What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-11 compared with 2025-11-04 · 84 added, 125 removed, 216 unchanged (49% of the section changed)

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We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, operating results, business strategy, and short-term and long-term business operations and objectives.

These forward-looking statements speak only as of the date of this Quarterly Report and are subject to a number of risks, uncertainties and assumptions, including those described in Part I, Item IA, "Risk Factors" in our 2024 Annual Report.

The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements.

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With significant increases in autoimmune incidence in recent years, AVISE® CTD provides unique biomarkers that empower clinicians to confidently and quickly diagnose various CTDs.

Beginning in late 2022, we revitalized our organization with the addition of key members to our senior leadership team, including our Chief Executive Officer, Chief Financial Officer, Vice President of Sales, Chief Medical Officer, and Medical and Laboratory Director.

Beginning in late 2022, we revitalized our organization with the addition of key members to our senior leadership team, each with successful industry track records in diagnostics, medical device and medical technology, including our Chief Executive Officer, Chief Financial Officer, Chief Scientific Officer, Vice President of Sales, V ice President of Commercial Strategy, and Medical and Laboratory Director .

By leveraging our team’s extensive experience to create clinically distinct solutions that improve patient lives, we have created a strong foundation for growth and believe that we are well-positioned to positively impact patient care and address unmet clinical needs in autoimmune disease.

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Under the leadership of our Chief Executive Officer, John Aballi, who joined Exagen in October 2022, we have executed an operational turnaround of the business, resulting in a return to revenue growth and gross margin expansion while significantly reducing operating expenses and cash burn.

All of our AVISE® tests are performed in our approximately 13,000 square foot laboratory located in Vista, California, which is certified under the clinical laboratory testing administered by the Centers for Medicare &

Medicaid Services (CLIA) and accredited by the College of American Pathologists (CAP).

Our laboratory is certified for performance of high-complexity testing by the Centers for Medicare & Medicaid Services (CMS) in accordance with CLIA and is licensed by all states requiring out-of-state licensure.

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Since launching AVISE® CTD, we have produced an extensive body of peer-reviewed literature supporting the test’s clinical validity and utility, demonstrating the importance of AVISE® CTD in patient care.

Revenue from this product comprised 89% and 91% of our revenue for each of the nine months ended September 30, 2025 and 2024, respectively.

Revenue from this product comprised 91% and 92% of our revenue for the three months ended March 31, 2026 and 2025, respectively.

In addition to providing diagnostic testing, we are leveraging our clinical laboratory to enter into agreements in the normal course of business with leading pharmaceutical companies and contract research organizations for the use of our testing products and/or the de-identified data generated from such tests.

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We continue to leverage our intellectual property licensed from Johns Hopkins University to develop a test for detecting protein analytes in urine that can aid rheumatologists in the ongoing management and risk stratification of patients suffering from LN.

We are currently testing a new customized array and currently expect to have results of this testing in the fourth quarter of 2025.

We expect to make this panel available initially through Pharma collaborations for research use prior to releasing commercially through our clinical lab.

We tested a new customized array and presented novel data on the use of urinary biomarkers (especially Tenascin ‑ C) for the prediction of kidney function loss during the 2025 American College of Rheumatology annual meeting (ACR 2025).

During the first half of 2026, we expect further adoption by our existing and new pharma partnerships of our panel as part of exploratory trials.

In addition, we continue our efforts in releasing our LN offering commercially through our clinical lab.

▪ SLE Disease Activity .

We are continuing to leverage clinical and laboratory data collected across multiple longitudinal SLE cohorts to identify a set of biomarkers that can inform an AI-developed algorithm aimed at guiding ongoing treatment decisions throughout the course of a lupus patient’s journey.

This candidate assay for SLE Disease Activity is currently being clinically validated with patient recruitment ongoing.

We continue to leverage clinical and laboratory data collected across multiple longitudinal SLE cohorts to identify a set of biomarkers that can inform an artificial intelligence (AI) developed algorithm aimed at guiding ongoing treatment decisions throughout the course of a lupus patient’s journey.

Our candidate assay for SLE Disease Activity is currently being clinically validated with patient recruitment ongoing.

▪ RA Disease Activity .

We are also continuing to leverage our extensive biorepository containing clinically annotated serum collected from RA patients to screen for a host of protein antibody markers in an effort to develop an algorithmic solution that accurately predicts RA disease activity in a manner that outperforms conventional RA biomarkers.

This candidate assay for RA disease activity is in development, with the validation cohort procured for analysis.

Our candidate assay for RA disease activity is in development, with the validation cohort procured for analysis.

▪ Kidney Damage Biomarkers .

We have developed a four-protein blood-based panel, which sensitively detects kidney damage in early LN and diabetic nephropathy which significantly outperforms creatinine and eGFR.

A provisional patent application was filed in November 2024 for methods of detecting kidney damage using the blood-based panel.

An additional patent was filed in May 2025.

We continue to expect to make this panel available initially through Pharma collaborations for research use prior to releasing commercially through our clinical lab.

We have a multi‑analyte blood‑based panel under development, which sensitively detects kidney damage in early renal disease, outperforming creatinine and estimated glomerular filtration rate.

provisional patent applications were filed in May 2025 for methods of detecting kidney damage using the blood-based panel.

In addition, two abstracts were presented at ACR 2025 on our biomarker panel for early kidney damage comprising uromodulin, myo‑inositol oxygenase, heparanase, and apoptosis‑resistant E3 ubiquitin ligase 1.

Further investment is needed to make this offering commercially viable, and it has been deprioritized at this time, in light of other high‑potential programs within our pipeline.

▪ Myositis Biomarkers .

Myositis specific antibodies (MSA) are a well-defined group of important biomarkers for the diagnosis of idiopathic inflammatory myopathies, and the stratification of patients into clinical phenotypes, according to treatment responses, and disease outcomes.

Despite the advanced research on these markers, significant challenges persist with standardization and availability of validated methods with fast turnaround time.

Our research studies use different technologies for the detection of MSA.

When compared, we gain a unique understanding about potential avenues for product development in the area of myositis.

Factors Affecting Our Performance

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With a focus on research, innovation, education, and patient-centered care, we are dedicated to addressing the ongoing challenges of autoimmune disease management.

In January 2025, we announced conditional approval by the New York State Department of Health and commercial launch of our new SLE and RA biomarker assays on the AVISE® CTD platform.

In January 2025, we announced conditional approval by the New York State Department of Health (NYSDOH) and commercial launch of our new SLE and RA biomarker assays on the AVISE® CTD platform.

Collectively, we believe these new biomarkers will further improve the clinical utility of AVISE® CTD, providing clinicians with the information they need to definitively diagnose patients and shorten their autoimmune diagnostic journeys.

We expect the addition of these new biomarkers will continue to drive gains in our AVISE® CTD average selling price, gross margin expansion and increase demand while positioning us for profitability.

While these biomarkers have contributed positively to AVISE® CTD ASP, these gains have built gradually, and we remain encouraged by their progress.

We expect that, over time, these new biomarkers will continue to drive gains in AVISE® CTD average selling price and gross margin, increase demand, and better position us for profitability.

▪ Peptidyl Arginine Deiminase 4 (PAD4) Biomarkers.

During the third quarter of 2025, we received conditional approval from the New York State Department of Health and commercially launched our new PAD4 biomarker assays on the AVISE® CTD platform.

During the third quarter of 2025, we received conditional approval from the NYSDOH and commercially launched our new PAD4 biomarker assays on the AVISE® CTD platform.

Anti-PAD4 antibodies have been found to be 35% sensitive and 95% specific for RA in a peer-reviewed validation study.

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Additionally, changes in our estimated reimbursements for tests performed in prior periods can positively or negatively impact our revenue in the current period and cause our financial results to fluctuate.

In addition, in connection with our revenue cycle management initiatives, we held claims in the first half of the fiscal year ended December 31, 2024, which

resulted in increases in our accounts receivable and an accelerated decrease in our cash in the same period.

As expected, this trend reversed in the second half of the fiscal year ended December 31, 2024 as cash was collected on billed tests.

We held claims in the first quarter of the fiscal year ending December 31, 2025, which resulted in increases in our accounts receivable and an accelerated decrease in our cash in the same period and a reversal of that trend is expected in the remaining quarter of the fiscal year ending December 31, 2025.

In addition, in connection with our revenue cycle management initiatives, we have in the past and continue to hold claims in the first half of the fiscal year, which typically results in increases in our accounts receivable and an accelerated decrease in our cash in the same period, with the trend subsequently reversed in the second half of the fiscal year as cash is collected on billed tests.

▪ Expanding Adoption of AVISE® CTD.

Since the launch of AVISE ® CTD in 2012 and through September 30, 2025, we have delivered over one million of these tests.

During the three months ended September 30, 2025, the number of AVISE ® CTD tests delivered increased by approximately 16% over the same period in 2024 and increased sequentially by approximately 2% over the second quarter of 2025.

Since the launch of AVISE ® CTD in 2012 and through March 31, 2026, we have delivered over one million of these tests.

During the three months ended March 31, 2026, the number of AVISE ® CTD tests delivered increased by approximately 10% over the same period in 2025.

Revenue growth for our testing products will depend, in part, on our ability to continue to expand our base of ordering healthcare providers and increase our penetration with existing healthcare providers and on the success of the T-Cell Biomarkers and RA Sub-Profile Biomarkers, which we added to our AVISE ® CTD tests in January 2025.

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or other governments.

Our business requires access to reagents and other materials to run our tests, some of which we source from suppliers located outside the U.S., including Germany.

Our business requires access to reagents and other materials to run our tests, some of which we source from suppliers located outside the United States, including Germany.

Any imposition of or increase in tariffs or other restrictions on imports of reagents or other materials, as well as corresponding price increases for such materials available domestically, if any, could increase our costs.

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Noridian Healthcare Solutions (Noridian), our Medicare Administrative Contractor (MAC), has set the current pricing for this PLA code at $840.65 per test.

CMS will align local MAC pricing with national payment rates for the PLA code on the 2026 Clinical Laboratory Fee Schedule (CLFS) through their annual payment determination process to provide a standardized, nationally determined payment rate.

CMS will align local MAC pricing with national payment rates for the PLA code on the 2026 Clinical Laboratory Fee Schedule through their annual payment determination process to provide a standardized, nationally determined payment rate.

The process for obtaining and maintaining consistent reimbursement for new tests can be uncertain, lengthy and time consuming.

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Because the Executive Order extends to LCDs not yet in effect, it leaves the fate and timing of our LCD application uncertain.

In the meantime, we have continued to submit Medicare claims for AVISE® Lupus, appeal denials and responses to requests for additional information.

In the meantime, we have continued to submit Medicare claims for AVISE® Lupus, appeal denials and respond to requests for additional information.

On January 31, 2024, CMS released a coverage article under which all multi-analyte proteomic testing will be considered within the scope of the Molecular Diagnostic Services Program administered by Palmetto GBA on behalf of CMS (MolDX) and reviewed through their technology assessment process.

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During the fiscal year ended December 31, 2024, we experienced moderate declines in test volume since the second half of the fiscal year ended December 31, 2023, as rheumatologists and patients adjusted to these changes.

During the first three quarters of 2025, we saw a return to volume growth.

The number of AVISE® CTD tests delivered during the three months ended September 30, 2025 improved by approximately 16% as compared to the number of AVISE® CTD tests delivered during the three months ended September 30, 2024 due to continuing physician demand and adoption, early traction from our new biomarkers, and salesforce expansion.

Additionally, the trailing-twelve-month ASP of our AVISE® CTD tests increased by approximately 9% during the three months ended September 30, 2025 compared to the same period in 2024.

During the fiscal year ended December 31, 2025, we saw a return to volume growth.

The number of AVISE® CTD tests delivered during the three months ended March 31, 2026 improved by approximately 10% as compared to the number of AVISE® CTD tests delivered during the three months ended March 31, 2025 due to continuing physician demand and adoption, early traction from our new biomarkers, and salesforce expansion.

Additionally, the trailing-twelve-month ASP of our AVISE® CTD tests increased by approximately 6% during the three months ended March 31, 2026 compared to the same period in 2025.

Cost of Revenue

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As a result, our cost of revenue as a percentage of revenue may vary significantly from period to period due to the composition of payors for each period's billings.

Our cost per AVISE® CTD test has increased year-over-year as a result of costs associated with the addition of the T-Cell Biomarkers and RA Sub-Profile Biomarkers to our AVISE® CTD test.

Our cost per AVISE® CTD test has increased

year-over-year as a result of costs associated with the addition of the T-Cell Biomarkers and RA Sub-Profile Biomarkers to our AVISE® CTD test.

Operating Expenses

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Interest Expense

Interest expense consists of cash and non-cash interest expense associated with our financing arrangements.

We expect interest expense to increase by approximately $1.7 million annually, including an increase of $0.9 million in non-cash interest expense, in the year ending December 31, 2025 as compared to the year ended December 31, 2024, as a result of borrowings under the Perceptive Term Loan Facility.

Loss on Extinguishment of Debt

Loss on extinguishment of debt consists of the unamortized debt issuance costs and final payment fee due under the terms of the Amended Loan Agreement.

The Amended Loan Agreement was fully repaid and terminated on April 25, 2025.

Change in Fair Value of Warrant Liability

Changes in the fair value of the warrant liability relates to our issued warrants and commitments to issue warrants for the purchase of our common stock in connection with the Credit Agreement with Perceptive.

Interest Income

Interest income consists of interest income earned on our cash and cash equivalents.

Results of Operations

Comparison of the Three Months Ended September 30, 2025 and 2024 (in thousands):

Three Months Ended September 30,

2025 2024 Change

Revenue $ 17,244 $ 12,507 $ 4,737

Cost of revenue 7,169 5,526 1,643

Gross profit 10,075 6,981 3,094

Operating expenses:

Selling, general and administrative expenses 11,445 10,163 1,282

Research and development expenses 1,730 1,481 249

Total operating expenses 13,175 11,644 1,531

Loss from operations (3,100) (4,663) 1,563

Interest expense (1,319) (562) (757)

Loss on extinguishment of debt — — —

Interest expense consists of cash and non-cash interest expense associated with borrowings under the Perceptive Term Loan Facility as well as our other financing arrangements.

Change in Fair Value of Warrant Liability

Interest income 3 197 (194)

Loss before income taxes (7,086) (5,028) (2,058)

Changes in the fair value of the warrant liability relates to the Warrant Certificate.

Other Income (Expense), net

Other Income (Expense), net consists of gains and losses on debt modification related to the First Amendment executed in March 2026, as well as Interest income earned on our cash and cash equivalents.

Income Tax Expense

Net loss $ (7,087) $ (5,028) $ (2,059)

Revenue increased $4.7 million, or 37.9%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, due to an increase in test volume and continued ASP expansion.

The number of AVISE ® CTD tests delivered in the three months ended September 30, 2025 increased by approximately 16% compared to the same period in 2024.

In addition, our AVISE ® CTD trailing twelve-month ASP increased by $37 per test to $441 per test in the third quarter of 2025 from $404 per test in the third quarter of 2024.

Cost of Revenue

Cost of revenue increased $1.6 million, or 29.7%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

This increase was primarily due to increases in materials and supplies related to our new biomarkers and employee-related expenses (including salaries, benefits and stock-based compensation) related to increased headcount, and in facility-related expenses.

Gross margin as a percentage of revenue increased slightly to 58.4% for the three months ended September 30, 2025 compared to 55.8% for the three months ended September 30, 2024, primarily due to ASP expansion driven by our new biomarkers and improved overhead absorption.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased $1.3 million, or 12.6%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

This increase was primarily due to an increase in employee-related expenses (including salaries, benefits, travel and stock-based compensation) related to increased headcount, and an increase in outside services and facilities expense, partially offset by a decrease in other expenses.

We expect that our selling, general and administrative expenses may increase moderately in absolute dollars in the near-term as we expand our sales force and invest in infrastructure to support expected volume and revenue growth, but should decrease year-over-year as a percentage of revenue.

Research and Development Expenses

Research and development expenses increased $0.2 million, or 16.8%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

This increase was primarily due to an increase in employee-related expenses (including salaries, benefits and stock-based compensation), partially offset by a decrease in outside services and other expenses.

We expect that our research and development expenses may increase moderately in absolute dollars in the near-term as we execute on additional pipeline initiatives, but should decrease year-over-year as a percentage of revenue.

Interest Expense

Interest expense increased by $0.8 million, including an increase of $0.3 million in non-cash interest expense, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to the Perceptive Term Loan Facility that we entered into in April 2025 and the embedded finance lease related to the Amended Supply Agreement.

We expect to continue to incur this interest expense under the Perceptive Term Loan Facility.

Change in Fair Value of Warrant Liability

The fair value of the warrant liability increased by $2.7 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to increases in the fair value of the underlying common stock.

Interest Income

Interest income decreased by $0.2 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to a decrease in cash and cash equivalents held in money market funds.

Comparison of the Nine Months Ended September 30, 2025 and 2024 (in thousands):

Nine Months Ended September 30,

Income taxes include federal and state income taxes in the United States.

Results of Operations

Comparison of the Three Months Ended March 31, 2026 and 2025 (in thousands):

Three Months Ended March 31,

2026 2025 Change

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Interest expense (1,267) (545) (722)

Loss on extinguishment of debt (295) — (295)

Change in fair value of warrant liability 882 — 882

Interest income 246 570 (324)

Other income (expense), net (132) 158 (290)

Loss before income taxes (3,931) (3,752) (179)

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Net loss $ (3,967) $ (3,752) $ (215)

Revenue increased $8.0 million, or 19.0%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, due to continued ASP expansion, and an increase in test volume.

The number of AVISE ® CTD tests delivered in the nine months ended September 30, 2025 increased by approximately 8% compared to the same period in 2024.

In addition, our AVISE ® CTD trailing twelve-month ASP increased by $37 per test to $441 per test in the third quarter of 2025 from $404 per test in the third quarter of 2024.

Revenue increased $1.8 million, or 11.7%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily due to ASP expansion driven primarily by our new biomarkers, and, to a lesser extent, an increase in test volume.

The number of AVISE ® CTD tests delivered in the three months ended March 31, 2026 increased by approximately 10% compared to the same period in 2025.

In addition, our AVISE ® CTD trailing twelve-month ASP increased by $25 per test to $444 per test in the first quarter of 2026 from $419 per test in the first quarter of 2025.

Cost of Revenue

Cost of revenue increased $3.0 million, or 17.3%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

This increase was primarily due to increases in materials and supplies, related to our new biomarkers, increases in employee-related expenses (including salaries, benefits and stock-based compensation) related to increased headcount, as well as increased in facilities and other expenses, partially offset by decreases in shipping and handling costs, royalties, and outside services.

Gross margin as a percentage of revenue increased slightly to 59.3% for the nine months ended September 30, 2025 compared to 58.7% for the nine months ended September 30, 2024, primarily due to ASP expansion driven by our new biomarkers and improved overhead absorption.

Cost of revenue increased $0.7 million, or 11.4%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

This increase was primarily due to increases of $0.5 million in the cost of materials and supplies, $0.2 million in depreciation and amortization, and $0.2 million in other expenses, partially offset by a decrease of $0.2 million in employee-related expenses (including salaries, benefits and stock-based compensation).

Gross margin as a percentage of revenue increased to 59.0% for the three months ended March 31, 2026 compared to 58.9% for the three months ended March 31, 2025, primarily due to the changes to revenue and cost of revenue described above.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased $3.0 million, or 9.7%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

This increase was primarily due to increases in employee-related expenses (including salaries, benefits and stock-based compensation) related to increased headcount, as well as increased travel expenses and outside services, partially offset by a decrease in facilities-related expenses.

Selling, general and administrative expenses increased $0.9 million, or 7.7%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

This increase was primarily due to an increase of $0.8 million in employee-related expenses (including salaries, benefits, commissions, bonuses and stock-based compensation) and an increase of $0.1 million in outside services.

We expect that our selling, general and administrative expenses may increase moderately in absolute dollars in the near-term as we expand our sales force and invest in infrastructure to support expected volume and revenue growth, but expect our selling, general and administrative expenses to decrease year-over-year as a percentage of revenue.

Research and Development Expenses

Research and development expenses increased $0.8 million, or 20.9%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

This increase was primarily due to increases in employee-related expenses (including salaries, benefits and stock-based compensation), and outside services and other expenses.

We expect that our research and development expenses may increase moderately in absolute dollars in the near-term as we execute on additional pipeline initiatives, but should remain flat or moderately decrease year-over-year as a percentage of revenue.

Research and development expenses increased $0.3 million, or 21.0%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

This increase was primarily due to an increase of $0.3 million in employee-related expenses (including salaries, benefits, bonuses and stock-based compensation) and an increase of $0.1 million in clinical trial expenses, partially offset by a decrease of $0.1 million in outside services.

We expect that our research and development expenses may increase moderately in absolute dollars in the near-term as we execute on additional pipeline initiatives, but expect our research and development expenses to decrease year-over-year as a percentage of revenue.

Interest Expense

Interest expense increased by $1.3 million, including an increase of $0.5 million in non-cash interest expense, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily due to the Perceptive Term Loan Facility that we entered into in April 2025 and the embedded finance lease related to the Amended Supply Agreement.

Interest expense increased by $0.7 million, including an increase of $0.3 million in non-cash interest expense, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily due to the Perceptive Term Loan Facility that we entered into in April 2025 and the embedded finance lease related to a supply agreement, as amended, with one of our suppliers for certain reagents.

We expect to continue to incur this interest expense under the Perceptive Term Loan Facility.

Loss on Extinguishment of Debt

Loss on extinguishment of debt increased by $0.3 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, as a result of our early payoff of all outstanding indebtedness under the Amended Loan Agreement in April 2025.

Change in Fair Value of Warrant Liability

The fair value of the warrant liability increased by $3.1 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily due to increases in the fair value of the underlying common stock.

Interest Income

Interest income decreased by $0.3 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily due to a decrease in cash and cash equivalents held in money market funds.

The fair value of the warrant liability increased by $0.9 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily due to the Credit Agreement executed in April 2025.

Other Income (Expense), net

Interest income decreased $0.3 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily due to a $0.3 million net loss on debt modification related to the First Amendment executed in March 2026.

Liquidity and Capital Resources

We have incurred net losses since our inception.

For the nine months ended September 30, 2025 and 2024, we incurred a net loss of $15.3 million and $11.4 million, respectively, and we expect to incur additional losses in future periods.

For the three months ended March 31, 2026 and 2025, we incurred a net loss of $4.0 million and $3.8 million, respectively, and we expect to incur additional losses in future periods.

To date, we have generated only limited revenue, and despite any estimates we may make regarding our ability to become profitable, we may never achieve revenue sufficient to offset our expenses.

As of September 30, 2025, we had an accumulated deficit of $309.6 million and cash and cash equivalents of $35.7 million.

As of March 31, 2026, we had an accumulated deficit of $318.2 million and cash and cash equivalents of $21.5 million.

Cash in excess of immediate requirements is invested in accordance with our investment policy, primarily with a view to liquidity and capital preservation.

Currently, our funds are held in cash.

We held claims in the first quarter of the fiscal year ending December 31, 2025, which resulted in increases in its accounts receivable and an accelerated decrease in its cash and cash equivalents in the first quarter of the fiscal year ending December 31, 2025 and a reversal of that trend has occurred in the second and third quarters and is expected to continue in the remaining quarter of the fiscal year ending December 31, 2025.

A total of an additional $50.0 million is available at our option under the Perceptive Term Loan Facility should we attain specified revenue levels and satisfy other conditions.

A total of an additional $40.0 million is available at our option under the Perceptive Term Loan Facility as amended in March 2026 should we attain specified revenue levels and satisfy other conditions.

We held claims in the quarter ended March 31, 2026, which resulted in increases in our accounts receivable and an accelerated decrease in our cash and cash equivalents in the quarter ended March 31, 2026 and a reversal of that trend is expected in the remaining three quarters of the fiscal year ending December 31, 2026.

Since becoming a public company, our primary sources of capital have been cash inflows from product sales, sales of our common stock and, to a lesser extent, borrowings under term loan facilities.

Our obligations under the Perceptive Term Loan Facility are secured by a first-priority lien on substantially all of our existing and future assets.

In connection with the Credit Agreement, we have issued the Warrant Certificate to Perceptive.

In connection with the Credit Agreement, we issued the Warrant Certificate to Perceptive.

The Warrant Certificate has a ten-year term from the applicable issuance date and includes protection for certain dilutive issuances and registration rights provisions.

The Perceptive Term Loan Facility includes

customary affirmative, negative, and financial covenants.

The Perceptive Term Loan Facility includes customary affirmative, negative, and financial covenants.

These include, among others, restrictions on additional indebtedness, liens, dividends, mergers and acquisitions, and affiliate transactions.

The Perceptive Term Loan Facility also requires that we maintain a minimum unrestricted cash balance of $3.0 million and achieve specified net revenue levels on a quarterly basis beginning with the quarter ending June 30, 2025.

In addition, upon the occurrence of an event of default, Perceptive, among other things, can declare all indebtedness due and payable immediately, which would adversely impact our liquidity and reduce the availability of our cash flows to fund working capital needs, capital expenditures and other general corporate purposes.

As of September 30, 2025, we were in compliance with all covenants of the Perceptive Term Loan Facility.

On May 9, 2025, we issued and sold an aggregate of 3,852,500 shares of our common stock (inclusive of 502,500 shares pursuant to the exercise in full of the Underwriters’ option to purchase additional shares) at a public offering price of $5.25 per share, for aggregate net proceeds of $18.6 million after deducting underwriting discounts and commissions and other offering expenses.

On November 17, 2023, we filed the 2023 Shelf Registration Statement covering the offering, from time to time, of up to $150.0 million shares of our common stock, preferred stock, debt securities, warrants and units, of which $129.8 million remains available for sale at September 30, 2025.

On September 15, 2022, we entered into the Sales Agreement with TD Securities, as sales agent, pursuant to which we may offer and sell, from time to time, shares of common stock having an aggregate offering price of up to $50.0 million.

We are not obligated to sell any shares of the Company's common stock in the offering.

During the three months ended September 30, 2025, we have sold 360,554 shares of common stock under the Sales Agreement at an average per share price of $9.82, for gross proceeds of approximately $3.5 million and net proceeds of approximately $3.4 million after deducting $0.1 million in commissions paid to TD Securities and other offering expenses payable by us.

capital expenditures and other general corporate purposes.

As of March 31, 2026, we were in compliance with all covenants of the Perceptive Term Loan Facility.

On November 17, 2023, we filed the Shelf Registration Statement covering the offering, from time to time, of up to $150.0 million shares of our common stock, preferred stock, debt securities, warrants and units, of which $126.2 million remained available for sale at March 31, 2026.

On September 15, 2022, we entered into the Amended Sales Agreement with TD Cowen, as sales agent, pursuant to which we may offer and sell, from time to time, shares of common stock having an aggregate offering price of up to $50.0 million.

We are not obligated to sell any shares of our common stock under the Amended Sales Agreement.

As of December 31, 2025, we have sold 360,554 shares of common stock under the Amended Sales Agreement at an average per share price of $9.82, for gross proceeds of approximately $3.5 million and net proceeds of approximately $3.4 million after deducting $0.1 million in commissions paid to TD Cowen and other offering expenses payable by us.

During the three months ended March 31, 2026, we did not sell any shares of our common stock pursuant to the Amended Sales Agreement.

Funding Requirements

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Borrowings," and "Note 5.

Commitments and Contingencies ,” to our unaudited financial statements included in this Quarterly Report).

Based on our current business plan, we believe that our existing cash and cash equivalents and our anticipated future revenue, will be sufficient to meet our anticipated cash requirements for at least the next 12 months from the date of this filing.

Commitments and Contingencies ," to our unaudited condensed financial statements included in this Quarterly Report and "Note 5.

Leases ," to our financial statements included in our 2025 Annual Report).

Our estimate of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement and involves risks and uncertainties.

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• the extent to which we establish additional partnerships or in-license, acquire or invest in complementary businesses or products as well as the success of our existing partnerships and/or in-licenses.

Until such time, if ever, as we can generate revenue to support our costs structure, we may be required to finance our operations as needed through equity offerings, debt financings or other capital sources, including potentially collaborations, licenses and other similar arrangements.

Until such time, if ever, as we can generate revenue to support our costs structure, we may be required to finance our operations as needed through equity offerings, debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements.

The Perceptive Term Loan Facility involves, and any additional debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends.

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The following table summarizes our cash flows for the periods indicated:

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands)

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Cash Flows from Operating Activities

Net cash used in operating activities for the nine months ended September 30, 2025 was $10.6 million, primarily resulting from (i) our net loss of $15.3 million adjusted for non-cash charges of $7.9 million primarily related to stock-based compensation, depreciation, amortization, change in fair value of warrant liability, loss on extinguishment of debt, bad debt expense, non-cash lease expense and non-cash interest and (ii) changes in our net operating assets of $3.3 million primarily related to net increases in accounts receivable and net decreases in operating lease liabilities and accrued and other current liabilities and accounts payable, partially offset by net decreases in prepaid expenses and other current assets and other assets.

Net cash used in operating activities for the nine months ended September 30, 2024 was $13.6 million, primarily resulting from (i) our net loss of $11.4 million adjusted for non-cash charges of $3.7 million primarily related to stock-based compensation, depreciation, amortization and non-cash lease expense and (ii) changes in our net operating assets of $6.0 million primarily related to net increases in accounts receivable and net decreases in accounts payable, operating lease liabilities and accrued and other current liabilities, partially offset by net decreases in prepaid expenses.

The increase in accounts receivable was primarily due to delays in claim submission as part of our revenue cycle management initiatives.

Net cash used in operating activities for the three months ended March 31, 2026 was $10.4 million, primarily resulting from (i) our net loss of $4.0 million adjusted for non-cash charges of $1.3 million primarily related to change in fair value of warrant liability, stock-based compensation, depreciation and amortization, non-cash lease expense and non-cash interest and (ii) changes in our net operating assets of $7.8 million primarily related to net increases in accounts receivable and prepaid expenses and other current assets, partially offset by net decreases in accrued and other current liabilities and operating lease liabilities.

Net cash used in operating activities for the three months ended March 31, 2025 was $10.7 million, primarily resulting from (i) our net loss of $3.8 million adjusted for non-cash charges of $1.2 million primarily related to stock-based compensation, depreciation, amortization, non-cash lease expense and non-cash interest, and (ii) changes in our net operating assets of $8.1 million primarily related to net increases in accounts receivable and net decreases in accrued and other current liabilities and operating lease liabilities, partially offset by net increases in accounts payable.

Cash Flows from Investing Activities

Net cash used in investing activities for the nine months ended September 30, 2025 and 2024 was $0.6 million and $0.4 million, respectively, due to net purchases of property and equipment.

Net cash used in investing activities for the three months ended March 31, 2026 and 2025 was $0.2 million and $0.1 million, respectively, due to net purchases of property and equipment.

Cash Flows from Financing Activities

Net cash provided by financing activities for the nine months ended September 30, 2025 was $24.8 million, primarily resulting from $23.7 million in proceeds from the issuance of debt and warrants, net of discounts, $18.6 million in proceeds from common stock issued in public offering, net of issuance costs, $3.4 million in proceeds from common stock issued under the Sales Agreement with TD Securities, net of issuance costs, and $0.4 million in proceeds from common stock issued under the ESPP, partially offset by a $19.7 million payment to early extinguish debt, $0.9 million in payments of debt issuance costs, $0.4 million in principal payments on notes payable obligations, and $0.3 million in principal payments on finance lease obligations.

Net cash used in financing activities for the nine months ended September 30, 2024 was $0.4 million, primarily resulting from payments on finance lease and notes payable obligations, partially offset by proceeds from purchases under our ESPP.

Net cash used in financing activities for the three months ended March 31, 2026 was $0.1 million, primarily resulting from payments on finance lease and notes payable obligations, partially offset by proceeds from ESPP purchases.

Net cash used in financing activities for the three months ended March 31, 2025 was $0.1 million, primarily resulting from payments on finance lease and notes payable obligations, partially offset by proceeds from ESPP purchases.

Critical Accounting Estimates

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For a description of our critical accounting estimates, please see the section entitled " Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates " contained in our 2025 Annual Report.

There have been no significant changes in our critical accounting policies and estimates during the nine months ended September 30, 2025 as compared to the critical accounting policies and estimates disclosed in the Management’s Discussion and Analysis of Financial Condition and Operations included in our 2024 Annual Report.

There have been no significant changes in our critical accounting policies and estimates during the three months ended March 31, 2026 as compared to the critical accounting policies and estimates disclosed in the Management’s Discussion and Analysis of Financial Condition and Operations included in our 2025 Annual Report.

Recent Accounting Pronouncements

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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 2. Management’s Discussion and Analysis