What changed in this filing

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Item 1A. Risk Factors

2026-05-08 compared with 2025-11-06 · 133 added, 122 removed, 991 unchanged (20% of the section changed)

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• our ability to repay our debt and fund our long-term operations;

• the impact of the disposition of assets related to our short-read DNA sequencing technology and related clustering, sequencing reagent, and detection technologies could have on our business, financial condition and results of operations;

• our ability to successfully leverage and integrate our acquisitions and future acquisitions;

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• our reliance on outsourcing to other companies for manufacturing certain of our products, components and sub-assemblies, some of which are sole-sourced;

• the impact of tariffs recently imposed by the U.S.

government and its trading partners in response, other possible tariffs or trade protection measures, import or export licensing requirements, new or different customs duties, trade embargoes and sanctions and other trade barriers;

• the impact of tariffs recently threatened or imposed by the U.S.

government or its trading partners in response, other possible tariffs or trade protection measures, import or export licensing requirements, new or different customs duties, trade embargoes and sanctions and other trade barriers;

• our ability to consistently manufacture our instruments and consumables to meet customers’ specifications, quantity, cost, or performance requirements;

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• adverse effects resulting from political and economic tensions between the United States and other countries, including China and Russia, and other geopolitical uncertainties;

Q1 Fiscal 2026 Form 10-Q

• securing and maintaining patent or other intellectual property protection for our products and related improvements;

• current and future legal proceedings filed against us claiming intellectual property infringement;

Q3 Fiscal 2025 Form 10-Q

• the potential adverse impact of health epidemics;

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We have made and expect to continue making substantial investments to develop new products and enhance our existing products through our acquisitions and research and development efforts.

For example, we commenced commercial shipments of Revio, our long-read sequencing system, and of Onso, our SBB short-read platform, in 2023.

For example, we commenced commercial shipments of Revio, our long-read sequencing system, in 2023.

We also began taking orders and shipping our new Vega benchtop long-read sequencing system in the fourth quarter of 2024.

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• anticipate and adapt to changes in our market;

Q1 Fiscal 2026 Form 10-Q

• accommodate customer expectations and demands with respect to our products, increase product adoption by our existing customers or develop new customer relationships;

• deliver our early access systems to our external early access testing sites or complete our external early access testing program on our currently expected timelines;

Q3 Fiscal 2025 Form 10-Q

• overcome unexpected challenges discovered during early access testing;

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We also perform regular reviews to determine if any event has occurred that may indicate that the carrying values of our intangible assets with finite lives and other finite-lived assets are impaired.

Events that would indicate impairment and trigger an interim impairment test include, but are not limited to, unexpected adverse business conditions, weak demand for a specific product line or business, economic factors, shifting focus to certain lines of business, unanticipated technological changes or competitive activities, loss of key personnel, changes in business strategy, and acts by governments or courts.

Events that would indicate impairment and trigger an interim impairment test include, but are not limited to, adverse changes in business or economic conditions, lower-than-expected performance of a product line or business, changes in strategic direction, unanticipated technological or competitive developments, loss of key personnel, and actions by governments or courts.

The occurrence of any of these events, may require us to record future impairment charges.

For example, we recorded $15.0 million of impairment charges during the year ended December 31, 2025, as described in additional detail in Note 4.

Balance Sheet Components in Part II, Item 8 of our 2024 Annual Report, and $15.0 million of impairment charges during the nine months ended September 30, 2025, as described in additional detail in Note 3.

Balance Sheet Components in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Additionally, amortization of acquired intangible assets during the nine months ended September 30, 2025 included $359.3 million of accelerated amortization pertaining to the Company's change in estimate of its remaining useful life of the developed technology acquired in connection with the 2021 Omniome acquisition as described in additional detail in Note 5.

Restructuring in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Balance Sheet Components in Part II, Item 8 of our 2025 Annual Report.

Additionally, amortization of acquired intangible assets during the year ended December 31, 2025 included $ 359.3 million of accelerated amortization pertaining to the Company's change in estimate of its remaining useful life of the developed technology acquired in connection with the 2021 Omniome acquisition as described in additional detail in Note 6.

Restructuring in Part II, Item 8 of our 2025 Annual Report.

Any such charges may adversely affect our results of operations.

Q1 Fiscal 2026 Form 10-Q

We have incurred losses to date, and we expect to continue to incur significant losses as we develop our business and we may never achieve profitability.

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We expect to continue to incur substantial losses and negative cash flow from operations for the foreseeable future.

Although we initiated expense reduction plans during the second quarter of 2024, and further expense reduction plans during the first quarter of 2025, we do not expect to be profitable in 2025, and there can be no assurance that these expense reduction initiatives will be successful in helping us achieve profitability.

Q3 Fiscal 2025 Form 10-Q

Although we initiated expense reduction plans during the second quarter of 2024 and initiated further expense reduction plans during the first quarter of 2025, we do not expect to be profitable in 2026, and there can be no assurance that these expense reduction initiatives will be successful in helping us achieve profitability.

Our net losses since inception and our expectation of incurring substantial losses and negative cash flow for the foreseeable future could:

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In addition, inflationary pressure, including as a result of supply shortages, has adversely impacted and could continue to adversely impact our financial results, and our operating costs may increase.

For example, we have experienced and may continue to experience inflationary pressure with respect to certain components of certain of our products, including with respect to semiconductor materials, such as memory chips, due in part to accelerated demand associated with data processing and storage applications.

We may not fully offset these cost increases by raising prices for our products and services, which could result in downward pressure on our margins.

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The implementation of these expense reduction initiatives, including the impact of workforce reductions, could impair our ability to invest in developing, marketing and selling new and existing products, be disruptive to our operations, make it difficult to attract or retain employees, result in higher than anticipated charges, divert the attention of management, result in a loss of accumulated knowledge, impact our customer and supplier relationships, and otherwise adversely affect our results of operations and financial condition.

In addition, our ability to complete our expense reduction initiatives and achieve the anticipated benefits within the expected time frame is subject to estimates and assumptions and may vary materially from our expectations, including as a result of factors that are beyond our control.

Furthermore, our efforts to stabilize our business may not be successful.

In addition, our ability to complete our expense reduction initiatives and achieve the anticipated benefits within the expected time frame is subject to estimates and assumptions and may vary

Q1 Fiscal 2026 Form 10-Q

materially from our expectations, including as a result of factors that are beyond our control.

Furthermore, our efforts to stabilize our business may not be successful.

We are not cash flow positive and may not have sufficient cash to make required payments under the terms of our debt or fund our long-term planned operations.

Our operations have consumed substantial amounts of cash since inception, and we expect to continue to incur substantial losses and negative cash flow from operations for the foreseeable future.

Additional funds may not be available on terms acceptable to us or at all.

Additional funds may not be available on terms acceptable to us or at all, particularly in light of our outstanding notes and lack of positive cash flow from operations.

We have incurred significant debt, and we may incur additional debt in the future.

As of December 31, 2024, we had outstanding approximately $200.0 million aggregate principal amount of our 1.50% Convertible Senior Notes due 2029 (the “2029 Notes”) and $441.0 million aggregate principal amount of our 1.375% Convertible Senior Notes due 2030 (the “2030 Notes” and together with the 2029 Notes, the “Notes”).

As of March 31, 2026, we had outstanding approximately $200.0 million aggregate principal amount of our 1.50% Convertible Senior Notes due 2029 (the “2029 Notes”) and $441.0 million aggregate principal amount of our 1.375% Convertible Senior Notes due 2030 (the “2030 Notes” and together with the 2029 Notes, the “Notes”).

As discussed in Note 4 .

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If our cash, cash equivalents and investments are insufficient to fund our projected operating requirements and we are unable to raise capital, it could have a material adverse effect on our business, financial condition and results of operations and prospects.

The disposition of our assets related to our short-read DNA sequencing technology and related clustering, sequencing reagent, and detection technologies could have a material adverse effect on our business, financial condition and results of operations.

On January 30, 2026, we completed a disposition of assets to Buyer in accordance with the terms of the Asset Purchase Agreement, pursuant to which, among other matters, Buyer acquired certain intellectual property and other assets related to our short-read DNA sequencing technology and related clustering, sequencing reagent, and detection technologies.

Pursuant to the Asset Purchase Agreement, we have retained certain liabilities arising from our short-read DNA sequencing technology and related clustering, sequencing reagent, and detection technologies as they existed

Q1 Fiscal 2026 Form 10-Q

prior to the closing of the Asset Sale.

While we are not aware of any such liabilities that may be material and have adequately accrued for these liabilities, there can be no assurances that additional expenditures will not be incurred in resolving these liabilities, which may have a material adverse effect on our business, operations, financial condition, operations and prospects.

We have made acquisitions and, in the future, may continue to acquire businesses, technologies or assets, form joint ventures or make other strategic investments with companies that could adversely affect our operating results, dilute our stockholders’ ownership, or cause us to incur debt or significant expense.

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• failure or material delay in closing a transaction;

Q3 Fiscal 2025 Form 10-Q

• transaction-related lawsuits or claims;

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Considering the highly complex technologies involved in our products, there can be no assurance that we will be able to manufacture and commercialize our current and future products on a timely basis or continue providing adequate support for our existing products.

The commercial success of our products, including the Revio, Onso and Vega systems, and the products under development, including acquired technologies, depends on a number of factors, including performance and reliability of the systems, our anticipating and effectively addressing customer preferences and demands, the success of our sales and marketing efforts, effective forecasting and management of product demand, purchase commitments and inventory levels, effective management of manufacturing and supply costs, and the quality of our products, including consumables such as SMRT Cells and reagents.

The commercial success of our products, including the Revio and Vega systems, and the products under development, including acquired technologies, depends on a number of factors, including performance and reliability of the systems, our anticipating and effectively addressing customer preferences and demands, the success of our sales and marketing efforts, effective forecasting and management of product demand, purchase commitments and inventory levels, effective management of manufacturing and supply costs, and the quality of our products, including consumables such as SMRT Cells and reagents.

Should we face delays in or discover unexpected defects during the further development or manufacturing process of instruments or consumables related to our products, including any delays or defects in software development or product functionality, the timing and success of the continued rollout and scaling of our products may be significantly impacted, which may materially and negatively impact our revenue and gross margin.

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Such testing may also expose fundamental flaws in our products that may cause us to abandon the further development of such products.

If the continued rollout of our current and future products, including with respect to the SMRT Cell, the Revio, Onso and Vega systems, is delayed or is not successful or less successful than anticipated, then we may not be able to achieve an acceptable return, if any, on our substantial research and development efforts, and our business may be materially and adversely affected.

The expenses or losses associated with delayed or unsuccessful product development or lack of market acceptance of our existing and new products, including the SMRT Cell and the Revio, Onso and Vega systems could materially and adversely affect our business, operations, financial condition, and prospects.

If the continued rollout of our current and future products, including with respect to the SMRT Cell, the Revio and Vega systems, is delayed or is not successful or less successful than anticipated, then we may not be able to achieve an acceptable return, if any, on our substantial research and development efforts, and our business may be materially and adversely affected.

The expenses or losses associated with delayed or unsuccessful product development or lack of market acceptance of our existing and new products, including the SMRT Cell and the Revio and Vega systems could materially and adversely affect our business, operations, financial condition, and prospects.

Q1 Fiscal 2026 Form 10-Q

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We have dedicated significant resources to developing our current products.

We are also engaged in substantial and complex research and development efforts, which, if successful, may result in the introduction of new products in the future, including in connection with the SMRT Cell and the Revio, Onso and Vega systems, in addition to other products currently under development, including acquired technologies.

We are also engaged in substantial and complex research and development efforts, which, if successful, may result in the introduction of new products in the future, including in connection with the SMRT Cell and the Revio and Vega systems, in addition to other products currently under development, including acquired technologies.

Our research and development efforts are complex and require us to incur substantial expenses and we may not be able to develop, manufacture and commercialize new products or obtain regulatory approval if necessary.

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If our products and services fail to deliver the performance, scalability or results expected by our current and future customers, or are not delivered on a timely basis, our reputation and credibility may suffer, our current and future sales and revenue may be materially harmed and our business may not succeed.

For instance, if we are not able to successfully execute on the commercialization plan for our Revio HiFi long-read sequencing system and the Vega benchtop long-read sequencing system, and each of their related consumables, and any future products that may be developed for research, medical and clinical uses, including acquired technologies, it could have a material adverse effect on our business, financial condition and results of operations.

For instance, if we are not able to successfully demonstrate the differentiated value of long-read sequencing relative to short-read sequencing, and execute on the commercialization plan for our Revio HiFi long-read sequencing system and the Vega benchtop long-read sequencing system, and each of their related consumables, and any future products that may be developed for research, medical and clinical uses, including acquired technologies, it could have a material adverse effect on our business, financial condition and results of operations.

In addition, the introduction of future products, including with respect to future long-read products, and related consumables, has led and may in the future lead to our limiting or ceasing development of further enhancements to our existing products as we focus our resources on new products, and has resulted and could in the future result in reduced marketplace acceptance and loss of sales of our existing products, materially adversely affecting our revenue and operating results.

The introduction of new products, including the recent commercialization of our Vega system, has had and may in the future also have a negative impact on our revenue in the near-term as our current and future customers have delayed or cancelled and may in the future delay or cancel orders of existing products in anticipation of new products and we may also be pressured to decrease prices for our existing products.

The introduction of new products, including the recent announcement of SPRQ-Nx and commercialization of our Vega system, has had and may in the future also have a negative impact on our revenue in the near-term as our current and future customers have delayed or cancelled and may in the future delay or cancel orders of existing products in anticipation of new products and we may also be pressured to decrease prices for our existing products.

Our experience in managing product transitions is limited, and we have experienced, and may in the future experience, difficulty in managing or forecasting customer reactions, purchasing decisions or transition requirements with respect to newly launched products.

We have incurred and may continue to incur significant costs in completing these transitions, including costs of write-downs of our products, as current or future customers transition to new products.

If we do not successfully manage these product transitions, including with respect to the Revio, Onso and Vega systems and each of their related consumables, and any future long-read products, our business, operations, financial condition, and prospects may be materially and adversely affected.

If we do not successfully manage these product transitions, including with respect to the Revio and Vega systems and each of their related consumables, and any future long-read products, our business, operations, financial condition, and prospects may be materially and adversely affected.

Our business may be adversely affected by epidemics or other public health emergencies.

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We need to continue to expand and update our internal capabilities or to collaborate with other partners, or both, in order to successfully expand sales of our products in the applications that we seek to reach, which we may be unable to do at the scale required to support our business.

If the demand for our products grows more slowly than anticipated, if we are unable to successfully scale or otherwise ensure sufficient manufacturing capacity for new products to meet demand, if we are not able to successfully market and sell our products, if competitors develop better or more cost-effective products, if our product launches and commercialization are not successful, or if we are unable to further grow our customer base or do not realize the growth with existing customers that we are expecting, our current and future sales and revenue may be materially and adversely harmed, or we may recognize an impairment loss, and our business may not succeed.

If the demand for our products grows slower than anticipated, if we are unable to successfully scale or otherwise ensure sufficient manufacturing capacity for new products to meet demand, if we are not able to successfully market and sell our products, if competitors develop better or more cost-effective products, if our product launches and commercialization are not successful, or if we are unable to further grow our customer base or do not realize the growth with existing customers that we are expecting, our current and future sales and revenue may be materially and adversely harmed, our gross margins and operating results may decline, our

Q1 Fiscal 2026 Form 10-Q

cash flows and liquidity may be negatively impacted, our long-term growth strategy may not be realized, and our business may not succeed.

We rely on other companies for the manufacture of certain of our products, components and sub-assemblies and intend to outsource additional sub-assemblies in the future, some of which are sole sources.

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If we are required to purchase these products or components from alternative sources, it could take several months or longer to qualify the alternative sources.

If we are unable to source these products or product components from sole-source third-party manufacturing and supply collaborators for any reason, including in connection with the U.S.

federal government shutdown, acts of terrorism, hostilities, military conflict and acts of war, including between China and Taiwan, or secure a sufficient supply of these products or product components on a timely basis and at an acceptable cost, or if these products or components do not meet our expectations or specifications for quality and functionality, our operations and manufacturing would be materially and adversely affected, we could be unable to meet customer demand and our business and results of operations may be materially and adversely affected.

If we are unable to source these products or product components from sole-source third-party manufacturing and supply collaborators for any reason, including acts of terrorism, hostilities, military conflict and acts of war, including between China and Taiwan, or secure a sufficient supply of these products or product components on a timely basis and at an acceptable cost, or if these products or components do not meet our expectations or specifications for quality and functionality, our operations and manufacturing would be materially and adversely affected, we could be unable to meet customer demand and our business and results of operations may be materially and adversely affected.

Q1 Fiscal 2026 Form 10-Q

The operations of our third-party manufacturing partners and suppliers have had and may in the future be disrupted by conditions unrelated to our business or operations or that are beyond our control, including but not limited to changing international trade policies, inflation, supply chain disruptions, and conditions related to epidemics or pandemics.

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Various government policies have had, and may continue to have in the future, a negative impact on manufacturing and/or supply chains, in addition to customer demand for our products and demand through certain distributors.

As a result of global economic or political instability, such as the uncertainty in the Middle East, an escalation of the war in Ukraine, potential uncertainty related to Taiwan and its relationship with China, changing international trade policies, other disease outbreaks, or supply issues, we or our contractors could experience shortages, business disruptions or delays for materials sourced or manufactured in the affected countries, and their ability to supply us with instruments, products or components may be affected.

As a result of global economic or political instability, war and other international conflicts, such as the conflicts in the Middle East (including Iran), an escalation of the war in Ukraine, potential uncertainty related to Taiwan and its relationship with China, changing international trade policies, other disease outbreaks, or supply issues, we or our contractors could experience shortages, business disruptions or delays for materials sourced or manufactured in the affected countries, and their ability to supply us with instruments, products or components may be affected.

For example, in times of global conflicts, we have experienced and may continue to experience supply shortages, delays in contracting, and negative impacts on delivering and installing products at customer locations adversely affected by such conflicts.

While the conflict in the Middle East (including Iran) has not resulted in any material disruption to the supply of component materials that we source directly, we continue to monitor supplier operations, commodity markets, and transportation-related factors, including shipping lanes.

These factors could adversely affect the availability and cost of raw materials sourced by our direct suppliers, as well as the cost and timing of transporting our products to customers.

In addition, due in part to accelerated demand associated with data processing and storage applications, we have experienced and may continue to experience inflationary pressure with respect to certain components of certain of our products, including with respect to semiconductor materials, such as memory chips.

Occasionally, system components and reagents reach the end of their life cycles or become obsolete, requiring us to source alternatives.

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Accordingly, if any of the foregoing occurs, our ability to commercialize our products, revenue and gross margins could suffer until lockdowns related to epidemics or pandemics are lifted, supply issues or business disruptions are resolved and/or other sources can be developed.

Q3 Fiscal 2025 Form 10-Q

Our current manufacturing process is also characterized by long lead times between the placement of orders for and delivery of our products.

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We have experienced and may continue to experience delays, quality issues or other difficulties leading to customer dissatisfaction with our products.

Our production of SMRT Cells, flow cells and of reagents for both our long- and short-read technologies, involve a long and complex manufacturing process and has been and may in the future be below desired yields and resulting output levels.

Our production of SMRT Cells, flow cells and of reagents for our long-read technologies, involve a long and complex manufacturing process and has been and may in the future be below desired yields and resulting output levels.

We have experienced and may experience in the future manufacturing delays, product defects, variability in the performance of SMRT Cells, flow cells and other products, inadequate reserves for inventory, or other issues.

Q1 Fiscal 2026 Form 10-Q

There is no assurance that we will be able to manufacture our products so that they consistently achieve the product specifications and quality that our customers expect, including any products developed for clinical uses.

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Our inability to develop and introduce new products and to gain market acceptance of our existing and new products could harm our future operating results.

Unanticipated difficulties or delays in replacing existing products with new products or in commercializing our existing or new products in sufficient quantities and of acceptable quality to meet customer demand, including with respect to the SMRT Cell and the Revio, Onso and Vega systems, could diminish future demand for our products and may materially and adversely harm our future operating results.

Q3 Fiscal 2025 Form 10-Q

The size of the markets for our products, including our Revio, Onso and Vega instruments, may be smaller than estimated, and new market opportunities may not develop as quickly as we expect, or at all, limiting our ability to successfully sell our products.

The market for sequencing systems and consumables products is evolving, making it difficult to accurately predict the size of the markets for our current and future products, including our Revio, Onso and Vega instruments.

Unanticipated difficulties or delays in replacing existing products with new products or in commercializing our existing or new products in sufficient quantities and of acceptable quality to meet customer demand, including with respect to the SMRT Cell and the Revio and Vega systems, could diminish future demand for our products and may materially and adversely harm our future operating results.

The size of the markets for our products, including our Revio and Vega instruments, may be smaller than estimated, and new market opportunities may not develop as quickly as we expect, or at all, limiting our ability to successfully sell our products.

Our estimates of the total addressable market for our current and future products are based on a number of internal and third-party estimates and assumptions that may be incorrect, including the assumptions that academic, governmental, corporate, or other sources of funding will continue to be available to life sciences researchers at times and in amounts necessary to allow them to purchase our products.

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As a result, our estimates of the total addressable market and growth opportunities for our products may be incorrect.

Q1 Fiscal 2026 Form 10-Q

The future growth of the market for our current and future products depends on many factors beyond our control, including recognition and acceptance of our products by the research and scientific communities, the growth, prevalence and costs of competing products and solutions and the development of robust ecosystems supporting our products and their methodologies.

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These companies may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards, or customer requirements.

Q3 Fiscal 2025 Form 10-Q

There are also several companies that are in the process of developing or have already developed and commercialized new, competing or potentially competing technologies, products and/or services, including ONT Ltd.

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• the performance and commercial availability expectations of our existing and potential customers with respect to new and existing products;

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• availability of potential sales and distribution partners to sell our technologies, and our ability to attract and retain such sales and distribution partners;

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We receive a significant portion of our revenue from a limited number of customers.

While during the nine months ended September 30, 2025, and 2024, no customer accounted for 10% or more of our total revenue, many of our customers make large purchases on a purchase-order basis rather than pursuant to long-term contracts.

While during the years ended December 31, 2025, 2024, and 2023, no customer accounted for 10% or more of our total revenue, many of our customers make large purchases on a purchase-order basis rather than pursuant to long-term contracts.

As a consequence of the concentrated nature of our customer base and their purchasing behavior, our quarterly revenue and results of operations have fluctuated, and may fluctuate in the future, from quarter to quarter and are difficult to forecast.

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To the extent one or more of our larger customers experience significant financial difficulty, bankruptcy or insolvency, this could have a material adverse effect on our sales and our ability to collect on receivables, which could materially and adversely harm our financial condition and results of operations.

Q3 Fiscal 2025 Form 10-Q

In addition, many of our customers, including some of our larger customers, have negotiated, or may in the future negotiate, volume-based discounts or other more favorable terms from us or our sales and distribution partners, which have had and may have a negative effect on our gross margins or revenue.

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The loss of one of our larger customers, a significant delay or reduction in its purchases, or any volume-based discount or other more favorable terms that we or our sales and distribution partner(s) may agree to provide, in light of the aggregated purchase volume or buying power resulting from such consolidation, has harmed, and in the future could harm, our business, financial condition, results of operations and prospects.

Q1 Fiscal 2026 Form 10-Q

Our products are highly complex, have recurring support requirements and could have unknown defects or errors, which may give rise to claims against us or divert application of our resources from other purposes.

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Our customers have previously experienced reliability issues with our existing products, including the Sequel and Sequel II/IIe systems.

In addition, it is possible our customers could experience reliability issues with current or future products, including the Revio, Onso and Vega systems.

In addition, it is possible our customers could experience reliability issues with current or future products, including the Revio and Vega systems.

Despite internal and external testing, defects, or errors may arise in our products, which could result in a failure to obtain, maintain, or increase market acceptance of our products, diversion of development resources, injury to our reputation and increased warranty, service, and maintenance costs.

New products, including the Revio, Onso and Vega systems, or enhancements to our existing products, including the SMRT Cell, in particular may contain undetected errors or performance problems that are discovered only after delivery to customers.

New products, including the Revio and Vega systems, or enhancements to our existing products, including the SMRT Cell, in particular may contain undetected errors or performance problems that are discovered only after delivery to customers.

If our products have reliability or other quality issues or require unexpected levels of support in the future, the market acceptance and utilization of our products may not grow to levels sufficient to support our costs and our reputation and business could be harmed.

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Any delay or reduction in purchases by current or potential customers or our inability to forecast fluctuations in demand could materially and adversely harm our future operating results.

Q3 Fiscal 2025 Form 10-Q

We may not be able to convert our orders in backlog into revenue.

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If our orders in backlog do not result in sales, our operating results may suffer.

Q1 Fiscal 2026 Form 10-Q

Our sales cycles are unpredictable and lengthy, which makes it difficult to forecast revenue and may increase the magnitude of quarterly or annual fluctuations in our operating results.

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We are subject to risks associated with political conflicts between the U.S.

While during the nine months ended September 30, 2025 and 2024, no customer accounted for 10% or more of our total revenue, a portion of our revenue is generated from China.

While during the years ended December 31, 2025, 2024, and 2023, no customer accounted for 10% or more of our total revenue, a portion of our revenue is generated from China.

In addition, certain components, some of which are critical components, of our products are manufactured in China.

These components are either sourced directly from companies in China or indirectly from third parties that source from companies in China.

Q3 Fiscal 2025 Form 10-Q

Consequently, we are subject to significant risks associated with the trading relationship between the U.S.

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Any such changes could directly and adversely impact our financial results and results of operations.

For more information, see “ — Enhanced trade tariffs, import restrictions, export restrictions or other trade barriers may materially harm our business.

For more information, see “— E nhanced trade tariffs, import restrictions, export restrictions , or other trade barriers may materially harm our business .”

Other risks could include:

• interruptions to operations in China as a result of potential disease outbreaks or natural catastrophic events, which have in the past and can result in the future in business closures, transportation restrictions, import and export complications and cause shortages in the supply of raw materials or disruptions in manufacturing;

Q1 Fiscal 2026 Form 10-Q

• product supply disruptions and increased costs as a result of heightened exposure to changes in the policies of the Chinese government, political unrest or unstable economic conditions in China;

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• our ability to achieve economies of scale and other manufacturing efficiencies at the rate we anticipate;

Q3 Fiscal 2025 Form 10-Q

• publications of studies by us, our competitors or third parties;

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• our ability to obtain additional financing as necessary;

• the impact of the U.S.

federal government shutdown on the U.S.

economy, capital markets and our business;

• changes or trends in new technologies and industry standards.

Q1 Fiscal 2026 Form 10-Q

Consequently, it is possible that in some quarters our operating results will fall below the expectations of securities analysts or investors.

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Changes in tax laws, regulations or rulings, changes in interpretations of existing laws and regulations or changes in accounting principles could negatively and materially affect our financial position, cash flows, and results of operations.

Q3 Fiscal 2025 Form 10-Q

Our facilities in California are located near earthquake faults, and the occurrence of an earthquake or other catastrophic disaster could cause damage to our facilities and equipment, which could require us to cease or curtail operations.

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• we or our licensors might not have been the first to file patent applications for these inventions;

Q1 Fiscal 2026 Form 10-Q

• it is possible that neither our pending patent applications nor the pending patent applications of our licensors will result in issued patents;

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The occurrence of any of these events could impair our ability to operate without infringing upon the proprietary rights of others or prevent us from establishing or maintaining a competitive advantage over our competitors.

Q3 Fiscal 2025 Form 10-Q

Variability in intellectual property laws may adversely affect our intellectual property position.

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Accordingly, we cannot predict the scope of the patents that may be granted to us with certainty, the extent to which we will be able to enforce our patents against third parties or the extent to which third parties may be able to enforce their patents against us.

Q1 Fiscal 2026 Form 10-Q

Some of the intellectual property that is important to our business is owned by other companies or institutions and licensed to us, and changes to the rights we have licensed may adversely impact our business.

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The occurrence of these events may have a material adverse effect on our business, financial condition or results of operations.

Q3 Fiscal 2025 Form 10-Q

The measures that we use to protect the security of and enforce our intellectual property and other proprietary rights may not be adequate, which could result in the loss of legal protection for, and thereby diminish the value of, such intellectual property and other rights.

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The occurrence of these events may have a material adverse effect on our business, financial condition, or results of operations.

Q1 Fiscal 2026 Form 10-Q

Our intellectual property may be subject to challenges in the United States or foreign jurisdictions that could adversely affect our intellectual property position.

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Such a loss of patent protection would have a material adverse impact on our business.

Q3 Fiscal 2025 Form 10-Q

Some of our technology is subject to “march-in” rights by the U.S.

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government, particularly for the benefit of one of more of our competitors, that may have a material adverse effect on our business.

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We are involved in legal proceedings to enforce our intellectual property rights.

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Furthermore, an adverse determination or judgement could lead to an award of damages against us, or the issuance of an injunction against us or our products that could prevent us from selling any products found to be infringing the intellectual property rights of another party.

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We have been, are currently, and could in the future be, subject to legal proceedings with third parties who may claim that our products infringe or misappropriate their intellectual property rights.

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As a result, third parties have claimed, and may in the future claim, that we infringe their patent rights and have filed, and may in the future file lawsuits or engage in other proceedings against us to enforce their patent rights.

For example, we are involved in legal proceedings for alleged patent infringement and related matters in the United States with Personal Genomics of Taiwan, Inc.

In addition, ONT Ltd.

and Harvard University have, in the past, filed claims against us in the High Court of England and Wales and the District Court of Mannheim, Germany for patent infringement, and PGI has filed claims against us in the U.S.

District Court for the District of Delaware and in the Wuhan People’s Court in China.

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The occurrence of these events may have a material adverse effect on our business, financial condition, or results of operations.

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In addition, in the course of our business, we may from time to time have access or be alleged to have access to confidential or proprietary information of others, which, though not patented, may be protected as trade secrets.

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A portion of the products or technologies developed and/or distributed by us incorporate “open source” software, and we may incorporate open source software into other products or technologies in the future.

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open source software licenses require that we disclose the source code for any modifications to such open source software that we make and distribute to one or more third parties, and that we license the source code for such modifications to third parties, including our competitors, at no cost.

Some open source software licenses require that we disclose the source code for any modifications to such open source software that we make and distribute to one or more third parties, and that we license the source code for such modifications to third parties, including our competitors, at no cost.

We monitor the use of open source software in our products to avoid uses in a manner that would require us to disclose or grant licenses under our source code that we wish to maintain as proprietary;

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Successful claims made by the licensors of open source software that we have violated the terms of these licenses could result in unanticipated obligations, including being subject to significant damages, being enjoined from distributing products that incorporate open source software and being required to make available our proprietary source code pursuant to an open source license, which could substantially help our competitors develop products that are similar to or better than ours or otherwise materially and adversely affect our business.

Q1 Fiscal 2026 Form 10-Q

Risks Related to Regulation

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For example, a governmental prohibition on the use of human in vitro diagnostics or other regulations that negatively impact the research and development activities of our customers would adversely impact our commercialization of products on which we have expended significant research and development resources, which would in turn have a material adverse impact on our business and prospects.

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Our products could become subject to government regulation as medical devices by the U.S.

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For example, our customers may independently elect to use our RUO labeled products in their own LDTs for clinical diagnostic use, which could subject our products to government regulation, and the regulatory clearance or approval and maintenance process for such products may be uncertain, expensive, and time-consuming.

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In particular, in 2013, the FDA issued Final Guidance “Distribution of In Vitro Diagnostic Products Labeled for Research Use Only.” The guidance emphasizes that the FDA will review the totality of the circumstances when it comes to evaluating whether equipment and testing components are properly labeled as RUO.

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District Court in Texas ruled that the FDA exceeded its authority and vacated and set aside this LDT final rule in its entirety.

We will continue to monitor this case, as well as any future lawsuits brought against the FDA, and future legislative and administration actions on our business.

We cannot predict the potential impact of any future lawsuits brought against the FDA, and future legislative and administration actions on our business.

Additionally, in June 2024, the U.S.

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We cannot predict the full impact of this decision on our business or that of our customers.

Further, under the new leadership at the Department of Health and Human Services under the Trump administration, agency reorganization, departure of high-profile regulators at the FDA, layoffs due to the reduction in force initiative may impact the normal operations of federal agencies, including the FDA.

Further, under the current administration, agency reorganization, departure of high-profile regulators at the FDA, and layoffs due to the reduction in force initiative may impact the normal operations of federal agencies, including the FDA.

NIH funding cuts can impact the business operations of our customers and decrease the demand for our products.

It is unclear how our industry and the businesses of our customers will be impacted by executive orders, policies and regulations implemented under the Trump administration.

It is unclear how our industry and the businesses of our customers will be impacted by executive orders, policies and regulations implemented under the current administration.

There is significant uncertainty in the industry.

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Such laws include, without limitation, state and federal anti-kickback or anti-referral laws, healthcare fraud and abuse laws, false claims laws, privacy and security laws, Physician Payments Sunshine Act and related transparency and manufacturer reporting laws, and other laws and regulations applicable to medical device manufacturers.

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If the FDA determines our products or related applications should be subject to additional regulation as in vitro diagnostic devices based upon customers’ use of our products for clinical diagnostic or therapeutic decision-making purposes, our ability to market and sell our products could be impeded and our business, prospects, results of operations and financial condition may be adversely affected.

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It is possible, in the event we elect to submit 510(k) applications for certain of our products, that the FDA would take the position that a more burdensome pre-market application, such as a PMA or a de novo application is required for some of our products.

If such applications were required, greater time and investment would be required to obtain FDA approval.

If such applications were required, greater time and investment would be required to

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obtain FDA approval.

Even if the FDA agreed that a 510(k) was appropriate, FDA clearance can be expensive and time consuming.

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Unlike many of the other companies offering nucleic acid sequencing equipment or consumables, this is an area where we do not have expertise.

We, or our other third-party sales and distribution partners, may not be able to obtain regulatory approvals in such countries or

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may incur significant costs in obtaining or maintaining our foreign regulatory approvals.

We, or our other third-party sales and distribution partners, may not be able to obtain regulatory approvals in such countries or may incur significant costs in obtaining or maintaining our foreign regulatory approvals.

In addition, the export by us of certain of our products, which have not yet been cleared for domestic commercial distribution, may be subject to FDA or other export restrictions.

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government has made and continues to make significant changes in U.S.

trade policy, specifically tariffs, and may continue to take actions that could negatively impact our business.

For example, since September 2018, the U.S.

Trade Representative (the “USTR”) enacted various Section 301 tariffs on certain commodities from certain U.S.

trading partners, most prominently China and Brazil, ranging from 7.5% to 100%.

In addition, since February 2025, under authority of the International Emergency Economic Powers Act (“IEEPA”), the U.S.

government enacted an additional 10% to 35% “fentanyl-related” ad valorem tariffs on virtually all goods from China, Canada, and Mexico, with an exception for items qualifying for duty-free treatment under the U.S.-Mexico-Canada Agreement (“USMCA”).

Since March 2025, the U.S.

government has also implemented new Section 232 tariffs of 10% to 50% on various commodities based on findings by the U.S.

government that imports of these items threaten to impair U.S.

national security, including but not limited to certain articles of steel and aluminum;

trade policy, specifically tariffs, and may continue to take actions that could negatively impact our business, including the imposition of Section 301 tariffs on imports of products of countries engaging in unfair trading practices;

of “reciprocal” and “fentanyl-related” tariffs imposed under the

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International Emergency Economic Powers Act (“IEEPA”) (which were subsequently invalidated by the U.S.

Supreme Court in February 2026);

of Section 232 tariffs on imports of items that threaten to impair U.S.

national security, including but not limited to certain advanced semiconductors, articles of steel and aluminum;

passenger vehicles, trucks, and automotive components;

certain articles of copper;

and timber, lumber, and certain articles of wood.

Department of Commerce has initiated Section 232 investigations into the import of additional products, including but not limited to semiconductors, semiconductor manufacturing equipment, processed critical minerals, derivative electronic products, pharmaceuticals and pharmaceutical products;

articles of copper;

and timber, lumber, and articles of wood;

as well as a “temporary import surcharge” imposed under Section 122 on certain imports from most U.S.

trading partners.

government announced in April 2026 that it would impose a new Section 232 tariff of 100% on certain patented or branded pharmaceuticals and pharmaceutical products beginning in July 2026.

Additional U.S.

government investigations are underway or may be undertaken with respect to Section 232 and Section 301 authorities;

when these investigations are complete, the U.S.

government may decide to levy additional tariffs on such products.

Additional IEEPA “reciprocal” tariffs of 10% to 125% ad valorem have been imposed since April 2025 on most imports from most U.S.

trading partners, initially at a baseline 10% reciprocal tariff rate and now at various country-specific reciprocal tariff rates since August 2025—with limited exceptions for certain pharmaceuticals, semiconductors, computers, and certain other imports, and certain other exceptions as negotiated in trade deals reached between the U.S.

and various key trading partners.

government may decide to levy additional tariffs on products under these authorities.

Although, the Supreme Court ruled against President Trump’s use of IEEPA to impose tariffs on global trade partners, the full impact of this decision on previous tariffs that we have paid —including the availability and timing of possible refunds for these amounts—is not yet clear.

In response to these and other U.S.

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These trade controls have and could continue to raise our costs.

Furthermore, tariffs, trade restrictions, or trade barriers that have been, or may in the future be, placed on products such as ours by foreign governments, which have raised and could further raise amounts paid for some or all of our products, which may result in the loss of customers and our business, and our financial condition and results of operations may be harmed.

Although some of these risks have been contained by trade deals reached between the U.S.

and affected governments, including China, the EU, Japan, and South Korea.

For example, the trade deal reached between the U.S.

and the EU in July 2025 resulted in the implementation of a 15% all-in reciprocal tariff on imports of EU goods into the U.S as of August 2025, and short-term trade deals reached between the U.S.

and China have resulted in implementation of a 10% reciprocal tariff on imports of Chinese goods into the U.S.

through November 2025.

and affected governments, including China, the EU, Japan, Taiwan, and South Korea.

However, these policies are subject to continued negotiation and effective policies may change over time;

for example, these trade deals may not be fully honored or implemented following the changed legal circumstances stemming from the Supreme Court’s invalidation of the President’s use of IEEPA to impose tariffs.

We may be unable to make changes in our supply chain quickly enough to avoid the impact of new or potential tariffs, or to do so on commercially reasonable terms.

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export control laws and regulations, including the Export Administration Regulations administered by BIS.

Under these laws and regulations, exports of our products as well as the

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underlying technology may require export authorization, including by license, a license exception, or other appropriate government authorizations.

Under these laws and regulations, exports of our products as well as the underlying technology may require export authorization, including by license, a license exception, or other appropriate government authorizations.

Furthermore, our products and services are subject to U.S.

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Department of Treasury’s Office of Foreign Assets Control that prohibit the provision of services and the export of hardware, software, and technology to embargoed jurisdictions or sanctioned parties without the required export authorizations.

government has continued to increase controls imposed in 2022 restricting the ability to send certain products and technology related to semiconductors, semiconductor manufacturing, and supercomputing including expanding the list of advanced integrated circuits subject to heightened export controls, expanding the list of destinations requiring export authorization for such items, and adding new restrictions based on the headquarters location of the parties involved.

government has continued to increase controls initially imposed in 2022 restricting the ability to send certain products and technology related to semiconductors, semiconductor manufacturing, and supercomputing including expanding the list of advanced integrated circuits subject to heightened export controls, expanding the list of destinations requiring export authorization for such items, and adding new restrictions based on the headquarters location of the parties involved.

In many cases, these licenses are subject to a policy of denial and will not be issued.

Regulations further expanding the controls to impose a worldwide licensing requirement on certain integrated circuits and computing resources that are used for training of AI models were introduced in January 2025, with a scheduled compliance date beginning in April 2025.

Although these regulations were rescinded shortly before the compliance date, we expect that they will be replaced by a new regulation containing a version of these controls.

government also continues to add additional entities in China and other countries to restricted party lists impacting the ability of U.S.

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If we need to obtain any necessary export licenses or other authorizations for a particular sale, the process may be time-consuming and may result in the delay or loss of opportunities to sell our products.

In addition, these licenses may not be issued.

In April 2025, the Company received inquiries from BIS regarding a distributor based in Hong Kong and that distributor's customer located in China.

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This self-disclosure was closed out by BIS in September 2025 without penalties with a warning letter.

If we are found to be in violation of U.S.

economic sanctions or export control laws, it could result in fines and penalties.

We may also be adversely affected through other penalties, business disruption, reputational harm, loss of access to certain markets, or otherwise.

There is currently significant uncertainty about the future relationship between the U.S.

and various other countries, most significantly China, with respect to trade restrictions, treaties, foreign investment laws, data

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transfer restrictions, and other limitations on cross-border operations.

government has made and continues to make significant additional changes in U.S.

trade policy and may continue to take future actions that could introduce additional restrictions and negatively impact our business.

For example, legislation in Congress known as the BIOSECURE Act was passed as part of the 2026 National Defense Authorization Act, which limits certain U.S.

biotechnology companies from using equipment or services produced or provided by select Chinese biotechnology companies, and others in Congress have advocated for the use of existing executive branch authorities to limit those Chinese service providers’ ability to engage in business in the U.S.

This legislation, or similar laws and regulations in the future, could adversely impact our current or future third-party arrangements with certain companies, including those in China or Chinese-owned U.S.

companies, which could delay or impact our clinical trials and consequently delay or obstruct successful commercialization of our product candidates.

We cannot predict what actions may ultimately be taken with respect to trade relations between the United States and China or other countries, what products and services may be subject to such actions or what actions may be taken by the other countries in retaliation.

If we are unable to obtain or use services from existing service providers or become unable to export or sell our products to any of our customers or service providers, our business, liquidity, financial condition, and/or results of operations would be materially and adversely affected.

Compliance with these laws and regulations may be costly.

In addition, if we are found to be in violation of U.S.

economic sanctions or trade control laws, it could result in fines and penalties.

We may also be adversely affected through other penalties, business disruption, loss of export privileges, reputational harm, loss of access to certain markets, or otherwise.

It is possible that our ability to export our products to customers or distributors may be further restricted in the future.

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While the Company’s products would not be included under the current IFR, future BIS or other government regulations could potentially apply to our products and/or negatively impact our ability to export those products to certain countries and markets.

The Chinese government has introduced and may in the future introduce retaliatory measures in response to existing or future U.S.

export controls, tariffs and other trade restrictions and it is possible that the Chinese or U.S.

governments will implement additional retaliatory measures which could impact our business.

The Chinese government has introduced and may in the future introduce additional retaliatory measures in response to existing or future U.S.

export controls, tariffs and other trade restrictions and it is possible that the Chinese, U.S., or other foreign governments will implement additional retaliatory measures which could impact our business.

It is possible that additional restrictions will be put in place that could impact our ability to provide our products to customers or distributors in China or source components from China.

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Bribery Act of 2010 and other anti-corruption laws, regulations relating to the use of certain hazardous substances or chemicals in commercial products, and require the collection, reuse, and recycling of waste from products we manufacture;

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• required compliance with U.S.

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• restrictions on both inbound and outbound cross-border investment;

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• foreign currency exchange, longer payment cycles and difficulties in enforcing agreements and collecting receivables through certain foreign legal systems;

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The information obtained from our products could be used in a variety of applications which may have underlying ethical, legal, privacy, data protection and social concerns, including the genetic engineering or modification of agricultural products or testing for genetic predisposition for certain medical conditions.

Governmental authorities could, for safety, social or other purposes, call for limits on or regulation of the use of

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genetic testing, and may consider or adopt such regulations or other restrictions.

Governmental authorities could, for safety, social or other purposes, call for limits on or regulation of the use of genetic testing, and may consider or adopt such regulations or other restrictions.

Such concerns or governmental restrictions could limit the use of our products or be costly and burdensome to comply with, and actual or perceived violations of any such restrictions may lead to the imposition of substantial fines and penalties, remediation costs, claims and litigation, regulatory investigations and proceedings, and other liability, any of which could have a material adverse effect on our business, financial condition, and results of operations.

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Regulations related to conflict minerals has caused us to incur, and will continue to cause us to incur, additional expenses and could limit the supply and increase the costs of certain materials used in the manufacture of our products.

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• sales of our common stock by us or our stockholders;

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• stock price and volume fluctuations attributable to inconsistent trading volume levels of our shares;

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• operating results below the expectations of securities analysts or investors;

federal government shutdown, acts of terrorism, hostilities or the perception that hostilities may be imminent, and military conflict and acts of war.

Q1 Fiscal 2026 Form 10-Q

• general economic and market conditions, which could be impacted by various events including health epidemics or pandemics, interest rate fluctuations, increases in fuel prices, foreign currency fluctuations, changing international trade policies, acts of terrorism, hostilities or the perception that hostilities may be imminent, and military conflict and acts of war.

If any of the forgoing occurs, it would cause our stock price or trading volume to decline.

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This control could have the effect of delaying or preventing a change of control of our company or changes in management and will make the approval of certain transactions difficult or impossible without the support of these stockholders.

Q3 Fiscal 2025 Form 10-Q

Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management and limit the market price of our common stock.

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• specify that special meetings of our stockholders can be called only by our board of directors, the Chair of the Board, the Chief Executive Officer or the President;

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• establish advance notice procedures for stockholder approvals to be brought before an annual meeting of our stockholders, including proposed nominations of persons for election to our board of directors;

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To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our amended and restated bylaws also provide that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act including, without limitation and for the avoidance of doubt, any auditor, underwriter, expert, control person or other defendant.

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Any person or entity purchasing, holding or otherwise acquiring any interest in any of our securities shall be deemed to have notice of and consented to the foregoing bylaw provisions.

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Further, in the event a court finds either exclusive forum provision contained in our bylaws to be unenforceable or inapplicable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our results of operations.

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Our large number of authorized but unissued shares of common stock may potentially dilute existing stockholders’ stockholdings.

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We may not have the ability to raise the funds necessary to settle conversions of the Notes in cash or to repurchase the Notes upon a fundamental change, and our future debt may contain limitations on our ability to pay cash upon conversion or repurchase of the Notes.

As of September 30, 2025, we had outstanding approximately $200.0 million aggregate principal amount of our 2029 Notes and $441.0 million aggregate principal amount of our 2030 Notes.

As of March 31, 2026, we had outstanding approximately $200.0 million aggregate principal amount of our 2029 Notes and $441.0 million aggregate principal amount of our 2030 Notes.

The 2029 Notes will mature on August 15, 2029, subject to earlier conversion, redemption or repurchase, including upon a fundamental change.

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However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of Notes surrendered therefor or pay cash with respect to Notes being converted or at their maturity.

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In addition, our ability to repurchase the Notes or to pay cash upon conversions of Notes or at the applicable maturity may be limited by law, regulatory authority or agreements governing our future indebtedness.

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On November 21, 2024, in connection with the issuance of the 2029 Notes, the Company and SB Northstar LP (“SBN”) entered into a letter agreement (the “Letter Agreement”) pursuant to which the Company and SBN agreed that, for so long as SBN and its affiliates hold at least $180 million aggregate principal amount of the 2029 Notes, the Company and its subsidiaries are subject to certain negative covenants that restrict the Company’s and its subsidiaries’ ability to incur additional indebtedness and create liens, in each case, subject to the exceptions set forth in the Letter Agreement, including exceptions which permit the Company to incur up to $75 million in aggregate principal amount of secured indebtedness pursuant to Credit Facilities (as defined in the Letter Agreement).

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Additionally, the Letter Agreement restricts the ability of the Company and its subsidiaries from guaranteeing any indebtedness or incurring certain indebtedness outside of the ordinary course of business unless, in each case, the Company and its subsidiaries concurrently provide a guarantee of the Company’s obligations under the 2029 Notes.

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A breach of any of the covenants under the Letter Agreement could result in an event of default under the 2029 Notes.

As of September 30, 2025, we were in compliance with all covenants under the Letter Agreement.

As of March 31, 2026, we were in compliance with all covenants under the Letter Agreement.

However, if an event of default occurs, SBN could accelerate our obligations under the 2029 Notes.

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The existence of the Notes may encourage short selling by market participants because the conversion of the Notes could depress the price of our common stock.

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General Risk Factors

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General conditions in the global economy and in the global financial markets could adversely affect our results of operations, and the overall demand for nucleic acid sequencing products may be particularly vulnerable to unfavorable economic conditions.

A global financial crisis, inflation or a global or regional political disruption, as well as the U.S.

federal government shutdown, acts of terrorism, hostilities, military conflict and acts of war, including any further escalation of the conflict in the Middle East and the war in Ukraine, as well as the related responses, could cause extreme volatility in the capital and credit markets.

A global financial crisis, inflation or a global or regional political disruption, acts of terrorism, hostilities, military conflict and acts of war, including any further escalation of the conflicts in the Middle East (including Iran) and the war in Ukraine, as well as the related responses, could cause extreme volatility in the capital and credit markets, and disrupt shipping lanes.

We have experienced and may continue to experience negative impacts from the conflicts in the Middle East (including Iran) on delivering and installing products at customer locations adversely affected by such conflicts.

A severe or prolonged economic downturn or political disruption could result in a variety of risks to our business, including weakened demand for our products and our ability to raise additional capital when needed on acceptable terms, if at all.

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The failure to deliver our products in a safe and timely manner may harm our relationship with our customers, increase our costs and otherwise disrupt our operations.

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Doing business internationally creates operational and financial risks for our business.

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• challenges with defending against intellectual property claims in other countries;

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• restrictions on both inbound and outbound cross-border investment, including enhanced oversight by the Committee on Foreign Investment in the United States (“CFIUS”) and substantial restrictions on investment from China;

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on goods from other countries and tariffs imposed by other countries on U.S.

goods, which may be imposed on products such as ours, the scope and duration of which, if implemented, remains uncertain;

goods, which may be imposed on products such as ours, the amount, scope, and duration of which, if implemented, remains uncertain;

• deterioration of political relations among, between, and within the U.S., Russia, China, Japan, Korea, Mexico, Canada, the United Kingdom (“U.K.”), and the European Union ("E.U."), which could have a material adverse effect on our sales and operations in these countries;

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General Data Protection Regulation.

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In conducting our international operations, we are subject to U.S.

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If the current global economic environment deteriorates, our business could be negatively affected.

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Moreover, changes in the value of the relevant currencies may affect the cost of certain items required in our operations.

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Pursuant to Section 404 of the Sarbanes-Oxley Act, we perform periodic evaluations of our internal control over financial reporting.

While we have in the past performed this evaluation and concluded that our internal control over financial reporting was operating effectively, there can be no assurance that in the future material weaknesses or significant deficiencies will not exist or otherwise be discovered.

While we have in the past performed this evaluation and concluded that our internal control over financial reporting was operating effectively, there can be no assurance that in the future material

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weaknesses or significant deficiencies will not exist or otherwise be discovered.

In addition, if we are unable to produce accurate financial statements on a timely basis, investors could lose confidence in the reliability of our financial statements, which could cause the market price of our common stock to decline and make it more difficult for us to finance our operations and growth.

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federal government of certain grants or contracts may significantly impact the markets in which we compete.

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There is significant ongoing uncertainty with respect to potential legislation, regulation and government policy at the federal level, as well as the state and local levels.

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Our IT systems, including those used in our products, may be vulnerable to damage from a variety of sources, including telecommunications or network failures, power loss, natural disasters, human acts, computer viruses, ransomware, computer denial-of-service attacks, unauthorized access to customer or employee data or company trade secrets, and other attempts to harm our systems.

Furthermore, there may be a heightened risk of potential cybersecurity incidents and security breaches to which we could be vulnerable by state-sponsored or affiliated actors or others in connection with political uncertainty and conflict in the Middle East and the war in Ukraine.

Furthermore, there may be a heightened risk of potential cybersecurity incidents and security breaches to which we could be vulnerable by state-sponsored or affiliated actors or others in connection with political uncertainty, war and other international conflicts, including the conflicts in the Middle East (including Iran) and the war in Ukraine.

In addition, due to recent hostilities in the Middle East (including Iran) and elsewhere, certain companies have become more frequent targets of cyberattacks.

While incidents of cybersecurity breaches have not significantly impacted our IT systems, or to our knowledge our supply chain, we continue to monitor such risks given their potential to disrupt our and our suppliers’ operations and logistics networks.

Certain of our systems are not redundant, and our disaster recovery planning is not sufficient for every eventuality.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors