Blaize Holdings, Inc. 10-Q

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read together with our Annual Report on Form 10-K for the year ended December 31, 2025 (the “Annual Report on Form 10-K”), previous Quarterly Reports on Form 10-Q released during fiscal year 2026 , and the unaudited interim condensed consolidated financial statements as of and for the three and six months ended June 30, 2026 and 2025, together with related notes thereto. Unless the context otherwise requires, all references in this Quarterly Report on Form 10-Q to “the Company” “Blaize,” “us,” “our,” “ours,” or “we” refer to Blaize Holdings, Inc. Certain terms are defined in our Annual Report on Form 10-K. Overview We provide purpose-built, transformative AI-enabled edge computing solutions comprised of both our proprietary hardware and software, and complementary third-party hardware solutions, as further described below. Our computing solutions are designed for efficient processing of AI inference workloads across edge and data center environments. Our architecture supports AI workloads where latency, power efficiency, and cost efficiency are important considerations. Our systems can process data locally at the edge or within data center infrastructure, depending on deployment requirements. Local processing can reduce bandwidth usage and support latency-sensitive applications requiring real-time decision making. In addition to our internally developed products, we also deliver third-party hardware solutions that complement and enhance our core offerings. By integrating certain third-party hardware components, we believe that we are able to provide customers with comprehensive and flexible computing solutions tailored to their specific needs. These third-party hardware solutions typically are substantially comprised of servers, which are selected to ensure optimal compatibility and performance with our products and our AI-enabled platforms. Our portfolio includes highly efficient, programmable AI processors in a broad range of form factors, deployable across several verticals, including smart city, defense, retail and enterprise markets. Our accelerated AI computing platforms enable applications such as computer vision, advanced video analytics, and AI inference, and our software tools allow non-expert practitioners to deploy existing and novel AI applications on our hardware without the need to learn or use source code. Recent Developments in Our Business On May 1, 2024, we entered into a Purchase Order Contract Agreement (the “POCA”) with a potential customer in the United Arab Emirates that was intended to provide defense and other solutions to entities in the region. The contract was later amended on October 18, 2024, to add additional detail regarding the potential customer’s hardware and software requirements, as well as intended estimated delivery schedules. Discussions with the potential customer regarding this opportunity and other potential opportunities in the region were ongoing throughout 2025 and into 2026. This opportunity, and / or other potential opportunities that have been discussed with the potential customer, was expected to result in up to $104.0 million in revenue; however, as of August 13, 2026, we have not received a purchase order from this potential customer, nor have we received any revenue from this potential customer. We are currently reevaluating our relationship with this potential customer, and there is substantial uncertainty that any commercial relationship will progress. We are party to certain agreements entered into in 2025, including a Strategic Cooperation Agreement (the “Starshine Agreement”) with Starshine Computing Power Technology Limited, a Hong Kong company (“Starshine”), and the Sales Partner Referral Agreement (the “Referral Agreement”) with Burkhan LLC (the “Sales Partner”), an affiliate of BurTech LP, LLC (the “Sponsor”). The Referral Agreement designated BurTech Systems Tech LLC (“BST”), an affiliate of the Sales Partner, as the initial approved customer under the Referral Agreement. Starshine had agreed, in the Starshine Agreement, to deliver a minimum of $120.0 million in revenue to us, subject to the issuance of purchase orders, over the first 18 months of the Starshine Agreement. Under the Referral Agreement, BST agreed to purchase, subject to the issuance of purchase orders, up to $56.5 million of our products on behalf of a certain unaffiliated end user. Starshine issued one purchase order to us in the third quarter of 2025 for $10.4 million and paid $1.6 million to us at that time. The remaining $8.8 million of Starshine’s account receivable remains outstanding as of August 13, 2026. This account receivable has been transferred to our wholly-owned Chinese subsidiary, and collection of the account is being pursued by a third party (the “collections agent”). If the collections agent is able to collect the receivable, it will earn a fee 24 Table of Contents of 10% of the amount collected. There is substantial risk that the collections agent may not be successful in its attempts to collect this cash. BST issued one purchase order to us in the second quarter of 2025. We delivered hardware under that purchase order in the second and third quarters of 2025, and completed the final delivery of hardware in the first quarter of 2026, after receiving payment in full from BST. We have not received any purchase orders from either Starshine or BST in 2026. We do not expect further purchase orders to be forthcoming from Starshine. We do not have any visibility into any potential further purchase orders from BST for the remainder of 2026. In the fourth quarter of 2025, we received a purchase order from NeoTensr in the amount of $23.8 million, and we completed our performance obligation at that time. During 2026, NeoTensr paid this amount in full. On April 14, 2026, we entered into a contract with NeoTensr for up to $50.0 million in revenue within the first year of the agreement, subject to NeoTensr’s issuance of purchase orders. NeoTensr has issued one purchase order under this agreement for $13.7 million, and paid its required deposit of 3%, or $0.4 million. The remaining $13.3 million of accounts receivable is due on September 24, 2026. On August 7, 2026, this contract was amended to be a firm contract with a minimum purchase commitment, also known as a “take or pay” arrangement, where our performance obligations over time of deliveries of servers to the customer is intended to be completed by July 2027. On August 4, 2026, a class action complaint was filed against us and certain of our current officers in the United States District Court for the Central District of California, alleging, among other things, that we and the individual defendants made false and misleading statements or omissions regarding our contracts with Starshine and NeoTensr. The case is at a preliminary stage. We are in the process of evaluating this complaint and cannot make a reasonable estimate of any outcome, recovery, or loss at this time. Key Business Metrics Starting this quarter, management has focused its evaluation of the business on the following key business metrics: revenue, EBITDA and Adjusted EBITDA. See “Non-GAAP Measures” in this Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations, for additional information, including a reconciliation of net loss to EBITDA and Adjusted EBITDA. As our business continues to scale and evolve, we may supplement or modify these metrics. For example, management is currently reviewing the connection between purchase orders received and backlog to determine whether such metrics are meaningful measures of our future financial results. In our Annual Report on Form 10-K and Quarterly Report on Form 10-Q for the three months ended March 31, 2026, as well as certain other earnings materials furnished in connection therewith, we presented pipeline metrics as key business metrics. We classified pipeline metrics into the following categories: proof of concept stage, partners, and design wins. Although our sales pipeline itself and pipeline progression from the inception of a deal through actual conversion of that pipeline into revenue are indicators of our future business, we determined that these metrics were not as closely connected with future revenue as previously expected. Therefore, management no longer considers these pipeline metrics as key business metrics. As a result, this Quarterly Report on Form 10-Q does not include updated figures for these metrics and we do not expect to present these metrics in the future. Results of Operations Revenue We currently derive revenue through a combination of: • Hardware revenue — encompasses the sale of our semiconductor products and/or third-party hardware products which support our semiconductor products through various supply agreements. • Software revenue — encompasses the sale of our applications and other software products through various licensing agreements. • Strategic consulting services revenue (when applicable) — providing customized design services to our customers, tailored to their specific requirements. Cost of Revenue 25 Table of Contents Cost of revenue is currently primarily comprised of the cost of purchase of hardware from third parties (servers into which our graph streaming processor (“GSP”) products can be placed and can otherwise enhance our branded products), and also includes Blaize-designed semiconductors purchased from foundries and various edge form factors supplied to us by contract manufacturers as well as indirect costs such as inventory carrying costs and inventory valuation reserves. In addition, cost of revenue includes direct labor costs associated with the servicing of our strategic consulting services revenue contracts. There is no depreciation allocable to cost of revenue; however, if such depreciation expense were to be incurred, it would be allocated to cost of revenue. Gross Profit The difference between revenue and cost of revenue is gross profit, as calculated in accordance with accounting principles generally accepted in the United States (“GAAP”). The following table sets forth our revenue, cost of revenue, and gross profit for the three and six months ended June 30, 2026 and 2025: Three Months Ended June 30, Change (Amounts in thousands, except for percentages) 2026 2025 $ % Total revenue $ 11,985 $ 1,982 $ 10,003 * Cost of revenue (11,067) (804) (10,263) * Gross profit $ 918 $ 1,178 $ (260) * Six Months Ended June 30, Change (Amounts in thousands, except for percentages) 2026 2025 $ % Total revenue $ 14,723 $ 2,989 $ 11,734 * Cost of revenue (12,229) (1,131) (11,098) * Gross profit $ 2,494 $ 1,858 $ 636 * * Percentage change is not meaningful. Revenue for the three and six months ended June 30, 2026 was primarily earned from sales of our complementary third party hardware. Revenue in the second quarter ended June 30, 2026 was primarily earned from the sale of complementary third party hardware to a major customer located in China. Revenue in the first quarter of 2026 was earned at the final shipment of such hardware along with our manufactured hardware to a related party, under the Referral Agreement. Revenue for the three and six months ended June 30, 2025 was earned primarily from a related party for the initial sale of complementary third party hardware and our branded hardware under the Referral Agreement. Cost of revenue for the three and six months ended June 30, 2026 and 2025 is primarily a result of the mix between complementary third party hardware and our branded hardware. Cost of revenue increases as the proportion of third party hardware in the revenue mix increases. Further, cost of revenue increases as our proportion of revenue from hardware increases, and decreases with revenue earned from software sales. There were no material sales of software for the three and six months ended June 30, 2026, compared to the three and six months ended June 30, 2025, which had a more significant component of revenue derived from software. The following table sets forth our revenue by the geographical location of our customers for the three and six months ended June 30, 2026 and 2025: Three Months Ended June 30, Change (Amounts in thousands, except for percentages) 2026 2025 $ % China $ 11,941 $ 6 $ 11,935 * United States 28 1,974 (1,946) * Other 16 2 14 * Total revenue $ 11,985 $ 1,982 26 Table of Contents Six Months Ended June 30, Change (Amounts in thousands, except for percentages) 2026 2025 $ % China $ 11,941 $ 966 $ 10,975 * United States 2,625 1,974 651 * Other 157 49 108 * Total revenue $ 14,723 $ 2,989 * Percentage change is not meaningful. Since our revenue is concentrated among a small number of customers, revenue from any one significant customer may significantly change the geographical mix of our revenue. The following table sets forth a summary of the Company’s revenue concentration by customer for the three and six months ended June 30, 2026 and 2025: Three Months Ended June 30, (Amounts in thousands, except for percentages) 2026 % 2025 % Customer A (1) $ 28 0.2% $ 1,625 82.0% Customer D 11,941 99.6% 300 15.1% Others (2) 16 0.1% 57 2.9% Total revenue $ 11,985 $ 1,982 Customers B and C were not customers for the three months ended June 30, 2026 and 2025, and are intentionally omitted. Six Months Ended June 30, (Amounts in thousands, except for percentages) 2026 % 2025 % Customer A (1) $ 2,625 17.8% $ 1,625 54.4% Customer B — —% 960 32.1% Customer D 11,941 81.1% 300 10.0% Others (2) 157 1.1% 104 3.5% Total revenue $ 14,723 $ 2,989 (1) Customer A is a related party. (2) Each of the customers within “Others” comprised less than 10% of revenue each. Customer C was not a customer for the six months ended June 30, 2026 and 2025, and is intentionally omitted. Expenses Research and Development Research and development (“R&D”) expense primarily consists of personnel costs for our research and development activities. R&D expense includes costs associated with the design and development of our application-specific integrated circuit and intellectual property (“IP”) solutions, such as third-party foundry costs, third party computer-aided tools and software licenses, third party IP licenses, and reference design development. Selling, General and Administrative Selling, general and administrative (“SG&A”) expense primarily consists of personnel-related expenses for our sales and marketing teams, finance, human resources, information technology, and legal organizations. These expenses also include non-personnel costs, such as legal, audit, accounting services, advertising expenses, other professional fees as well as certain expected credit loss provision, tax, corporate software licenses, and insurance-related expenses. 27 Table of Contents Selling, General and Administrative - Related Party SG&A - related party expense is comprised of expenses incurred with related parties. Depreciation Depreciation consists of ordinary depreciation on long-lived assets such as computer equipment, furniture and fixtures, leasehold improvements, and office equipment and is generally not material to us. Transaction Costs Transaction costs consisted of direct incremental legal, consulting, and banking fees related to the consummation of the transactions (the “Merger”) contemplated by the Agreement and Plan of Merger (the “Merger Agreement”), dated as of December 22, 2023 (as amended on April 22, 2024, October 24, 2024 and November 21, 2024), with BurTech Acquisition Corp. (“BurTech”), BurTech Merger Sub, Inc. (“Merger Sub”), Blaize, Inc. (“Legacy Blaize”), and for the limited purposes set forth therein, Burkhan Capital LLC (“Burkhan”), a Delaware limited liability company and an affiliate of BurTech, which was completed in the first quarter of 2025. No additional costs relating to the Merger are expected to be incurred. Detail of Costs and Expenses The following table sets forth our costs and expenses, as described above, for the three and six months ended June 30, 2026 and 2025: Three Months Ended June 30, Change (Amounts in thousands, except for percentages) 2026 2025 $ % Operating expenses: Research and development $ 10,480 $ 9,613 $ 867 9.0 % Selling, general and administrative 18,029 12,965 5,064 39.1 % Selling, general and administrative - related party 2,794 27 2,767 * Depreciation 219 456 (237) (52.0) % Total operating expenses $ 31,522 $ 23,061 Six Months Ended June 30, Change (Amounts in thousands, except for percentages) 2026 2025 $ % Operating expenses: Research and development $ 20,155 $ 22,731 $ (2,576) (11.3) % Selling, general and administrative 33,095 26,082 7,013 26.9 % Selling, general and administrative - related party 2,831 267 2,564 * Depreciation 405 647 (242) (37.4) % Transaction costs — 12,035 (12,035) * Total operating expenses $ 56,486 $ 61,762 * Percentage change is not meaningful. R&D The increase in R&D expense for the three months ended June 30, 2026, compared to June 30, 2025, was primarily due to higher technology costs, which was partially offset by a reduction in employee costs, including costs related to stock compensation expense. The decrease in R&D expense for the six months ended June 30, 2026, compared to June 30, 2025, was primarily due to a reduction in employee costs related to stock compensation expense. 28 Table of Contents SG&A The increase in SG&A expense for the three and six months ended June 30, 2026, compared to June 30, 2025, was primarily due to an increase in our provision for expected credit losses. SG&A - related party Selling, general and administrative - related party expenses for the three and six months ended June 30, 2026, were substantially comprised of a liability arising from a resolution to enter into a future settlement agreement to issue shares of our common stock to the chair of our Board of Directors. Selling, general and administrative - related party expenses for three months ended June 30, 2025, were comprised solely of payroll expenses for an individual related to one of our executive officers. During the six months ended June 30, 2025, these expenses included payroll expenses for the individual as well as advertising expenses incurred with a company owned by a relative of the chair of our Board of Directors. Other Expense, net The following table sets forth the details of our total other expense, net, for the three and six months ended June 30, 2026 and 2025: Three Months Ended June 30, Change (Amounts in thousands, except for percentages) 2026 2025 $ % Change in fair value of earnout shares $ 1,573 $ (7,257) $ 8,830 * Change in fair value of Polar warrants 2,344 — 2,344 * Change in fair value of unissued shares of common stock — (300) 300 * Financing charge on Polar warrants modification (1,969) — (1,969) * Other, net 115 (110) 225 * Total other income (expense), net $ 2,063 $ (7,667) Six Months Ended June 30, Change (Amounts in thousands, except for percentages) 2026 2025 $ % Change in fair value of Legacy Blaize convertible notes and warrants $ — $ (226,048) $ 226,048 * Change in fair value of earnout shares 2,131 109,261 (107,130) * Change in fair value of Polar warrants 2,813 — 2,813 * Change in fair value of unissued shares of common stock — (300) 300 * Financing charge on Polar warrants modification (1,969) — (1,969) * Other, net (78) (158) 80 * Total other income (expense), net $ 2,897 $ (117,245) * Percentage change is not meaningful. Our “total other income (expense), net” for the three and six months ended June 30, 2026 compared to the three and six months ended June 30, 2025 was driven by the fair value changes in the different financial instruments in place during each period. During the three and six months ended June 30, 2026, the fair value of the liability-classified earnout shares varied by changes in the value of those instruments. During that same period, the fair value of the Polar warrants also varied by the change in value of those instruments, and a financing charge was also applied to the modification of the warrants during the second quarter of 2026. 29 Table of Contents In the first quarter of 2025, as a result of the Merger, the Legacy Blaize convertible notes and warrants were all converted into shares of our common stock. These instruments were, therefore, not outstanding in 2026. During the three and six months ended June 30, 2025, there were shares of common stock issuable but unissued to an advisor, and the change in the fair value is therefore applicable to 2025 but not 2026. “Other, net” includes interest income, interest expense, fines and penalties (and the reversal of the same) regarding non-income tax based tax positions and foreign exchange gains and losses. Non-GAAP Measures In addition to financial measures presented in accordance with GAAP, we report certain key financial measures that are not required by, or presented in accordance with, GAAP. Non-GAAP financial information is presented for supplemental informational purposes only, should not be considered in isolation of, or as a substitute for or superior to, financial information presented in accordance with GAAP, and may be different from similarly-titled non-GAAP measures used by other companies. Accordingly, you are cautioned not to place undue reliance on this information. We believe that along with our GAAP financial information, our non-GAAP financial information when taken collectively and evaluated appropriately, is helpful to investors in assessing our operating performance. In conjunction with net loss calculated in accordance with GAAP, we also use EBITDA and Adjusted EBITDA, as defined below, to evaluate our ongoing operations and for internal planning and forecasting purposes. EBITDA and Adjusted EBITDA EBITDA is defined as “Earnings before interest, income taxes, depreciation, and amortization”. Adjusted EBITDA is defined as EBITDA further adjusted for non-cash items such as stock-based compensation, changes in fair value, and operational income and expenses that are not expected to be ongoing, as discussed below in the footnote to “other adjustments”. The following table sets forth a reconciliation of net loss to EBITDA and Adjusted EBITDA for the three and six months ended June 30, 2026 and 2025: Three Months Ended June 30, Change (Amounts in thousands, except for percentages) 2026 2025 $ % Net loss $ (28,809) $ (29,589) $ 780 (2.6) % Depreciation 219 456 (237) (52.0) % Provision for income taxes 268 39 229 587.2 % Interest income, net (183) (314) 131 (41.7) % EBITDA (28,505) (29,408) 903 (3.1) % Stock-based compensation 8,689 7,566 1,123 14.8 % Fair value changes and financing charges (1,948) 7,557 (9,505) * Related party settlement expense 2,760 — 2,760 * Non-cash inventory cost realignment adjustments (572) 81 (653) * Other adjustments (1) (1,287) 1,271 (2,558) * Adjusted EBITDA $ (20,863) $ (12,933) $ (7,930) 61.3 % 30 Table of Contents Six Months Ended June 30, Change (Amounts in thousands, except for percentages) 2026 2025 $ % Net loss $ (51,462) $ (177,350) $ 125,888 (71.0) % Depreciation 405 647 (242) (37.4) % Provision for income taxes 367 201 166 82.6 % Interest income, net (362) (713) 351 (49.2) % EBITDA (51,052) (177,215) 126,163 (71.2) % Stock-based compensation 17,637 18,606 (969) (5.2) % Fair value changes and financing charges (2,975) 117,087 (120,062) * Transaction costs — 12,035 (12,035) * Related party settlement expense 2,760 — 2,760 * Non-cash inventory cost realignment adjustments (466) (544) 78 * Other adjustments (1) (693) 1,710 (2,403) * Adjusted EBITDA $ (34,789) $ (28,321) $ (6,468) 22.8 % * Percentage change is not meaningful. (1) “Other adjustments” includes, but is not limited to, other non-cash expenses, including foreign exchange gains and losses, and income and expenses that are not expected to be ongoing, including litigation expenses, financing advisory fees, and fines and penalties (or the recoveries and reversals of such). We believe that these items are not reflective of our ongoing operating performance and excluding these items provides a more meaningful comparison of our results of operations over comparative periods. Liquidity and Capital Resources Our primary sources of cash flows have historically been from financing activities. We expect our primary sources of liquidity to continue to be cash flows from financing activities, as our expenses continue to exceed our revenues, and therefore, we cannot satisfy our cash needs through operations. We intend to raise such capital through issuances of additional equity and/or debt. As discussed below, our liquidity condition raises substantial doubt about our ability to continue as a going concern through a year from the issuance date of our unaudited condensed consolidated financial statements, as we cannot expect that the sources of financing currently available to us will be sufficient to fund our ongoing cash requirements for at least the next twelve months and/or into the foreseeable future. Going Concern As described in Item 1 — “Financial Statements,” in Note 2 — “Liquidity and Going Concern,” our condensed consolidated financial statements accompanying this Quarterly Report on Form 10-Q have been prepared on a “going concern” basis, which assumes that we will be able to meet our obligations and continue our operations for the foreseeable future. Our condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should we be unable to continue as a going concern. Our ability to continue to meet our obligations, to achieve our business objectives and continue as a going concern is dependent upon several factors, including our revenue growth rate, the timing and extent of spending to support further sales and marketing initiatives, as well as our research and development efforts. In order to continue to finance our operations, we will need to raise additional financing, if such financing is available at all. As a result of the above considerations, we have determined that our liquidity condition raises substantial doubt about our ability to continue as a going concern through a year from the date of issuance of our unaudited condensed consolidated financial statements. Issuance of Common Stock During the Current Year The table below sets forth a description of our issuance of common stock as of August 13, 2026: 31 Table of Contents Common stock outstanding as of December 31, 2025 122,043,966 Release of restricted stock units, net of shares withheld for taxes 1,084,508 Exercise of stock options 730,683 Issuance of common stock in public offering 18,918,918 Common stock outstanding as of June 30, 2026 142,778,075 Release of restricted stock units 3,964 Exercise of stock options 50,000 Shares issued to related party on July 7, 2026 (1) 2,000,000 Common stock outstanding as of August 13, 2026 144,832,039 (1) On July 7, 2026, one of our subsidiaries entered into a settlement agreement (the “Settlement Agreement”) with Bess Ventures and Advisory LLC (“Bess Ventures”), an entity whose owner-manager is Lane M. Bess, chair of the Board, to resolve certain disagreements between the parties relating to a letter agreement dated February 15, 2024 and matters arising thereunder. Pursuant to the Settlement Agreement, we issued 2,000,000 shares of common stock to Bess Ventures in consideration for the mutual covenants and releases set forth therein. Future Commitments to Issue Shares of Our Common Stock The table below sets forth a description of our future commitments to issue common stock as of August 13, 2026: Stock options (1) 29,785,144 RSUs (1) 8,628,534 Employee stock purchase plan shares available for future purchase (1) 3,047,669 Earnout shares (2) 17,600,000 BZAI warrants (3) 29,648,250 Warrants issued to an advisor (3) 50,000 Polar warrants (4) 9,375,000 Issuable under Sales Partner Referral Agreement (5) * Issuable under Committed Equity Facility (6) * Total potential commitments to issue common stock 98,134,597 * Variable number of shares not determinable as of August 13, 2026. (1) As of June 30, 2026, we had commitments to issue 29,785,144 shares of common stock to employees and others under stock option awards, and an additional 8,628,534 shares of our common stock under employee and other RSU awards. These commitments did not differ materially as of August 13, 2026, as we did not issue additional such awards during the time period between June 30, 2026 and August 13, 2026, although forfeitures from terminated employees and option exercises may decrease these commitments by immaterial amounts. We have further reserved 3,047,669 shares of our common stock under an employee stock purchase plan, which has not yet commenced. (2) We have commitments in respect of the Earnout Shares to issue up to 15,000,000 shares of our common stock, primarily to Legacy Blaize stockholders and also to then-outstanding Legacy Blaize employee equity award holders, and 2,600,000 shares of our common stock to Burkhan, subject to our share price achieving certain thresholds over a period of time (collectively, the “Earnout Shares”). These Earnout Shares are dependent upon, among other things, changes in the closing share price of our common stock, the expected timing of settlement, and the probability of achieving certain triggering events. (3) We have a total of 29,648,250 warrants to purchase shares of our common stock outstanding, exercisable at $11.50 per share (the “BZAI warrants”), which expire on January 13, 2030. Additionally, shortly after the Merger, we issued, to an advisor, 50,000 warrants to purchase shares of our common stock, exercisable at $11.50 per share, which expire in the first quarter of 2030. 32 Table of Contents (4) On May 5, 2026, we amended the outstanding Polar warrants to adjust the exercise price from $5.00 per share to $3.00 per share. (5) In 2025, we entered into a Sales Partner Referral Agreement with Burkhan LLC (the “Sales Partner”), an affiliate of BurTech LP, LLC, that allows partially for shares of our common stock to be issued to that affiliate in respect of a sales commission, at our discretion. Cash or shares of stock for commission payments are to be released upon our receipt of cash on the sales made under the Sales Partner Referral Agreement. To date, we have chosen to pay any such commissions in cash and not in shares of our common stock. During 2026, we have not received any new purchase orders under the Sales Partner Referral Agreement. (6) The remaining number of shares that we may sell under the committed equity facility (the “Committed Equity Facility”) with B. Riley Principal Capital, LLC (“B. Riley”) varies in relation to our stock price. However, under the terms of the facility, we may not effect sales thereunder while the market price of our common stock is below $1.00 per share. Our common stock has recently begun trading below $1.00 per share, and therefore, this facility may not be available to us. Cash Flows for the Six Months Ended June 30, 2026 and 2025 Cash Flows used in Operating Activities Net cash used in operating activities was $41.3 million for the six months ended June 30, 2026, compared to $32.4 million for the six months ended June 30, 2025, an increase of $8.9 million. Although net loss decreased by $125.9 million, the reduction in net loss was primarily due to a decrease of $109.9 million in non-cash adjustments to reconcile net loss to net cash used in operating activities, as the prior-year period included significant non-cash losses from changes in fair value measurements that did not recur in the current period. The change in operating assets and liabilities of $24.9 million reflected our payment of accrued trade and other payables and increases in accounts receivables and prepaid expenses, partially offset by cash collections of accounts receivable. Cash Flows used in Investing Activities For the six months ended June 30, 2026 and 2025, we used $0.6 million and $0.7 million, respectively, of cash to purchase property and equipment. Cash Flows provided by Financing Activities For the six months ended June 30, 2026, net cash provided by financing activities was $32.6 million, which consisted primarily of net proceeds from the issuance of common stock. During the six months ended June 30, 2025, net cash provided by financing activities consisted of $15.9 million of proceeds from the Merger and PIPE financing, partially offset by the $4.3 million payment of deferred offering costs. Cash Availability, Material Cash Requirements, and Cash Collections As of June 30, 2026, we had cash and cash equivalents on hand of $36.8 million, of which approximately $12.4 million, or approximately 34%, is held in China and subject to currency controls. Currency controls may delay our access to this cash. We are a party to a Committed Equity Facility with a remaining available capacity of approximately $15.5 million; however, under the terms of the facility, we may not effect sales thereunder while the market price of our common stock is below $1.00 per share. Because our common stock has recently begun trading below $1.00 per share, the facility may not represent a readily available source of liquidity to us. Material cash requirements recorded on our condensed consolidated balance sheet as of June 30, 2026 included normal course of business near-term general corporate expenses accrued in accounts payable and accrued expenses, such as consulting fees and employee payroll. Additionally, we had purchase commitments for raw materials for manufactured inventories of $10.8 million and purchase commitments for finished goods for resale of $1.9 million as of June 30, 2026. Certain of these purchase commitments for raw materials for inventory manufacture, in the amount of $5.4 million require prepayment in advance from us in order for the vendor to be obligated to our purchase commitment. Purchase commitments for finished goods held for resale are generally made when a customer has issued a purchase order. We are continuing to pursue collections of the Starshine account receivable of $8.8 million, through a third-party collections agent. This receivable has been transferred to our wholly-owned Chinese subsidiary, and any such recovery is 33 Table of Contents subject to a 10% collections fee to such collections agent. Any recovered cash would be deposited in our subsidiary’s bank account in China, and therefore subject to currency controls. Our other accounts receivable are currently generally deemed to be collectible in the normal course of business. Substantially all of the balance of these accounts receivable are due from one customer located in China. Emerging Growth Company and Smaller Reporting Company Status There have been no material changes to our Emerging Growth Company and Smaller Reporting Company Statuses during the six months ended June 30, 2026. The Company will remain a Smaller Reporting Company for the year ended December 31, 2026, but will not retain its Emerging Growth Company status past December 31, 2026. Critical Accounting Estimates Refer to Part II, Item 7, “Critical Accounting Estimates” of our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes to our Critical Accounting Policies and Estimates during the six months ended June 30, 2026. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK As a smaller reporting company, we are not required to provide this information.