This discussion contains forward-looking statements based upon current plans, expectations, and beliefs that involve risks and uncertainties. As a result of many factors, including those factors set forth in the "Risk Factors" section of this Annual Report on Form 10-K, our actual results could differ materially from the results described in or implied by these forward-looking statements. Please also see the section of this Annual Report on Form 10-K titled "Special Note Regarding Forward-Looking Statements."

Overview

Sight Sciences' mission is to develop transformative, interventional technologies that allow eyecare providers to procedurally elevate the standards of care - empowering people to keep seeing. We are passionate about improving patients' lives by helping them preserve their sight. Our objective is to develop and market products for use in new treatment paradigms and to create an interventional mindset in eyecare whereby our products may be used in procedures which supplant conventional outdated approaches. Our business philosophy is grounded in the following principles:

Our initial product development has focused on the treatment of two of the world's most prevalent and underserved eye diseases, glaucoma and dry eye disease ("DED"). We have commercialized products in each of our two reportable operating segments, Interventional Glaucoma and Interventional Dry Eye. Our Interventional Glaucoma revenue consists of sales of our OMNI® Surgical System family of products ("OMNI"), currently comprised of our Ergo Series OMNI Surgical System and OMNI Edge Surgical System, and the SION® Surgical Instrument ("SION"), while our Interventional Dry Eye revenue consists of sales of the TearCare® System ("TearCare"), and related components and accessories. Each product is primarily sold through a highly involved direct sales model that offers intensive education, training and customer service. We believe this model not only enables us to differentiate our products and company from competitors, but also expands our addressable market by educating ECPs, patients and other stakeholders on our products and evolving treatment paradigms. Outside of the U.S., we have established direct commercial operations in the United Kingdom and Germany. We sell OMNI directly in the United Kingdom and Germany, and indirectly in several other countries in Europe through distributors.

We sell OMNI and SION to facilities where ophthalmic surgeons perform outpatient procedures, such as ambulatory surgery centers ("ASCs") and hospital outpatient departments ("HOPDs"), which are typically reimbursed by Medicare (or similar foreign governmental reimbursement entity) or private payors for procedures using our products. We are focused on educating surgeons on the clinical benefits of earlier interventions with the comprehensive OMNI and TearCare procedures, driving TearCare revenue growth in the jurisdictions where appropriate payment values have been established for the TearCare procedure, expanding equitable reimbursed access to the TearCare procedure in other jurisdictions, engagement efforts with accounts, enhanced competitive counter selling, investments in targeted commercial resources including growth of our TearCare commercial infrastructure, and development of the OMNI pseudophakic standalone market.

We sell TearCare to ECPs, where eyecare providers perform evacuation of meibomian glands, using heat-delivered through wearable, open-eye eyelid treatment devices and manual expression, which TearCare is specifically designed for.

We are continuing our TearCare commercial launch while focusing on our comprehensive, clinical data-driven, long-term market development plan that aims to improve awareness and patient access to TearCare. In addition, in the areas where appropriate fee schedules have been established for the TearCare procedure, we are focusing our commercial resources on supporting providers in these specific geographies to drive utilization. Our strategy is focused on driving adoption and utilization through our experienced sales, marketing, and customer support teams who are already dedicated to the dry eye

market, and the ECP customers who have previously purchased TearCare SmartHubs in these states. We are also targeting new ECP customers in these states based on their current treatment approaches to DED and also focus on our Interventional Glaucoma customers in these states who may also benefit from adding TearCare to their treatment offerings.

We have dedicated meaningful resources to execute our commercial strategy, while also seeking to reduce operating expenses and improve cost efficiencies to better align our operating structure for long-term, profitable growth. In the third quarter of 2025, we implemented a targeted restructuring plan in which we reduced our headcount by approximately 20% of our global workforce, and reduced our operating expenses, principally by (i) delaying certain research and development project spend while prioritizing near term pipeline projects, (ii) reducing our selling, general, and administrative operating expenses by implementing measures to limit marketing, travel, and administrative costs, and (iii) not backfilling certain open and planned headcount. As part of this restructuring, we also executed changes to our operations in the United Kingdom ("UK") which included elimination of three general and administrative and sales management roles.

We do not have, and do not currently intend to develop, any internal manufacturing capabilities or infrastructure, and rely on a limited number of third-party manufacturers, many of which are single source suppliers, for the components, accessories and materials that are utilized in the assembly of our products. We believe the manufacturing capacity provided by our current suppliers will be adequate to meet our current and anticipated manufacturing needs across all of our product lines. However, as part of our long-term manufacturing strategy, we are actively expanding third party manufacturing capacity and options for our products, which we expect to be available to us starting in 2026 for certain products. We plan to continue to utilize third-party contract manufacturers for our products and any related components.

Revenue in our Interventional Glaucoma segment for the years-ended December 31, 2025 and 2024 was $75.7 million and $75.9 million, respectively, with gross margins for the same periods of 86.8% and 87.6%, respectively. Revenue in our Interventional Dry Eye segment for the year-ended December 31, 2025 and 2024 was $1.6 million and $4.0 million, respectively, with gross margins for the same periods of 59.3% and 46.2%, respectively. For the years ended December 31, 2025 and 2024, we generated more than 90% of our revenue from customers in the U.S.

Our Interventional Glaucoma revenue was down slightly for the year ended December 31, 2025 compared to the same period in 2024 due to a number of factors, including reimbursement coverage changes and increased competition from other minimally invasive glaucoma surgery ("MIGS") devices. These reimbursement changes were primarily restrictions on the performance of multiple MIGS procedures in combination with cataract surgery for Medicare patients in the jurisdictions administered by the five MACs that issued the local coverage determinations ("LCDs") containing such restrictions. We believe that these restrictions, which became effective in the fourth quarter of 2024, led to a decrease in the number of overall MIGS devices used in procedures that are being performed, including procedures utilizing our OMNI technology.

Our Interventional Dry Eye revenue was down for the year ended December 31, 2025 compared to the same period in 2024 due to lower demand. Lower demand was the result of a shift in strategy to focus on establishing equitable market access for the TearCare procedure, which took effect in the fourth quarter of 2024. While we established pricing with two MACs as of October 2025, there is no guarantee as to the timing of reimbursement decisions or the amount of reimbursement, if any, with other payors. Given the earlier stage of TearCare's commercial development, we expect our Interventional Dry Eye segment's gross margins to be lower than our Interventional Glaucoma segment's gross margins for the near- and medium-term due to the allocation of fixed labor and overhead costs to the segment's cost of goods sold.

We expect Interventional Dry Eye gross margin to improve over time as market access expands, although these improvements may be partially offset by the impact of tariffs.

We believe in the importance of continued strategic investment in initiatives that:

As a result, we intend to continue to invest in product development, market access, sales and marketing, clinical studies, and education initiatives. Because of these and other factors, we expect to continue to incur net losses for at least the next several years, and we may seek additional debt and/or equity financing to fund our operations and planned growth.

Factors Affecting Our Business and Results of Operations

We believe there are several important factors that have impacted and that will continue to impact our business, financial condition, and results of operations. For additional information on risk factors that could impact our results, please refer to the sections entitled "Risk Factors" in this Annual Report on Form 10-K.

These factors affecting our business and results of operations include, but are not limited to:

Product Development

We believe our product development approach is a key differentiator of our team and our company. We are focused on continuous innovation and design and utilize input from our network of expert employees (including ophthalmologists on staff), advisors and customers to rapidly iterate our pre-and post-commercial product designs with the aim of better satisfying the needs of our customers and their patients, delivering the most effective, safe, and consistent outcomes, and increasing adoption and utilization of our solutions. We believe it is critical to our product development approach to comprehensively understand the disease physiology, treat the underlying causes with an interventional mindset, and create products with an intuitive design and strong clinical evidence.

Once our products are launched, our customer feedback loop helps us further develop our products. This is particularly evident in the evolution of OMNI, which originated from the combined functionality of two internally developed, commercial predicate devices, each of which had their own multiple commercial iterations. Our future growth is dependent on our ability to continue innovating and applying our expertise of disease physiology to improve existing products and develop new products.

We brought OMNI Edge to the market in the first half of 2025. The addition of OMNI Edge was done to accommodate varying physician preferences and patient needs in today's evolving MIGS marketplace. OMNI Edge is designed to increase the amount of viscoelastic delivered with our patented motion synchronized delivery system to ensure the consistency, reproducibility, and safety surgeons have come to trust in the OMNI procedure. With this product, we are further advancing procedural intervention and reinforcing our commitment to best serving both our surgeon customers and the patients they care for. The addition of OMNI Edge reflects our ongoing dedication to enhancing outcomes and supporting the evolving needs of the eye care community.

Reimbursement Rates and Coverage

In the U.S., healthcare providers use separate billing codes to report the provision of medical procedures and use of supplies to third-party payors, such as government programs or private insurance, and seek reimbursement for all or a portion of those costs. Physician fee payment rates for products covered by temporary Current Procedural Terminology ("CPT") codes are set by the multi-state, regional contractors, or Medicare Administrative Contractors ("MACs"), which are responsible for administering Medicare claims. MACs have in the past, and may in the future, change coverage terms, and there can be no assurance that coverage and adequate reimbursement will be obtained from, or maintained by, the MACs.

In November 2024, five of the seven MACs adopted a non-coverage policy when an aqueous shunt or stent procedure is performed with another surgical MIGS procedure, such as canaloplasty or goniotomy, at the same time in the same patient eye. We believe the non-coverage determination for multiple MIGS procedures reduced and may continue to reduce overall MIGS procedure claims volumes, which may adversely impact our business, revenue and prospects. Any updated or new local coverage determinations or other coverage policies that may establish a policy of Medicare non-coverage, or materially restrict coverage, for one or more of our products would have materially and adversely impacted our business, financial condition, and results of operations.

In October 2025, two MACs, Novitas and FCSO, each established jurisdiction-wide pricing, effective retroactively to January 1, 2025, for CPT code 0563T, which is specifically associated with procedures using TearCare. In jurisdictions outside of those covered by Novitas and FCSO, there is still no meaningful reimbursement coverage by Medicare or private payors for DED procedures, including TearCare, and patients are typically paying out-of-pocket for TearCare procedures, although some payors may agree to provide case-based coverage outside of a formal policy. We plan to continue to engage

with other MACs, third-party payors, the clinical societies, and other stakeholders in continued support of patient access for interventional meibomian gland disease procedures performed with the TearCare System; however, there can be no guarantee that other third-party payors, including other MACs, will provide similar reimbursement coverage and/or payment decisions, if at all, for DED procedures, including TearCare

Proper reimbursement for our products is critical to the adoption of our products, and we plan to continue to focus on improving and expanding reimbursement coverage and payment amounts for our Interventional Glaucoma technologies, and establishing and enhancing reimbursement coverage and payment amounts for our Interventional Dry Eye technology.

Market Education and Training on the Benefit of Our Products vis-à-vis Existing Treatment Alternatives

One of the key drivers of our success is educating ophthalmologists, optometrists, patients, and third-party payors about the clinical and safety benefits of our products and of the benefits of more proactive, interventional approach to treating glaucoma and DED. We believe the required market education and development is best accomplished through a differentiated, highly involved commercial approach. As such, we devote significant resources to onboarding our sales professionals and to continuously augmenting their knowledge and capabilities. Our sales professionals provide ECPs with the necessary education, training and support to adopt and continue to safely use our products. We believe that increasing acceptance and usage of our products will require continued investment in our sales force and education efforts to ensure ECPs, patients and third-party payors learn more about our products and appreciate our benefits to their target patient populations.

Maximizing Product Usage by Customers

Demand for our products will be highly dependent on our ability to develop their potential addressable markets and maximize the breadth of patients our products can serve. Our ability to establish OMNI as a standard of care for POAG patients by continuing to grow its adoption and utilization in Combination Cataract Procedures and by pioneering the development of the market for interventional Standalone Procedures, with a focus on pseudophakic patients, will have a substantial impact on our future growth.

We introduced our SION Surgical Instrument in 2022. SION satisfies the American Academy of Ophthalmology definition of goniotomy and is registered with the FDA as a Class I 510(k) exempt device. Our ability to establish SION as a product with differentiated ease of use, safety and efficacy will be an important driver of SION's commercial growth and success.

TearCare is a unique open-eye heating and expression device designed to melt and remove meibomian gland obstructions. We believe TearCare has a compelling physiological profile to address obstruction from meibomian gland disease ("MGD"), which is the primary cause of evaporative DED, a disease characterized by low quality tears that evaporate prematurely. The current DED treatment market primarily consists of an abundance of OTC and prescription eyedrops that seek to lubricate the ocular surface, alleviate inflammation and/or increase tear production. However, OTC and prescription eyedrops are incapable of clearing obstructions in the meibomian glands and do not address MGD's eyelid-borne physiology and poor tear quality. MGD is associated with up to 86% of DED cases and is a leading root cause of evaporative DED, which is characterized by low quality tears that evaporate prematurely. Clinical studies have demonstrated that treating MGD by liquefying and removing clogged meibum is the most effective method to eliminate obstructions and restore the lipid layer of tear film, thereby preventing premature evaporation of tears. TearCare was designed to be administered during the course of a routine office visit to an ECP, which makes it convenient for patients, and allows providers to maintain procedural throughput in their practices. Our ability to improve patient access and market education on TearCare and the benefits of proactive MGD treatment will be key drivers of TearCare's future growth. We believe that sufficiently reimbursed patient access to the TearCare procedure is necessary to drive broad customer acceptance and adoption.

Operational Excellence and Cost Efficiency

We aim to achieve operating and financial milestones with optimal capital efficiency, and focus on our market value relative to invested capital as a key measurement of our performance. Utilizing the capital raised through our equity and debt financings (our December 31, 2025 cash and equivalents was $92.0 million), we have developed and commercially launched multiple clinically differentiated products, funded multiple completed and ongoing clinical trials, and built our management team and company infrastructure to support the continued growth of our business. We believe this level of operational and commercial progress relative to our total capital investment to date compares favorably to medical technology peers and we seek to design products that can achieve attractive long-term gross margins.

During the year ended December 31, 2025, global and regional economies, as well as the markets we serve, have experienced significant volatility, including as a result of the impacts of macroeconomic conditions, such as tariffs, inflation,

supply shortages, and geopolitical pressures. For example, in February and March 2025, the United States imposed additional tariffs on products from China. A significant portion of our OMNI and SION products, and certain of our TearCare system components, are produced and assembled in China by a Taiwan-based manufacturer. While we plan to diversify our third-party suppliers, these tariffs, as well as any future tariffs, by the United States or other countries could significantly increase the cost of our products and components, and could have a negative impact on our gross margins. However, the impact of any such tariffs will depend upon various factors, including the timing, amount, scope, and nature of the tariffs.

While the impact of these macroeconomic factors is not readily determinable, we have not been materially impacted by these macroeconomic conditions, but there can be no assurance that our business operations and financial condition will not be materially adversely affected in the future. The duration and scope of these conditions cannot be predicted with certainty, and it is uncertain what impacts, if any, these pressures may have on our ability to support the efficient and sustainable growth of our business.

Components of Our Results of Operations

Revenue

We currently derive the majority of our U.S. revenue from the sale of our OMNI and SION products to ASCs and HOPDs and from the sale of our TearCare products to ECPs. To date, the revenue from our Interventional Glaucoma segment has accounted for the vast majority of our total revenue, substantially all of which was generated from sales within the U.S. Our Interventional Glaucoma customers place orders based on their expected procedure volume. Our TearCare customers typically purchase a TearCare System which consists of one or more TearCare SmartHubs® ("SmartHubs"), multiple single-use TearCare SmartLids® ("SmartLids") and other accessories. After utilizing their initial inventory, customers can reorder SmartLids as needed. No single customer accounted for 10% or more of our revenue for the years ended December 31, 2025 and 2024.

The growth of our revenue is primarily dependent upon the demand for elective surgery and in-office treatment utilizing our products in the United States and Europe, product reimbursement rates and coverage criteria, and competition. Such demand can be subject to seasonality patterns such as lower demand during summer months because of ECP vacations and lower demand in winter months because of fewer business or surgery days due to holidays and adverse weather conditions.

Cost of Goods Sold

Our components and products are produced by third-party suppliers and manufacturers. Our cost of goods sold consists primarily of amounts paid for our products to third-party manufacturers, and our manufacturing overhead costs, which consist primarily of personnel expenses, including salaries, benefits and stock-based compensation, and reserves for excess, obsolete and non-sellable inventory. Cost of goods sold also includes depreciation expenses for production equipment which we provide to our third-party manufacturers, and certain direct costs, such as shipping and handling costs and tariffs on imported products and components.

Gross Profit and Gross Margin

We calculate gross profit as revenue minus cost of goods sold. We calculate gross margin as gross profit divided by revenue. Our gross profit and gross margin have been, and we believe they will continue to be, affected by a variety of factors, including differences in segment gross profit and gross margins, changes in average selling prices, changes in product reimbursement rates, product sales mix, production and ordering volumes, manufacturing, tariff and freight costs, product yields, and headcount. In general, we expect our gross profit to increase over time as our revenue increases, and we expect our gross margins to increase over the long term to the extent our production and ordering volumes increase and as we spread the fixed portion of our overhead costs over a larger number of units produced and sold.

We intend to use our design, engineering and manufacturing know-how and capabilities to further advance and improve the efficiency of our suppliers' manufacturing processes, which we believe will reduce costs and increase our gross margins.

Our gross margins could fluctuate from quarter to quarter due to a number of factors, including variations in product mix, changes in product reimbursement rates or average selling prices, transitions to new suppliers, introduction of new products by us or our competitors, adoption of new manufacturing processes and technologies, and responses to evolving macroeconomic and geopolitical conditions, including the adoption of new or increased tariffs by the United States, China, and other countries.

Research and Development Expenses

Research and development ("R&D") expenses consist primarily of costs associated with engineering, product development, clinical studies to develop and support our products, including clinical trial design, clinical trial site initiation

and study costs, internal and external costs associated with our regulatory compliance and quality assurance functions, medical affairs, cost of products used for clinical trials and other costs associated with products and technologies that are in development. These expenses also include personnel expenses, including salaries, benefits and stock-based compensation related to R&D functions, supplies, consulting, prototyping, testing, materials, travel expenses, depreciation expenses for equipment and an allocation of IT and facility overhead expenses.

Our R&D expenses as a percentage of revenue may vary over time depending on the level and timing of new product development efforts, as well as clinical development, clinical trial and other related activities. While we expect to continue to make key investments in our R&D initiatives, including active clinical trials, we implemented a targeted plan during the third quarter intended to reduce operating expenses, improve cost efficiencies, and better align our operating structure for long-term profitability growth. This targeted plan is expected to reduce R&D costs in the near term.

Selling, General and Administrative Expenses

Selling, general and administrative ("SG&A") expenses consist primarily of personnel expenses, including salaries, benefits and stock-based compensation related to selling, marketing and corporate functions, allocation of IT and facility overhead expenses, bad debt expense, finance, legal and human resource costs. Other SG&A expenses include training, travel expenses, promotional activities, marketing initiatives, market research and analysis, conferences and trade shows, professional services fees (including external legal, audit, consulting and tax fees), insurance costs, and general corporate expenses.

Our SG&A expenses as a percentage of revenue may vary over time depending on the level and timing of commercial expansion efforts. While we expect to continue to make strategic investments in SG&A expenses, we implemented a targeted plan during the third quarter intended to reduce operating expenses, improve cost efficiencies, and better align our operating structure for long-term profitability growth. This targeted plan is expected to reduce SG&A costs in the near term.

Investment Income

Investment income primarily consists of interest and amortization on held-to-maturity investments in U.S. treasury securities and money market funds.

Interest Expense

Interest expense consists of interest incurred on our outstanding indebtedness and non-cash interest related to the accretion of debt discount and amortization of debt issuance costs associated with the Term Loans.

Loss on Debt Extinguishment

The loss on debt extinguishment is associated with our termination and settlement of the indebtedness under our prior secured credit facility with MidCap Financial Trust and certain of its affiliates (the "Prior Lender") that was initiated and completed during the year ended December 31, 2024.

Other Expense, Net

Other expense, net primarily consists of income and expenses that do not originate from our primary business.

Results of Operations

Comparison of the Years Ended December 31, 2025 and 2024

Revenue. Revenue in the year ended December 31, 2025 was $77.4 million, a decrease of $2.5 million, or 3.1%, compared to the prior year.

In the year ended December 31, 2025, our Interventional Glaucoma revenue was $75.7 million, a decrease of $0.2 million, or 0.2%, compared to the prior year. The decrease was primarily attributable to the LCDs that became effective in the fourth quarter of 2024 . Revenue increased in the second half of 2025, primarily attributable to an increase in ordering facilities, an increase in the number of units sold, and an increase in average selling prices compared to the prior year period.

Our Interventional Dry Eye revenue was $1.6 million for the year ended December 31, 2025, a decrease of $2.3 million, or 58.7% compared to the prior year. The overall decrease in revenue was primarily due to fewer SmartLids sold, due to our focus on the next phase of our commercial strategy, which involves achieving reimbursed market access for our TearCare products. During the fourth quarter of 2025, two MACs established jurisdiction-wide pricing, which led to improved sales performance in the fourth quarter.

Cost of Goods Sold. Cost of goods sold during the year ended December 31, 2025, decreased $0.9 million, or 7.6%, compared to the prior year. Our Interventional Glaucoma cost of goods sold increased $0.6 million compared to 2024. The increase was primarily driven by tariffs, higher overhead costs per unit, and product sales mix. Interventional Dry Eye cost of goods sold decreased $1.5 million compared to the prior year, primarily driven by lower volumes.

Gross Profit and Gross Margin. Our total gross profit was $66.7 million for the year ended December 31, 2025, a decrease of $1.6 million from the prior year comparable period. Our gross margin for the year ended December 31, 2025 increased to 86.2%, from 85.5% in the prior year comparable period. Gross margin in our Interventional Glaucoma segment was 86.8% for the year ended December 31, 2025, a decrease from 87.6% for the prior year comparable period, primarily due to higher overhead costs per unit, tariff costs, and product sales mix. In our Interventional Dry Eye segment, gross margin increased from 46.2% for the year ended December 31, 2024 to 59.3% for the year ended December 31, 2025, primarily driven by increased average selling prices.

Research and Development Expenses. R&D expenses were $14.6 million for the year ended December 31, 2025, a decrease of $3.4 million, or 18.8%, compared to the prior year. The decrease was primarily attributable to a $2.7 million decrease in personnel costs related to our August 2025 reduction in force. Clinical studies and general R&D expenses also decreased by $1.6 million during the current year. R&D expenses during the year ended December 31, 2025 included $1.0 million of restructuring costs related to this reduction in force.

Selling, General, and Administrative Expenses. SG&A expenses were $89.2 million for the year ended December 31, 2025, a decrease of $11.7 million, or 11.6%, compared to the prior year. The decrease was primarily attributable to a $5.4 million decrease in legal expenses, as well as a $1.0 million decrease in sales training, events, and demos. In addition, our personnel expenses decreased by $4.7 million, primarily driven by our August 2025 reduction in force. SG&A expenses during the year ended December 31, 2025 included $1.8 million of restructuring costs related to this reduction.

Investment Income. Investment income was $4.0 million for the year ended December 31, 2025, a decrease of $1.9 million, or 32.9%, from $5.9 million in the prior year period. The decline was due to lower investment balances as well as lower yield on held-to-maturity investments during the current year.

Interest Expense. Interest expense was $5.1 million in the year ended December 31, 2025, an increase of $0.5 million, or 10.3%, compared to the prior year period due to a higher outstanding principal balance under the Hercules Loan Agreement.

Loss on Debt Extinguishment.There were no extinguishments of debt in the current year. Loss on debt extinguishment was $2.0 million for the year ended December 31, 2024.

Cash Flows

The following table summarizes our cash flows for the periods indicated (in thousands):

Net Cash Used in Operating Activities

Net cash used in operating activities for the year ended December 31, 2025 was $29.7 million, consisting primarily of a net loss of $38.4 million and a net change in our operating assets and liabilities of $6.4 million, partially offset by non-cash charges of $15.1 million. The $6.4 million change in our net operating assets and liabilities included increases of $1.4 million in inventory and 0.7 million in prepaid expenses and other current assets, as well as decreases of $3.6 million in accrued compensation and $1.4 million in accounts payable and accrued and other current liabilities. These changes were partially offset by a $0.9 million decrease in accounts receivable. The non-cash charges primarily consisted of $13.1 million related to stock-based compensation, $0.9 of accretion of debt discount and debt issuance costs, $0.5 million of depreciation and amortization, and $0.5 million of noncash operating lease expense.

Net cash used in operating activities for the year ended December 31, 2024 was $22.4 million, consisting primarily of a net loss of $51.5 million, partially offset by non-cash charges of $20.1 million and a net change in our operating assets and liabilities of $9.0 million. The $9.0 million change in our net operating assets and liabilities included decreases of $3.5 million in accounts receivable and $1.6 million in inventory, as well as increases of $5.2 million in accrued compensation and $0.3 million accounts payable. These were partially offset by a $1.6 million decrease in other noncurrent liabilities. The non-cash charges primarily consisted of $17.1 million related to stock-based compensation, $1.0 million of noncash loss on debt

extinguishment, $0.8 million of accretion of debt discount and debt issuance costs, $0.7 million of depreciation and amortization, and $0.6 million of noncash operating lease expense.

Net Cash Used in Investing Activities

Net cash used in investing activities in the years ended December 31, 2025 and 2024 was $0.2 million and $0.4 million, respectively, consisting of purchases of property and equipment.

Net Cash Provided by Financing Activities

Net cash provided by financing activities for the year ended December 31, 2025 was $1.8 million, consisting primarily of proceeds from the exercise of stock options and proceeds from employee stock plan purchases. Net cash provided by financing activities for the year ended December 31, 2024 was $5.0 million, consisting primarily of proceeds from the Hercules Loan Agreement, partially offset by costs associated with refinancing the term loan agreement.

Liquidity and Capital Resources

Sources of Liquidity

To date, our primary sources of capital have been private placements of redeemable convertible preferred stock, the sale of common stock in our IPO, debt financing arrangements, and revenue from the sale of our products. In January 2024, we entered into a Loan and Security Agreement (the "Hercules Loan Agreement") with Hercules Capital, Inc ("Hercules") and certain of its affiliates (collectively with Hercules, the "Lenders"), which provides for a senior secured term loan facility in the aggregate principal amount of up to $65.0 million. We used the proceeds from an initial $35.0 million tranche (the "Initial Loan") funded under the Hercules Loan Agreement to discharge our indebtedness under the Prior Loan Agreement with our Prior Lenders. In December 2024, we consummated the drawdown of the $5.0 million Tranche I(b) term loan advance (the "Tranche I(b) Loan") contemplated by the Hercules Loan Agreement.

As of December 31, 2025, we had cash and cash equivalents of $92.0 million, an accumulated deficit of $384.7 million, and an outstanding term loan balance of $40.0 million plus a $2.4 million fee final payment due at maturity under the Hercules Loan Agreement (excluding debt discount and amortized debt issuance costs). Based on our current planned operations, we expect our cash and cash equivalents balance, as well as other sources of liquidity, will enable us to fund our operations for at least the next 12 months and the foreseeable future.

Our historical cash outflows have primarily been associated with cash used for operating activities such as sales, marketing and commercialization of our products, research and development activities, regulatory and market access activities, intellectual property enforcement and portfolio expansion, capital expenditures and debt service costs. Our cash requirements will be significantly impacted by our ability to manage and grow our business by maintaining and expanding our sales to existing customers or introducing our products to new customers; our ability to obtain and maintain sufficient reimbursement for our products, including successfully protecting reimbursement for our Interventional Glaucoma products and expanding and maintaining sufficient reimbursement for our Interventional Dry Eye products; the level of our investment in commercialization and research and development activities, including clinical trials; whether we enter into any strategic acquisitions or investments, and the timing and amount of the associated capital expenditures; the outcome of our litigation against Alcon, including receipt of any final, non-appealable award thereunder; and competitive dynamics within our industry. There are numerous factors that may impact our long-term cash requirements, and we are unable to accurately predict them at this time. An extended period of global supply chain disruption, geopolitical or trade tensions, or economic uncertainty could materially affect our business, results of operations, financial condition, and access to sources of liquidity. For example, since February 2025, the U.S. has imposed tariffs that apply to all of our products and product components imported from China, which has increased, and may to continue to increase, the cost of our products and components and have a negative impact on our gross margins and liquidity.

We may in the future need to seek additional sources of liquidity and capital resources through equity or debt financings, such as additional securities offerings or through borrowings under a new or existing credit facility. There can be no assurance that such transactions will be available to us on favorable terms, if at all.

Hercules Capital Loan Agreement

In January 2024, we entered into the Hercules Loan Agreement with the Lenders, which provides for a maximum $65.0 million credit facility. An Initial Loan of $35.0 million was funded under the Hercules Loan Agreement on January 22, 2024, which was used to discharge our indebtedness under the Prior Loan Agreement. On December 10, 2024, we consummated the drawdown of the $5.0 million Tranche I(b) Loan under the Hercules Loan Agreement. Upon consummation of the Tranche I(b) Loan, the aggregate principal amount of borrowings under the Hercules Loan Agreement was $40.0 million.

In addition to the Initial Loan and the Tranche 1(b) Loan, the Hercules Loan Agreement provides additional tranches available to us (the "Tranche Loans," and together with the Initial Loan and the Tranche I(b) Loan, the "Term Loans). Tranche 2 originally consisted of $10.0 million available to draw through September 15, 2025, contingent upon the achievement of certain performance milestones prior to June 30, 2025, which milestones were not met and thus this Tranche 2 was not available to the Company. Tranche 3 consisted of $15.0 million available to draw through the interest only period in increments of $5.0 million, subject to the sole approval of Hercules' investment committee.

The Hercules Loan Agreement originally provided for a maturity date of July 1, 2028, with an interest only period running for the first 30 months of the agreement term. This interest-only period was extendable for an additional six months for a total of 36 months upon the achievement of certain performance milestones prior to June 30, 2025; these milestones were not met by the June 30, 2025 deadline and thus the six-month extension of the interest only period was not available to the Company.

In September 2025, the Company and Hercules entered into a third amendment (the "Amendment") to its Loan and Security Agreement. The Amendment provided for an additional six-month extension of the interest only period, to now extend to February 1, 2027. The Amendment also amended the Hercules Loan Agreement to reallocate the undrawn and unavailable $10.0 million tranche by increasing the amount available to draw through the interest only period from $15.0 million to $25.0 million in minimum increments of $5.0 million, subject in each case to the sole approval of Hercules' investment committee.

The Term Loans accrue interest at a floating annual rate equal to the greater of 10.35%, or the Wall Street Journal prime rate (the "Prime Rate") plus 2.35%, with the interest rate equal to 10.35% at September 30, 2025. The final payment fee is set at 5.95% of the funded balance, which is recognized as a debt discount and is being accreted into the amortization of debt issuance costs using the effective interest rate method over the term of the loan.

In conjunction with the funding of the Initial Loan, we issued warrants to the Lenders to purchase up to an aggregate of 135,686 shares of our common stock at an exercise price of $5.159 per share, which were recorded and classified as equity. On December 10, 2024, upon the funding of the Tranche I(b) Loan, we issued additional warrants to the Lenders to purchase 26,095 shares of our common stock at an exercise price of $3.83 per share. Each warrant is exercisable for a period of seven years from the date of issuance. If the additional Term Loans are funded, we will be obligated to issue to the Lenders additional warrants to purchase common stock in an amount equal to 2.0% of the funded balance of each tranche loan under the Hercules Loan Agreement, divided by the exercise price on the date we draw funds under such tranche loan. The exercise price will be calculated using the five-day volume-weighted average stock price as of such date. See Note 7, Stockholders' Equity, for additional information regarding these common stock warrants.

The obligations under the Hercules Loan Agreement are guaranteed by us and our future subsidiaries, subject to exceptions for certain foreign subsidiaries. The obligations under the agreement are secured by substantially all of our assets, including its material intellectual property. Additionally, we are subject to customary affirmative and negative covenants, including covenants that limit or restrict our ability to, among other things, incur indebtedness, grant liens, merge or consolidate, make investments, dispose of assets, make acquisitions, pay dividends or make distributions, repurchase stock and enter into certain transactions with affiliates, in each case subject to certain exceptions. We are also subject to certain minimum cash and revenue covenants under the Hercules Loan Agreement. We were in compliance with all covenants as of December 31, 2025.

While any Term Loans remain outstanding under the Hercules Loan Agreement, we are required to use commercially reasonable efforts to grant to the Lenders the option to invest up to $3.0 million in our next round of equity financing, if any, that is broadly marketed to multiple investors on the same terms, conditions and pricing offered to investors in such subsequent equity financing.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements

Critical Accounting Estimates

Our financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP. The preparation of these financial statements requires us to make estimates and assumptions for the reported amounts of assets, liabilities, revenue, expenses and related disclosures. 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.

While our significant accounting policies are more fully described in Note 2 to our financial statements included in this Annual Report on Form 10-K, we believe the following discussion addresses our most critical accounting estimates, which are those that are most important to our financial condition and results of operations and require our most difficult, subjective and complex judgments.

Stock-Based Compensation

We maintain an equity incentive plan that permits the grant of stock-based awards, such as stock options and restricted stock units ("RSUs"), to employees, directors, and consultants. We recognize equity-based compensation expense for awards of equity instruments based on the grant date fair value of those awards. We estimate the fair value of our stock option awards based on the estimated fair values as of the grant date using the Black-Scholes-Merton ("Black-Scholes") option-pricing model, net of estimated forfeitures. The model requires us to make a number of assumptions, including expected volatility, expected term, risk-free interest rate, and expected dividend yield.

The fair value of RSU awards is determined based on the number of units granted and the closing price of the Company's common stock as of the grant date. We expense the fair value of our equity-based compensation awards on a straight-line basis over the requisite service period, which is the period during which the related services are provided.

Recent Accounting Pronouncements

See Note 2 to our consolidated financial statements included in this Annual Report on Form 10-K for more information about recent accounting pronouncements, the timing of their adoption, and our assessment with respect to their impact on our financial statements and related disclosures.