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

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 in conjunction with our consolidated financial statements and related notes thereto included elsewhere in this Annual Report on Form 10-K, as well as the other information provided from time to time in our other filings with the SEC. Some of the information contained in this discussion and analysis or set forth elsewhere in this annual report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, our actual results could differ materially from those discussed in or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section of this Annual Report on Form 10-K titled "Risk Factors." Please also see the section titled "Special Note Regarding Forward-Looking Statements."

Overview

We are a leading commercial cell engineering company focused on providing enabling platform technologies to advance the discovery, development and commercialization of next-generation cell therapeutics and to support innovative cell-based research and development. Over more than two decades, we have developed and commercialized our proprietary Flow Electroporation technology, which facilitates complex engineering of a wide variety of cells. Electroporation is a method of transfection, or the process of deliberately introducing molecules into cells, that involves applying an electric field in order to temporarily increase the permeability of the cell membrane. This precisely controlled increase in permeability allows the intracellular delivery of molecules, such as genetic material and proteins, that would not normally be able to cross the cell membrane as easily.

Our ExPERT platform, which is based on our Flow Electroporation technology, has been designed to address this rapidly expanding cell therapy market and can be utilized across the continuum of the high-growth cell therapy sector, from discovery and development through commercialization of next-generation, cell-based therapies. The ExPERT family of products includes five instruments, which we call the DTx, the ATx, the STx, the GTx, and the VLx, and related software protocols, as well as a portfolio of proprietary related PAs and consumables.

We have garnered meaningful expertise in cell engineering via our internal research and development efforts as well as our customer-focused commercial approach, which includes a growing application scientist team. The platform is also supported by a robust intellectual property portfolio with more than 200 granted U.S. and foreign patents and more than 100 pending patent applications worldwide.

From leading commercial cell therapy drug and biologic developers and top biopharmaceutical companies to top academic and government research institutions, including the NIH, our customers have extensively validated our technology. We believe the features and performance of our platform have led to sustained customer engagement. Our existing customer base ranges from large biopharmaceutical companies, including a majority of the top 25 pharmaceutical companies based on 2024 global revenue, to hundreds of biotechnology companies and academic centers focused on translational research. As of December 31, 2025, we have placed more than 857 of our electroporation instruments with customers worldwide.

Historically, we have financed our operations primarily from the issuance and sale of equity securities, previous debt borrowings and cash flows from operations. On August 3, 2021, we issued and sold 15,525,000 shares of common stock in our U.S. IPO at a price to the public of $13.00 per share, inclusive of 2,025,000 shares issued pursuant to the full exercise of the underwriters' option to purchase additional shares. The IPO generated gross proceeds to us of $201.8 million. We received aggregate net proceeds of $184.3 million after deducting aggregate underwriting commissions and offering costs of $17.6 million.

We believe that our current cash, cash equivalents and short-term investments will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months from the date of the filing of this Annual Report. We have based this estimate on assumptions that may prove to be wrong, however, and we could exhaust our

available capital resources sooner than we expect. See "Liquidity and Capital Resources" below for more information about our current capital resources.

Since our inception, we have incurred significant operating losses. Our ability to generate revenue sufficient to achieve profitability will depend on the successful further development and commercialization of our products. We generated revenue of $33.0 million and $38.6 million for the years ended December 31, 2025 and 2024, respectively, and incurred net losses of $44.6 million and $41.1 million for those same years. As of December 31, 2025, we had an accumulated deficit of $261.5 million. We expect to continue to incur net losses as we focus on growing commercial sales of our products in both the United States and international markets, including growing our sales teams, scaling our manufacturing operations, and continuing research and development efforts to develop new products and further enhance our existing products.

We believe we have a diversified revenue model with revenue generated from multiple sources including recurring license fees, sales of instruments and related PAs and participation in the clinical and commercial success of some of our customers through milestone and sales-based payments under SPL agreements.

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 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 this Annual Report under the heading "Risk Factors."

Sales and Licenses of Instruments

Our financial performance has largely been driven by, and in the future will continue to be impacted by, the rate of sales and licenses of our ExPERT family of proprietary Flow Electroporation instruments to existing and new customers. We currently market five versions of our instruments, the DTx, the ATx, the STx, the GTx, and the VLx.. The ATx is primarily to academic institutions and investigative research users. The STx is primarily sold to end users for research and drug discovery purposes, and the GTx is licensed to customers for research, clinical or commercial use or sold for research use in certain circumstances or sold to academic centers for research or clinical use. We launched the VLx to provide our customers with an easier to use system that incorporates the benefits of the ExPERT platform. We announced the launch the DTx in February 2026. We view the demand for our instruments, whether in the form of sales or license, as an indicator of the health of our current business and as a predictor of future instrument sale and license revenue. As described below, we separately sell proprietary single-use processing assemblies, which we call PAs, that are necessary for our customers to use our electroporation instruments. Therefore, depending on the number of instruments that have been sold or are under active license, we have insight into the demand for PAs that will also translate to future revenue for us.

Our sales model varies based on the activity of the end customer, such as whether they are a translational research center, an academic center, a company focused on drug or biologic discovery, or a company engaged in cell therapy development, and the customer's intended use of our platform. If our customer intends to use our platform for research or discovery only, we typically sell the instrument outright. Each of the ExPERT instruments have different prices based on the instrument's features. When we sell an instrument, we also provide a non-exclusive license to our intellectual property for the customer to use the instrument broadly for research or discovery, as applicable. In the case of a sale, title to the instrument conveys to the buyer, but we retain ownership of intellectual property rights and software and protocols loaded onto the instruments.

The sales cycle for our cell engineering instruments varies widely and typically ranges from approximately six to approximately 12 months, with the actual period depending on project stage, budget process, equipment prioritization and the general financial status of the customer or the market in general. As a result of this lengthy and unpredictable sales cycle, we expect that we may be prone to quarterly fluctuations in our instrument sales revenue.

For cell therapy customers who use our technology to develop engineered cells for human therapeutic use in clinical trials or, if approved by regulatory authorities, for commercial sale, we license our platform on a non-exclusive basis in exchange for an annual fee per instrument licensed. This license fee varies based on whether the instrument is being used for preclinical or clinical purposes. Once we have a research or clinical license with a customer, we generally have high visibility into future license revenue from this customer. It is possible, however, that our future license revenue could be impacted by failure of the customer therapeutic candidates to progress through clinical development for reasons unrelated to the successful use of our instruments, such as toxicity, lack of efficacy, funding constraints, changes in development priorities, patient access limitations or regulatory challenges. For any of these reasons, a customer could determine not to renew or to enter into additional licenses with us, which could result in our actual future license revenues differing from our estimates and projections.

Our installed base of electroporation instruments has grown to over 857 instruments as of December 31, 2025. This installed base includes both instruments sold to customers and instruments licensed for research and clinical use. Because of the size of the drug and biologic discovery market and our long history in that market, the installed base of instruments is currently weighted more heavily towards instruments sold for discovery and research applications. However, since each licensed instrument provides us with ongoing license revenues, the share of revenues from licensed instruments may grow as a share of our total revenue mix.

We plan to further grow our installed base of ExPERT instruments through additional sales and licenses to our current customers and through the sale or license of instruments to new cell therapy, product discovery, academic and other customers. To achieve this goal, we intend to further expand our commercial infrastructure, including through the expansion of our sales force and field application scientists. We have over 23 dedicated field sales and application scientist professionals globally.

In addition, we have numerous collaborations in place with academic and commercial institutions to further expand our capabilities and supporting data in new cell engineering applications. Recent sales efforts have also focused on expanding our presence in translational academic centers, which we view as a potentially meaningful source of installed base expansion given the increased industry focus on, and government funding allocated to, cell therapy. Academic translational centers have been a strong source of cell therapy innovation and commercial spinouts in the cell therapy sector.

We expect license revenue to continue to grow as those customers move their existing drug or biologic development programs into later-stage clinical trials and advance their preclinical pipeline programs into clinical development. In addition, we expect new customers to emerge and contribute to these revenues.

Sales of Processing Assemblies and Consumables

In addition to instrument sales, our current and future revenue is dependent on sales of our proprietary PAs, as well as the sale of our proprietary consumables, for use with our instruments. We sell PAs that are intended either to support research use or use in cGMP clinical research applications. The PAs differ in terms of their volume capacities and the associated numbers of cells that can be processed in each electroporation sequence with a particular PA, as well as the number of transfection experiments that can be performed in a single electroporation process. Our PA pricing varies based on the volume of cells processed and the number of transfections per PA.

We expect that as our installed instrument base grows, our sales of PAs and consumables will grow accordingly, especially as cell therapy programs continue to progress through clinical development and potentially become commercial-stage, thereby increasing the number of PAs needed by customers. We are also developing and intend to launch new PAs that target previously unserved subsegments across the bioprocessing and cell therapy markets, which could further increase our PA sales. However, both the number of PAs used per instrument, as well as the specific PA used, is highly variable across our customer base and depends on several factors, including:

•the purpose for which the customer is using the platform;

•the relative pricing of our PAs;

•the progression of cell therapy products through preclinical and clinical development;

•whether the cell therapy customer uses a centralized or decentralized manufacturing process;

•the customer's target indication, which can result in variations in patient numbers needed for clinical trials; and

•whether the cells to be processed using our platform are patient-derived, donor-derived or cell line-derived.

With considerable variability of processes, even within the same indication, such as is the case for allogeneic genetically-modified cell therapies, such as CAR-Ts, and the nascency of the cell therapy industry, we expect that it may take several years for us to gain visibility into how these factors will impact our PA revenue over time.

We continuously re-evaluate our PA portfolio based on customer needs and have introduced, and intend to continue to introduce, new PAs, improvements to existing PAs, and complementary products. Some new PAs may fail to be used in line with our expectations when they are launched. While we also price PAs based on the value provided to the customer, introduction of new PAs could cannibalize our existing PA portfolio more than we anticipated if customers find the new products to be a better solution for their applications or workflows.

Strategic Platform Licenses (SPLs)

Typically, our cell therapy customers will either purchase our ATx instrument for research purposes or purchase or obtain a research use license of our GTx instrument technology in order to validate the use of our technology in their programs and to progress their preclinical work towards clinic trials. However, once a cell therapy customer using one of our ExPERT instruments advances their preclinical research to a stage where they are planning to enter clinical development, they need to enter into a licensing arrangement with us for the rights to clinical and/or commercial use of our instrument. Our customers typically negotiate the terms of those licenses during research and preclinical development.

We refer to these arrangements as SPL agreements, the terms of which contain not only higher annual, non-exclusive fees for the clinical use of the instrument, but also allow us to share in the economics of the customer's programs. We have 31 SPL partnerships with commercial cell therapy developers, On average, our current SPL agreements allow for approximately six product candidates per license, although this average may change over time. SPL agreements typically include potential payments to us upon the customer's achievement of specified clinical development or regulatory milestones, as well as potential sales-based payments to us, which could be payments based upon the achievement of specified sales levels and/or royalty payments that are a percentage of the customer's net sales. The amount of each milestone payment is typically correlated in size with value-creating, precommercial clinical progress events or commercial sales levels.

Under our current SPLs, one program is in commercial stage, and 13 programs are currently in clinical development as of December 31, 2025, meaning they have at least an FDA-cleared IND application or foreign equivalent. Our 31 SPLs have the potential to generate greater than $2 billion. This figure includes both existing active SPL programs currently in clinical development and future SPL programs that are encompassed in our SPL agreements. From the 13 clinical programs under our SPL agreements, the total pre-commercial milestone opportunity can exceed $130 million if all of the active programs were to achieve regulatory approvals. We have received over $30 million in milestone revenue to date. However, our actual milestone revenue from these agreements will likely be lower, as not all programs covered by each agreement will become and remain active programs in a customer's development pipeline or successfully complete the clinical development process. Further, each agreement typically includes programs that have not been specifically identified, or for which a candidate may never be identified or developed by the customer.

Our strategy is to capitalize on the growth in the number of cell therapy developers by entering into new SPL agreements. We entered into four agreements in 2025.

For the year ended December 31, 2025, one cell therapy company with which we have entered into an SPL agreement accounted for 26% of our total revenue, and our five largest SPL customers accounted for an aggregate of

approximately 42% of our total revenue for the year through a combination of instrument license fees, milestones realized and processing assembly revenue.

Our future milestone revenue under our SPL agreements will depend in large part on the clinical and regulatory achievements of our customers. Generally, precommercial milestone payments become larger as programs move through clinical development. We rely in part on our customers' public disclosures around regulatory timelines to forecast our receipt of precommercial milestone payments. While we expect our forecasting ability to improve over time as more of our customers' programs advance through clinical development and the number of clinical programs covered by our licenses expands, given the early nature of the cell therapy clinical market, we expect our realization of precommercial milestones to be somewhat unpredictable.

In addition, the potential for sales-based payments once a customer's product is approved and in commercial use is unknown and variable based on a number of factors, including inherent clinical risk, potential changes in the customer's strategy, the designated indication and its impact on the potential number of patients to be served and the competitive products available to patients, product pricing and reimbursement structures, our customer's commercial manufacturing plans and the inherent unknowns in adoption of next-generation cell therapies relative to other modalities.

Gross Margins

We have generated overall gross margins of over 80% for the last six years, although our margins vary depending on our revenue mix from instruments, PAs and milestones under SPL agreements and other factors. We price our instruments at a premium given what we believe to be the broad benefits of our platform, and the limited availability of alternative, clinically validated non-viral delivery approaches. However, the market for non-viral delivery is highly competitive, and introduction of a cGMP-grade platform by a competitor that delivers similar performance across a similar diversity of cell types could negatively impact our business and lead to increased price pressure that could negatively impact our gross margins. In addition, part of our growth strategy is to expand into new regional markets, which could require the use of distributors and/or our participation in more competitive environments, which could impact our ability to price our instruments at a premium and could negatively impact our ability to enter into SPL agreements on terms similar to those currently in effect.

We expect our gross margins to benefit from realization of the economics from our SPL agreements described above, to the extent that such milestones and/or sales-based payments grow to be a significant proportion of overall revenues, as there is no cost of goods sold associated with such revenue. However, realization of these potential revenues is uncertain. Margins may also experience downward pressure due to increases in labor and materials costs, expansion of our PA portfolio, future design changes or the mix of PAs sold, or other factors, but may benefit in the mid-to-long term as PA production becomes more automated.

Key Business Metrics

In addition to revenue, we regularly review several key business metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions. These key metrics include:

With respect to the numbers of programs under license, in many cases we make estimates of such programs based on our contract terms with our customers and our knowledge about our customers' clinical progression of their programs. We rely, in part, on our customers' public disclosures around regulatory timelines to forecast our receipt of precommercial milestone payments. However, it is possible that some programs may have become dormant or inactive without our knowledge, some new programs may be identified and some programs may progress further in clinical development without our knowledge if the customer has not made a public announcement. While we expect our forecasting ability to continue to improve over time as more of our customers' programs move through clinical development and the number of clinical programs covered by our licenses expands, given the early nature of the cell therapy clinical market, we expect our realization of precommercial milestones to be somewhat unpredictable. This number may fluctuate due to the success of our commercial partners. Additionally, the addition of a large SPL agreement in which one SPL customer uses multiple instruments as part of their research, clinical or commercial program, may dilute the percentage of commercial programs currently in the clinic.

As of the dates presented, our key metrics described above were as follows:

* Number of licensed clinical programs under SPL agreements are by number of product candidates and not by indication.

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Components of Our Results of Operations

Revenue

We generate revenue principally from the sale of instruments, single-use PAs and consumables as well as from licenses to our customers. Our SPL agreements also include associated clinical progress milestones and sales-based payments to us, in addition to annual license payments. Sales of instruments and PAs under contracts with customers are classified as product sales in our consolidated financial statements. Revenue from SPLs, including payments that we may receive from our customers based on their achievement of specified clinical development or commercialization milestones, are classified as leased elements in our consolidated financial statements.

Our business and revenue growth strategy currently consists of the sale of instruments, the sale of PAs and consumables, and SPL license fees. We record revenue from the sale of instruments, PAs or consumables upon shipment to a customer. Licenses are typically invoiced annually at the start of each license period and are accounted for as monthly revenue over the license term with the expectation of continuing customer renewals of their licenses. As our customers achieve clinical progress milestones and/or sales-based payment milestones, we recognize the full value of the milestone as revenue. In addition, as customers use instruments they have either purchased or included with their license, they typically replenish their supplies of PAs and consumables through recurring purchases. Although customers are not

contractually obligated to renew their licenses or to purchase additional PAs or consumables and may decide not to do so solely in their own discretion, license fees and PAs and consumable revenue streams have historically formed an important component of our revenues, and we believe they provide insight into our future performance. We consider these sales and license revenue streams to be recurring revenues.

In order to evaluate how our sales are trending across key markets, as well as the contribution of program economics from our SPL agreements, we separately analyze revenue derived from our core revenue, as well as the performance-based milestone revenues we recognize under our SPL agreements. Core revenue includes sales instruments, PAs and consumables, and research and clinical licenses, while non-core revenue relates to SPL program-related revenue. We recognize both core and non-core revenue in accordance with generally accepted accounting principles in the United States ("U.S. GAAP").

Program-related revenue includes precommercial milestones earned and recognized as revenue during the period. Once SPL customers achieve regulatory approval for and commercialize their products, in nearly all cases we will also be entitled to receive sales-based payments which may be milestone payments upon achievement of specified levels of net sales and/or royalties expressed as a percentage of net sales. We have not received any commercial payments from our SPL customers to date. As our customers progress their programs and achieve additional milestones, our SPL program revenue is expected to constitute a growing portion of our total revenues in future periods.

We also offer our customers extended warranty and service plans. Our extended warranty and service plans are offered for periods beyond the standard no-fee, one-year warranty that customers who purchase instruments receive. Research and clinical licenses include a warranty during the license term without additional charge. Extended warranty and service plans generally have fixed fees and terms ranging from one additional year to four additional years and include an annual calibration. We recognize revenue from the sale of extended warranty and service plans over the respective coverage period, which approximates the service effort provided by us. Warranties are typically not a material revenue stream for us and included in other revenue.

Product Sales

Revenue from contracts with customers includes revenue from the sale of instruments, PAs and consumables. Customers purchase a specific ExPERT instrument depending upon their intended use and all customers purchase PAs and consumables for use with our instruments. Commercial customers may not use a purchased instrument for clinical or commercial processes.

We expect product sales revenue to increase in future periods as our market and customer base grow.

License Revenue

License revenue consists of revenue from research and commercial licenses. These licenses consist of fixed license payments and variable milestone payments that are dependent on our customer's achievement of clinical milestones. Typically, licenses that provide for clinical or commercial use also include sales-based milestone payments (and/or sales-based royalties in some cases) upon the commercialization of the customer's product. Under our research and clinical licenses, we provide our instruments and associated software to customers for non-exclusive use of our technology for research and/or specific clinical programs, typically along with rights for commercial use upon regulatory approval of the customer's products. We also provide scientific and regulatory support to our clinical use licensees to help them improve process optimization and facilitate their regulatory submission process.

We expect license revenue to increase in future periods as our market and customer base grow.

Cost of Goods Sold

Cost of goods sold primarily consists of costs for raw material parts, contract manufacturer costs, salaries, overhead, other direct costs related to sales recognized as revenue in the period, and licensed equipment depreciation.

We expect that our cost of goods sold will increase or decrease primarily to the extent that our instrument and PA and consumable revenue increases and decreases.

Gross Profit and Gross Margin

Gross profit is calculated as revenue less cost of goods sold. 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 sales mix among instruments, PAs, consumables and milestones, the specific mix among types of instruments or PAs, the proportion of revenues associated with licenses as opposed to sales, the share of revenues composed of milestones, changes in the costs to produce our various products, the launch of new products or changes in existing products, our cost structure for manufacturing including changes in production volumes, the proportion of sales made through third-party distributors, and the pricing of our products which may be impacted by market conditions.

Operating Expenses

Research and Development

Research and development expenses consist primarily of costs incurred for our research activities related to advancing our technology and development of applications for our technology, including research into specific applications and associated data development, process development, product development (e.g., development of instruments and PAs and consumables, including hardware and software engineering) and design and other costs not directly charged to inventory or cost of goods sold, such as supply chain development and design and management of quality systems.

These expenses include employee-related costs, such as salaries, benefits, incentive compensation, stock-based compensation, and travel, as well as consultant services, facilities, and other expenses, laboratory supplies and materials expenses for employees and contractors engaged in research and development. These expenses are exclusive of depreciation and amortization. We expense research and development costs as incurred in the period in which the underlying activity is undertaken.

We believe that our continued investment in research and development is essential to our long-term competitive position. We expect to continue to incur substantial research and development expenses as we invest in research and development to support our customers, develop new uses for our existing technology and develop improved and/or new offerings to our customers and partners. While we expect an initial decrease in 2026 in research and development compared to 2025 as a result of our restructuring, we expect these expenses will increase in absolute dollars in future periods beyond 2026 and vary from period to period as a percentage of revenue.

Sales and Marketing

Our sales and marketing expenses consist primarily of salaries, commissions and other variable compensation, benefits, stock-based compensation and travel costs for employees within our commercial sales and marketing functions, as well as third-party costs associated with our marketing activities. These expenses are exclusive of depreciation and amortization.

While we expect an initial decrease in 2026 in sales and marketing compared to 2025 as a result of our restructuring, we expect these expenses will increase in absolute dollars in future periods beyond 2026 as we expand our commercial sales, marketing and business development teams, increase our presence globally, and increase marketing activities to drive awareness and adoption of our products.

General and Administrative

General and administrative expenses primarily consist of salaries, benefits, stock-based compensation and travel costs for employees in our executive, accounting and finance, legal, corporate development, human resources, and office administration functions as well as professional services fees, such as consulting, audit, tax and legal fees, general

corporate costs, facilities and allocated overhead expenses and costs associated with being a Nasdaq-listed and previously an AIM-listed public company such as director fees, U.K. Nominated Advisor and broker fees, investor relations consultants and insurance costs. These expenses are exclusive of depreciation and amortization.

While we expect an initial decrease in 2026 in general and administrative expenses compared to 2025 as a result of our restructuring, we expect these expenses will increase in absolute dollars in future periods beyond 2026 primarily due to increased headcount to support anticipated growth in the business and due to incremental costs associated with operating as a public company listed on a U.S. exchange, including insurance (particularly directors and officers insurance), costs to comply with the rules and regulations applicable to companies listed on a U.S. securities exchange and costs related to compliance and reporting obligations pursuant to the rules and regulations of the SEC and stock exchange listing standards, investor relations and professional services. We expect these expenses to vary from period to period as a percentage of revenue.

Restructuring expense

On September 22, 2025, we began to implement a workforce reduction plan (the "Plan") as part of our ongoing efforts to streamline operations, improve our cost structure, and align resources with strategic priorities. As of December 31, 2025, the Plan has resulted in a reduction of approximately 34% of the Company's workforce globally, which includes both directly employed personnel and individuals engaged through third-party employer-of-record arrangements. Expenses incurred with the execution of the plan, including one-time severance and associated costs, are recorded as restructuring expense.

Goodwill impairment

We test for impairment on our recorded goodwill at least annually, and any impairment would be recorded as goodwill impairment in our statement of operations.

Depreciation and Amortization

Depreciation expense consists of the depreciation of property and equipment used actively in the business, primarily by research and development activities. Amortization expense includes the amortization of leasehold improvements over their respective lease terms.

Other Income

Interest income includes interest earned on cash balances in our cash accounts and interest earned on money market funds, commercial paper and corporate bonds as well as miscellaneous income unrelated to our core operations.

Provision for Income Taxes

We did not recognize a benefit for the net operating losses we incurred for the years ended December 31, 2025 and 2024. As of December 31, 2025, we had U.S. net operating loss carryforwards of $156.7 million, which may be available to offset future taxable income and begin to expire in 2026, as well as net operating losses in the various states in which we file. We have recorded a full valuation allowance against our net deferred tax assets at each balance sheet date since, due to our history of net losses, we have determined that it is currently more likely than not that our net deferred tax assets are not recoverable.

Results of Operations

Comparison of the Years Ended December 31, 2025 and 2024

The results of operations presented below should be reviewed in conjunction with the consolidated financial statements and notes included elsewhere in this Annual Report. The following tables set forth our results of operations for the periods presented:

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Revenue

The following table provides details regarding the sources of revenue for the periods presented:

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Total revenue for the year ended December 31, 2025 was $33.0 million, a decrease of $5.6 million, or 15%, compared to revenue of $38.6 million during the year ended December 31, 2024. The decrease was primarily driven by decreases in core and program-related revenue.

Total core revenue for the year ended December 31, 2025 was $29.6 million, a decrease of $2.9 million, or 9%, compared to core revenue of $32.5 million for the year ended December 31, 2025. Our overall decrease in core revenue was primarily driven by revenue decreases in PA and consumable sales, which decreased by $2.1 million, or 15% for the year ended December 31, 2025 compared to the year ended December 31, 2024. The decrease was also attributable to a decrease in license revenue of $1.4 million, or 13% compared to the year ended December 31, 2024, and a decrease in instrument revenue of $0.3 million, or 4%. These decreases were offset by increases in assay service revenue from the acquisition of SeQure of $0.8 million and other service revenue of $0.1 million for the year ended December 31, 2025 compared to the year ended December 31, 2024.

The $2.7 million decrease in SPL program-related revenues resulted from achievement of fewer contractually specified clinical and regulatory milestones during the year ended December 31, 2025 compared to the year ended December 31, 2024. The decrease reflects the expected variability from period to period in the level of program-related revenue given the small number of individual triggering events which currently generate this portion of revenue. We expect program-related revenue to continue to experience variability for some time, although we anticipate that variability may moderate as the volume of SPL agreements and associated milestones grows.

Cost of Goods Sold and Gross Profit

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Cost of goods sold decreased by $0.9 million, or 12%, for the year ended December 31, 2025, compared to the year ended December 31, 2024. The decrease was primarily driven by decreases in PA and consumable sales, and a decrease in the allowance for obsolete inventory of $1.1 million due to enhancements in supply chain management.

Gross profit decreased by $4.7 million, or 15%, for the year ended December 31, 2025, compared to the year ended December 31, 2024. The decrease was primarily driven by a decrease in program-related revenue for the year ended December 31, 2025 and a decrease in license revenue.

During the year ended December 31, 2025, gross margin was 81%, compared to 82% in the same period of 2024.

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Operating Expenses

Research and Development

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Research and development expenses decreased by $1.4 million, or 6%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The decrease was primarily driven by a $1.1 million decrease in stock-based compensation, a $0.6 million decrease in lab and production expenses, a $0.4 million decrease in compensation expenses, and a net decrease of $0.1 million in travel, occupancy and other overhead expenses, offset by a $0.5 million increase in professional fees, and a $0.3 million increase in engineering expenses.

Sales and Marketing

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Sales and marketing expenses decreased by $7.7 million, or 29%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The decrease was primarily driven by a $4.5 million decrease in compensation expenses due to a reduction in headcount, a $1.2 million decrease in stock-based compensation, a $0.8 million decrease in marketing expenses, a $0.7 million decrease in travel expense commensurate with the reduction in headcount, and a $0.5 million decrease in professional fees.

General and Administrative

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General and administrative expenses decreased by $1.6 million, or 5%, for the year ended December 31, 2025, compared to the year ended December 31, 2024. The decrease was primarily driven by a $1.5 million decrease in stock-based compensation, a decrease in compensation expenses of $0.3 million, a smaller fixed asset disposal loss of $0.6 million compared to year ended December 31, 2024, offset by a $0.8 million increase in professional services.

Restructuring expense

We incurred $3.1 million in restructuring expense during the year ended December 31, 2025 due to the implementation of the Plan. We did not incur restructuring expense during the year ended December 31, 2024.

Goodwill impairment

During the year ended December 31, 2025, we performed our annual quantitative impairment analysis during out fourth fiscal quarter, and based on the evaluation performed, we determined that our goodwill was fully impaired and recognized a non-cash impairment charge of $3.6 million. We did not have goodwill impairment during the year ended December 31, 2024.

Depreciation and Amortization

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Depreciation and amortization expense increased by $0.1 million, or 2%, for the year ended December 31, 2025, compared to the year ended December 31, 2024.

Interest Income

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Interest income decreased $2.9 million, or 28%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The decrease is primarily due to decreases in interest rates and in balances of cash and investments.

Liquidity and Capital Resources

Since our inception, we have experienced losses and negative cash flows from operations. For the years ended December 31, 2025 and 2024, we incurred net losses of $44.6 million and $41.1 million, respectively. As of December 31, 2025, we had an accumulated deficit of $261.5 million. To date, we have funded our operations primarily with proceeds from sales of common stock, borrowings under loan agreements and cash flows associated with sales and licenses of our products to customers. On August 3, 2021, we completed our U.S. IPO, generating gross proceeds of $201.8 million. We received net proceeds of $184.3 million after deducting aggregate underwriting commissions and offering expenses of $17.6 million. As of December 31, 2025, we had cash and cash equivalents and short-term investments of $103.0 million.

In 2025, we implemented a workforce reduction plan as part of our ongoing efforts to streamline operations, improve our cost structure, and align resources with strategic priorities. As a result of this workforce reduction plan, we expect operating expenses to decrease in 2026 compared to 2025.

We expect to incur near-term operating losses as we continue to invest in expanding our business through growing our sales and marketing efforts, continued research and development, product development and expanding our product offerings. Based on our current business plan, we believe that our existing cash, cash equivalents, short-term investments and internally generated cash flows will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months. We expect to end 2026 with at least $136 million in total cash, cash equivalents and investments.

We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect. Our future funding requirements will depend on many factors, including:

If we are unable to execute on our business plan and adequately fund operations, or if the business plan requires a level of spending in excess of cash resources, we may have to seek additional equity or debt financing. If additional financings are required from outside sources, we may not be able to raise such capital on terms acceptable to us or at all. To the extent that we raise additional capital through the sale of equity or debt securities, the ownership interest of our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely

affect the rights of our common stockholders. Debt financing, if available, may involve agreements that include covenants restricting our ability to take specific actions, such as incurring additional debt, selling or licensing our assets, making product acquisitions, making capital expenditures or declaring dividends. If we raise additional funds through collaboration and licensing arrangements with third parties, it may be necessary to relinquish some rights to our technologies or our products, or grant licenses on terms that are not favorable to us. If we are unable to raise additional capital when desired, we may have to delay development or commercialization of future products. We also may have to reduce marketing, customer support or other resources devoted to our existing products.

Cash Flows

The following table summarizes our uses and sources of cash for the periods presented:

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Operating Activities

Net cash used in operating activities for the year ended December 31, 2025 was $34.4 million, and consisted primarily of our net loss of $44.6 million, offset in part by net non-cash expenses of $16.3 million, including stock-based compensation of $9.2 million, depreciation and amortization expenses of $4.3 million, goodwill impairment of $3.6 million, lease right-of use asset amortization of $0.8 million, an increase in our inventory reserve of $0.7 million, and a loss on disposal of assets of $0.3 million, offset by the amortization of $2.6 million of discounts on investments. We also had net cash outflows of $6.1 million due to net changes in our operating assets and liabilities. Net changes in our operating assets and liabilities consisted primarily of a $3.7 million decrease in accounts payable, accrued expenses and other liabilities, a $1.7 million decrease in deferred revenue, a $1.2 million decrease in operating lease liabilities, and a $1.2 million increase in prepaid expenses and other assets, offset by a $1.1 million decrease in accounts receivable and a $0.6 million decrease in inventory.

Net cash used in operating activities for the year ended December 31, 2024 was $27.6 million, and consisted primarily of our net loss of $41.1 million, offset in part by net non-cash expenses of $14.2 million, including stock-based compensation of $13.1 million, depreciation and amortization expenses of $4.3 million, an increase in our inventory reserve of $1.8 million, a loss on disposal of assets of $0.9 million, and other net non-cash expenses totaling $0.3 million, offset by the amortization of $6.2 million of discounts on investments. We also had net cash outflows of $0.7 million due to net changes in our operating assets and liabilities. Net changes in our operating assets and liabilities consisted primarily of a $1.9 million decrease in accounts payable, accrued expenses and other liabilities, a $1.2 million increase in other assets, and a $0.7 million decrease in operating lease liabilities, offset by a $1.4 million decrease in inventory, a $1.2 million decrease in accounts receivable, $0.3 million decrease in prepaid expenses and other current assets, and a $0.2 million increase in deferred revenue.

Investing Activities

Net cash provided by investing activities during the year ended December 31, 2025 was $25.9 million, which was primarily attributable to maturities of investments of $155.8 million, offset by purchases of investments of $126.3 million, $1.8 million for the acquisition of SeQure, net of cash acquired, and purchases of property and equipment of $1.8 million.

Cash provided by investing activities during the year ended December 31, 2024 was $6.9 million, which was primarily attributable to maturities of investments of $159.4 million, partially offset by purchases investments of $150.9

million, and purchases of property and equipment of $1.7 million. Purchases of investments are made as part of ordinary course investing activities in compliance with our investment policy which has as its primary objective preservation of principal.

Financing Activities

Net cash provided by financing activities during the years ended December 31, 2025 and 2024 was $0.7 million and $2.1 million, respectively, which consisted of proceeds from the exercise of stock options and employee purchases from our employee stock purchase plan.

Contractual Obligations and Commitments

Our contractual obligations and commitments as of December 31, 2025 consisted exclusively of operating lease obligations. In May 2021, we entered into an operating lease for new office, lab and warehouse/manufacturing space (the "Headquarters Lease"). The Headquarters Lease term expires on August 31, 2035. The total incremental remaining non-cancellable lease payments under the lease agreement are $24.0 million through the lease term. Upon acquisition of SeQure, we assumed the SeQure headquarters lease, (the "SeQure Lease") which term expires on December 31, 2027. The total incremental remaining non-cancellable lease payments under the SeQure Lease are $0.8 million throughout the lease term. We expect to be able to fund our obligations under these leases, both in the short-term and in the long-term, from cash on hand, investments and operating cash flows. See Part I, Item 2, "Facilities" in this Annual Report for additional information regarding our leases.

We had no debt obligations as of December 31, 2025 or 2024.

Purchase orders or contracts for the purchase of supplies and other goods and services are based on our current procurement or development needs and are generally fulfilled by our vendors within short time horizons.

Critical Accounting Estimates

We have prepared our consolidated financial statements in accordance with U.S. GAAP. Our preparation of these consolidated financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We evaluate our estimates and judgments on an ongoing basis. We base our estimates on 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 could therefore differ materially from these estimates under different assumptions or conditions.

Critical accounting estimates are those estimates that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our statement of operations and financial position. The following subset of our accounting estimates are considered to be our critical accounting estimates as of December 31, 2025 and 2024:

Allowance for Obsolete Inventory

We maintain an allowance for excess, obsolete, and slow-moving inventory to reflect the inventory at the lower of cost or net realizable value. These reserves are based on management's estimates of market conditions, future demand, and the physical condition of the inventory. Significant assumptions used in these estimates include historical sales trends, forecasted sales, and the expected timing of product obsolescence. Changes in these assumptions could materially affect the amounts reported in our financial statements. For the years ended December 31, 2025 and 2024, we recorded inventory reserves of $0.7 million and $1.8 million, respectively, primarily due to anticipated obsolescence and expiration of certain products.

Fair Value of Stock-based Compensation

We maintain an incentive compensation plan under which stock options and restricted stock units are granted primarily to employees, consultants and non-employee directors. We measure stock-based compensation expense on the date of grant and recognize the corresponding compensation expense of those awards over the requisite service period, which is generally the vesting period of the respective award. We record forfeitures as they occur.

We estimate the fair value of stock options granted to our employees and directors based on the closing price of our common stock on the grant date and the resulting stock-based compensation expense using the Black-Scholes option-pricing model. The fair value is based on the value of our common stock on the Nasdaq Global Select Market on the grant date. The Black-Scholes option-pricing model requires the use of assumptions regarding a number of variables that are complex, subjective and generally require significant judgment to determine. The assumptions include expected volatility based on the historical volatility of our common stock, expected dividend yield, risk-free rate of interest and the expected term using the simplified method and are disclosed in Note 4 to our consolidated financial statements.

Business Combination Accounting-Developed Technology

Assets acquired and liabilities assumed as part of a business acquisition are generally recorded at their fair value at the date of acquisition. The excess of purchase price over the fair value of assets acquired and liabilities assumed is recorded as goodwill. Determining fair value of intangible assets requires management to make estimates, which are based on all available information and in some cases assumptions with respect to the timing and amount of future revenues and expenses associated with an asset. These estimates affect the amount of consideration that is allocable to assets and liabilities acquired in the business acquisition. We recorded $471,000 in developed technology upon the acquisition of SeQure.

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Goodwill

The Company tests goodwill for impairment at least annually, or more frequently if events or changes in circumstances indicate that goodwill may be impaired. The impairment analysis requires significant judgment and is based on estimates and assumptions, including projected future cash flows, long-term growth rates, and the weighted-average cost of capital.

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The Company operates as a single reporting unit and estimates fair value primarily using an income approach based on a discounted cash flow ("DCF") model. The DCF model incorporates assumptions related to projected revenues, expenses, capital expenditures, working capital requirements, income tax rates, and a discount rate derived from a weighted-average cost of capital. The Company also considers a market approach based on comparable companies and transactions. Fair value estimates are assessed for reasonableness through comparison to the Company's market capitalization.

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As of December 31, 2025, the quantitative impairment test indicated that the carrying amount of the reporting unit exceeded its estimated fair value. Accordingly, the Company recorded a goodwill impairment charge of $3.6 million for the year ended December 31, 2025.

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Recent Accounting Pronouncements

A description of recently issued accounting pronouncements that may potentially impact our financial position, results of operations or cash flows is disclosed in Note 2 to our consolidated financial statements in this Annual Report.

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Emerging Growth Company Status

We are an "emerging growth company," or EGC, under the JOBS Act. Section 107 of the JOBS Act provides that an EGC can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. Thus, an EGC can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of the delayed adoption of new and revised accounting standards and, therefore, we will be subject to the same requirements to adopt new or revised accounting standards as private entities. We also intend to rely on other exemptions provided by the JOBS Act, including not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act.

We will remain an EGC until the earliest of: (i) December 31, 2026, which is the last day of the fiscal year following the fifth anniversary of our initial public offering in the United States; (ii) the last day of the first fiscal year in which our annual gross revenue is $1.235 billion or more; (iii) the date on which we have, during the previous rolling three-year period, issued more than $1 billion in non-convertible debt securities; and (iv) the last day of the fiscal year in which the market value of our common stock held by non-affiliates exceeded $700 million as of June 30 of such fiscal year.

We are also a "smaller reporting company," as defined by Rule 12b-2 of the Exchange Act. We may continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than $250 million as of the last business day of our second fiscal quarter or (ii) our annual revenue is less than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million as of the last business day of our second fiscal quarter. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we have elected to present only the two most recent fiscal years of audited financial statements in this Annual Report. In addition, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.