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

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

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on March 9, 2026, or the 2025 Form 10-K. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, 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, including those factors set forth in "Item 1.A. Risk Factors" section of our 2025 Form 10-K, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Overview

We have developed an innovative suite of purpose-built handheld devices for point-of-need chemical analysis. Leveraging complementary analytical technologies including our proprietary mass spectrometry, or Mass Spec, and FTIR, an optical spectroscopy technology and analytics and machine learning technologies, we make devices that are significantly smaller and more accessible than conventional laboratory instruments. Our devices are used at the point-of-need to interrogate unknown and invisible materials and provide quick, actionable answers to directly address vital health and safety applications, including the fentanyl and illicit drug crisis, toxic carcinogen exposure, and global security threats.

We create simplified measurement devices that our customers can use as accurate tools where and when their work needs to be done, rather than overly complex and centralized analytical instrumentation. We believe the insights and answers our devices provide will accelerate workflows, reduce costs, and offer transformational opportunities for our end users.

Front-line workers rely upon our Mass Spec handheld devices to combat the opioid crisis and detect counterfeit pharmaceuticals and illicit materials in the air or on surfaces at levels 1,000 times below their lethal dose. First responders also utilize our handheld devices to detect and identify thousands of hazardous bulk materials. The term "products" as used in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" refers to the MX908, ThreatID, ProtectIR, XplorIR, VipIR and related devices.

On March 4, 2025, the Company completed the sale of its Desktop Portfolio to Repligen. The Company has determined the sale of the Desktop Portfolio represents a strategic shift that will have a major effect on its business and therefore met the criteria for classification as discontinued operations in the first quarter of 2025. Accordingly, the Desktop Portfolio is reported as discontinued operations in accordance with ASC 205-20, Discontinued Operations. The related assets and liabilities of the Desktop Portfolio are classified as assets and liabilities of discontinued operations in the consolidated balance sheets and the results of operations from the Desktop Portfolio as discontinued operations in the consolidated statements of operations.

Applicable amounts in prior years have been recast to conform to this discontinued operations presentation. The Company recognized a gain on the sale of the Desktop Portfolio upon closing.

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 from continuing operations of $13.4 million and $11.8 million for the three months ended March 31, 2026 and 2025, respectively, and incurred net losses from continuing operations of $12.0 million and $9.8 million for those same periods. As of March 31, 2026, we had an accumulated deficit of $235.3 million. We expect to continue to incur net losses as we focus on growing sales of our products in both the United States and international markets, scaling our manufacturing operations, continuing research and development efforts to develop new products and further enhance our existing products. As a result, we may need additional funding for expenses related to our operating activities, including selling, general and administrative expenses and research and development expenses.

Because of the numerous risks and uncertainties associated with product development and commercialization, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to achieve or maintain profitability. Until such time, if ever, as we can generate substantial revenue sufficient to achieve profitability, we expect to finance our operations through a combination of available cash, equity offerings, debt financings and strategic alliances. We may be unable to raise additional funds or enter into such other agreements or arrangements when needed on favorable terms, or at all. If we are unable to raise capital or enter into such agreements as, and when needed, we may have to significantly delay, scale back or discontinue the further development and commercialization efforts of one or more of our products, or may be forced to reduce or terminate our operations.

We believe that our existing cash and cash equivalents and revenue from product and service will enable us to fund our operating expenses, capital expenditure requirements and debt service payments for at least the next 12 months. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. See "Liquidity and Capital Resources."

Global Economic Conditions

We are continuing to closely monitor macroeconomic factors, including, but not limited to, continued inflationary and interest rate pressures, changes in countries' trade policies and tariffs, challenging capital market conditions and the limited availability of financing alternatives, which may have an impact on our business, results of operations and financial results.

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We are closely monitoring continued economic uncertainty in the United States and abroad, including volatility in the global markets and the rise and fluctuations in inflation and interest rates. These developments and the potential worsening of other macroeconomic conditions present risks for us, and our suppliers and customers. For example, general inflation in the United States, Europe, the Middle East and other geographies has recently been at levels not experienced in recent decades, which has led to higher prices for our raw materials and other inputs, as well as higher salaries and travel expenses, which could continue to negatively impact our business by increasing our cost of sales and operating expenses. General inflation could also negatively impact our business if it leads to spending pressure and decreased available capital for our customers to deploy to purchase our products and services.

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Challenging capital market conditions and the limited availability of financing alternatives, together with inflationary and interest rates pressures, may contribute to more cautious spending by our customers. We cannot accurately predict the full impact of current macroeconomic factors on the budgets and capital expenditures of our customers, or the timing of the normalization of customer purchasing patterns.

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We are closely monitoring the ongoing military conflict between Russia and Ukraine and the conflicts in the Middle East. Although we do not directly source any material products or supplies from Russia, Ukraine or the Middle East, our customers in Europe and the Middle East could be impacted by extended conflicts or an escalation of these conflicts into neighboring countries.

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We are also closely monitoring increases or changes in tariffs on parts and components imported into the U.S., as well as reciprocal tariffs recently implemented by non-U.S. countries where we export our finished products. We do not expect these tariffs to materially impact our business or results of operations in the 2026 fiscal year. Nonetheless, we will continue to review

and assess how any current or future tariffs may affect our business.

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While it is difficult to predict all of the impacts these global economic events and continued inflationary, tariff and interest rate pressures will have on our business and to predict the effects of these factors on our customers' spending in the near term, we believe the long-term opportunity that we see for our products and services remain unchanged.

For further discussion of the possible impacts of these global factors and other risks on our business, see Part I, Item 1A, "Risk Factors," of our 2025 Form 10-K.

Factors Affecting Our Performance

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

Device sales

Our financial performance has largely been driven by, and in the future will continue to be impacted by, the rate of sales of our handheld devices. Management focuses on device sales as an indicator of current business success and a leading indicator of likely future recurring revenue from consumables and services. We expect our device sales to continue to grow as we increase penetration in our existing markets and expand into, or offer new features and solutions that appeal to, new markets.

We plan to grow our device sales in the coming years through multiple strategies including expanding our sales efforts domestically and globally and continuing to enhance the underlying technology and applications for our handheld devices. We regularly solicit feedback from our customers and focus our research and development efforts on enhancing our devices and enabling our customers to use additional applications that address their needs, which we believe in turn helps to drive additional sales of our devices and consumables.

Our handheld device orders relate to our MX908, ThreatID, ProtectIR, XplorIR and VipIR, as well as components for the Aerosol and Vapor Chemical Agent Detectors, or AVCAD, sold to our channel partner. Historically, our handheld devices have been used by municipal, state, federal and foreign governments and governmental agencies. Our sales process with government customers is often long and involves multiple levels of approvals, testing and, in some cases, trials. Device orders from a government customer are typically large orders and can be impacted by the timing of their capital budgets. As a result, the revenue for our handheld devices can vary significantly from period-to-period and has been and may continue to be concentrated in a small number of customers in any given period.

Recurring revenue

We regularly assess trends relating to recurring revenue which includes consumables, accessories and services based on our product offerings, our customer base and our understanding of how our customers use our products. Recurring revenue was 30% and 37% of total revenue for the three months ended March 31, 2026 and 2025, respectively. Our recurring revenue as a percentage of total revenue will vary based upon new device placements in the period. As our device installed base expands, recurring revenue on an absolute basis is expected to increase and over time should be an increasingly important contributor to our revenue.

Recurring revenue is primarily from service revenue and accessories. Consumable revenue is mainly related to single-use swab samplers for MX908 to be used in liquid and solid materials analysis, but there are a number of other applications that the MX908 can be used for that do not require consumables. ThreatID, ProtectIR, XplorIR and VipIR do not have consumables.

Revenue mix and gross margin

Our revenue is derived from sales of our devices, consumables, accessories and services. There will be fluctuations in the mix between devices and recurring from period-to-period. Over time, as our device installed base grows, we expect service

revenue to constitute a larger percentage of total revenue, provided that our customers remain under a service contract. However, the percentage will be subject to fluctuation based upon our handheld sales in a period. In addition, our selling price and, consequently, our margins, are higher for those devices and recurring revenue that we sell directly to customers as compared to those that we sell through channel partners. While we expect the mix of direct sales as compared to sales through channel partners to remain relatively constant in the near term, we may consider increasing our direct sales capabilities in certain geographies based upon identified opportunities.

Future device and recurring selling prices and gross margins may fluctuate due to a variety of factors, including the introduction by others of competing products and solutions. We aim to mitigate downward pressure on our average selling prices by increasing the value proposition offered by our devices and consumables and accessories, primarily by expanding the applications for our devices and increasing the quantity and quality of data that can be obtained using our consumables.

Product adoption

We monitor our customers' stages of adoption of our products to provide insight into the timing of future potential sales and to help us formulate financial projections. Typical stages of adoption include testing, trials, pilot and deployment as follows:

Key Business Metrics

We regularly review the number of product placements and cumulative product placement as key metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections, and make strategic decisions. We believe that these metrics are representative of our current business; however, we anticipate these will change or may be substituted for additional or different metrics as our business grows.

During the three months ended March 31, 2026 and 2025, our product placements (units recognized as revenue) were as follows:

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The number of product placements vary considerably from period-to-period due to the type and size of our customers and concentrations among larger government customers as described above. We expect continued fluctuations in our period-to-period number of product placements.

Our cumulative product placements consist of the following number of devices:

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Components of Our Results of Operations

Revenue

Product and Service Revenue

We generate product and service revenue from the sale of our devices and recurring revenue from the sale of consumables, accessories and services. Device sales accounted for 70% and 63% of our total revenue for the three months ended March 31, 2026 and 2025, respectively. Recurring revenue accounted for 30% and 37% of our total revenue for the three months ended March 31, 2026 and 2025, respectively. Our current device offerings include MX908, ThreatID, ProtectIR, XplorIR, VipIR and AVCAD components.

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We sell our devices directly to customers and through channel partners. Each of our device sales drives various streams of recurring revenue comprised of consumable and accessory product sales and service revenue. Our consumables consist primarily of accessories and swabs for MX908.

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We also offer our customers extended warranty and service plans. Our extended warranty and service plans are offered for periods beyond the standard one-year warranty that all of our customers receive. These extended warranty and service plans generally have fixed fees and terms ranging from one additional year to four additional years. 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.

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We expect consumables and service revenue to increase in future periods as our installed base grows and we are able to generate recurring sales.

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Contract revenue

Contract agreements are arrangements whereby we provide engineering services for the development of our technology platform for specific programs or new and expanding applications of our technologies for future commercial endeavors. Our contract agreements are with the U.S. government and commercial entities (who may be contracting with the government). Contracts typically include compensation for labor effort and materials incurred related to the deliverables under the contract. Our contract revenue was related to one customer during the three months ended March 31, 2025.

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During the three months ended March 31, 2026 and 2025, our revenue was comprised of revenue from the following sources:

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Our product and service revenue is comprised of sales of our devices and related consumables, accessories and service contracts to end-users in the government, pharmaceutical and industrial markets as follows:

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We sell our products primarily in the United States; however, we will continue to expand our global sales efforts as we see traction in our products and assess global market needs. The majority of our international sales are through a distribution channel.

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Cost of Revenue, Gross Profit and Gross Margin

Product cost of revenue primarily consists of costs for raw material parts and associated freight, shipping and handling costs, royalties, contract manufacturer costs, salaries and other personnel costs, overhead, amortization of intangibles and other direct costs related to those sales recognized as product revenue in the period.

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Cost of revenue for services primarily consists of salaries and other personnel costs, travel related to services provided, facility costs associated with training, warranties and other costs of servicing equipment on a return-to-factory basis and at customer sites. Contract cost of revenue primarily consists of salaries and other personnel costs, materials, travel and other direct costs related to the revenue recognized in the period. The contract cost of revenue will vary based upon the type of contract, including whether it is primarily for development services or for both materials and development services.

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We expect that our cost of revenue will increase or decrease to the extent that our revenue increases and decreases and depending on how many contracts we have ongoing at any given point in time and the stage of those contracts.

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Gross profit is calculated as revenue less cost of revenue. Gross profit margin is gross profit expressed as a percentage of revenue. Our gross profit in future periods will depend on a variety of factors, including: market conditions that may impact our pricing, sales mix among devices, sales mix changes among consumables, excess and obsolete inventories, our cost structure for manufacturing operations relative to volume, and product warranty obligations. Our gross profit in future periods will vary based upon our channel mix and may decrease based upon our distribution channels and the potential to establish original equipment manufacturing channels for certain components of our technology platform which would have a lower gross margin.

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We expect that our gross profit margin for product and service will increase over the long term as our sales and production volumes increase and our cost per unit decreases due to efficiencies of scale. We intend to use our design, engineering and manufacturing capabilities to further advance and improve the efficiency of our manufacturing, which we believe will reduce costs and increase our gross margin. We expect that our gross profit margin for contract will remain consistent for our contracts that are cost reimbursement contracts.

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Operating Expenses

Research and development expenses

Research and development expenses consist primarily of costs incurred for our research activities, product development, hardware and software engineering and consultant services and other costs associated with our technology platform and products, which include:

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We believe that our continued investment in research and development is essential to our long-term competitive position.

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Selling, general and administrative expenses

Selling, general and administrative expenses consist primarily of salaries and other personnel costs, and stock-based compensation for our sales and marketing, finance, legal, human resources and general management, as well as professional services, such as legal, audit and accounting services, and director and officer insurance costs as well as investor and public relations expenses associated with operating as a public company.

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We expect selling, general and administrative expenses, amortization of customer relationship and tradename intangibles to stabilize in future periods as we execute our strategic transformation as outlined in our restructuring plan.

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Beginning in the first quarter of 2025, general and administrative expenses also include rent expense and passthrough costs, reimbursable by Repligen, incurred in performing duties under the TSA.

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Change in fair value of contingent consideration

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Change in fair value of contingent consideration represents the change in fair value of the contingent consideration obligation included in contingent consideration on the consolidated balance sheets as of the end of each period. Remeasurement of the contingent consideration obligation is done each quarter and the carrying value of the obligation is adjusted to the current fair value through our consolidated statements of comprehensive income (loss).

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Other Income (Expense)

Interest income

Interest income consists of interest earned on our invested cash, cash equivalents and marketable securities balances.

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Income from transition services agreement, net

Income from transition services agreement, net represents service charges provided to Repligen to facilitate the transition of the Desktop Portfolio, net of directly identifiable personnel related costs. The scope of transition services includes the provision of certain manufacturing services, research and development support and certain administrative functions related to the Desktop Portfolio. In addition, the TSA by and between the Company and Repligen, dated as of March 4, 2025, or the TSA, provided Repligen with access to the Company's former facility in Boston, Massachusetts. The services and obligations under the TSA were substantially completed, and access to the Company's facility was terminated, as of June 30, 2025. The Company is continuing to provide certain general and administrative functions under the TSA.

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Other income (expense), net

Other income (expense), net consists of miscellaneous other income and expense unrelated to our core operations, interest expense associated with the amortization of deferred financing costs and debt discounts associated with our loan and security agreements.

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Provision for Income Taxes

We have not recorded any U.S. federal or state income tax benefits for the net operating losses we have incurred in each year or for the research and development tax credits we generated in the United States and have recorded a full valuation

allowance against our net deferred assets, as we believe, based upon the weight of available evidence, that it is more likely than not that all of our net operating loss carryforwards and tax credits will not be realized.

As of December 31, 2025, the Company had gross federal and state operating loss carryforwards of $147.0 million and $94.5 million, respectively. The federal operating loss carryforward may be available to offset future taxable income and begin to expire in 2032, of which $112.6 million of federal gross operating losses do not expire. As of December 31, 2025, the Company also had U.S. federal and state research and development tax credit carryforwards of $9.1 million and $4.9 million, respectively, which may be available to offset future tax liabilities and begin to expire in 2032 and 2030, respectively.

Utilization of the net operating loss and research and development tax credit carryforwards may be subject to a substantial annual limitation under Sections 382 and 383 of the Code due to ownership changes that have occurred previously or that could occur in the future. These ownership changes may limit the amount of carryforwards that can be utilized annually to offset future taxable income. In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of certain shareholders or public groups in the stock of a corporation by more than 50% over a three-year period. Since its formation, the Company has raised capital through the issuance of capital stock on several occasions. These financings, combined with the purchasing shareholders' subsequent disposition of those shares, may have resulted in a change of control or could result in a change of control in the future upon subsequent disposition. The Company conducted an analysis to determine if historical changes in ownership through March, 2025 would limit or otherwise restrict its ability to utilize these net operating loss and research and development credit carryforwards. As a result of this analysis, the Company does not believe there are any significant limitations on its ability to utilize these carryforwards. However, future changes in ownership after March 2025 could affect the limitation in future years. Any limitation may result in expiration of a portion of the net operating loss or research and development credit carryforwards before utilization.

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Results of Operations

Unless otherwise noted, all amounts included below relate to continuing operations. The results of operations from the Desktop Portfolio are classified as discontinued operations in the consolidated statements of operations. Applicable amounts in prior years have been recast to conform to this presentation.

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

The following table summarizes our results of operations for the three months ended March 31, 2026 and 2025:

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Revenue, Cost of Revenue and Gross Profit

Product

Our product revenue is comprised of revenue from sales of devices and related accessories, software and consumables as follows:

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Product revenue increased by $2.2 million, or 26%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The increase was primarily related to a $1.3 million increase in product revenue from our mass spec products related to higher device shipments in the quarter within our federal and defense and state and local customers. The increase was also related to an increase of $0.9 million related to our FTIR products, driven by our VipIR placements, offset in part by a decrease in international shipments of our ProtectIR product.

Product cost of revenue increased by $0.4 million, or 9%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The increase in product cost of revenue was primarily related to a $0.7 million increase in shipments and related warranty costs and $0.3 million in personnel related costs related to our acquired precision machining shop in July 2025, offset in part by $0.3 million in lower facility related costs, $0.2 million in reduction in charges for excess and obsolete inventory and a $0.2 million reduction in all other manufacturing costs.

Product gross profit increased by $1.8 million, or 47%, and gross profit margin increased by seven percentage points for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. The increased product gross profit was primarily due to the higher product revenue volume, a shift in channel mix with less international product sales that are at a lower gross margin, as well as the decreased facility costs related to the shutdown of the Boston facility as of June 30, 2025 and lower operating costs for the three months ended March 31, 2026, which drove the increase in gross profit margin.

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Service and contract

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Our service and contract revenue is comprised of revenue from sales of extended warranty and service plans and customer training as follows:

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Service and contract revenue decreased by $0.6 million, or 19%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The decrease was primarily related to a $0.7 million decrease in extended service contracts for MX908 devices mainly related to a funding-related pause in service coverage by a United States defense customer which began to impact our service revenues in the fourth quarter of 2025. The decrease was offset in part by a $0.2 million increase in service revenue related to our FTIR products. Contract revenue for the three months ended March 31, 2026 was zero compared to $0.1 million in the three months ended March 31, 2025.

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Service and contract cost of revenue decreased by $0.2 million, or 11%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. There was a decrease in service cost of revenue of $0.1 million and a decrease of $0.1 million in contract cost of revenue during the three months ended March 31, 2026. The decrease in service cost of revenue was primarily related to a reduction in third party contractors and materials spent on extended service contracts during the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

Service and contract gross profit decreased by $0.4 million, or 25%, and gross profit margin decreased by four percentage points for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, primarily due to a decrease in service volume related to extended service contracts, resulting in reduced leverage of our investments in personnel and service infrastructure.

Operating Expenses

Research and development

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Our research and development expenses were $3.5 million for the three months ended March 31, 2026, a decrease of $0.4 million from research and development expenses of $3.8 million for the three months ended March 31, 2025. The decrease was primarily due to a $0.4 million reduction in facility costs related to the shutdown of the Boston facility as of June 30, 2025.

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Selling, general and administrative expenses

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Our selling, general and administrative expenses were $9.9 million for the three months ended March 31, 2026, a decrease of $0.3 million from selling, general and administrative expenses of $10.2 million for the three months ended March 31, 2025. The decrease was due primarily to a $0.6 million charge for transaction bonuses earned in connection with the sale of the Desktop Portfolio in the three months ended March 31, 2025 and a net decrease in all other expenses of $0.2 million, offset in part by $0.4 million in higher legal costs incurred with the NIRLAB acquisition during the three months ended March 31, 2026.

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Change in fair value of contingent consideration

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The change in fair value of contingent consideration was $6.4 million for the three months ended March 31, 2026, an increase of $3.9 million, compared to the $2.5 million charge in the three months ended March 31, 2025. The increase in fair value was primarily due to the increase in the Company's publicly quoted share price during the three months ended March 31, 2026 and to a lesser extent an increase in the projections for FTIR revenue.

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Other Income

Interest income

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Interest income increased by $0.1 million for the three months ended March 31, 2026 from $0.8 million for the three months ended March 31, 2025. The increase was due to the higher cash, cash equivalent and marketable securities balances, primarily due to the average balance during the three months ended March 31, 2026, compared to the three months ended March 31, 2025, offset in part by lower interest rates.

Income from transition services agreement, net

Income from the transition services agreement, net was zero for the three months ended March 31, 2026 compared to $0.4 million for the three months ended March 31, 2025.

Other expense (income), net

Other expense, net for the three months ended March 31, 2026 did not change materially from the three months ended March 31, 2025 to the three months ended March 31, 2026.

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Liquidity and Capital Resources

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Since our inception, we have incurred significant operating losses. To date, we have funded our operations primarily with proceeds from sales of redeemable preferred stock, borrowings under loan agreements and revenue from sales of our products and services and contract revenue. As of March 31, 2026, we had cash, cash equivalents and marketable securities of $111.7 million. We believe that our existing cash, cash equivalents and marketable securities will enable us to fund our operating expenses, capital expenditure requirements and debt service payments for at least the next twelve months.

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:

On March 5, 2026, the Company entered into the Amended 2026 Revolver by and between the Company, as borrower, and SVB, as lender. The Amended 2026 Revolver provides for a revolving line of credit of up to $20.0 million. The Amended 2026 Revolver supersedes and replaces the Amended 2022 Revolver and its extension upon the execution of the Amended 2026 Revolver. The Company is permitted to make interest-only payments on the revolving line of credit through March 5, 2028, at which time all outstanding indebtedness shall be immediately due and payable. The outstanding principal amount of any advance shall accrue interest at a floating rate per annum equal to the greater of (i) six percent (6.00%) or (ii) the "prime rate" as published in The Wall Street Journal. The Company's obligations under the Amended 2026 Revolver are secured by substantially all of the Company's assets, excluding its intellectual property, which is subject to a negative pledge. The Company capitalized $0.1 million of the debt issuance cost upon entering into the Amended 2026 Revolver and no balance has been drawn from the revolving line of credit as of March 31, 2026.

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We may seek additional funding through private or public equity financings, debt financings, collaborations, strategic alliances and marketing, channel partner or licensing arrangements. We cannot assure you that we will be able to obtain additional funds on acceptable terms, or at all. If we raise additional funds by issuing equity or equity-linked securities, our stockholders may experience dilution. Future debt financing, if available, may involve covenants, in addition to our existing covenants, restricting our operations or our ability to incur additional debt or potentially limiting our ability to obtain new debt financing or the refinance of our existing debt. Any debt or equity financing that we raise may contain terms that are not favorable to us or our stockholders. 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 do not have or are not able to obtain sufficient funds, we may have to delay development or commercialization of our products. We also may have to reduce marketing, customer support or other resources devoted to our products or cease operations.

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Cash Flows

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

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Operating Activities

During the three months ended March 31, 2026, net cash provided by operating activities was $1.2 million, primarily resulting from noncash items of $10.2 million and inflows from our operating assets and liabilities of $3.0 million, partially

offset by our net loss of $11.9 million. Noncash items consisted primarily of a $6.4 million increase from the change in fair value of contingent consideration and a $2.4 million increase from stock-based compensation expense. Inflows from our operating assets and liabilities of $3.0 million consisted primarily of a $1.5 million increase from changes in accounts receivable, a $1.3 million increase from deferred revenue, and a $0.8 million increase from accounts payable and accrued expenses, partially offset by a $0.5 million decrease from changes in inventory.

During the three months ended March 31, 2025, net cash used in operating activities was $15.0 million, primarily resulting from noncash charges of $50.5 million and net cash used in changes in our operating assets and liabilities of $8.1 million, partially offset by our net income of $43.6 million. Noncash charges consisted primarily of a $56.6 million increase from the gain on sale of our Desktop Portfolio, net of transaction costs, partially offset by a $2.5 million increase from the change in fair value of contingent consideration. Net cash used in changes in our operating assets and liabilities of $8.1 million consisted primarily of a $5.6 million decrease from changes in accounts payable and accrued expenses, a $3.3 million decrease from changes in other long-term assets and a $2.1 million decrease from changes in inventory, partially offset by a $4.6 million increase from changes in account receivable, net.

Investing Activities

During the three months ended March 31, 2026, net cash used by investing activities was $2.0 million, due primarily to $18.3 million in purchases of marketable securities, partially offset by $16.4 million of proceeds from the maturity of marketable securities.

During the three months ended March 31, 2025, net cash provided by investing activities was $50.3 million, due primarily to a $69.9 million of proceeds from the sale of the Desktop Portfolio and $4.9 million of proceeds from the maturity of marketable securities, partially offset by $24.3 million in purchases of marketable securities.

Financing Activities

Cash used in financing activities during the three months ended March 31, 2026 was $2.2 million, consisting primarily of payments for withholding taxes on vested equity awards and $0.1 million of payments for debt financing costs, net of proceeds from issuances of common stock.

Cash used in financing activities during the three months ended March 31, 2025 was $0.2 million, consisting primarily of payments for withholding taxes on vested equity awards.

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Critical Accounting Policies and Significant Judgments and Estimates

Our condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States, or GAAP. The preparation of our condensed consolidated financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, costs and expenses and the disclosure of contingent assets and liabilities in our condensed consolidated financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.

For a further discussion of our critical accounting policies, please refer to Note 2 to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q and our Annual Report. There were no significant changes to our critical accounting policies for the three months ended March 31, 2026.

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Recently Issued Accounting Pronouncements

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A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q and is incorporated herein by reference.

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