EVERSPIN TECHNOLOGIES INC. 10-Q

Item 2. Management’s Discussion and Analysi s of Financial Condition and Results of Operations ​ You should read the following discussion and analysis of our financial condition and results of operations together with our condensed financial statements and related notes included in Part I, Item 1 of this report and with our audited financial statements and related notes thereto included as part of our Annual Report on Form 10-K for the year ended December 31, 2024. ​ Forward-Looking Statements ​ This discussion contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (Exchange Act). Forward-looking statements are identified by words such as “believe,” “will,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “expect,” “predict,” “could,” “potentially” or the negative of these terms or similar expressions. You should read these statements carefully because they discuss future expectations, contain projections of future results of operations or financial condition, or state other “forward-looking” information. These statements relate to, among other things, our industry, business, future plans, strategies, objectives, expectations, intentions and financial performance. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, those discussed in this report in Part II, Item 1A — “Risk Factors,” and elsewhere in this report, as well as in our other filings with the Securities and Exchange Commission (SEC). Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. These statements, like all statements in this report, speak only as of their date, and we undertake no obligation to update or revise these statements in light of future developments. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Quarterly Report on Form 10-Q. While we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into or review of, all relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely on these statements. We caution investors that our business and financial performance are subject to substantial risks and uncertainties. ​ Overview ​ Everspin is a pioneer in the successful commercialization of Magnetoresistive Random Access Memory (MRAM) technology. Our portfolio of MRAM technologies, including Toggle MRAM and Spin-transfer Torque MRAM (STT-MRAM), is delivering superior performance, persistence and reliability in non-volatile memories that transform how mission-critical data is protected against power loss. With over 15 years of MRAM technology and manufacturing leadership, our memory solutions deliver significant value to our customers in key markets such as industrial, medical, automotive/transportation, aerospace and data center. We are the leading supplier of discrete MRAM components and a successful licensor of our broad portfolio of related technology intellectual property. ​ We sell our products directly and through our established distribution channels to industry-leading OEMs and ODMs. We manufacture our MRAM products using both captive and third-party manufacturing capabilities. We purchase industry-standard complementary metal-oxide semiconductor (CMOS) wafers from semiconductor foundries and perform back end of line (BEOL) processing that includes our magnetic-bit technology at our 200mm fabrication facility in Chandler, Arizona. We also manufacture full-flow 300mm CMOS wafers with our STT-MRAM magnetic-bit technology integrated in BEOL as part of our strategic relationship with GLOBALFOUNDRIES. Key Metrics ​ We monitor a variety of key financial metrics to help us evaluate trends, establish budgets, measure the effectiveness of our business strategies, and assess operational efficiencies. These financial metrics include revenue, gross margin, operating expenses and operating income determined in accordance with GAAP. Additionally, we monitor and project cash flow to determine our sources and uses for working capital to fund our operations. We also monitor Adjusted net 17 Table of Contents income, a non-GAAP financial measure, and design wins. We define Adjusted net income as net income adjusted for stock-based compensation expense. Adjusted net income. Our management and board of directors use Adjusted net income to assess and evaluate our overall performance and financial trends, inform the annual budgeting process, and guide both short-term and long-term operational and strategic planning. As such, we believe Adjusted net income provides meaningful insight for investors into our financial performance, consistent with how our management team and board view and analyze our results. Adjusted net income is a non-GAAP financial measure and should be considered alongside, but not as a replacement for or superior to, net income as reported in accordance with GAAP. The following table provides a reconciliation of net income, the most directly comparable GAAP measure, to Adjusted net income for the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ Six Months Ended June 30, ​ 2025 2024 2025 2024 ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) Adjusted Net Income (Loss) reconciliation: ​ ​ ​ ​ ​ Net loss ​ $ (670) ​ $ (2,502) ​ $ (1,836) ​ $ (2,704) Stock-based compensation expense ​ 1,419 ​ 1,862 ​ 2,996 ​ 3,576 Adjusted Net Income (Loss) ​ $ 749 ​ $ (640) ​ $ 1,160 ​ $ 872 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 18 Table of Contents Results of Operations ​ The following tables set forth our results of operations for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ ​ 2025 2024 2025 2024 ​ ​ (In thousands) ​ (As a percentage of revenue) ​ Product sales ​ $ 11,091 ​ $ 9,887 ​ ​ 84 % ​ 93 % Licensing, royalty, patent, and other revenue ​ 2,110 ​ 749 ​ 16 ​ 7 ​ Total revenue ​ 13,201 ​ 10,636 ​ 100 ​ 100 ​ Cost of product sales ​ ​ 6,166 ​ ​ 5,235 ​ ​ 47 ​ ​ 49 ​ Cost of licensing, royalty, patent, and other revenue ​ ​ 267 ​ ​ 185 ​ ​ 2 ​ ​ 2 ​ Total cost of sales ​ 6,433 ​ 5,420 ​ 49 ​ 51 ​ Gross profit ​ 6,768 ​ 5,216 ​ 51 ​ 49 ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ Research and development ​ 3,580 ​ 3,457 ​ 27 ​ 33 ​ General and administrative ​ 3,642 ​ 3,254 ​ 28 ​ 31 ​ Sales and marketing ​ 1,507 ​ 1,324 ​ 11 ​ 12 ​ Total operating expenses ​ 8,729 ​ 8,035 ​ 66 ​ 76 ​ Loss from operations ​ (1,961) ​ (2,819) ​ (15) ​ (27) ​ Interest income ​ ​ 423 ​ ​ 423 ​ ​ 3 ​ ​ 4 ​ Other income (expense), net ​ 842 ​ (30) ​ 6 ​ — ​ Net loss before income taxes ​ ​ (696) ​ (2,426) ​ (5) ​ (23) ​ Income tax benefit (expense) ​ ​ 26 ​ (76) ​ — ​ (1) ​ Net loss ​ $ (670) ​ $ (2,502) ​ ​ (5) % ​ (24) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Comparison of the three months ended June 30, 2025 and 2024 ​ Revenue ​ We generated 66% and 87% of our revenue from products sold to distributors for the three months ended June 30, 2025 and 2024, respectively. In addition to selling our products to our distributors, we maintain a direct selling relationship, for strategic purposes, with several key customer accounts. We have organized our sales team and representatives into three primary regions: North America; EMEA; and APAC. We recognize revenue by geography based on the region in which our customer is located and to which our products are sold, and not to where the end products in which they are assembled are shipped. Our revenue by region and by type of revenue for the periods indicated were as follows (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, ​ ​ 2025 2024 APAC ​ $ 8,582 ​ $ 6,310 North America ​ ​ 2,926 ​ ​ 3,051 EMEA ​ ​ 1,693 ​ ​ 1,275 Total revenue ​ $ 13,201 ​ $ 10,636 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ Change ​ 2025 2024 Amount % ​ ​ (Dollars in thousands) Product sales ​ $ 11,091 ​ $ 9,887 ​ $ 1,204 12.2 % Licensing, royalty, patent, and other revenue ​ 2,110 ​ 749 ​ 1,361 181.7 % Total revenue ​ $ 13,201 ​ $ 10,636 ​ $ 2,565 24.1 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 19 Table of Contents ​ Total revenue increased by $2.6 million, or 24.1%, from $10.6 million during the three months ended June 30, 2024 to $13.2 million during the three months ended June 30, 2025 . The increase was due to an increase in product sales of $1.2 million, and an increase of licensing, royalty, patent, and other revenue of $1.4 million. ​ Licensing, royalty, patent, and other revenue is a highly variable revenue item characterized by a small number of transactions annually with revenue based on size and terms of each transaction. Licensing, royalty, patent, and other revenue increased by $1.4 million, or 181.7% from $0.7 million during the three months ended June 30, 2024, to $2.1 million during the three months ended June 30, 2025 . The increase was primarily due to the progression of our contractual agreements with customers for the development of RAD-Hard products, a new agreement for the development of an AI technology application, partially offset by the conclusion of a contractual arrangement with a customer for the development of reliability models for strategic radiation hardened toggle MRAM. Our best estimate of royalty revenue earned is made throughout the year for royalty contracts with an annual performance period, with an annual adjustment recognized for actual sales in the first quarter of each fiscal year. ​ Cost of Sales and Gross Margin ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ ​ ​ ​ ​ ​ June 30, ​ Change ​ 2025 2024 Amount % ​ ​ (Dollars in thousands) Cost of product sales ​ $ 6,166 ​ $ 5,235 ​ $ 931 ​ 17.8 % Cost of licensing, royalty, patent, and other revenue ​ ​ 267 ​ ​ 185 ​ ​ 82 ​ 44.3 % Total cost of sales ​ $ 6,433 ​ $ 5,420 ​ $ 1,013 ​ 18.7 % Gross margin ​ 51.3% ​ 49.0% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of product sales increased by $0.9 million, or 17.8%, from $5.2 million during the three months ended June 30, 2024 , to $6.2 million during the three months ended June 30, 2025 . Cost of product sales relate primarily to costs of our toggle and STT products. ​ Cost of licensing, royalty, patent, and other revenue slightly increased by $0.1 million, or 44.3% from $0.2 million during the three months ended June 30, 2024, to $0.3 million during the three months ended June 30, 2025 . The increase was primarily due to an increase in costs related to labor and materials associated with the progression of our RAD-Hard and AI technology application projects. ​ Gross margin increased from 49.0% during the three months ended June 30, 2024, to 51.3% during the three months ended June 30, 2025. Gross margin increased as a result of a shift in product mix, an increase in licensing, royalty, patent, and other revenue revenue, offset by a decrease in FAB loadings. ​ Operating Expenses ​ Our operating expenses consist of research and development, general and administrative and sales and marketing expenses. Personnel-related expenses, including salaries, benefits, bonuses and stock-based compensation, are among the most significant components of each of our operating expense categories. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ ​ ​ ​ ​ ​ June 30, ​ Change ​ ​ 2025 2024 Amount % ​ ​ (Dollars in thousands) Research and development ​ $ 3,580 ​ $ 3,457 ​ $ 123 ​ 3.6 % Research and development as a % of revenue ​ ​ 27 % ​ 33 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and Development Expenses. Research and development expenses increased by $0.1 million, or 3.6%, from $3.5 million during the three months ended June 30, 2024 , to $3.6 million during the three months ended June 30, 2025. Research and development expenses relate primarily to the development and enhancement of our new Extended Serial Peripheral Interface (xSPI) family of STT-MRAM products, which offer high-performance, multiple I/O, SPI- 20 Table of Contents compatibility and feature a high-speed, low pin count SPI compatible interface, and increases in share-based compensation. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ Change ​ 2025 2024 Amount % ​ ​ (Dollars in thousands) General and administrative ​ $ 3,642 ​ $ 3,254 ​ $ 388 ​ 11.9 % General and administrative as a % of revenue ​ ​ 28 % ​ 31 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ General and Administrative Expenses. General and administrative expenses increased by $0.4 million, or 11.9%, from $3.3 million during the three months ended June 30, 2024, to $3.6 million during the three months ended June 30, 2025 . The increase is primarily due to one-time professional services. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ Change ​ 2025 2024 Amount % ​ ​ (Dollars in thousands) Sales and marketing ​ $ 1,507 ​ $ 1,324 ​ $ 183 ​ 13.8 % Sales and marketing as a % of revenue ​ ​ 11 % ​ 12 % ​ ​ ​ ​ ​ ​ Sales and Marketing Expenses. Sales and marketing expenses increased by $0.2 million, or 13.8%, from $1.3 million during the three months ended June 30, 2024, to $1.5 million during the three months ended June 30, 2025. Sales and marketing expenses relate primarily to compensation costs and contract labor. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ ​ ​ ​ ​ ​ June 30, ​ Change ​ 2025 2024 Amount % ​ ​ (Dollars in thousands) Interest income ​ $ 423 ​ $ 423 ​ $ — ​ — % ​ ​ Interest income remained consistent at $0.4 million during the three months ended June 30, 2025 and 2024, respectively. ​ Other Income (Expense), Net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ Change ​ ​ 2025 2024 Amount % ​ ​ ​ (Dollars in thousands) Other income (expense), net ​ $ 842 ​ $ (30) ​ $ 872 ​ (2,906.7) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income (expense), net increased by $0.9 million, or 2906.7%, from $30,000 other expense during the three months ended June 30, 2024, to $0.8 million other income during the three months ended June 30, 2025 . Other income relates primarily to other income recognized from a strategic award we received to develop a long-term plan to provide manufacturing services for aerospace and defense segments. ​ 21 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ ​ ​ 2025 2024 2025 2024 ​ ​ ​ (In thousands) ​ (As a percentage of revenue) ​ Product sales ​ $ 22,117 ​ $ 20,747 ​ ​ 84 % ​ 83 % Licensing, royalty, patent, and other revenue ​ 4,222 ​ 4,319 ​ 16 ​ 17 ​ Total revenue ​ 26,339 ​ 25,066 ​ 100 ​ 100 ​ Cost of product sales ​ ​ 12,195 ​ ​ 11,238 ​ ​ 46 ​ ​ 45 ​ Cost of licensing, royalty, patent, and other revenue ​ ​ 623 ​ ​ 452 ​ ​ 2 ​ ​ 2 ​ Total cost of sales ​ 12,818 ​ 11,690 ​ 49 ​ 47 ​ Gross profit ​ 13,521 ​ 13,376 ​ 51 ​ 53 ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ Research and development ​ 6,936 ​ 6,875 ​ 26 ​ 27 ​ General and administrative ​ 7,480 ​ 7,290 ​ 28 ​ 29 ​ Sales and marketing ​ 2,998 ​ 2,630 ​ 11 ​ 10 ​ Total operating expenses ​ 17,414 ​ 16,795 ​ 65 ​ 67 ​ Loss from operations ​ (3,893) ​ (3,419) ​ (15) ​ (14) ​ Interest income ​ 831 ​ 862 ​ 3 ​ 3 ​ Other income (expense), net ​ 1,230 ​ (71) ​ 5 ​ — ​ Net loss before income taxes ​ (1,832) ​ (2,628) ​ (7) ​ (10) ​ Income tax benefit (expense) ​ (4) ​ (76) ​ — ​ — ​ Net loss ​ $ (1,836) ​ $ (2,704) ​ ​ (7) % ​ (11) % ​ Comparison of the six months ended June 30, 2025 and 2024 ​ Revenue ​ We generated 63% and 78% of our revenue from products sold to distributors for the six months ended June 30, 2025 and 2024, respectively. Our revenue by region and by type of revenue for the periods indicated were as follows (in thousands). ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, ​ ​ 2025 2024 APAC ​ $ 15,841 ​ $ 13,240 North America ​ ​ 5,409 ​ ​ 5,843 EMEA ​ ​ 5,089 ​ ​ 5,983 Total revenue ​ $ 26,339 ​ $ 25,066 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended ​ ​ ​ ​ ​ ​ ​ June 30, ​ Change ​ 2025 2024 Amount % ​ ​ (Dollars in thousands) Product sales ​ $ 22,117 ​ $ 20,747 ​ $ 1,370 6.6 % Licensing, royalty, patent, and other revenue ​ 4,222 ​ 4,319 ​ (97) (2.2) % Total revenue ​ $ 26,339 ​ $ 25,066 ​ $ 1,273 ​ 5.1 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total revenue increased by $1.3 million, or 5.1%, from $25.1 million during the six months ended June 30, 2024 to $26.3 million during the six months ended June 30, 2025. The increase was primarily due to an increase in product sales revenue of $1.4 million. ​ Licensing, royalty, patent, and other revenue decreased by $0.1 million, or 2.2% from $4.3 million during the six months ended June 30, 2024, to $4.2 million during the six months ended June 30, 2025. The decrease was primarily due to the conclusion of a contractual arrangement with a customer for the development of reliability models for strategic 22 Table of Contents radiation hardened toggle MRAM, partially offset by the progression of our contractual agreements with customers for the development of RAD-Hard products a new agreement for the development of an AI technology application. ​ Cost of Sales and Gross Margin ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended ​ ​ ​ ​ ​ ​ ​ June 30, ​ Change ​ 2025 2024 Amount % ​ ​ (Dollars in thousands) Cost of product sales ​ $ 12,195 ​ $ 11,238 ​ $ 957 8.5 % Cost of licensing, royalty, patent, and other revenue ​ 623 ​ 452 ​ 171 37.8 % Total cost of sales ​ $ 12,818 ​ $ 11,690 ​ $ 1,128 ​ 9.6 % Gross margin ​ ​ 51.3% ​ ​ 53.4% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of product sales increased by $1.0 million, or 8.5%, from $11.2 million during the six months ended June 30, 2024 , to $12.2 million during the six months ended June 30, 2025 . Cost of product sales relate primarily to costs of our toggle and STT products. ​ Cost of licensing, royalty, patent, and other revenue slightly increased by $0.2 million, or 37.8% from $0.5 million during the six months ended June 30, 2024, to $0.6 million during the six months ended June 30, 2025. The increase was primarily due to an increase in costs related to labor and materials associated with the progression of our RAD-Hard and AI technology application projects. ​ Gross margin decreased from 53.4% during the six months ended June 30, 2024, to 51.3% during the six months ended June 30, 2025. Gross margin decreased as a result of a decrease in FAB loadings, and a decrease in other revenue. ​ Operating Expenses ​ Our operating expenses consist of research and development, general and administrative and sales and marketing expenses. Personnel-related expenses, including salaries, benefits, bonuses and stock-based compensation, are among the most significant components of each of our operating expense categories. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended ​ ​ ​ ​ ​ ​ ​ June 30, ​ Change ​ 2025 2024 Amount % ​ ​ (Dollars in thousands) Research and development ​ $ 6,936 ​ $ 6,875 ​ $ 61 ​ 0.9 % Research and development as a % of revenue ​ ​ 26 % ​ 27 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Research and Development Expenses Research and development expenses increased by $0.1 million, or 0.9%, from $6.9 million during the six months ended June 30, 2024 , to $6.9 million during the six months ended June 30, 2025 . Research and development expenses relate primarily to the development and enhancement of our new Extended Serial Peripheral Interface (xSPI) family of STT-MRAM products, which offer high-performance, multiple I/O, SPI-compatibility and feature a high-speed, low pin count SPI compatible interface. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended ​ ​ ​ ​ ​ ​ ​ June 30, ​ Change ​ 2025 2024 Amount % ​ ​ (Dollars in thousands) General and administrative ​ $ 7,480 ​ $ 7,290 ​ $ 190 ​ 2.6 % General and administrative as a % of revenue ​ ​ 28 % ​ 29 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 23 Table of Contents General and Administrative Expenses. General and administrative expenses increased by $0.2 million, or 2.6%, from $7.3 million during the six months ended June 30, 2024, to $7.5 million during the six months ended June 30, 2025. The increase is primarily due to one-time professional services. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended ​ ​ ​ ​ ​ ​ ​ June 30, ​ Change ​ 2025 2024 Amount % ​ ​ (Dollars in thousands) Sales and marketing ​ $ 2,998 ​ $ 2,630 ​ $ 368 ​ 14.0 % Sales and marketing as a % of revenue ​ ​ 11 % ​ 10 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Sales and Marketing Expenses. Sales and marketing expenses increased by $0.4 million, or 14.0%, from $2.6 million during the six months ended June 30, 2024, to $3.0 million during the six months ended June 30, 2025. Sales and marketing expenses relate primarily to compensation costs and contract labor. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended ​ ​ ​ ​ ​ ​ ​ June 30, ​ Change ​ 2025 2024 Amount % ​ ​ (Dollars in thousands) Interest income ​ $ 831 ​ $ 862 ​ $ (31) (3.6) % ​ Interest income remained consistent at $0.9 million during the six months ended June 30, 2025 and 2024, respectively. ​ Other Income (Expense), Net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended ​ ​ ​ ​ ​ ​ ​ ​ June 30, ​ Change ​ ​ 2025 2024 Amount % ​ ​ ​ (Dollars in thousands) Other income (expense), net ​ $ 1,230 ​ $ (71) ​ $ 1,301 (1,832.4) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other income (expense), net increased by $1.3 million, or 1,832.4%, from $0.1 million other expense during the six months ended June 30, 2024, to $1.2 million other income during the six months ended June 30, 2025. Other income relates primarily to income recognized from a strategic award we received to develop a long-term plan to provide manufacturing services for aerospace and defense industries. ​ On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We are currently assessing its impact on our consolidated financial statements. ​ Liquidity and Capital Resources ​ As of June 30, 2025, we had $45.0 million of cash and cash equivalents, compared to $42.1 million as of December 31, 2024. We believe our cash and cash equivalents are sufficient to meet our anticipated capital requirements in the next 12 months. Our future capital requirements will depend on many factors, including, among other things, our growth rate, the timing and extent of our spending to support research and development activities, the timing and cost of establishing additional sales and marketing capabilities, and the introduction of new products. ​ 24 Table of Contents Cash Flows ​ The following table summarizes our cash flows for the periods indicated (in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Month Ended June 30, ​ 2025 2024 ​ ​ (In thousands) Cash provided by operating activities ​ $ 6,455 ​ $ 428 Cash used in investing activities ​ (3,878) ​ (1,239) Cash provided by financing activities ​ 288 ​ 629 ​ ​ ​ ​ ​ ​ ​ ​ Cash Flows From Operating Activities ​ During the six months ended June 30, 2025, cash provided by operating activities was $6.5 million , which consisted of net loss of $1.8 million , non-cash charges of $4.7 million and changes of net operating assets and liabilities of $3.6 million . The non-cash charges consisted of stock-based compensation of $3.0 million and depreciation and amortization of $1.7 million. The change in our net operating assets and liabilities was primarily due to a decrease in accounts receivable of $4.4 million due to a one-time distributor transition, which provided improved payment terms , an increase in accounts payable of $0.8 million, an increase in contract obligation of $0.7 million, a decrease in prepaid and other current assets of $0.2 million, offset by an increase in inventory of $2.2 million and a decrease in accrued liabilities of $0.2 million. ​ During the six months ended June 30, 2024 , cash provided by operating activities was $0.4 million, which consisted of net loss of $2.7 million, non-cash charges of $4.4 million and changes of net operating assets and liabilities of $1.2 million. The non-cash charges consisted of stock-based compensation of $3.6 million and depreciation and amortization of $0.8 million. The change in our net operating assets and liabilities was primarily due to a decrease in accounts receivable of $1.4 million due to timing of cash receipts for outstanding balances, a decrease in prepaid and other current assets of $0.5 million, and a decrease in inventory of $0.4 million offset by a decrease in accounts payable of $0.6 million, a decrease in accrued liabilities of $2.6 million and a decrease in deferred revenue of $0.3 million. ​ Cash Flows From Investing Activities ​ Cash used in investing activities during the six months ended June 30, 2025 was $3.9 million due to $2.9 million of purchases of manufacturing equipment and $1.0 million in purchases of intangible assets. ​ Cash used in investing activities during the six months ended June 30, 2024 was $1.2 million, reflecting purchases of manufacturing equipment. ​ Cash Flows From Financing Activities ​ Cash provided by financing activities during the six months ended June 30, 2025 was $0.3 million, primarily due to proceeds from the exercise of employee stock options and purchase of shares under our employee stock purchase plan offset by a nominal amount in payments on finance leases. ​ Cash provided by financing activities during the six months ended June 30, 2024 was $0.6 million, consisting of proceeds from the exercise of employee stock options and purchase of shares under our employee stock purchase plan. ​ Critical Accounting Policies and Significant Judgements and Estimates ​ Our condensed financial statements have been prepared in accordance with GAAP. The preparation of these condensed financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenue generated, and expenses incurred during the reporting periods. We base our estimates on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. ​ 25 Table of Contents There have been no changes to our critical accounting policies and estimates described in the Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 27, 2025, that have had a material impact on our condensed financial statements and related notes. ​ Item 3. Quantitative and Qualitativ e Disclosures About Market Risk ​ Not required for a smaller reporting company. ​ Item 4. Controls and Procedure s ​ Evaluation of disclosure controls and procedures. ​ Our management, including our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of June 30, 2025, the end of the period covered by this Quarterly Report on Form 10-Q. ​ Based on this evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2025. ​ There have been no changes in our internal control over financial reporting that occurred during the three and six months ended June 30, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. ​ Inherent limitation on the effectiveness of internal control. The effectiveness of any system of internal control over financial reporting, including ours, is subject to inherent limitations, including the exercise of judgment in designing, implementing, operating, and evaluating the controls and procedures, and the inability to eliminate misconduct completely. Accordingly, any system of internal control over financial reporting, including ours, no matter how well designed and operated, can only provide reasonable, not absolute assurances. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We intend to continue to monitor and upgrade our internal controls as necessary or appropriate for our business, but cannot assure you that such improvements will be sufficient to provide us with effective internal control over financial reporting. ​ PART II—O THER INFORMATIO N ​ Item 1. Legal Proceedings ​ We are not party to any material legal proceedings at this time. From time to time, we may become involved in various legal proceedings that arise in the ordinary course of our business. ​