BillionToOne, Inc. 10-K

Item 8. Financial Statements and Supplementary Data BillionToOne, Inc. Index to Financial Statements Page Report of Independent Registered Public Accounting Firm (PCAOB ID 238 ) 113 Balance Sheets 114 Statements of Operations and Comprehensive Income (Loss) 115 Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) 116 Statements of Cash Flows 118 Notes to Financial Statements 120 112 Table of Contents Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of BillionToOne, Inc. Opinion on the Financial Statements We have audited the accompanying 2025 and 2024 financial statements of BillionToOne, Inc. and the 2023 consolidated financial statements of BillionToOne, Inc. and its subsidiary (collectively referred to as the “Company"), which comprise the balance sheets as of December 31, 2025 and 2024, and the related statements of operations and comprehensive income (loss), of redeemable convertible preferred stock and stockholders' equity (deficit) and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ PricewaterhouseCoopers LLP Florham Park, New Jersey March 11, 2026 We have served as the Company’s auditor since 2022. 113 Table of Contents BillionToOne, Inc. Balance Sheets (in thousands, except share amounts) December 31, 2025 2024 Assets Current assets: Cash and cash equivalents $ 495,975 $ 191,477 Accounts receivable 41,617 24,709 Inventories 17,545 8,733 Prepaid expenses and other current assets 5,421 2,898 Total current assets 560,558 227,817 Property and equipment, net 20,361 17,111 Operating lease right-of-use assets, net 46,742 51,739 Other non-current assets 4,993 5,392 Total assets $ 632,654 $ 302,059 Liabilities, redeemable convertible preferred stock, and stockholders’ deficit Current liabilities: Accounts payable 7,184 4,304 Accrued expenses and other current liabilities 7,247 3,882 Accrued commissions 3,912 2,756 Accrued compensation and employee benefits 12,551 8,419 Common stock warrant liability 9,282 - Deferred revenue, current 2,188 2,806 Operating lease liabilities, current 5,079 4,393 Financing lease liabilities, current 519 1,826 Total current liabilities 47,962 28,386 Operating lease liabilities, non-current 45,723 50,802 Financing lease liabilities, non-current 348 874 Deferred revenue, non-current 1,290 - Long-term debt 57,226 51,481 Other non-current liabilities - 2,763 Total liabilities 152,549 134,306 Commitments and contingencies (Note 7) Redeemable convertible preferred stock, $ 0.00001 par value; 50,000,000 and 29,544,989 shares authorized as of December 31, 2025 and 2024, respectively; 0 and 29,084,235 shares issued and outstanding as of December 31, 2025 and 2024, respectively; aggregate liquidation preference of $ 0 and $ 422,458 as of December 31, 2025 and 2024, respectively - 419,409 Stockholders’ equity: Common stock, $ 0.00001 par value; 0 and 51,100,000 shares authorized as of December 31, 2025 and 2024, respectively; 0 and 10,925,950 shares issued and outstanding as of December 31, 2025 and 2024, respectively - - Class A common stock, $ 0.00001 par value; 800,000,000 shares authorized as of December 31, 2025; 41,252,105 shares issued and outstanding as of December 31, 2025 - - Class B common stock, $ 0.00001 par value; 10,000,000 shares authorized as of December 31, 2025; 4,552,650 shares issued and outstanding as of December 31, 2025 - - Additional paid-in capital 756,644 30,545 Accumulated other comprehensive loss ( 1,792 ) - Accumulated deficit ( 274,747 ) ( 282,201 ) Total stockholders’ equity 480,105 ( 251,656 ) Total liabilities, redeemable convertible preferred stock, and stockholders’ equity $ 632,654 $ 302,059 The accompanying notes are an integral part of these financial statements. 114 Table of Contents BillionToOne, Inc. Statements of Operations and Comprehensive Income (Loss) (in thousands, except per share amounts) Year Ended December 31, 2025 2024 2023 Revenue $ 305,112 $ 152,582 $ 71,729 Cost of revenue 96,654 71,667 54,421 Gross profit 208,458 80,915 17,308 Operating expenses: Research and development 49,384 36,596 22,414 Selling, general and administrative 143,051 91,465 64,389 Total operating expenses 192,435 128,061 86,803 Income (loss) from operations 16,023 ( 47,146 ) ( 69,495 ) Other income (expense): Interest income 7,750 5,819 3,456 Interest expense ( 95 ) ( 2,386 ) ( 3,272 ) Net gain on extinguishment of debt - 7,289 - Change in fair value of term loan ( 8,509 ) ( 3,137 ) - Change in fair value of convertible notes - ( 835 ) ( 12,921 ) Other expense, net ( 7,410 ) ( 1,145 ) ( 442 ) Total other income (expense) ( 8,264 ) 5,605 ( 13,179 ) Income (loss) before provision for income taxes 7,759 ( 41,541 ) ( 82,674 ) Provision for income taxes 305 29 9 Net income (loss) $ 7,454 $ ( 41,570 ) $ ( 82,683 ) Less: Net income (loss) attributable to participating securities ( 4,535 ) - - Net income (loss) attributable to common stockholders $ 2,919 $ ( 41,570 ) $ ( 82,683 ) Other comprehensive loss, net of taxes: Change in fair value of term loan attributable to instrument‑specific credit risk ( 1,792 ) - - Other comprehensive loss, net of taxes ( 1,792 ) - - Comprehensive income (loss), net of taxes $ 5,662 $ ( 41,570 ) $ ( 82,683 ) Net income (loss) per share attributable to common stockholders, basic and diluted: Net income (loss) per share, basic $ 0.18 $ ( 4.12 ) $ ( 8.45 ) Net income (loss) per share, diluted $ 0.14 $ ( 4.12 ) $ ( 8.45 ) Weighted-average shares used in calculating net income (loss) per share attributable to common stockholders, basic and diluted: Weighted-average shares used in calculating net income (loss) per share, basic 15,875,091 10,079,925 9,782,770 Weighted-average shares used in calculating net income (loss) per share, diluted 21,230,752 10,079,925 9,782,770 The accompanying notes are an integral part of these financial statements. 115 Table of Contents BillionToOne, Inc. Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) (in thousands, except share data) Redeemable Convertible Preferred Stock Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders’ Equity (Deficit) Shares Amount Shares Amount Balance at January 1, 2023 22,701,179 $ 249,527 10,424,709 $ - $ 16,140 $ - $ ( 157,948 ) $ ( 141,808 ) Issuance of common stock upon exercise of stock options - - 147,352 - 518 - - 518 Partial repayment of promissory note by executive - - - - 51 - - 51 Stock-based compensation - - - - 4,854 - - 4,854 Vesting of early exercises - - - - 15 - - 15 Net loss - - - - - - ( 82,683 ) ( 82,683 ) Balance at December 31, 2023 22,701,179 $ 249,527 10,572,061 $ - $ 21,578 $ - $ ( 240,631 ) $ ( 219,053 ) Issuance of Series C-1 redeemable convertible preferred stock upon settlement of Convertible Notes 1,726,823 39,886 - - - - - - Issuance of Series D redeemable convertible preferred stock, net of issuance costs of $ 474 4,656,233 129,996 - - - - - - Issuance of common stock upon exercise of stock options - - 380,639 - 1,146 - - 1,146 Stock-based compensation - - - - 8,362 - - 8,362 Repurchase of common stock - - ( 26,750 ) - ( 546 ) - - ( 546 ) Vesting of early exercises - - - - 5 - - 5 Net loss - - - - - - ( 41,570 ) ( 41,570 ) Balance at December 31, 2024 29,084,235 $ 419,409 10,925,950 $ - $ 30,545 $ - $ ( 282,201 ) $ ( 251,656 ) Conversion of redeemable convertible preferred stock to Class A and Class B common stock in connection with initial public offering ( 29,084,235 ) ( 419,409 ) 29,084,235 - 419,409 - - 419,409 Issuance of Class A common stock in connection with initial public offering, net of underwriting discounts and commissions and issuance costs - - 5,233,765 - 286,928 - - 286,928 Issuance of Class A common stock upon exercise of stock options - - 551,145 - 2,924 - - 2,924 Stock-based compensation - - - - 15,915 - - 15,915 Exercise of Class A common stock warrants - - 9,660 - 870 - - 870 Repayment of promissory notes by executives - - - - 51 - - 51 Vesting of early exercises - - - - 2 - - 2 Other comprehensive loss - - - - - ( 1,792 ) - ( 1,792 ) Net income - - - - - - 7,454 7,454 Balance at December 31, 2025 - $ - 45,804,755 $ - $ 756,644 $ ( 1,792 ) $ ( 274,747 ) $ 480,105 116 Table of Contents The accompanying notes are an integral part of these financial statements. 117 Table of Contents BillionToOne, Inc. Statements of Cash Flows (in thousands) Year Ended December 31, 2025 2024 2023 Cash flows from operating activities: Net income (loss) $ 7,454 $ ( 41,570 ) $ ( 82,683 ) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Stock-based compensation 15,915 8,362 4,854 Depreciation and amortization 6,910 7,040 5,874 Amortization of debt discount costs and accretion of exit fees - 341 540 Debt issuance costs on term loan expensed upon election of fair value option - 453 - Amortization of operating right-of-use assets 4,997 4,648 589 Loss on disposal of fixed assets 55 126 - Change in fair value of common stock warrant liability 6,749 880 392 Change in fair value of redeemable convertible preferred stock warrant liability 615 84 48 Net gain on extinguishment of debt - ( 7,289 ) - Change in fair value of convertible notes - 835 12,921 Change in fair value of term loan 3,953 1,481 - Changes in operating assets and liabilities: Accounts receivable ( 16,908 ) ( 15,619 ) ( 2,588 ) Inventories ( 8,812 ) ( 1,535 ) ( 1,412 ) Prepaid expenses and other current assets ( 2,193 ) ( 860 ) 2,232 Other non-current assets ( 60 ) ( 3,101 ) 491 Accounts payable 1,775 877 151 Accrued expenses and other current liabilities 2,578 697 733 Accrued commissions 1,156 905 387 Accrued compensation and employee benefits 4,132 5,859 737 Deferred revenue 672 ( 218 ) 3,024 Operating lease liabilities ( 4,393 ) ( 3,771 ) 38 Net cash provided by (used in) operating activities 24,595 ( 41,375 ) ( 53,672 ) Cash flows from investing activities: Proceeds from maturities of certificates of deposit - - 90,000 Deposits paid for financing leases - ( 31 ) ( 988 ) Purchase of domain name ( 41 ) - - Purchases of property and equipment ( 8,881 ) ( 5,402 ) ( 6,174 ) Net cash provided by (used in) investing activities ( 8,922 ) ( 5,433 ) 82,838 118 Table of Contents BillionToOne, Inc. Statement of Cash Flows—Continued (in thousands) Year Ended December 31, 2025 2024 2023 Cash flows from financing activities: Proceeds from issuance of Class A common stock in connection with the Company’s initial public offering, net of underwriting discounts and commissions 292,044 - - Payments of deferred offering costs ( 4,612 ) - - Proceeds from issuance of debt, net - 49,775 15,000 Repayment of debt upon extinguishment - ( 35,000 ) - Payment of exit fee and prepayment payable upon debt extinguishment - ( 1,688 ) - Principal payments on finance lease liabilities ( 1,777 ) ( 2,376 ) ( 2,090 ) Repurchase of common stock outstanding - ( 546 ) - Payment of debt issuance costs on term loan - ( 228 ) - Proceeds from exercise of stock options, net of repurchases 3,094 1,084 444 Proceeds from exercise of common stock warrants 25 - - Proceeds from repayment of promissory notes by executives 51 - 51 Proceeds from issuance of Series D redeemable convertible preferred stock, net of issuance costs - 129,996 - Net cash provided by financing activities 288,825 141,017 13,405 Net increase in cash and cash equivalents 304,498 94,209 42,571 Cash and cash equivalents at beginning of year 191,477 97,268 54,697 Cash and cash equivalents at end of year $ 495,975 $ 191,477 $ 97,268 Supplemental cash flow disclosure: Cash payments for interest $ 4,651 $ 3,915 $ 2,584 Cash paid for income taxes $ 487 $ 9 $ - Supplemental non-cash investing and financing activities: Conversion of redeemable convertible preferred stock into shares of Class A common stock in connection with the Company’s initial public offering $ 419,409 $ - $ - Purchases of property and equipment in accounts payable and accrued expenses and other current liabilities $ 2,391 $ 1,001 $ - Issuance of Series C-1 redeemable convertible preferred stock upon settlement of convertible notes $ - $ 39,886 $ - Offering costs in accounts payable and accrued expenses and other current liabilities $ 504 $ - $ - Right-of-use assets obtained in exchange for new finance lease liabilities $ - $ 395 $ 2,795 Exercise of stock options for which cash has not been received $ 3 $ 173 $ 102 Settlement of common stock warrant liability $ 845 $ - $ - The accompanying notes are an integral part of these financial statements. 119 Table of Contents BillionToOne, Inc. Notes to Financial Statements (1) Description of Business BillionToOne, Inc. (the “Company”) was formed in 2016, and is headquartered in Menlo Park, California. The Company is a precision diagnostics company that quantifies biology to create molecular diagnostics. The Company’s proprietary molecular counting platform is designed to detect and measure DNA molecules at the single-count level to help improve disease detection. The Company currently applies its proprietary technology to non-invasive prenatal screening (“Prenatal”) and liquid biopsy (“Oncology”). (2) Summary of Significant Accounting Policies Basis of Presentation The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Prior to April 2024, the financial statements also included the Company’s wholly owned subsidiary SeqIndia Labs Private Limited which had immaterial activities and was not material to these financial statements and was divested in April 2024. Accordingly, in 2023, the financial statements were consolidated while in 2024 and 2025 they were not. All intercompany transactions and balances have been eliminated upon consolidation. Initial Public Offering On November 7, 2025, the Company closed its initial public offering (the “IPO”) of 5,233,765 shares of its Class A common stock, which includes the exercise in full by the underwriters of their option to purchase from the Company 682,665 shares of the Company’s Class A common stock, at a price to the public of $ 60.00 per share. The gross proceeds to the Company from the IPO were $ 314.0 million and the net proceeds amounted to $ 286.9 million, after deducting underwriting discounts and commissions and offering expenses payable by the Company. Immediately prior to the closing of the IPO, each outstanding share of the Company’s Series A-1, Series A-2, Series A-3, Series A-4, Series A-5, Series A-6, Series B-1, Series B-2, Series C, Series C-1 and Series D redeemable convertible preferred stock converted, on a one -for-one basis, into 29,084,235 shares of the Company’s Class A common stock (such conversion, the “Reclassification”). Following the Reclassification, and immediately prior to the closing of the IPO, 2,227,542 shares of Class A common stock held by Oguzhan Atay, the Company's Chief Executive Officer and Co-Founder, and 2,325,108 shares of Class A common stock held by David Tsao, the Company's Chief Technology Officer and Co-Founder, were exchanged at a 1:1 ratio for shares of Class B common stock. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On a regular basis, management evaluates estimates, including, but not limited to: stock-based compensation, deferred tax assets and liabilities, useful lives of long-lived assets, the incremental borrowing rate applied to operating and finance leases, determination of revenue recognition and accounts receivable, and valuation of debt, convertible notes and common stock warrants. These estimates are inherently subject to judgment and actual results could differ from those estimates. Emerging Growth Company The Company is an emerging growth company, as defined by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies may delay adopting new or revised accounting standards that have different effective dates to public and private companies until the earlier of the date that (i) the Company is no longer an emerging growth company or (ii) the Company affirmatively and irrevocably opts out of the extended transition period as permitted in the JOBS Act. As a result, these financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. The Company expects to avail itself of the extended transition period for any other new or revised accounting standards during the period in which it remains an emerging growth company. 120 Table of Contents Liquidity Prior to the completion of its IPO, the Company’s available liquidity and operations had been financed primarily through the issuance of convertible notes, redeemable convertible preferred stock, debt and sale of the Company's products. The Company has generated significant losses from operations and negative cash flows from operating activities in the past as reflected in its accumulated deficit of $ 274.7 million and $ 282.2 million as of December 31, 2025 and 2024, respectively, though the Company did generate income from operations and positive cash flows from operating activities during the year ended December 31, 2025. For the year ended December 31, 2025, $ 24.6 million in cash was provided by operating activities, compared to $ 41.4 million used in operating activities for the year ended December 31, 2024. The Company continues to invest in the development and commercialization of its existing and future products and, consequently, will need to generate additional revenues to achieve future profitability and may need to raise additional equity or debt financing. The Company believes its existing cash and cash equivalent balances and cash generated from sales will be sufficient to meet its cash needs for at least the next 12 months. These financial statements were prepared under the assumption that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business, and do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty. Risks and Uncertainties Certain of the Company’s product candidates are in development. If the Company is unable to advance its product candidates through development, clinical validation and ultimately commercialize its product candidates, or experiences significant delays in doing so, the Company’s business will be materially harmed. Even if the Company completes the necessary validation studies and product development, the process to meet any applicable regulatory requirements can be expensive. As a result, the Company cannot predict when, or if, it will be able to commercialize a product candidate. The Company is subject to certain risks and uncertainties that the Company believes could have a material adverse effect on its future financial position or results of operations. As of the date of issuance of the financial statements, the Company is not aware of any specific event or circumstance that would require it to update its estimates, judgments, or the carrying value of its assets or liabilities. These estimates may change as new events occur and additional information is obtained and are recognized in the financial statements as soon as they become known. Actual results could differ from those estimates, and any such differences may be material to the Company’s financial statements. The Company is subject to regulation and enforcement by the federal government and by authorities in state and foreign jurisdictions in which the Company conducts business. Such laws include, without limitation, state and federal anti-kickback, fraud and abuse, false claims, privacy and security laws and regulations. If the Company’s operations are found to be in violation of any such laws or government regulations that apply to use, the Company may be subject to penalties, including, without limitation, civil and criminal penalties, damages, fines, the curtailment or restructuring of operations and exclusion from participation in federal and state healthcare programs. Cash and Cash Equivalents The Company’s cash and cash equivalents consist of all highly liquid investments deposited with banks, including money market funds. The money market funds are managed in accordance with regulatory requirements applicable to money market funds, including restrictions on the maturity of the underlying investments. These investments are considered highly liquid and readily convertible to cash. Concentration of Credit Risk Financial instruments that potentially expose the Company to significant concentration of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company’s cash and cash equivalents are generally held with large financial institutions. Certain deposits held with these financial institutions are in excess of the amount of FDIC insured limits provided on such deposits. As of December 31, 2025, 2024 and 2023, no customers represented more than 10% of accounts receivable, and for the years ended December 31, 2025, 2024 and 2023, no customers represented more than 10% of the Company’s revenue. 121 Table of Contents Fair Value of Financial Instruments The Company records all financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. Other financial instruments, including cash and cash equivalents, are recorded at cost, which approximates fair value. Additionally, the carrying amounts of accounts receivable, prepaid expenses and other current assets, accounts payable and accrued expenses and other current liabilities approximate fair value due to their relatively short-term nature. The accounting guidance for fair value provides a framework for measuring fair value, clarifies the definition of fair value, and expands disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows: Level 1 input Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date. Level 2 input Inputs other than the quoted prices included within Level 1 that are observable for the assets or liabilities, either directly or indirectly. Level 3 input Unobservable inputs for the assets or liabilities. Unobservable inputs shall be used to measure fair value to the extent that relevant observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Reclassifications of financial instruments between levels of the fair value hierarchy are reported as transfers in or out as of the beginning of the period in which the reclassifications occur. The Company's cash and cash equivalents include money market funds which are quoted in an active market and classified within Level 1 of the fair value hierarchy, which are measured at fair value based on the closing price as of the reporting date. The Company measures certain of its liabilities at fair value on a recurring basis, including warrants, due to their terms, and certain debt agreements where the Company has elected the fair value option. Any changes in fair value caused by instrument-specific credit risk are presented separately in other comprehensive loss. See Note 3 for further details. During the year ended December 31, 2025, there was a change in the fair value of the term loan where the Company elected the fair value option that related to changes in credit risk. During the years ended December 31, 2024 and 2023, there was no change in the fair value of debt agreements where the Company elected the fair value option that related to changes in credit risk. Accounts Receivable and Allowances The Company regularly assesses the collectability of accounts and reviews the allowance by considering factors such as historical experience, the age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay. Based on this assessment for credit losses the Company determined an allowance for credit losses was not needed given the payors from whom such receivables are collectible and the relatively short duration over which the majority of receivables are collected. There was no allowance for credit losses as of December 31, 2025, 2024 and 2023. Account balances are written off against the allowance after all means of collection have been exhausted without success. During the years ended December 31, 2025, 2024 and 2023, there were no write-offs of accounts receivable. Inventories Inventories consist primarily of supplies for prenatal testing, consumables and lab supplies (including reagents) which are stated at the lower-of-cost or net realizable value. The supplies are consumed at the point samples are collected, and as the Company performs its testing service and accordingly, the Company does not maintain any work-in-process or finished goods inventory. The cost of inventory is determined on an average cost method. Inventory that is obsolete or in excess of forecasted demand is written down to its estimated net realizable value. The Company periodically reviews its inventory and writes off inventory that are determined to 122 Table of Contents be obsolete based on market factors, utilization rates and product expiration dates. Inventory write-downs are recognized as cost of revenue in the accompanying statements of operations and comprehensive income (loss). During the years ended December 31, 2025, 2024 and 2023, inventory write-downs totaled approximately $ 0.3 million, $ 0.1 million and $ 0.1 million , respectively, and were related to expired and unusable inventory. Property and Equipment, Net Property and equipment, net is stated at historical cost less accumulated depreciation and amortization. Depreciation and amortization on property and equipment is calculated using the straight-line method over the estimated useful lives of the assets which are as follows: Machinery and equipment 5 years Furniture and fixtures 5 years Automobiles 5 years Computer hardware 3 years Computer software 3 years Leasehold improvements Shorter of 10 years or remaining lease term Maintenance and repairs are charged to expenses as incurred. The Company entered into finance leases for certain lab equipment. The Company records amortization of assets leased in connection with finance lease arrangements as depreciation expense. Impairment of Long-Lived Assets The Company evaluates long-lived assets for indicators of possible impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets held and used is measured by comparison of the carrying amount of an asset or an asset group to estimated undiscounted future net cash flows expected to be generated by the asset or asset group. If the carrying amount of an asset exceeds these estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the assets exceeds the fair value of the asset or asset group. There were no such impairment losses during the years ended December 31, 2025, 2024 and 2023. Leases The Company determines if an arrangement is a lease, or contains a lease, by evaluating whether there is an identified asset and whether the Company controls the use of the identified asset throughout the period of use. The Company determines the classification of the lease, whether operating or financing, at the lease commencement date, which is the date the leased assets are made available for use. If the Company determines a lease exists, the Company then determines whether the lease should be classified as an operating or finance lease. A lease is classified as a finance lease when one or more of the following criteria are met: (1) the lease transfers ownership of the asset by the end of the lease term, (2) the lease contains an option to purchase the asset that is reasonably certain to be exercised, (3) the lease term is for a major part of the remaining useful life of the asset, (4) the present value of the lease payments equals or exceeds substantially all of the fair value of the asset or (5) the asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term. A lease is classified as an operating lease if it does not meet any of these criteria. Operating leases consist of the Company’s real estate facilities and finance leases consist of the Company’s lab equipment. At the lease commencement date, the Company records a right-of-use (“ROU”) asset and a lease liability for all leases, except for short-term leases with an original term of 12 months or less, whereby the Company has elected a practical expedient not to recognize an ROU asset or lease liability for short term leases. ROU assets are measured based on the corresponding lease liability adjusted for (i) payments made to the lessor at or before the commencement date, (ii) initial direct costs incurred and (iii) tenant incentives under the lease. All ROU assets are periodically reviewed for impairment in accordance with standards that apply to long-lived assets. Lease liabilities are recognized at the lease inception date based on the present value of lease 123 Table of Contents payments over the lease term discounted based on the more readily determinable of (i) the rate implicit in the lease or (ii) the Company’s incremental borrowing rate (which is the estimated rate the Company would be required to pay for a collateralized borrowing equal to the total lease payments over the term of the lease). Because the Company’s leases generally do not provide an implicit rate, the Company estimates its incremental borrowing rate based on the information available such as credit rating, lease term and collateral at lease commencement date for borrowings with a similar term. Lease expense for operating leases consists of the fixed lease payments recognized on a straight-line basis over the lease term plus variable lease payments as incurred. Lease expense for finance leases consists of the depreciation recognized on a straight-line basis over the lease term and interest expense on the lease liability based on the discount rate at lease commencement. The Company does not assume renewals or early terminations unless it is reasonably certain the Company will exercise these options at commencement. The Company elected the practical expedient which allows the Company to not allocate consideration between lease and non-lease components. Variable lease payments are recognized in the period in which the obligation for those payments are incurred. Revenue The Company recognizes revenue upon transfer of control of promised goods and services in an amount that reflects the consideration it expects to be entitled to receive in exchange for those goods and services. Under ASC 606— Revenue from Contracts with Customers ("ASC 606"), the Company applies the following five-step approach: • Identify the contract with a customer • Identify the performance obligations in the contract • Determine the transaction price • Allocate the transaction price to the performance obligations in the contract • Recognize revenue when, or as, a performance obligation is satisfied The Company generates revenue primarily from prenatal and oncology testing services, which are referred to as testing services or test results. The Company considers the patient as its customer, that requests a test service through their physician. Test results are the single performance obligation being provided to customers. Testing service revenue is recognized at a point in time when test results are delivered to the ordering physician. The Company generally bills an insurance carrier, Medicaid, Medicare, the patient, or a combination upon delivery of test results. The Company enters into contracts with third-party payors, including insurance carriers, Medicaid and Medicare, to set the pricing for tests provided to patients. Due to the nature of these third-party payor contract arrangements, the total consideration the Company expects to collect for test results is variable as they are dependent on the terms negotiated with the third-party payor. The predominance of the Company’s revenue is derived from payments by third-party insurance carriers. The Company uses the expected value method of estimating variable consideration. The total consideration the Company expects to collect in exchange for the Company’s products is an estimate and is largely variable in nature. Consideration includes reimbursement from both patients and third-party payors. The Company establishes variable consideration by considering historical payment trends for tests delivered, test reimbursement disallowances, and contractual arrangements in place, among other factors, which is adjusted for current expectations. Current expectations of cash collections factor in changes in reimbursement rate trends, historical events not expected to recur, and future known changes such as anticipated contractual pricing changes or changes to insurance coverage. The Company also considers hindsight, where applicable, in estimates established for variable consideration and updates those estimates when actual experience supports doing so. In establishing variable consideration, the Company considers payors with similar reimbursement characteristics together. The Company monitors the cash collections against the estimated variable consideration over the expected cash collection period and any difference is recognized as an adjustment to estimated revenues after such estimated cash collection period has closed. In January 2023, the Company entered a partnership with Johnson & Johnson ("J&J") under which the Company is licensing the Company’s proprietary knowledge, performing clinical trial support services including 124 Table of Contents developing a clinical study assay, and other testing services to support a clinical trial for the counterparty. The Company concluded that the agreement with J&J was within the scope of ASC 606 because the counterparty in the agreement meets the definition of a customer. The Company evaluated the terms of the agreement for revenue recognition, including whether the services are capable of being distinct and considered distinct within the context of the contract. The Company concluded that the licensing of the know how is not distinct from the other promises within the agreement and, as a result, was treated as a single performance obligation. Under this contract, the Company receives payments upon the achievement of milestones, including (i) receipt of approval of the trial, which was achieved in 2023, (ii) various patient enrollment milestones, and (iii) subsequent full trial completion, as well as reimbursement for testing services. In making assessment of whether variable consideration should be included in the transaction price, the Company considers the degree of complexity and uncertainty associated with each milestone and related testing services, and whether achievement of the milestones and testing services are dependent on parties other than the Company. In July 2025, the Company entered into a partnership with J&J for the development and commercialization of a companion diagnostic (CDx), intended for use with a new drug candidate of J&J. The Company is providing services related to regulatory filings to support companion diagnostic submissions for the Company’s assay. The development and regulatory support services represent a single performance obligation as the Company performs a significant integration service, such as analytical validation and regulatory submissions. The individual promises are not separately identifiable from other promises in the contract, and therefore, not distinct. The Company receives payment from achievement of milestones, including (i) various CDx development milestones, (ii) FDA regulatory submission and pre-approval, and (iii) CDx approval by FDA. For the companion diagnostic development and regulatory approval performed, the Company is compensated through a combination of an upfront fee and performance-based, non-refundable regulatory and development milestones. The transaction price represents variable consideration and the Company uses the most likely amount to estimate variable consideration. Application of the constraint for variable consideration to milestone payments is an area that requires significant judgment. The Company evaluates factors such as the scientific, clinical, regulatory, and other risks that must be managed to achieve the respective milestone and the level of effort and investment required to achieve the respective milestone. In making this assessment, the Company considers its historical experience with similar milestones, the degree of complexity and uncertainty associated with each milestone, and whether the achievement of the milestone is dependent on parties other than the Company. The constraint for variable consideration is applied to the contract price such that it is probable a significant cumulative reversal of revenue will not occur when the uncertainty associated with the contingency is resolved. Application of the constraint for variable consideration is assessed and updated at each reporting period as a revision to the estimated transaction price. The Company recognizes revenue for the single performance obligation for each of the J&J partnership agreements over the period the services are provided. Specifically, the Company recognizes revenue using an input method to measure progress, utilizing costs incurred to-date relative to the total expected costs as a measure of progress. The Company assesses the changes to the total expected cost estimates in determining the revenue recognition for each reporting period. The Company applies the practical expedient not to disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. As of December 31, 2025, the Company’s remaining performance obligations beyond one year were approximately $ 3.3 million. Disaggregation of revenue The following table presents disaggregation of revenue by Prenatal, Oncology and Clinical trial support and other services for the years ended December 31, 2025, 2024 and 2023: Year Ended December 31, 2025 2024 2023 (in thousands) Prenatal $ 277,105 $ 145,901 $ 68,803 Oncology 24,953 2,944 - Clinical trial support and other services 3,054 3,737 2,926 Total revenue $ 305,112 $ 152,582 $ 71,729 125 Table of Contents Substantially all revenue recognized for the years ended December 31, 2025, 2024 and 2023 was generated in the United States. Revenue related to performance obligations satisfied in prior periods For the years ended December 31, 2025, 2024 and 2023, the Company recorded $ 8.7 million, $ 11.0 million and $ 2.7 million, respectively, as revenue related to performance obligations satisfied in prior periods. Deferred revenue Deferred revenue, which is a contract liability, consists of billings or cash received for services in advance of revenue recognition and is recognized as revenue when all the Company’s revenue recognition criteria are met. As of December 31, 2025, 2024 and 2023, the deferred revenue balance was $ 3.5 million, $ 2.8 million and $ 3.0 million, respectively. As of December 31, 2025, $ 1.3 million of the deferred revenue balance was classified as non-current and $ 2.2 million was classified as current. All deferred revenue as of December 31, 2024 and 2023 was classified as current. For the years ended December 31, 2025 and 2024, revenue recognized from deferred revenue at the beginning of the period was $ 2.1 million and $ 3.0 million, respectively. No revenue was recognized from deferred revenue at the beginning of the period during the year December 31, 2023. Cost of Revenue The Company’s cost of revenue consists primarily of expenses related to reagents and consumables, test kits, personnel-related expenses such as salaries, stock-based compensation expense and related benefits for its operations and support personnel, shipping costs, overhead allocations, depreciation expense, facilities-related expenses and other services used in connection with delivering the Company’s services. Advertising Costs Advertising costs are expensed as incurred. These amounts are included in selling, general and administrative expense in the statements of operations and comprehensive income (loss) and amounted to approximately $ 1.2 million, $ 1.3 million and $ 0.4 million for the years ended December 31, 2025, 2024 and 2023, respectively. Research and Development Research and development expenses consist primarily of personnel-related expenses such as salaries, stock-based compensation expense and related benefits for the Company’s product development employees. Research and development expenses also include non-personnel costs such as materials and consumables used for research, clinical third-party services and consulting expenses, and an allocation of the Company’s general overhead expenses. These costs are expensed in the period as incurred. Selling, General and Administrative Selling, general and administrative expenses consist primarily of personnel-related expenses such as salaries, stock-based compensation expense and related benefits for the Company’s sales, marketing, and general and administrative employees. Selling, general and administrative expenses also include the Company’s commission payments, marketing related expenses in promoting the Company’s brand and tests, and training costs for the sales employees. All selling, general and administrative costs are expensed in the period as incurred. Income Taxes Income taxes are accounted for under the asset-and-liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided on deferred tax assets when it is more-likely-than-not that some portion or all of the net deferred tax assets will not be realized. The Company evaluates uncertain tax positions taken or expected to be taken in the course of preparing its tax return to determine whether the tax positions are more-likely-than-not of being sustained upon challenge by the applicable tax authority based on the technical merits of the position. The Company recognizes the effect of income tax positions only if those positions are more-likely-than-not of being sustained. Recognized income tax positions 126 Table of Contents are measured at the largest amount that is greater than a 50% likelihood of being realized upon ultimate settlement. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company recognizes interest and penalties related to income tax matters in provision for income taxes. Comprehensive Income (Loss) The components of comprehensive loss consist of net income (loss) and changes in fair value due to instrument-specific credit risk on the term loan. During the years ended December 31, 2024 and 2023, the Company did not have any other comprehensive income (loss) and, therefore, the net income (loss) and comprehensive (income) loss was the same. Redeemable Convertible Preferred Stock The Company records shares of redeemable convertible preferred stock at their respective fair values on the dates of issuance, net of issuance costs. The redeemable convertible preferred stock is recorded outside of permanent equity because while it is not mandatorily redeemable, redemption is contingent upon the occurrence of certain events considered not solely within the Company’s control. The Company has not adjusted the carrying values of the redeemable convertible preferred stock to the liquidation preferences of such shares because it is uncertain whether or when a deemed liquidation event would occur that would obligate the Company to pay the liquidation preferences to holders of shares of redeemable convertible preferred stock. Subsequent adjustments to the carrying values to the liquidation preferences will be made only when it becomes probable that such a deemed liquidation event will occur. In connection with the IPO, the redeemable convertible preferred stock was automatically converted into shares of Class A common stock. See Note 11 for further information. Redeemable Convertible Preferred Stock Warrants Freestanding warrants to purchase shares of redeemable convertible preferred stock are classified as liabilities on the balance sheets at their estimated fair value because the underlying shares of redeemable convertible preferred stock are contingently redeemable and, therefore, may obligate the Company to transfer assets at some point in the future. Warrants to purchase shares of redeemable convertible preferred stock are recorded at fair value upon issuance and remeasured to fair value. Redeemable convertible preferred stock warrants are subject to re-measurement at each balance sheet date, and any change in fair value is recognized as other expense, net in the statements of operations and comprehensive income (loss). See Note 3 for further information. In connection with the IPO, the redeemable convertible preferred stock warrants were automatically converted to common stock warrants and subsequently exercised into Class A common stock. See Note 11 for further information. Common Stock Warrants Certain freestanding warrants to purchase shares of common stock are classified as liabilities on the balance sheets at their estimated fair value as the warrants allow the holders to put the warrants to the Company, in certain circumstances, in exchange for a cash payment. Those puttable warrants to purchase shares of common stock are recorded at fair value upon issuance and remeasured to fair value. Common stock warrants are subject to re-measurement at each balance sheet date and any change in fair value is recognized as other expense, net in the statements of operations and comprehensive income (loss) (See Note 3). Stock-Based Compensation The Company measures stock-based compensation expense for all stock-based payment awards based on the estimated fair value of the awards on the date of grant. The fair value of each stock option granted is estimated using the Black-Scholes-Merton option valuation model (the “Black-Scholes Model”). The model requires the Company to make assumptions and judgments about the variable inputs used in the Black-Scholes Model, including expected term, the volatility of the Company’s common stock, and assumed risk-free interest rate. Stock-based compensation is recognized net of actual forfeitures on a straight-line basis over the requisite service period of the awards. The Company accounts for forfeitures as they occur. The Company has granted awards to employees that vest based on continued service (service conditions). Stock-based compensation expense is recognized on a straight-line basis over the service period. 127 Table of Contents The Company grants restricted stock units (“RSUs”) to employees and directors as part of its equity incentive plans. RSUs represent the right to receive shares of the Company’s Class A common stock upon vesting. The grant-date fair value of RSUs is measured based on the closing price of the Company’s Class A common stock on the date of grant and is recognized as stock-based compensation expense on a straight-line basis over the requisite service period. The Company accounts for forfeitures as they occur. Deferred Offering Costs Deferred offering costs, consisting of legal, accounting, and other fees and costs relating to the Company’s IPO are capitalized within other non-current assets on the balance sheets. The deferred offering costs were offset against the proceeds received by the Company upon the closing of the IPO. At the closing of the IPO, $ 5.1 million of deferred offering costs were reclassified to additional paid-in capital within stockholders’ deficit and $ 0.5 million of IPO costs are accrued for and remain unpaid as of December 31, 2025. Segment Information Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources and assess performance. The Company’s Chief Executive Officer is the Company’s CODM. The CODM reviews financial information presented on a company-wide basis to make operating decisions, allocating resources, and evaluating financial performance. As such, the Company has determined that it is managed as one operating segment and one reportable segment. Key areas of focus for the CODM when making decisions on the allocations of resources is cash used in operations as well as revenue, gross margin and net income (loss); this information is used by the CODM and compared to budgeted amounts in order for the CODM to make decisions on how resources should be allocated across the organization. The Company’s segment measure of profitability is net income (loss). Segment revenues are derived from prenatal and oncology testing services delivered to patients, the Company's primary customers; both the prenatal and oncology testing products utilize the Company's proprietary molecular diagnostic technology platform. The Company’s customers are predominantly located in the United States. Substantially all of the Company’s long-lived assets are located in the United States. The Company’s technology platform is applied similarly in both the prenatal and oncology settings. The financial statements provide the CODM with a view of the Company’s financial condition as it pertains to the Company’s assets, liabilities and expenses. Significant expense categories align with the expense categories and amounts presented on the statements of operations and comprehensive income (loss). Recently Adopted Accounting Pronouncements In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which expands income tax disclosure requirements to include additional information related to the rate reconciliation of effective tax rates to statutory rates, as well as additional disaggregation of taxes paid. This ASU also removed disclosure related to certain unrecognized tax benefits and deferred taxes. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. The Company adopted this ASU for its year ended December 31, 2025 and included the expanded income-tax related disclosures. See Note 12 for further information. Recently Issued Accounting Pronouncements Not Yet Adopted In November 2024, the FASB issued ASU 2024-04, Debt – Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments . This ASU clarifies guidance on the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion or extinguishment. This guidance is effective for the Company beginning on January 1, 2026, and early adoption is permitted, although the Company does not plan to early adopt. The Company is currently evaluating the impact of the adoption of this standard on the Company’s financial statement and related disclosures. In November 2024 and January 2025, the FASB issued ASU 2024-03 and ASU 2025-01, respectively, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses , which requires disclosure in the notes to the financial statements of specified information about an entity’s certain costs and expenses. The amendments to the standards are effective for the Company’s fiscal year beginning January 1, 2027 and interim periods 128 Table of Contents beginning January 1, 2028. Early adoption is permitted. The amendments should be applied either prospectively to the financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating this ASU to determine the impact it may have on its financial statements and related disclosures. In July 2025, the FASB issued ASU 2025-05, Measurement of Credit Losses for Accounts Receivable and Contract Assets , which provides for a practical expedient to estimate credit losses related to accounts receivable and contract assets from revenue contracts accounted for in accordance with ASC 606 using information as of the balance sheet date. This ASU is effective for the Company’s fiscal year beginning January 1, 2026 and early adoption is permitted. The Company is currently evaluating this ASU to determine the impact it may have on its financial statements and related disclosures. In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software , which clarifies and expands the existing guidance on capitalizing implementation costs for cloud computing arrangements that are service contracts. The new guidance is effective for public business entities for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating this ASU to determine the impact it may have on its financial statements and related disclosures. In September 2025, the FASB issued ASU 2025-07, Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract , which amends the guidance under ASC Topic 815 (Derivatives and Hedging) and ASC Topic 606 (Revenue from Contracts with Customers). The ASU (i) refines the scope for derivative accounting to exclude certain non-exchange-traded contracts whose underlying are based on the operations or activities specific to one of the parties to the contract, and (ii) provides clarification on how to account for share-based noncash consideration from customers (such as equity instruments, warrants, or shares) received in exchange for the transfer of goods or services under a revenue contract. The new guidance is effective for public business entities for fiscal years beginning after December 15, 2026, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating this ASU to determine the impact it may have on its financial statements and related disclosures. (3) Fair Value Measurements The fair value measurements of assets and liabilities that are measured at fair value on a recurring basis consisted of the following as of December 31, 2025 (in thousands): Level 1 Level 2 Level 3 Total Current assets: Money market funds $ 359,813 $ - $ - $ 359,813 Total assets $ 359,813 $ - $ - $ 359,813 Liabilities: Common stock warrants $ - $ 9,282 $ - $ 9,282 Term loan - - 57,226 57,226 Total liabilities $ - $ 9,282 $ 57,226 $ 66,508 129 Table of Contents The fair value measurements of assets and liabilities that are measured at fair value on a recurring basis consisted of the following as of December 31, 2024 (in thousands): Level 1 Level 2 Level 3 Total Current assets: Money market funds $ 7,538 $ - $ - $ 7,538 Total assets $ 7,538 $ - $ - $ 7,538 Liabilities: Redeemable convertible preferred stock warrants $ - $ - $ 230 $ 230 Common stock warrants - - 2,533 2,533 Term loan - - 51,481 51,481 Total liabilities $ - $ - $ 54,244 $ 54,244 As of December 31, 2025, Level 3 instruments consist of the Company’s term loan due to the lack of relevant observable market data for the respective fair value inputs of the instrument. As of December 31, 2024, Level 3 instruments consist of the Company’s common stock warrant liabilities, redeemable convertible preferred stock warrant liabilities and term loan due to the lack of relevant observable market data for the respective fair value inputs for each instrument. In August 2024, the Company entered into a term loan agreement which the Company elected to account for using the fair value option. As such, the fair value of the debt is calculated by using the probability weighting of the present value of settlement scenarios (See Note 10). The significant assumptions used in preparing the income approach model for valuing the term loan as of December 31, 2025 and 2024 are as follows: December 31, 2025 December 31, 2024 Discount rate 7.10 % 9.37 % Annual interest rate 8.00 % 8.00 % Expected term (years) – Scenario 1 4.25 5.32 Expected term (years) – Scenario 2 5.60 6.69 The fair values of the common stock warrant and redeemable convertible preferred stock warrant are measured using a probability weighted option pricing model. The significant assumptions used in preparing the option pricing model for valuing the common stock warrant liability as of December 31, 2025, 2024 and 2023 is as follows: December 31, 2025 2024 2023 Stock price $ 81.84 $ 20.32 $ 13.41 Exercise price $ 2.80 - $ 10.92 $ 2.80 – $ 10.92 $ 2.80 – $ 10.92 Volatility 53.5 % 84.0 % 60.0 % Expected term (years) 0.3 2.30 1.5 Risk-free rate 3.63 % 4.14 % 4.50 % Dividend yield - % - % - % The redeemable convertible preferred stock warrant liability was reclassified to equity upon the exercise of the underlying warrants; as such, the redeemable convertible preferred stock warrant liability fair value was determined as of the date of exercise, on November 14, 2025 (see Note 10). The fair value of the warrants on the date of exercise is equal to the intrinsic value, as the expected term is reduced to zero. The intrinsic value 130 Table of Contents was determined based on the closing price of the Company’s Class A common stock on the date of exercise of $ 90.00 , less the exercise price of $ 2.59 . The significant assumptions used in preparing the option pricing model for valuing the redeemable convertible preferred stock warrant liability as of December 31, 2024 and 2023, respectively, are as follows: December 31, 2024 2023 Stock price $ 25.83 $ 17.45 Exercise price $ 2.59 $ 2.59 Volatility 84.0 % 60.0 % Expected term (years) 2.3 1.5 Risk-free rate 4.14 % 4.50 % Dividend yield - % - % The fair value of the convertible notes is measured based on the present value of the notes based on the fair market yield to maturity and an estimate of the probability of the notes’ conversion features. The fair market yield was estimated based on publicly traded debt securities with similar maturities and risk. During the year ended December 31, 2024, the Company settled the convertible notes through the issuance of Series C-1 redeemable convertible preferred stock to the noteholders (See Note 9). The significant assumptions used in preparing the discounted cash flow for valuing the convertible notes as of immediately prior to the conversion date of May 15, 2024, are as follows: May 15, 2024 Principal outstanding (in $’000s) 30,000 Expected term (years) - Risk-free rate 5.46 % Interest rate 8.00 % The following table presents a summary of the changes in the fair value of the Company’s Level 3 financial instruments (in thousands): Common Stock Warrants Redeemable Convertible Preferred Stock Warrants Convertible Notes Term Loan Balance at January 1, 2024 $ 1,653 $ 146 $ 47,686 $ - Additions - - - 50,000 Adjustment to fair value 880 84 835 1,481 Gain on extinguishment - - ( 8,635 ) - Settlements - - ( 39,886 ) - Balance at December 31, 2024 2,533 230 - 51,481 Adjustment to fair value - - - 5,745 Transfers from Level 3 to Level 2 ( 2,533 ) ( 230 ) - - Balance at December 31, 2025 $ - $ - $ - $ 57,226 For the years ended December 31, 2025, 2024 and 2023, the Company recognized losses related to the change in the fair value of the common stock warrant liability and redeemable convertible preferred stock warrant liability in other expense, net in the statements of operations and comprehensive income (loss). The common stock warrant liability is recorded within common stock warrant liability on the balance sheet as of December 31, 2025. The common stock warrant liability and redeemable convertible preferred stock warrant liability are recorded within other non-current liabilities on the balance sheets as of December 31, 2024. The term loan is recorded within long-term debt on the balance sheets as of December 31, 2025 and 2024. 131 Table of Contents For the years ended December 31, 2024 and 2023, the Company recognized losses related to the change in the fair value of convertible notes in change in fair value of convertible notes in the statements of operations and comprehensive income (loss). During the year ended December 31, 2024, the convertible notes were settled in Series C-1 Redeemable Convertible Preferred Stock, which was accounted for as a debt extinguishment as the settlement was not pursuant to the original conversion terms. The Company recorded a gain on extinguishment in net gain on extinguishment of debt in the statements of operations and comprehensive income (loss) upon the conversion date (See Note 9). For the year ended December 31, 2025, the Company recognized losses related to the change in the fair value of the term loan as follows: (i) the portion attributable to instrument-specific credit risk was recognized in other comprehensive loss, and (ii) the remaining portion was recognized in earnings within change in fair value of term loan in the statements of operations and comprehensive income (loss). Amounts recognized in other comprehensive loss are accumulated in accumulated other comprehensive loss and are not reclassified to earnings in subsequent periods. For the year ended December 31, 2024, the Company recognized losses related to the change in fair value of the term loan in change in fair value of term loan in the statements of operations and comprehensive income (loss). The Company recognizes transfers among Level 1, Level 2 and Level 3 classifications as of the actual date of the events or change in circumstances that caused the transfers. During the year ended December 31, 2025, the Company transferred its common stock warrant liability and redeemable convertible preferred stock warrant from Level 3 to Level 2 of the fair value hierarchy upon the completion of its IPO, as observable market data for the Company’s publicly traded Class A common stock became available for the valuation. As a result, unobservable inputs previously used in the valuation were observable. During the year ended December 31, 2024, the Company had no transfers of financial assets or liabilities between different levels of the fair value hierarchy. (4) Property and Equipment, Net Property and equipment, net consisted of the following (in thousands): December 31, 2025 2024 Machinery and equipment $ 29,151 $ 14,585 Equipment under finance leases 4,966 11,210 Furniture and fixtures 3,742 3,391 Computer hardware 2,421 1,770 Construction in progress 2,224 2,747 Leasehold improvements 495 290 Computer software 587 227 Automobiles 40 40 Property and equipment, gross 43,626 34,260 Less: Accumulated depreciation and amortization ( 23,265 ) ( 17,149 ) Property and equipment, net $ 20,361 $ 17,111 Depreciation and amortization expense for the years ended December 31, 2025, 2024 and 2023 was $ 6.9 million, $ 7.0 million and $ 5.9 million, respectively. Amounts included in construction in progress consist of purchases of lab equipment that have not yet been placed into service. Refer to Note 8 for additional details related to leased equipment. 132 Table of Contents (5) Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following (in thousands): December 31, 2025 2024 Accrued professional services $ 2,591 $ 898 Accrued inventory purchases 995 443 Accrued fixed asset purchases 1,006 798 Accrued property and other taxes 188 443 Accrued information technology purchases 462 250 Accrued legal expenses 968 191 Accrued phlebotomy expenses 200 171 Accrued insurance expenses - 159 Accrued rent 174 160 Accrued clinical expenses 35 98 Other 628 271 Accrued expenses and other current liabilities $ 7,247 $ 3,882 (6) Redeemable Convertible Preferred Stock Immediately prior to the closing of the Company's IPO, all of the 29,084,235 shares of the Company’s outstanding redeemable convertible preferred stock were automatically converted into 29,084,235 shares of common stock; in connection with the IPO, all shares of common stock underlying the redeemable convertible preferred stock were reclassified into an equivalent number of shares of the Company’s Class A common stock. Upon conversion, the redeemable convertible preferred stock was cancelled, retired, and eliminated from the shares of stock that the Company is authorized to issue and shall not be reissued by the Company. Accordingly, following the IPO and as of December 31, 2025, no shares of redeemable convertible preferred stock were outstanding. As of December 31, 2024, and immediately prior to the conversion into common stock upon completion of the IPO, redeemable convertible preferred stock consisted of the following (in thousands, except for share data): Shares Authorized Shares Issued and Outstanding Net Carrying Value Aggregate Liquidation Preference Series A-1 1,349,650 1,349,650 $ 3,493 $ 540 Series A-2 1,137,210 1,137,210 2,943 910 Series A-3 899,730 899,730 2,328 900 Series A-4 25,761 25,761 67 50 Series A-5 114,613 114,613 297 100 Series A-6 5,805,861 5,796,201 14,999 15,000 Series B-1 5,182,287 5,182,287 54,889 55,000 Series B-2 2,566,902 2,566,902 27,243 16,025 Series C 6,079,919 5,628,825 143,268 143,500 Series C-1 1,726,823 1,726,823 39,886 33,870 Series D 4,656,233 4,656,233 129,996 156,563 Total 29,544,989 29,084,235 $ 419,409 $ 422,458 The rights, preferences and privileges of the Company’s redeemable convertible preferred stock were as follows: (i) Dividends 133 Table of Contents The holders of shares of redeemable convertible preferred stock shall be entitled to receive dividends prior and in preference to any declaration of dividends on common stock. Dividends are payable only when and if declared by the Company’s Board of Directors and are not cumulative. After dividends paid on redeemable convertible preferred stock, any dividends or distribution should be distributed to the holders of common and redeemable convertible preferred stock on an as-converted basis. No dividends have been declared or paid through December 31, 2025. (ii) Liquidation Preference In the event of liquidation as approved by the Board of Directors, dissolution, or winding up of the Company, the holders of Series D shall be entitled to receive out of the proceeds or assets of this corporation available for distribution to its stockholders, prior and in preference to any distribution of proceeds to the holders of common stock, an amount per share equal the sum of 1.2 times the original issue price of $ 28.0204 , plus declared but unpaid dividends on such shares and (ii) the holders of each other series of redeemable convertible preferred stock shall be entitled to receive the assets of the Company available for distribution, prior and in preference to any distribution of proceeds to the holders of common stock, an amount per share equal to the sum of the applicable original issue price for such series of redeemable convertible preferred stock, plus declared but unpaid dividends on such share. If, upon occurrence of such event, the proceeds distributed among the holders of redeemable convertible preferred stock shall be insufficient to permit the payment to such holders of the full preferential amounts, then the entire proceeds available for distribution shall be distributed ratably among the holders of the redeemable convertible preferred stock in proportion to the full preferential amount. (iii) Conversion Each share of redeemable convertible preferred stock is convertible into common stock at any time after the issuance of the shares at the option of the holder (each share of Series A-1, Series A-2, Series A-3, Series A-4, Series A-5, Series A-6, Series B-1, Series B-2, Series C, Series C-1 and Series D is convertible to Common Stock). The conversion rate is determined by dividing the original issue price (as adjusted for any recapitalization) by the conversion price. The original issue prices of Series A-1, Series A-2, Series A-3, Series A-4, Series A-5, Series A-6, Series B-1, Series B-2, Series C, Series C-1 and Series D are $ 0.4001 , $ 0.8002 , $ 1.0003 , $ 1.9409 , $ 0.8725 , $ 2.5879 , $ 10.6130 , $ 6.2429 , $ 25.4937 , $ 19.6143 , and $ 28.0204 , respectively. The initial conversion price per share for each series of redeemable convertible preferred stock shall be the original issue price applicable to such series (1:1 conversion ratio), however that conversion price shall be subject to adjustment. There have been no adjustments to the conversion price since original issuance. Each share of redeemable convertible preferred stock shall automatically be converted into such shares of common stock at the conversion rate at the time in effect for such series redeemable convertible preferred stock at the closing of this corporation’s sale of its common stock in public offering, that results in at least $ 100,000,000 of gross proceeds; at this corporation’s initial listing of common stock on national securities exchange; in a Special Purpose Acquisition Company transaction, or the date or occurrence of an event specified by vote of redeemable convertible preferred stock (voting together as a single class and not as separate series, and on an as-converted basis). (iv) Voting Rights The holder of each share of redeemable convertible preferred stock shall have the right to one vote for each share of common stock into which such redeemable convertible preferred stock could then be converted. Thus, the holders of redeemable convertible preferred stock shall have the same voting rights as the holders of common stock. As long as at least 1,449,050 shares of Series A redeemable convertible preferred stock remain outstanding, the holders of such shares of Series A redeemable convertible preferred stock shall be entitled to elect two directors of the Company at any election of directors. As long as at least 1,225,790 shares of Series C redeemable convertible preferred stock remain outstanding, the holders of such shares of Series C redeemable convertible preferred stock shall be entitled to elect one director of the Company at any election of directors. As long as at least 1,164,058 shares of Series D redeemable convertible preferred stock remain outstanding, the holders of such shares of Series D redeemable convertible 134 Table of Contents preferred stock shall be entitled to elect one director of the Company at any election of directors. The holders of outstanding common stock shall be entitled to elect four directors of this Corporation at any election of directors. (v) Redemption The holders of redeemable convertible preferred stock have no voluntary rights to redeem shares. A liquidation, dissolution or winding up of the Company, a greater than 50 % change in control, or a sale of substantially all of its assets would constitute a redemption event. Although the redeemable convertible preferred stock is not mandatorily or currently redeemable, given the shares are redeemable upon an event outside the Company’s control, all shares of redeemable convertible preferred stock have been presented outside of permanent equity on the balance sheets. The carrying values of redeemable convertible preferred stock have not been accreted to their redemption values as redemption events are not probable to occur. (7) Commitments and Contingencies Legal Proceedings From time to time, the Company is party to certain claims in the ordinary course of business. The Company, in conjunction with its legal counsel, assesses the need to record a liability for litigation or contingencies. A liability is recorded when and if it is determined that such a liability for litigation or contingencies is both probable and the amount can be reasonably estimated. The Company believes that it is not presently a party to any litigation of which the outcome, if determined adversely, would individually or in the aggregate be expected to have a material and adverse effect on the business, operating results, cash flows, or financial position. Legal fees are expensed in the period in which they are incurred. Indemnification Agreements The Company has entered into indemnification agreements with its directors and officers against any liabilities that may arise by reason of their status or service as directors or officers, other than liabilities arising from willful misconduct of the individual. Additionally, in the ordinary course of business, the Company enters into agreements of varying scope and terms pursuant to which it agrees to indemnify customers, vendors, lessors, business partners, and other parties with respect to certain matters, including, but not limited to, losses arising out of the breach of such agreements, services to be provided by the Company, or from intellectual property infringement claims made by third parties. As of December 31, 2025 and 2024, no demands have been made upon the Company to provide indemnification under such agreements, and there are no claims that the Company is aware of that could have a material adverse effect on its financial position, results of operations, or cash flows. Accordingly, the Company has no liabilities recorded for these agreements as of December 31, 2025 and 2024. (8) Leases Operating Leases In February 2021, the Company entered into a lease agreement for office and laboratory space in Menlo Park, CA which will expire in February 2031. In December 2023, the Company entered into a lease agreement for office and laboratory space in Union City, CA, which will expire in June 2033. The Union City, CA lease contains a one -time tenant option to extend the lease term by a period of five years which the Company is not reasonably certain to exercise and which has been excluded from recognition in the Company’s right-of-use assets and lease liabilities. The Company records rent expense associated with operating lease liabilities in operating expenses in the statements of operations and comprehensive income (loss). In April 2024, the Company entered into a lease agreement for premises to be constructed in Austin, TX. The lease is expected to commence prior to September 30, 2027 at an initial rental rate of $ 12.3 million per year. The lease agreement includes annual rent increases of 3 % and is for a term of fifteen years and nine months. The agreement also includes a seven-year extension option that can be exercised by the Company. As part of the lease agreement, the Company remitted to the landlord $ 2.0 million in respect of a security deposit and $ 1.0 million in respect of the first month’s rent payment, which were recorded in other non-current assets on the balance sheets for the years ended December 31, 2025 and 2024. 135 Table of Contents The Company’s operating lease costs were $ 9.4 million, $ 9.4 million and $ 5.5 million during the years ended December 31, 2025, 2024 and 2023, respectively. The Company’s variable lease expense totaled $ 4.4 million, $ 4.4 million and $ 3.2 million for the years ended December 31, 2025, 2024 and 2023, respectively. The Company's short-term lease costs totaled $ 0.2 million during the year ended December 31, 2025 and were not material during the years ended December 31, 2024 and 2023. Other information related to the Company’s operating leases was as follows for the years ended December 31, 2025, 2024 and 2023 (in thousands): 2025 2024 2023 Cash paid for amounts included in the measurement of operating lease liabilities within operating cash flows $ 8,810 $ 8,516 $ 4,872 As of December 31, 2025 and 2024, the weighted average remaining operating lease term was 6.8 years and 7.8 years, respectively. As of December 31, 2025 and 2024, the weighted average discount rate used to estimate operating lease liabilities was 8.4 % and 8.4 %, respectively. As of December 31, 2025, future lease payments under operating leases were as follows (in thousands): Year ending December 31: 2026 $ 9,115 2027 9,430 2028 9,757 2029 10,094 2030 10,444 Thereafter 18,938 Total lease payments $ 67,778 Less: imputed interest ( 16,976 ) Present value of operating lease liabilities $ 50,802 Financing Leases As of December 31, 2025 and 2024, the weighted average remaining financing lease term was 1.7 years and 1.8 years, respectively. As of December 31, 2025 and 2024, the weighted average interest rate for the Company’s financing leases was 5.4 % and 6.5 %, respectively. As of December 31, 2025, future lease payments under financing leases were as follows (in thousands): Year ending December 31: 2026 $ 543 2027 362 Total lease payments $ 905 Less: interest expense ( 38 ) Present value of financing lease liabilities $ 867 136 Table of Contents Other information related to the Company’s financing leases were as follows for the years ended December 31 (in thousands): 2025 2024 2023 Amortization of right-of-use assets: $ 1,855 $ 3,436 $ 3,085 Operating cash flows from financing leases (interest paid): 104 243 361 Total finance lease cost $ 1,959 $ 3,679 $ 3,446 (9) Convertible Notes In September 2022, the Company entered into a Note Purchase Agreement for unsecured Convertible Promissory Notes (the “Notes”) to several note holders (the “Note Holders”) with a principal sum of $ 30.0 million together with interest thereon from the date of the Notes. The Notes accrue interest at a rate of 8.0 % per annum, simple interest. The Notes were scheduled to mature on September 20, 2024, and the Company may not make prepayments without written consent of the majority Note Holders. Due to the presence of certain embedded derivatives within the Notes, the Company elected to account for the Notes using the fair value option and changes in fair value related to the Notes are recorded in other expense, net in the Company’s statements of operations and comprehensive income (loss). Changes in fair value attributable to credit risk were immaterial to the financial statements through their conversion date. Inputs for fair value were determined by evaluating the probability of various conversion scenarios and applicable market interest rates. During May 2024, concurrent with the issuance of Series D redeemable convertible preferred stock, and pursuant to negotiation with the Note Holders, the Company and Note Holders agreed to settle the Notes through the issuance of Series C-1 redeemable convertible preferred stock to the Note Holders instead of Series D redeemable convertible preferred stock. The Notes converted into an aggregate of 1,726,823 shares of Series C-1 redeemable convertible preferred stock at a conversion price of approximately $ 19.6143 per share. The change in terms of the Notes was accounted for as a debt extinguishment as the settlement was not pursuant to the original conversion terms. Immediately prior to the extinguishment, the Company recorded a mark-to-market adjustment for the Notes resulting in a loss of $ 0.8 million which was recorded to change in fair value of convertible notes in the Company’s statements of operations and comprehensive income (loss). Upon extinguishment, the Company derecognized the Notes on the balance sheets at their fair value immediately prior to the extinguishment of $ 48.5 million. The difference of $ 8.6 million between the fair market value of the Series C-1 redeemable convertible preferred shares received by the Note Holders of $ 39.9 million and the fair value of the Notes immediately prior to the extinguishment was recorded as a gain on debt extinguishment in the Company’s statements of operations and comprehensive income (loss). The Notes were subordinated in right of payment to all indebtedness between the Company and Western Alliance Bank (“WAB”). The Note Holders agreed, that as long as any debt remains outstanding with WAB or WAB has obligations to make additional credit extensions to the Company, the Note Holders would not have received any payment other than a conversion of the Notes into equity securities, unless otherwise agreed by WAB in writing. The priority to WAB excluded payments in cash, including interest, but did not preclude conversion of the Notes and related interest in shares. As the Note was extinguished during 2024, no payments of cash were made to the Note Holders in principal or interest for the Notes. (10) Long-term Debt Oberland Note Purchase Agreement In August 2024, the Company entered into a note purchase agreement (as amended from time to time, the “2024 Notes”) with BWCB SA LLC, an entity affiliated with Oberland Capital Management, LLC (“Oberland Capital”), which provided the Company with up to four tranches of capital advances totaling up to $ 140.0 million. The advanced principal accrues interest at a rate of 8.0 % per annum. The first tranche of $ 50.0 million was advanced on August 5, 2024, with a Maturity Date on the seventh anniversary of the first purchase date (August 5, 2031). The first tranche requires interest-only payments through August 5, 2031, revenue participation payments, and a lump sum payment due on August 5, 2031 consisting of outstanding principal plus an amount that results in a 10 % internal rate of return over the seven year term of the loan. 137 Table of Contents The second tranche of up to $ 35.0 million in principal was available at the Company’s option at any time prior to September 30, 2025 provided that the trailing six-month worldwide net revenue of the Company was at least $ 80.0 million. The Company did not elect the option to draw on the second tranche. The Company is required to sell the third tranche of notes in the principal amount of $ 30.0 million prior to March 31, 2026 as the Company has achieved the thresholds triggering this tranche during the year ended December 31, 2025. The thresholds triggering this tranche are trailing six-month revenue of at least $ 112.5 million and a trailing six-month Gross Margin of at least 45 %. Gross Margin is defined as (i) net revenue minus cost of goods sold divided by (ii) net revenue, expressed as a percentage. The terms of the third tranche are identical to those of the first $ 50.0 million tranche. The fourth tranche of up to $ 25.0 million in principal is available at the mutual agreement of the Company and Oberland Capital at any time prior to March 31, 2026. The Company has the option at any time to prepay all of the then-outstanding notes, and Oberland Capital has the option to redeem the notes upon (i) a change in control of the Company, (ii) an event of default, or (iii) the maturity date. The redemption price of the note shall equal to the following: (1) 130 % of principal amounts of notes if the payment is made within 24 months of issuance; (2) 145 % of principal amounts of notes if the payment is made within 36 months of issuance; (3) if the payment is made within 48 months, an amount that would generate an internal rate of return (“IRR”) for the purchasers of 12.25 %; (4) if the payment is made within 60 months of issuance, an amount that would generate an IRR for the purchasers of 11.75 %; (5) if the payment is made thereafter but before maturity, an amount that would generate an IRR for the purchasers of 11.25 %; and (6) if the payment is made at maturity, an amount that would generate an IRR for the purchasers of 10.0 %. Under the terms of the 2024 Notes, on the last day of each fiscal quarter commencing with the fiscal quarter ended March 31, 2025, excluding any fiscal quarter with respect to which the Company’s aggregate cash and cash equivalents is greater than 1.1 times the aggregate principal amount of the 2024 Notes issued (the “Liquidity Condition”) at all times during such fiscal quarter, the Company is required to achieve minimum thresholds for both trailing six month revenues and trailing six month gross margin. If the Liquidity Condition is not satisfied, the Company is required to have trailing six-month Net Revenue of not less than the amount shown for each applicable period in the table below, as well as a trailing six-month Gross Margin of not less than 30 %, each as defined in the 2024 Notes. The Company was in compliance with all material financial covenants as of December 31, 2025. Period Minimum Trailing Six-Month Net Revenue Threshold (in millions) Q1 2025 $ 56.1 Q2 2025 $ 65.6 Q3 2025 $ 74.8 Q4 2025 $ 82.8 Q1 2026 $ 87.2 Q2 2026 $ 101.8 Q3 2026 $ 117.2 Q4 2026 $ 120.0 Thereafter $ 120.0 The agreement also contains a revenue participation provision, under which, for any fiscal quarter, 0.01 % of net revenue for such fiscal quarter (up to $ 100.0 million of net revenue for each fiscal year) per each $ 1.0 million principal amount of the notes outstanding will be payable to Oberland Capital. Amounts paid under the revenue participation agreement during the years ended December 31, 2025 and 2024 were interest payments on the debt. The revenue participation payments are additional financing costs of the loan and are included in the computation of the IRR measurements described above. Beginning with the fiscal year beginning January 1, 2025, the Company was required to make revenue participation payments under the agreement. As of December 31, 2025, the Company has made revenue participation payments of $ 0.5 million. The Company elected to account for the 2024 Notes using the fair value option and changes in fair value related to the 2024 Notes are recorded in change in fair value of term loan on the Company’s statements of 138 Table of Contents operations and comprehensive income (loss). Changes in fair value caused by instrument-specific credit risk are presented separately in other comprehensive income (loss). The Company also elected to present interest incurred on the 2024 Notes in the change in fair value of term loan; interest expense under the Oberland Capital arrangement was $ 4.1 million and $ 1.6 million for the years ended December 31, 2025 and 2024, respectively. The Company’s total indebtedness as of December 31, 2025 and 2024 is as follows (in thousands): December 31, 2025 2024 Long-term debt $ 57,226 $ 51,481 Long-term debt, net 57,226 51,481 Less: current portion - - Long-term debt, noncurrent portion $ 57,226 $ 51,481 Future principal payments of the Company’s long-term debt as of December 31, 2025 and 2024 are $ 50.0 million and are due during the year ending December 31, 2031. The term loan advances are secured by a lien on the Company’s assets. Redeemable Convertible Preferred Stock Warrants The Company has issued Comerica Bank a warrant to purchase 9,660 Series A-6 redeemable convertible preferred shares at an exercise price of $ 2.59 per share in connection with a former loan and security agreement entered into in March 2020. The warrants are exercisable until March 15, 2030. The warrants are classified as other non-current liabilities on the Company’s balance sheet as of December 31, 2024. In connection with the IPO, the redeemable convertible preferred stock warrants became warrants to purchase common stock based on the terms of the loan and security agreement. In November 2025, the warrants were exercised, resulting in the issuance of 9,660 shares of Class A common stock. Western Alliance Bank Debt In October 2021, the Company entered into a loan and security agreement (the “2021 LSA”) with WAB, which provided the Company with three tranches of capital advances totaling $ 15.0 million. The loan was collateralized by all property of the Company other than its Intellectual Property (“IP”). The advanced principal accrued interest based on the floating prime rate per annum. The first tranche of $ 5.0 million was advanced on October 12, 2021 and the second tranche was advanced on December 17, 2021, both with a maturity date of October 12, 2025 and interest-only payments, at the floating rate, through May 1, 2023 and 30 equal monthly payments thereafter, of principal and interest. The Company drew down the third tranche on January 3, 2022 and elected to extend the interest only period by an additional 6 months followed by 24 months of amortization. The loans include a final payment of 3.75 % of the advanced amount, or $ 562,500 , due upon the earlier of maturity or termination of the loan. The final payment was accreted to interest expense over the term of the loan. The term loan advances are secured by a lien on the Company’s assets. In July 2022, the Company amended the 2021 LSA with WAB, such that WAB made four tranches of capital advances available to the Company for an aggregate amount up to $ 35.0 million (“2022 LSA Amendment”). Under the 2022 LSA Amendment, the first tranche of $ 20.0 million in principal was advanced on July 22, 2022 and was used to pay off the existing $ 15.0 million in principal outstanding to WAB under the 2021 LSA, resulting in net proceeds to the Company of $ 5.0 million. The second tranche of $ 5.0 million in principal was advanced on January 25, 2023 and the third tranche of $ 5.0 million in principal was advanced on July 7, 2023. The fourth tranche of $ 5.0 million was advanced on October 11, 2023. The term loans had a maturity date of July 1, 2027. The term loans were interest-only through July 31, 2025, followed by 24 equal payments of principal plus interest. The loans required a final payment of 4.25 % of the total advanced amount, which resulted in an exit fee liability of $ 1.5 million payable at the maturity of the debt. The final payment was accreted to the debt balance and recognized as interest expense over the term of the loan. The term loan advances were secured by a lien on the Company’s assets. The Company was subject to certain financial and reporting covenants, including a requirement for the Company to meet certain test volumes, measured quarterly on a trailing two quarter basis. 139 Table of Contents During August 2024, the Company elected to prepay the outstanding amount of the term loans of $ 35.0 million in principal and the $ 1.5 million exit fee that was due upon early loan payoff. The Company recognized a loss on the extinguishment of debt of $ 1.3 million in the statements of operations and comprehensive income (loss). The loss on extinguishment consisted of incremental expense of $ 0.8 million unaccreted exit fee liability, $ 0.3 million unamortized debt issuance costs and a $ 0.2 million prepayment fee assessed by the bank. Common Stock Warrants In connection with the 2021 LSA, the Company issued to WAB warrants to purchase shares of the Company’s common stock at an exercise price of $ 2.80 per share. The number of underlying shares of the warrants was initially 53,571 and was increased to 80,357 upon the funding of the loans in January 2022. The warrants will expire if unexercised on October 12, 2031. Upon the occurrence of an acquisition of the Company, if the acquiror shall not have assumed the warrants, WAB shall have the right to put the warrants back to the Company for cash equal to the greater of (x) $ 450,000 or (y) the value of the aggregate consideration payable to WAB had WAB exercised the warrants immediately prior to exercise such put right. In connection with the 2022 LSA Amendment, the Company issued up to 41,209 warrants for common stock at an exercise price of $ 10.92 per share to WAB. 30,907 warrants were exercisable upon execution of the agreement; the remaining warrants became exercisable as the Company made additional draws on the 2022 LSA Amendment. As of December 31, 2023, all of the warrants were exercisable. The warrants will expire if unexercised on July 22, 2032. Upon the occurrence of an acquisition of the Company, if the acquiror shall not have assumed the warrants, WAB shall have the right to put the warrants back to the Company for cash equal to the greater of (x) $ 450,000 or (y) the value of the aggregate consideration payable to WAB had WAB exercised the warrants immediately prior to exercise such put right. All the warrants issued to WAB are puttable warrants and thus are liability classified. The warrants were initially recognized at fair value, with any subsequent changes in fair value to be recorded in other expense, net in the statements of operations and comprehensive income (loss) (See Note 3). The issuance date fair value of the warrants was determined using the option pricing model, with the following assumptions (in thousands, except percentages): 2021 LSA 2022 LSA Amendment Grant date October 12, 2021 July 22, 2022 Dividend yield 0 % 0 % Risk-free interest rate 1.59 % 2.77 % Expected volatility 70 % 78 % Expected term (in years) 10.00 10.00 Total grant date fair value $ 170 $ 312 The fair value of the warrants as of their respective issuance dates were recorded as a debt discount that is being amortized to interest expense over the term of the loan. In connection with the Company’s IPO, WAB entered into a lock-up agreement with the Company, pursuant to which WAB may not sell, transfer, or otherwise dispose of the underlying shares of Class A common stock for a period of 180 days following the date that the Company files its final prospectus. (11) Common Stock In connection with the closing of its IPO, on November 7, 2025, the Company’s amended and restated Certificate of Incorporation was amended and as of December 31, 2025 the Company was authorized to issue 800,000,000 shares of Class A common stock, par value $ 0.00001 per share, and 10,000,000 shares of Class B common stock, par value $ 0.00001 per share. Total common stock outstanding as of December 31, 2025 was 41,252,105 shares of Class A common stock and 4,552,650 shares of Class B common stock. There were no shares of Class A common stock and no shares of Class B common stock authorized or outstanding as of December 31, 2024. The holders of Class A common stock are entitled to vote on all corporate matters at a ratio of one vote per share together with the holders of Class B common stock. The holders of Class B common stock are entitled to 140 Table of Contents vote on all corporate matters at a ratio of 15 votes per share together with the holders of Class A common stock. The holders of Class A common stock and Class B common stock are also entitled to receive dividends whenever funds are legally available and when and if declared by the Board of Directors, subject to the prior rights of holders of all series of stock outstanding. As of December 31, 2025, no dividends had been declared or paid. All of the outstanding shares of the Company’s Class B common stock will convert automatically on a one -to-one basis into shares of the Company’s Class A common stock upon the earliest of (i) 7 years from the date of filing the Post-IPO Certificate of Incorporation, and (ii) the date specified by a vote of the holders of Class B common stock representing a majority of the outstanding shares of Class B common stock. In addition, each share of Class B common stock held by a Co-Founder and such Co-Founder's permitted transferees will automatically convert into one share of Class A common stock upon the earlier of (i) the date that is between 90 days and 270 days, as determined by the Board of Directors, after the death or incapacitation of such Co-Founder or (ii) the date that is between 61 and 180 days, as determined by the Board of Directors, after the date on which such Co-Founder is no longer serving as an officer or director of the Company. The Company is required to reserve and keep available out of its authorized but unissued shares of Class A common stock such a number of shares sufficient to affect the conversion of all outstanding shares of common stock warrants, all outstanding shares of Class B common stock, options granted under the Company’s 2018 Stock Plan and 2025 Equity Incentive Plan, shares available for grant under the Company’s 2025 Equity Incentive Plan, restricted stock units outstanding and shares available for issuance under the Employee Stock Purchase Plan. The amount of such shares of the Company’s Class A common stock reserved for these purposes at December 31, 2025, is as follows: Common stock warrants 121,566 Outstanding shares of Class B common stock 4,552,650 Options to purchase common stock 9,552,013 Restricted stock units outstanding 33,332 Shares available for future issuance under the Employee Stock Purchase Plan 548,880 Shares available for future grants 3,356,974 Total Class A common stock reserved 18,165,415 Stock Plans In December 2018, the Company adopted the 2018 Stock Plan (the “2018 Plan”). The 2018 Plan authorizes the granting of stock options upon the approval of the Company’s Board of Directors to employees and consultants providing services to the Company. Stock options granted under the 2018 Plan generally expire within 10 years from the date of grant and are generally issued at the fair value of the underlying shares of common stock on the date of grant as determined by the Company’s Board of Directors. The shares subject to each option typically allow for 25 % of the shares to vest and become exercisable on the first anniversary of the vesting commencement date and thereafter, the remaining 75 % will vest and become exercisable in 36 equal monthly installments. The Company may include other vesting terms from time to time. Incentive and non-statutory stock options may be granted with exercise prices not less than 100 % of the estimated fair value of the common stock on the date of grant. In connection with the IPO, the Company adopted the 2025 Equity Incentive Plan (the “2025 Plan”), which became effective in October 2025, although no awards could be granted under the 2025 Plan until the IPO date. The 2018 Plan was terminated upon the completion of the IPO, however awards outstanding under the 2018 Plan will remain outstanding and will continue to be governed by their existing terms. On the effective date of the 2025 Plan, the maximum number of shares of Class A common stock authorized for issuance was 3,297,972 shares of Class A common stock, plus up to 10,034,626 shares under the 2018 Plan that (i) remain available for issuance on the IPO date and (ii) that are outstanding on the IPO date and that are subsequently forfeited, expire, are reacquired by the Company or lapse unexercised, subject to annual adjustment on the first day of each fiscal year through January 1, 2035. The 2025 Plan authorizes the granting of stock options upon the approval of the Company’s Board of Directors to employees and consultants providing services to the Company. Stock options granted under the 2025 Plan generally expire within 10 years from the date of grant 141 Table of Contents and are issued at the fair value of the underlying shares of common stock on the date of grant as determined by the Company’s Board of Directors. The shares subject to each option typically allow for 25 % of the shares to vest and become exercisable on the first anniversary of the vesting commencement date and thereafter, the remaining 75 % will vest and become exercisable in 36 equal monthly installments. The Company may include other vesting terms from time to time. Incentive and non-statutory stock options may be granted with exercise prices not less than 100 % of the fair value of the Class A common stock on the date of grant, as determined by the Board of Directors. As of December 31, 2025, the Company had authorized up to 3,390,306 shares of Class A common stock reserved for issuance under the 2025 Plan. In further connection with the IPO, the Company adopted the 2025 Employee Stock Purchase Plan (the “2025 ESPP”), which became effective in October 2025. As of December 31, 2025, the number of shares of Class A common stock available for issuance under the 2025 ESPP is 548,880 shares of Class A common stock, subject to annual adjustment on the first day of each fiscal year through January 1, 2035. No more than 8,400,000 shares of Class A common stock may be issued under the 2025 ESPP. Each participant may purchase up to the number of shares determined by the Board of Directors on any purchase date, not to exceed 7,500 shares. The price of each share of Class A common stock purchased under the 2025 ESPP will not be less than 85 % of the lower of the fair market value per share of Class A common stock on the first day of the applicable offering period or the fair market value per share of Class A common stock on the purchase date. Stock-based Compensation The Company recognizes stock-based compensation expense for all stock-based payment awards based on the estimated fair value on the date of the grant. The Company recognizes the compensation cost on a straight-line basis over the requisite service period of the award. The fair value of stock options granted is estimated using the Black-Scholes Model utilizing the assumptions noted below: • Fair value of common stock. Prior to the completion of the IPO, there was no public market for the Company's common stock. Accordingly, the fair value of the Company's common stock was determined by the Board of Directors. The Board of Directors considered numerous objective and subjective factors to determine the fair value of the Company’s common stock options at each meeting in which awards are approved. The factors considered included, but were not limited to: (i) the results of contemporaneous independent third party valuations of the Company’s common stock; (ii) the prices, rights, preferences and privileges of the Company’s redeemable convertible preferred stock relative to those of its common stock; (iii) the lack of marketability of the Company’s common stock; (iv) actual operating and financial results; (v) current business conditions and projections; and (vi) the likelihood of achieving a liquidity event, such as an initial public offering or sale of the Company, given prevailing market conditions. For awards granted subsequent to the IPO, fair value of the Company's common stock is based on the quoted market price on the grant date. • Expected volatility . Expected volatility is a measure of the amount by which the stock price is expected to fluctuate. Since the Company does not have sufficient trading history of its common stock, it estimates the expected volatility of its stock options at their grant date by taking the weighted average historical volatility of a group of comparable publicly traded companies over a period equal to the expected life of the options. • Expected term . Expected term represents the period over which the Company anticipates stock-based awards to be outstanding. The Company uses the simplified method to calculate the expected term estimate based on the options’ vesting term and contractual terms. Under the simplified method, the expected life is equal to the average of the stock-based award’s weighted average vesting period and its contractual term. • Risk-free interest rate . The Company uses the average of the published interest rates of U.S. Treasury zero-coupon issues with terms consistent with the expected term of the awards for its risk-free interest rate. • Expected dividends . The Company historically has not paid dividends on common stock and has no plans to issue dividends in the foreseeable future. 142 Table of Contents The weighted average assumptions used to calculate the fair value of option grants issued under the 2025 Plan and 2018 Plan during the years ended December 31, 2025, 2024 and 2023, respectively, were as follows: 2025 2024 2023 Fair value of common stock $ 29.54 $ 16.47 $ 11.07 Dividend yield - % - % - % Risk-free interest rate 4.1 % 4.1 % 4.0 % Expected volatility 73 % 68 % 74 % Expected term (in years) 6.21 6.01 5.99 A summary of the Company’s stock option activity and related information is as follows: Number of Options Outstanding Weighted Average Exercise Price Per Share Weighted- Average Remaining Contractual Life (in years) Aggregate Intrinsic Value (in thousands) Outstanding as of January 1, 2025 6,849,412 $ 7.28 7.5 $ 73,992 Granted 3,640,368 22.85 Exercised ( 551,145 ) 5.58 Forfeited or expired ( 386,622 ) 15.84 Outstanding as of December 31, 2025 9,552,013 $ 12.96 7.6 $ 657,915 Vested and exercisable as of December 31, 2025 4,977,698 $ 6.43 6.2 $ 375,351 Vested and expected to vest as of December 31, 2025 9,552,013 $ 12.96 7.6 $ 657,915 The intrinsic value is calculated as the difference between the exercise price of the underlying stock option award and the estimated fair value of the Company’s common stock. The total intrinsic values of options exercised during the years ended December 31, 2025, 2024 and 2023 were $ 20.0 million, $ 4.7 million and $ 1.2 million, respectively. During the year ended December 31, 2025, the weighted average grant-date fair value of options granted was $ 21.37 per share, and the fair value of options vested during the period was $ 13.8 million. During the year ended December 31, 2024, the weighted average grant-date fair value of options granted was $ 10.89 per share, and the fair value of options vested during the period was $ 7.2 million. During the year ended December 31, 2023, the weighted average grant-date fair value of options granted was $ 7.75 per share, and the fair value of options vested during the period was $ 4.4 million. The grant-date fair value is being expensed over the vesting period of the options, on a straight-line basis, as the services are being provided. As of December 31, 2025 there was approximately $ 79.9 million of total unrecognized compensation cost related to unvested options, which is expected to be recognized over the weighted average period of 4.0 years. Also, in June 2025, the Board of Directors granted stock options of 1,003,102 shares to the Company’s CEO and Co-Founder and 501,551 shares to the Chief Technology Officer and Co-Founder at an exercise price of $ 20.04 per share. The vesting commencement date of the stock options is June 11, 2025 and the stock options vest monthly over six years . Restricted Stock Unit Activity A summary of the Company’s restricted stock unit activity and related information is as follows: 143 Table of Contents Shares Weighted- Average Grant Date Fair Value (per share) Nonvested as of January 1, 2025 - $ - Issued 33,332 108.94 Vested - - Forfeited - - Nonvested as of December 31, 2025 33,332 $ 108.94 As of December 31, 2025, there was approximately $ 3.4 million of total unrecognized compensation cost related to outstanding restricted stock units, which is expected to be recognized over the weighted average period of 2.8 years. There was no restricted stock award activity during the year ended December 31, 2024. Stock-Based Compensation Expense The table below shows stock-based compensation expense included in the statements of operations and comprehensive income (loss) for the years ended December 31, 2025, 2024, and 2023 (in thousands): 2025 2024 2023 Cost of revenue $ 1,789 $ 1,183 $ 683 Research and development 3,951 2,341 1,450 Selling, general and administrative 10,175 4,838 2,721 Total stock-based compensation $ 15,915 $ 8,362 $ 4,854 Options Subject to Early Exercise Subject to Board of Directors approval at the grant date per the 2018 Plan and the 2025 Plan, if an option includes an “early exercise” feature, then such option shall be exercisable at any time but any unvested option shares shall be subject to the Company’s repurchase right. Under the repurchase right, the Company may buy back any unvested shares at their original exercise price in the event of an employee’s termination prior to full vesting. If an option does not permit early exercise, then such option shall not be exercisable with respect to unvested shares. The consideration received for an exercise of an unvested option is considered to be a deposit of the exercise price and the related dollar amount is recorded as a liability. The liabilities are reclassified into equity as the awards vest. As of December 31, 2025 and 2024, the liability was $ 0.2 million and not material, respectively, and included in accrued expenses and other current liabilities on the accompanying balance sheets related to 4,950 and 521 shares of early-exercised common stock options, respectively. Early exercised stock options are legally issued and outstanding and are included in issued and outstanding common shares. Secondary Sales of Common Stock During June 2024, investors of the Company acquired 52,750 shares of common stock at a price per share equal to $ 22.42 per share from employee stockholders. During July 2024, investors of the Company acquired an additional 22,302 shares of common stock at a price per share equal to $ 22.42 per share from a stockholder who was a former employee of the Company. As a result, the Company recorded a total of $ 0.4 million for the year ended December 31, 2024 in stock-based compensation expense for the difference between the price paid by these investors and the estimated fair value of the acquired common stock from stockholders on the date of the transactions. For the year ended December 31, 2025, the Company did not acquire any shares of common stock, as such no additional stock-based compensation expense was recorded in the period. Repurchase of Common Stock In February 2024, the Company’s Board of Directors agreed to repurchase a total of 26,750 shares of common stock that were held by the Company's former CFO. The repurchase price paid by the Company was $ 20.3950 per share, resulting in a total repurchase cost of $ 0.5 million. As the repurchase price paid by the Company to 144 Table of Contents the former employee represented an excess over the common stock’s estimated fair market value at the time, the Company accounted for this premium as stock-based compensation expense of $ 0.2 million. For the year ended December 31, 2025, the Company did not repurchase any shares of common stock in a similar transaction, as such no additional stock-based compensation expense was recorded in the period. Option Exercises Under Promissory Notes In January 2019, the Company granted and approved the purchase of 700,000 restricted stock awards in aggregate at a price of $ 0.06 per share to two executives, and in exchange, the executives entered into full recourse promissory notes (the “Recourse Notes”) for the amount of the exercise price of the restricted shares. The loans are due seven years from the loan date, except in the case of termination, public filing event, or disposition of common stock acquired via these notes in which case the loan becomes due sooner. The Notes carry interest rates of 2.89 %, compounded annually. The balance of the Recourse Notes may be prepaid in whole or in part, at any time without penalty. Each loan is secured by the shares exercised by the loans, in addition to any and all other assets of the borrower. The terms of the loan require the loans to be repaid prior to termination or public offering. In October 2025, the executives fully repaid the promissory notes, resulting in net proceeds to the Company of $ 51,000 . In June 2021, the Company granted and approved the purchase of option awards at a price of $ 2.80 per share to an executive, and in exchange, the executive entered into a full recourse promissory note for the amount of the exercise price of the restricted shares. The loan is due five years from the loan date, except in the case of termination, public filing event, or disposition of common stock acquired via these notes in which case the loan becomes due sooner. The Recourse Note bears interest of 1.00 % per annum, compounded annually. The balance of the Note may be prepaid in whole or in part, at any time without penalty. Each loan is secured by the shares exercised by the loans, in addition to any and all other assets of the borrower. In November 2022, the executive partially repaid the promissory note, resulting in net proceeds to the Company of $ 62,000 . In June 2023, the executive fully repaid the promissory note, resulting in net proceeds to the Company of $ 51,000 . The Recourse Notes issued were collateralized by the shares issued in exchange for the notes and were nonrecourse for accounting purposes, as the Company did not intend nor has a history of demanding repayment of loan amounts in excess of the fair value of the shares. As such, for accounting purposes the exercised awards continue to be treated as unexercised awards and are not reflected as outstanding in the financial statements until the notes are repaid and the underlying awards have vested. Incremental stock-based compensation expense was not material. (12) Income Taxes The components of the provision for income taxes for the years ended December 31, 2025, 2024 and 2023 are as follows (in thousands): 2025 2024 2023 Current: Federal $ 92 $ - $ - State 213 29 9 305 29 9 Deferred: Federal - - - State - - - - - - Total provision for income taxes $ 305 $ 29 $ 9 Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant 145 Table of Contents components of the Company’s deferred tax assets as of December 31, 2025 and 2024 are as follows (in thousands): 2025 2024 Deferred tax assets: Net operating loss carryforwards $ 34,636 $ 36,725 Capitalized R&D expenditure 6,059 11,477 Accruals and reserves 3,061 2,322 R&D credits 4,817 3,768 Lease liability 12,108 13,126 Stock-based compensation 1,397 859 Other - 21 Total deferred tax asset 62,078 68,298 Deferred tax liabilities: Depreciation and amortization ( 2,207 ) ( 320 ) Right of use asset ( 11,140 ) ( 12,304 ) Total deferred tax liabilities ( 13,347 ) ( 12,624 ) Less: valuation allowance ( 48,731 ) ( 55,674 ) Net deferred tax assets $ - $ - The changes in the valuation allowance for the years ended December 31, 2025, 2024 and 2023 are as follows (in thousands): 2025 2024 2023 Valuation allowance - beginning of period $ 55,674 $ 45,555 $ 29,436 Additions/(reductions) recognized in income tax provision ( 6,943 ) 10,119 16,119 Valuation allowance - end of period $ 48,731 $ 55,674 $ 45,555 The following table presents a reconciliation of the income tax expense computed at the statutory federal rate and the Company’s income tax expense for the year ended December 31, 2025 (in thousands, except percentages): 2025 Tax at the federal statutory rate $ 1,630 21 % Domestic federal Nontaxable or nondeductible items Meals 963 12 % Stock-based compensation 2,582 33 % Change in fair value of term loan 2,376 31 % Other 147 2 % Research and development credits ( 1,689 ) ( 22 ) % Changes in tax laws or rates enacted in the current period - - % Change in valuation allowance ( 6,464 ) ( 83 ) % Foreign tax effects - - % State and local income taxes, net of federal benefits 169 2 % Change in unrecognized tax benefit 591 8 % Total provision for income taxes $ 305 4 % 146 Table of Contents The following table presents a reconciliation of the income tax expense computed at the statutory federal rate and the Company’s income tax expense for the years ended December 31, 2024 and 2023 (in thousands): 2024 2023 Tax at the federal statutory rate $ ( 8,725 ) $ ( 17,250 ) Other nondeductible items 792 550 Stock-based compensation 1,359 832 Research and development credits ( 994 ) ( 796 ) Change in valuation allowance 10,119 16,058 State taxes, net of federal benefits ( 1,443 ) ( 2,113 ) Debt extinguishment gain or loss ( 1,814 ) - Change in fair value of term loan 689 2,749 Other 46 ( 21 ) Total provision for income taxes $ 29 $ 9 The Company’s actual tax expense differed from the statutory federal income tax expense using a tax rate of 21% for the years ended December 31, 2025 and 2024, primarily due to nondeductible expenses, research and development tax credits, change in fair value of term loan, the change in valuation allowance, and state income taxes. For the tax year ended December 31, 2025, the States of Minnesota, Idaho and Georgia made up the majority of the domestic state income taxes, net of federal tax effect. As of December 31, 2025 and 2024, the Company had a net operating loss carryforwards of $ 147.0 million and $ 154.9 million for federal purposes, and $ 67.9 million and $ 78.6 million for state and city purposes, respectively. If not utilized, these carryforwards will begin to expire in 2026 for state and city purposes. The federal carryforwards do not expire. Federal net operating losses incurred in 2018 and in future years may be carried forward indefinitely, but the deductibility of such federal net operating losses is limited. Some but not all states conform to the federal treatment of net operating losses. As of December 31, 2025 and 2024, the Company had research and development tax credit carryforwards for federal tax purposes of $ 5.5 million and state research and development tax credit carryforwards of $ 2.8 million. As of December 31, 2024, the Company had research and development tax credit carryforwards for federal tax purposes of $ 4.1 million and state research and development tax credit carryforwards of $ 2.1 million. The federal research and development tax credit carryforwards will expire at various dates beginning in the year 2041. The Company’s state research and development tax credit carryforwards do not expire. Utilization of the net operating loss (“NOL”) carryforwards and credits may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitation may result in the expiration of NOL carryforwards and credits before utilization. Current laws impose substantial restrictions on the utilization of NOL carryforwards and credits in the event of an “ownership change” within a three-year period as defined by the Internal Revenue Code Section 382 (“Section 382”). If there should be an ownership change, the Company’s ability to utilize its NOL carryforwards and credits could be limited. The Company experienced an ownership change on March 31, 2019, which limited its ability to utilize its NOL carryforwards generated prior to that date. The Company experienced another ownership change on November 5, 2025, which did not limit its ability to utilize its NOL carryforwards in the current year. Based on the available objective evidence, management believes it is more likely than not that the net deferred tax assets of the Company will not be fully realizable for the years ended December 31, 2025 and 2024. Accordingly, the Company has established a full valuation allowance against its net deferred tax assets due to the uncertainty surrounding the realization of such assets. The valuation allowance decreased by approximately $ 6.9 million and increased by approximately $ 10.1 million during the years ended December 31, 2025 and 2024, respectively. Below are the Company's income taxes paid (net of tax refund) during the year ended December 31, 2025 (in thousands): 147 Table of Contents 2025 US Federal $ 240 US State and Local Illinois 80 Minnesota 34 Other 133 Total US State and Local 247 Total taxes paid $ 487 The Company records unrecognized tax benefits, where appropriate, for all uncertain income tax positions. The Company recorded unrecognized tax benefits for uncertain tax positions of $ 3.2 million and $ 2.2 million as of December 31, 2025 and 2024, respectively, none of which would impact the effective tax rate if recognized, because the benefit would be offset by an increase in the valuation allowance. A reconciliation of the beginning and ending balance of total unrecognized tax benefits is as follows (in thousands): 2025 2024 Unrecognized tax benefits - beginning of period $ 2,184 $ 1,410 Increases related to current year’s tax positions 984 774 Unrecognized tax benefits - end of period $ 3,168 $ 2,184 The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. During the year ended December 31, 2025 and 2024, the Company recognized no interest and penalties associated with unrecognized tax benefits. Due to the net operating loss carryforwards, all years remain open for income tax examination by tax authorities in the United States, various states and foreign tax jurisdictions in which the Company files tax returns. On July 4, 2025, the One Big Beautiful Bill Act (“2025 Tax Act”) was enacted in the United States. This legislation includes multiple changes, such as restoration of immediate expensing of domestic research and development expenditures under Section 174, reduction of GILTI and FDII deductions under Section 250, and reinstatement of 100% bonus depreciation for qualified property acquired after January 19, 2025, to name a few. The Company elected to immediately expense current year domestic research and development expenditures and to expense prior year’s capitalized domestic research and development expenditures ratably over two years. Additionally, the Company claimed 100% bonus depreciation for qualified property acquired after January 19, 2025. (13) Employee Benefit Plan The Company sponsors a qualified 401(k) defined contribution plan covering eligible employees. Participants may contribute a portion of their annual compensation limited to a maximum annual amount set by the Internal Revenue Service. Employer contributions to the plan are discretionary. During the year ended December 31, 2025, 2024 and 2023, the Company contributed $ 3.5 million, $ 2.4 million, and $ 1.7 million to this plan, respectively. (14) Related Party Transactions In February 2024, the Company repurchased 26,750 shares of common stock that were held by the former CFO. See Note 11 for additional information on this transaction. In June 2025, the Company granted stock options to certain founders and executive officers under the Company’s 2018 Plan. These grants were approved by the Board of Directors. See Note 11 for additional information on this transaction. There were no other material related party transactions during the years ended December 31, 2025 and 2024. 148 Table of Contents (15) Net Income (Loss) Per Share Attributable to Shareholders The Company applies the two-class method when computing net income (loss) per share attributable to common shareholders when shares meet the definition of participating securities. The two-class method determines net income (loss) per share of common stock and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires net income (loss) available to common stockholders for the period to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. The holders of the Company’s redeemable convertible preferred stock would be entitled to dividends in preference to common stockholders, if declared. Such dividends are not cumulative. Any remaining earnings would be distributed among the holders of redeemable convertible preferred stock and common stock pro rata on an as-converted basis. The holders of the Company’s redeemable convertible preferred stock are not contractually obligated to participate in the Company’s losses. Basic net income (loss) per share is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, less shares subject to repurchase. The dilutive effect of potentially dilutive common shares is reflected in diluted earnings per share by application of the if-converted method for the Company’s outstanding preferred stock, the treasury stock method for the Company’s other potentially dilutive securities, and is ultimately applied by sequencing instruments beginning with those that are more dilutive. For periods in which the Company reports net losses, diluted net income (loss) per common share is the same as basic net income (loss) per common share as all potentially dilutive securities are anti-dilutive. The following table sets forth the computation of basic and dilutive net income (loss) per share attributable to common stockholders for the years ended December 31, 2025, 2024 and 2023 (in thousands, except per share amounts): 2025 2024 2023 Basic net income (loss) per share: Numerator: Net income (loss) $ 7,454 $ ( 41,570 ) $ ( 82,683 ) Less: Net income attributable to participating securities ( 4,535 ) — — Net income (loss) attributable to common stockholders 2,919 ( 41,570 ) ( 82,683 ) Denominator: Weighted-average shares used in calculating net income (loss) per share, basic 15,875,091 10,079,925 9,782,770 Net income (loss) per share, basic $ 0.18 $ ( 4.12 ) $ ( 8.45 ) Diluted net income (loss) per share: Numerator: Net income (loss) attributable to common stockholders $ 2,919 $ ( 41,570 ) $ ( 82,683 ) Denominator: Weighted-average shares used in calculating net income (loss) per share, basic 15,875,091 10,079,925 9,782,770 Effect of dilutive securities: Outstanding stock options 4,701,545 — — Warrants to purchase redeemable convertible preferred stock 7,559 — — Warrants to purchase common stock 98,193 — — Restricted stock awards in exchange for non-recourse note 548,364 — — Weighted-average shares used in calculating net income (loss) per share, diluted 21,230,752 10,079,925 9,782,770 Net income (loss) per share, diluted $ 0.14 $ ( 4.12 ) $ ( 8.45 ) 149 Table of Contents Potentially dilutive securities that were not included in the diluted per share calculations because they would be anti-dilutive were as follows for the years ended December 31, 2025, 2024 and 2023: 2025 2024 2023 Redeemable convertible preferred stock 24,658,373 29,084,235 22,701,179 Outstanding stock options — 6,849,412 6,193,236 Restricted stock awards in exchange for non-recourse note — 700,000 700,000 Warrants to purchase common stock — 121,566 121,566 Warrants to purchase redeemable convertible preferred stock — 9,660 9,660 Unvested early-exercised options 4,950 521 — (16) Subsequent Events In March 2026, the Company entered into an amendment to its clinical trial agreement with J&J, to extend the study until six months after J&J receives the final performance study. The amendment provides for continued performance of clinical trial services under substantially similar terms. No material upfront payments were made in connection with the amendment. 150 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.