Outset Medical, Inc.

Previous wording

Our ability to expand into the home hemodialysis market and the expansion of the home hemodialysis market itself

Current wording

Our ability to expand into the home-based and post-acute hemodialysis markets and the expansion of the home hemodialysis market itself;

Previous wording

Our ability to retain our commercial team, optimize our sales processes and expand the adoption of Tablo as we focus more heavily on enterprise selling

Current wording

Our ability to optimize our sales processes and expand the adoption of Tablo as we focus more heavily on enterprise selling;

Previous wording

Potential disruptions of service provided by third parties that host our cloud-based ecosystem and information technology systems

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Potential disruptions of service provided by third parties that host our cloud-based ecosystem and information technology systems; and

Previous wording

Impact of potential adverse medical events associated with Tablo, product failures or malfunctions, or our failure to report such events to the FDA

Current wording

Impact of potential adverse medical events associated with Tablo, product failures or malfunctions, or our failure to report such events to the FDA; and

Previous wording

Influence of principal stockholders and management over matters subject to stockholder approval

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Influence of principal stockholders and management over matters subject to stockholder approval; and

Previous wording

Our estimates or judgments relating to our accounting policies

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Our estimates or judgments relating to our accounting policies; and

Previous wording

We have incurred losses since our inception and expect to continue to incur significant net losses for the foreseeable future. We have incurred net losses of $128.0 million, $172.8 million and $163.0 million for the years ended December 31, 2024, 2023, and 2022, respectively. As of December 31, 2024, we had $162.0 million in cash, cash equivalents, restricted cash and short-term investments, and an accumulated deficit of $1.1 billion. Based on our current planned operations, we believe that our existing cash, cash equivalents and short-term investments, cash generated from sales, as well as proceeds received from the debt financing and the sale of our Series A Preferred Stock, each of which are described in Note 13, Subsequent Events, to our audited financial statements included in this Annual Report, will be sufficient to meet our anticipated needs for at least the next 12 months from the date of this Annual Report. We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect.

Current wording

We have incurred losses since our inception and expect to continue to incur significant net losses for the foreseeable future. We have incurred net losses of $81.7 million, $128.0 million and $172.8 million for the years ended December 31, 2025, 2024, and 2023, respectively. As of December 31, 2025, we had $172.8 million in cash, cash equivalents, restricted cash and short-term investments, and an accumulated deficit of $1.2 billion. Based on our current planned operations, we believe that our existing cash, cash equivalents and short-term investments, and cash generated from sales will be sufficient to meet our anticipated needs for at least the next 12 months from the date of this Annual Report. We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect.

Previous wording

While we have recently undertaken various initiatives designed to reduce operating expenses and working capital to align with anticipated revenue growth, including implementing restructuring plans to streamline our overall organizational structure and renegotiating commitments with suppliers to reduce inventory, we expect to continue to incur significant expenses for the foreseeable future and to incur operating losses in the near term while we make investments to support our anticipated growth. Our ability to achieve and sustain profitability will depend on our ability to grow our revenue while expanding gross margins, as well as the success of our efforts to optimize spending and working capital, including inventory. We may never achieve profitability, and even if we do achieve profitability, we cannot be sure that we will remain profitable for any substantial period of time. If we do not achieve or sustain profitability, it will be more difficult for us to finance our business and accomplish our strategic objectives, either of which would have a material adverse effect on our business, financial condition and results of operations.

Current wording

While we have undertaken various initiatives designed to reduce operating expenses and working capital to align with anticipated revenue growth, including implementing restructuring plans to streamline our overall organizational structure and renegotiating commitments with suppliers to reduce inventory, we expect to continue to incur significant expenses for the foreseeable future and to incur operating losses in the near term while we make investments to support our anticipated growth. Our ability to achieve and sustain profitability will depend on our ability to grow our revenue while expanding gross margins, as well as the success of our efforts to optimize spending and working capital, including inventory. We may never achieve profitability, and even if we do achieve profitability, we cannot be sure that we will remain profitable for any substantial period of time. If we do not achieve or sustain profitability, it will be more difficult for us to finance our business and accomplish our strategic objectives, either of which would have a material adverse effect on our business, financial condition and results of operations.

Previous wording

Over the past several years, we have moved the production of Tablo consoles and a majority of Tablo cartridges in-house to our manufacturing facility in Tijuana, Mexico which we operate in collaboration with our outsourced business administration service provider, TACNA. This has helped further our long-term gross margin expansion and supply continuity strategies while reducing the costs of Tablo console production and improving the flexibility of our operations. We plan to continue to use our design, engineering, supply chain, and manufacturing capabilities to help further advance and improve the efficiency of our manufacturing processes, lower the cost of parts and components, and lower our costs of production. However, there is no guarantee that we will be able to sustain cost reductions, achieve planned cost reductions, or otherwise achieve the anticipated benefits from our various initiatives. For example, we may be unable to sustain the savings associated with producing Tablo consoles at our manufacturing facility with TACNA, or the benefits we anticipate will result from insourcing Tablo cartridge production at this same facility may not materialize or be as significant as projected or realized within the timeframe we currently estimate. Moreover, increased tariffs imposed by the new administration, including on goods imported into the United States from Mexico and China, could adversely impact our supply chain and distribution costs, as well as our ability to achieve sustainable gross margins. While we do not believe we have exposure to these potential tariffs as Tablo, TabloCart and Tablo consumables are covered under a special exemption, we cannot predict what actions may ultimately be taken with respect to tariffs or trade relations between the United States and other countries (including Mexico and China), what products may be subject to such actions, or what actions may be taken by the other countries in retaliation. There may also be unforeseen occurrences that increase our costs, such as increased prices of raw materials, changes to labor costs, less favorable terms with third party suppliers, freight providers, or contract manufacturing partners, or disruptions to the operations of our contract manufacturers or third-party suppliers including as a result of public health crises such as the COVID-19 pandemic. If we are unable to reduce our costs or if cost reductions or other anticipated benefits are less significant or less timely than projected, we will not be able to achieve sustainable gross margins, which would adversely affect our ability to invest in and grow our business and adversely impact our business, financial condition and results of operations.

Current wording

Over the past several years, we have moved the production of Tablo consoles and a substantial majority of Tablo cartridges in-house to our manufacturing facility in Tijuana, Mexico which we operate in collaboration with our outsourced business administration service provider, TACNA. This has helped further our long-term gross margin expansion and supply continuity strategies while reducing the costs of Tablo console production and improving the flexibility of our operations. We plan to continue to use our design, engineering, supply chain, and manufacturing capabilities to help further advance and improve the efficiency of our manufacturing processes, lower the cost of parts and components, and lower our costs of production. However, there is no guarantee that we will be able to sustain cost reductions, achieve planned cost reductions, or otherwise achieve the anticipated benefits from our various initiatives. For example, we may be unable to sustain the savings associated with producing Tablo consoles at our manufacturing facility with TACNA, or the benefits we anticipate will result from insourcing Tablo cartridge production at this same facility may not materialize or be as significant as projected or realized within the timeframe we currently estimate. Moreover, increased tariffs imposed by the current administration, including on goods imported into the United States from Mexico and China, could adversely impact our supply chain and distribution costs, as well as our ability to achieve sustainable gross margins. We currently do not believe we have exposure to these tariffs as Tablo, TabloCart and Tablo cartridges are covered under a special exemption. However, in September 2025, the U.S. Department of Commerce initiated an investigation under Section 232 of the Trade Expansion Act of 1962 to assess the national security implications of imports of personal protective equipment, medical consumables, and medical equipment, including medical devices. The outcome of this investigation could result in additional tariffs or other trade restrictions. While we continue to believe our products will remain exempt, the scope and outcome of the investigation are uncertain and could affect existing exemptions or expand coverage to additional product categories. We cannot predict what actions may ultimately be taken with respect to tariffs or trade relations between the United States and other countries (including Mexico and China), what products may be subject to such actions, or what actions may be taken by the other countries in retaliation. There may also be unforeseen occurrences that increase our costs, such as increased prices of raw materials, changes to labor costs, less favorable terms with third party suppliers, freight providers, or contract manufacturing partners, or disruptions to the operations of our contract manufacturers or third-party suppliers including as a result of public health crises such as the COVID-19 pandemic. If we are unable …

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Our success will depend, in part, on the acceptance of Tablo as safe, easy to learn, easy to use, clinically flexible, operationally versatile and, with respect to providers, cost effective. We began commercializing Tablo throughout the United States in 2018 and began the process to commercialize Tablo for home-based dialysis in 2020. Our relatively limited commercialization experience makes it more difficult to evaluate our current business and predict our future prospects. It is difficult to predict how quickly, if at all, providers and patients will accept Tablo or, if accepted, how frequently it will be used. These constituents must believe that Tablo offers benefits over traditional machines. The degree of market acceptance of Tablo will depend on a number of factors, including:

Current wording

Our success will depend, in part, on growing acceptance of Tablo as safe, easy to learn, easy to use, clinically flexible, operationally versatile and, with respect to providers, cost effective. We began commercializing Tablo in the United States in 2018 and expanded commercialization to support home-based dialysis in 2020. While we have gained commercial experience and expanded our installed base since that time, we must continue to demonstrate the financial, clinical and operational benefits of our technology and services to achieve broader and sustained market acceptance. It remains difficult to evaluate our long-term business performance and predict our future prospects, including how quickly, or whether, our technology and services will achieve broader market acceptance, adoption and utilization among providers and patients. These constituents must believe that Tablo, and insourcing with Tablo, offer benefits over traditional machines or outsourced dialysis offerings. The degree of market acceptance of Tablo and our service offerings will depend on a number of factors, including:

Previous wording

the cost of treatment, and convenience and ease of use of Tablo in the acute setting relative to outsourcing dialysis services to third-party providers;

Current wording

the potential and perceived advantages of Tablo, and insourcing with Tablo, compared to traditional machines or outsourcing dialysis services to third-party providers, including cost of treatment, convenience, ease of use and maintenance;

Previous wording

the potential and perceived advantages of Tablo relative to our customers’ other capital and operating purchase requirements;

Current wording

the potential and perceived advantages of Tablo, and insourcing with Tablo, relative to our customers’ other capital and operating purchase requirements;

Previous wording

Additionally, even if Tablo achieves widespread market acceptance, it may not maintain that market acceptance over time if competing products or technologies, which are more cost effective or received more favorably, are introduced. Failure to achieve or maintain market acceptance and/or market share would limit our ability to generate revenue and would have a material adverse effect on our business, financial condition and results of operations.

Current wording

Additionally, even if Tablo achieves widespread market acceptance, it may not maintain that market acceptance over time if competing products or technologies, that are more cost effective or received more favorably, are introduced. Failure to achieve or maintain broader market acceptance and/or market share would limit our ability to generate revenue and would have a material adverse effect on our business, financial condition and results of operations.

Previous wording

Our customers may face financial pressures including, but not limited to, capital budget constraints, staffing shortages and increased costs, that have had, and may continue to have, a negative impact on our financial condition or results of operations.

Current wording

Our customers may face financial pressures including, but not limited to, capital budget constraints, staffing shortages and increased costs arising from macroeconomic conditions, evolving policy changes or other factors, that have had, and may continue to have, a negative impact on our financial condition or results of operations.

Previous wording

Beginning in the third quarter of 2023, we began to observe an increasing number of our existing and prospective customers deferring their decisions to purchase Tablo in an environment of rising interest rates and more cautious capital spending. These deferrals served to further elongate our sales cycle and the timing of delivery and installations which in turn, contributed to an adverse impact on our bookings and revenues starting in the second half of 2023, and through 2024. We have no assurance that these impacts will abate in future periods. Beginning in 2022, our existing and prospective customers faced shortages of skilled nurses and other clinical personnel as well as increased labor costs, combined with economic pressures resulting from general economic and financial market conditions, primarily escalating inflation, tightening hospital operating budgets and increased scrutiny of capital purchase decisions, all of which generally have the effect of lengthening the average sales cycle and elongating the timing of installations. These factors negatively impacted our customer base on pipeline development and installation schedules, which, in turn, negatively impacted our bookings, delayed our shipments and adversely impacted our revenues for 2022 and, to a lesser extent, 2023. Moreover, in February 2024, Change Healthcare, a large provider of healthcare payment systems, experienced a cyberattack on its information technology systems, causing disruptions to healthcare providers across the United States, including financial impacts such as reduced reimbursements and cash flow. We believe several of our customers experiencing these disruptions deferred both Tablo console and treatment purchases until their cash flow normalized, adversely impacting our revenues for the first quarter of 2024. If our customers continue to face prolonged periods of rising interest rates, capital budget constraints, volatility, uncertainty, staffing shortages, cash flow challenges, rising costs and other financial pressures, whether due to general macroeconomic conditions, cybersecurity events or otherwise, it could ultimately adversely impact our ability to expand existing customer relationships or attract new customers of Tablo, timely collect amounts due, effectively manage our inventory levels, and have a material adverse effect on our bookings, revenues, results of operations, financial condition, and, ultimately, our future growth and profitability.

Current wording

Beginning in 2022, our existing and prospective customers faced shortages of skilled nurses and other clinical personnel as well as increased labor costs, combined with economic pressures resulting from general economic and financial market conditions, primarily escalating inflation, tightening hospital operating budgets and increased scrutiny of capital purchase decisions, all of which generally have the effect of lengthening the average sales cycle and elongating the timing of installations. These factors negatively impacted our customer base on pipeline development and installation schedules, which, in turn, negatively impacted our bookings, delayed our shipments and adversely impacted our revenues for 2022 and, to a lesser extent, 2023.

Previous wording

In March 2020, Tablo was cleared by the FDA for patient use in the home of patients with acute and/or chronic renal failure, with or without ultrafiltration, and we intend to expand within the home market. However, this goal is subject to certain risks, including our ability to attract, retain and manage patients, as well as our ability to further evolve our commercial infrastructure and sales processes as we scale our business in the home market. Our business strategy, including our pricing of Tablo, while informed by our relatively limited history of selling Tablo in the home care setting, continues to be based in part on certain assumptions about the adoption of Tablo by home dialysis patients, as well as patient retention. If these assumptions about the home market are inaccurate and we are unable to increase our share of the home dialysis market by attracting new patients, or retain such market share once achieved, we would need to significantly change certain aspects of our business strategy, including the pricing of Tablo console, associated consumables and support and maintenance, which could adversely affect our business, financial condition and results of operations.

Current wording

In March 2020, Tablo was cleared by the FDA for patient use in the home of patients with acute and/or chronic renal failure, with or without ultrafiltration, and we intend to expand within the home market. However, this goal is subject to certain risks, including our ability to attract, retain and manage patients, as well as our ability to further evolve our commercial infrastructure and sales processes as we scale our business in the home market. Our business strategy, including our pricing of Tablo, while informed by our relatively limited history of selling Tablo in the home care setting, continues to be based in part on certain assumptions about the adoption of Tablo by home dialysis patients, as well as patient retention. If these assumptions about the home market are inaccurate and we are unable to increase our share of the home dialysis market by attracting new patients, or retain such market share once achieved, we would need to significantly change certain aspects of our business strategy, including the pricing of the Tablo console, associated consumables and support and maintenance, which could adversely affect our business, financial condition and results of operations.

Previous wording

With a significant portion of our manufacturing operations located outside of the United States, we may experience manufacturing disruptions, and be subject to additional risks associated with international manufacturing operations, including uncertain or changing regulatory and/or labor requirements.

Current wording

With a significant portion of our manufacturing operations, as well as key software development and certain IT personnel, located outside of the United States, we may experience operational disruptions, and be subject to additional risks associated with international manufacturing operations, including uncertain or changing regulatory and/or labor requirements.

Previous wording

We have insourced the production of Tablo consoles, and a majority of Tablo cartridges, at our manufacturing facility in Tijuana, Mexico which we operate in collaboration with our outsourced business administration service provider, TACNA. Under our arrangement with TACNA, we control the operations, engineering, quality and materials supply functions at the facility, while TACNA provides manufacturing space, the workforce, utilities, cross-border logistics, local permits and licenses. We are subject to a number of additional risks associated with operating our Mexico-based manufacturing facility, and many of these risks may heighten to the extent we continue to ramp our cartridge manufacturing capabilities and increase our dependence on our Mexico-based manufacturing operations. We may experience strikes, work stoppages, work slowdowns, high personnel turnover, grievances, complaints, claims of unfair labor practices, other collective bargaining disputes or other labor disputes at our new facility. Our manufacturing operations at the facility may also suffer disruptions from global or regional public health crises such as the COVID-19 pandemic, natural disasters, cyber security attacks, vandalism, terrorism or other political hostilities. Any such occurrences could negatively impact our ability to produce Tablo consoles and cartridges.

Current wording

We have insourced the production of Tablo consoles, and a substantial majority of Tablo cartridges, at our manufacturing facility in Tijuana, Mexico which we operate in collaboration with our outsourced business administration service provider, TACNA. Under our arrangement with TACNA, we control the operations, engineering, quality and materials supply functions at the facility, while TACNA provides manufacturing space, the workforce, utilities, cross-border logistics, local permits and licenses. We are subject to a number of additional risks associated with operating our Mexico-based manufacturing facility, and many of these risks may heighten to the extent we continue to ramp our cartridge manufacturing capabilities and increase our dependence on our Mexico-based manufacturing operations. We may experience strikes, work stoppages, work slowdowns, high personnel turnover, grievances, complaints, claims of unfair labor practices, other collective bargaining disputes or other labor disputes at our new facility. Our manufacturing operations at the facility may also suffer disruptions from global or regional public health crises such as the COVID-19 pandemic, natural disasters, cyber security attacks, vandalism, terrorism or other political hostilities. Any such occurrences could negatively impact our ability to produce Tablo consoles and cartridges.

Previous wording

We are also subject to a variety of foreign laws and regulations, including trade and labor restrictions and laws relating to importation, exportation and taxation of goods, and U.S. laws and regulations relating to foreign operations, including anti-corruption, anti-bribery and anti-money laundering laws. For example, the new administration has advocated greater restrictions on trade generally and, in particular, tariff increases on certain goods imported into the United States, including from Mexico and China. In February 2025, the new administration issued executive orders imposing additional 25% tariffs on products imported from Mexico and additional 10% tariffs on products imported from China. While the tariffs on products from China went into effect in February 2025, the tariffs on products from Mexico were suspended for an additional month. These tariffs could potentially impact certain areas of our supply chain, including raw materials entering Mexico, raw materials entering the United States from China to be utilized by our Unites States-based suppliers, and finished goods imported from Mexico into the United States. While we do not believe we have exposure to these potential tariffs as Tablo, TabloCart and Tablo consumables are covered under a special exemption, we cannot predict what actions may ultimately be taken with respect to tariffs or trade relations between the United States and other countries (including Mexico and China), what products may be subject to such actions, or what actions may be taken by the other countries in retaliation. The adoption and expansion of trade restrictions, the occurrence of a trade war, other governmental action related to tariffs or trade agreements or policies, or the related uncertainties, has the potential to adversely impact our supply chain and distribution costs, which could in turn adversely affect our business, financial condition, and results of operations, including our ability to expand gross margins. Furthermore, proposals to amend Mexico’s federal labor law, including a reduction in maximum workweek hours from 48 to 40 hours, were rejected by the Mexican Congress in 2024, but are expected to return in future legislative efforts. If passed, these potential legislative changes are expected to increase our labor costs and, ultimately, could potentially negatively impact the productivity of our manufacturing operations to the extent our efforts to mitigate the impact of the changes are not successful. In addition, because certain of our Mexico-based manufacturing operations incur costs that are denominated in Mexican Pesos (MXN), we are exposed to additional risk of currency fluctuations between the U.S. dollars (USD) and MXN, which could increase our product and labor costs, thus reducing our gross profit. Moreover, while certain members of our management team have some manufacturing experience, as an organization, we do not have any prior experience in this type of manufacturing arrangem…

Excerpt shortened here; the source contains the full paragraph.

Current wording

We are also subject to a variety of foreign laws and regulations, including trade and labor restrictions and laws relating to importation, exportation and taxation of goods, and U.S. laws and regulations relating to foreign operations, including anti-corruption, anti-bribery and anti-money laundering laws. For example, the current administration has advocated greater restrictions on trade generally and, in particular, tariff increases on certain goods imported into the United States, including from Mexico and China. In February 2025, the current administration issued executive orders imposing additional 25% tariffs on products imported from Mexico and additional 10% tariffs on products imported from China. While the tariffs on products from China went into effect in February 2025 (and increased from 10% to 20% in March 2025), the tariffs on products from Mexico were suspended for an additional month. These tariffs could potentially impact certain areas of our supply chain, including raw materials entering Mexico, raw materials entering the United States from China for use by our United States-based suppliers, and finished goods imported from Mexico into the United States. We currently do not believe we have exposure to these tariffs as Tablo, TabloCart and Tablo cartridge are covered under a special exemption. However, in September 2025, the U.S. Department of Commerce initiated an investigation under Section 232 of the Trade Expansion Act of 1962 to assess the national security implications of imports of personal protective equipment, medical consumables, and medical equipment, including medical devices. The outcome of this investigation could result in additional tariffs or other trade restrictions. While we continue to believe our products will remain exempt, the scope and outcome of the investigation are uncertain and could affect existing exemptions or expand coverage to additional product categories. We cannot predict what actions may ultimately be taken with respect to tariffs or trade relations between the United States and other countries (including Mexico and China), which products may become subject to such actions, or how other countries may respond in retaliation. The adoption and expansion of trade restrictions, the occurrence of a trade war, other governmental action related to tariffs or trade agreements or policies, or the related uncertainties, has the potential to adversely impact our supply chain and distribution costs, which could in turn adversely affect our business, financial condition, and results of operations, including our ability to expand gross margins.

Previous wording

In addition, we continue to rely on a contract manufacturing partner in Southeast Asia, for the production of a portion of our Tablo cartridges. If this contract manufacturing partners’ facilities were disrupted, by labor disputes, work stoppages, public health crises such as the COVID-19 pandemic, riots, terrorism, vandalism, cyber security attacks, natural disaster, regulatory action or otherwise, it could cause substantial delays in our operations and result in our having insufficient Tablo cartridge in inventory to fulfill orders. For example, in late 2021, supply chain disruptions exacerbated by COVID-19 outbreaks and protocols escalated, and we faced increased supply constraints, which increased freight costs associated with the transportation of Tablo cartridges. Further, to the extent we seek to renew or renegotiate our arrangements with our contract manufacturing partner, and cannot agree to the terms and conditions of future contract manufacturing arrangements, our ability to produce and sell Tablo cartridges could be delayed until we are able to ramp our own in-house manufacturing capabilities to meet demand, or until an alternative manufacturing partner or arrangement is identified, a new contract manufacturing agreement is negotiated and new production lines are established.

Current wording

In addition, we continue to utilize a contract manufacturing partner in Southeast Asia, for the production of a small portion of our Tablo cartridges to supplement our in-house manufacturing production and provide additional flexibility. If this contract manufacturing partners’ facilities were disrupted, by labor disputes, work stoppages, public health crises such as the COVID-19 pandemic, riots, terrorism, vandalism, cyber security attacks, natural disaster, regulatory action or otherwise, or if we are unable to agree on acceptable terms and conditions in connection with the renewal or renegotiation of our arrangement with this partner, we may need to reallocate production to our in-house manufacturing facility. Such a shift could result in temporary operational inefficiencies or increased costs. While we believe we have the ability to mitigate the impact of disruptions affecting our contract manufacturing partner, including through internal manufacturing capacity, there can be no assurance that such mitigation efforts would fully eliminate all operational impacts, particularly in the short term.

Previous wording

In addition, we purchase supplies through purchase orders and do not have long-term supply agreements with, or guaranteed commitments from all, our suppliers, including single source suppliers. Moreover, while we manufacture a majority of Tablo cartridges in-house, we rely on a contract manufacturer for the production of a portion of Tablo cartridges. Many of our suppliers and our contract manufacturer are not obligated to perform services or supply products for any specific period, in any specific quantity or at any specific price, except as may be provided in a particular purchase order. We depend on our suppliers and contract manufacturer to provide us and our customers with materials in a timely manner that meet our and their quality, quantity and cost requirements. These suppliers and contract manufacturer may encounter problems during manufacturing for a variety of reasons, including as a result of public health crises such as the COVID-19 pandemic, labor disputes, work stoppages, damage or interruption from fires, severe weather or other natural disasters, vandalism, terrorism or other political hostilities, any of which could delay or impede their ability to meet our demand. These suppliers and contract manufacturer may cease producing the components we purchase from them or otherwise decide to cease doing business with us. As part of our supply continuity planning, we maintain limited quantities of raw material, work in progress and finished good product at both suppliers and contract manufacturers. However, if we inaccurately forecast demand for finished goods, we may be unable to meet customer demand which could harm our competitive position and reputation. Further, if we fail to effectively manage our relationships with our suppliers and contract manufacturer, we may be required to change suppliers or contract manufacturers. While we believe replacement suppliers exist for all most all materials, components and services necessary to continue manufacturing Tablo, establishing additional or replacement suppliers for any of these materials, components or services could be time-consuming and expensive, may result in interruptions in our operations and product delivery, may affect the performance specifications of Tablo or could require that we modify Tablo’s design. Even if we are able to find replacement suppliers, we will be required to verify that the new supplier maintains facilities, procedures and operations that comply with our quality expectations and applicable regulatory requirements. Any of these events could require that we obtain a new regulatory authority approval before we implement the change, which could result in further delay and which may not be obtained at all. If our third-party suppliers fail to deliver the required commercial quantities of materials on a timely basis and at commercially reasonable prices, and we are unable to find one or more replacement suppliers capable of production at a substantially equivalent…

Excerpt shortened here; the source contains the full paragraph.

Current wording

In addition, we purchase supplies through purchase orders and do not have long-term supply agreements with, or guaranteed commitments from all, our suppliers, including single source suppliers. Moreover, while we manufacture a substantial majority of Tablo cartridges in-house, we continue to utilize a contract manufacturer for the production of a small portion of Tablo cartridges. Many of our suppliers and our contract manufacturer are not obligated to perform services or supply products for any specific period, in any specific quantity or at any specific price, except as may be provided in a particular purchase order. We depend on our suppliers and contract manufacturer to provide us and our customers with materials in a timely manner that meet our and their quality, quantity and cost requirements. These suppliers and contract manufacturer may encounter problems during manufacturing for a variety of reasons, including as a result of public health crises such as the COVID-19 pandemic, labor disputes, work stoppages, damage or interruption from fires, severe weather or other natural disasters, vandalism, terrorism or other political hostilities, any of which could delay or impede their ability to meet our demand. These suppliers and contract manufacturer may cease producing the components we purchase from them or otherwise decide to cease doing business with us. As part of our supply continuity planning, we maintain limited quantities of raw material, work in progress and finished good product at both suppliers and contract manufacturers. However, if we inaccurately forecast demand for finished goods, we may be unable to meet customer demand which could harm our competitive position and reputation. Further, if we fail to effectively manage our relationships with our suppliers and contract manufacturer, we may be required to change suppliers or contract manufacturers. While we believe replacement suppliers exist for all most all materials, components and services necessary to continue manufacturing Tablo, establishing additional or replacement suppliers for any of these materials, components or services could be time-consuming and expensive, may result in interruptions in our operations and product delivery, may affect the performance specifications of Tablo or could require that we modify Tablo’s design. Even if we are able to find replacement suppliers, we will be required to verify that the new supplier maintains facilities, procedures and operations that comply with our quality expectations and applicable regulatory requirements. Any of these events could require that we obtain a new regulatory authority approval before we implement the change, which could result in further delay and which may not be obtained at all. If our third-party suppliers fail to deliver the required commercial quantities of materials on a timely basis and at commercially reasonable prices, and we are unable to find one or more replacement suppliers capable of production…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

For example, we have worked closely with our manufacturing partners and suppliers to enable us to source key components and maintain appropriate inventory levels to meet customer demand, and have not experienced material disruptions in our supply chain to date. However, macroeconomic factors such as rising inflation, increasing labor costs, and surges and shifts in consumer demand, have disrupted the operations of certain of our third-party suppliers, resulting, in some cases, in increased lead times and higher component costs. We faced increased supply chain constraints during late 2021, resulting in increased transportation and related costs associated with delivering adequate supply of Tablo treatments to our customers from our contract manufacturing partner in Southeast Asia. During 2023, we saw moderation in these costs. Moreover, we believe that localizing production of a majority of Tablo cartridges in Mexico (in-house at our manufacturing facility) has helped achieve cost reductions through lower freight costs, further our long-term gross margin expansion and supply continuity strategies and improve the flexibility of our operations. However, we may face increased supply chain constraints or the impact of tariffs in the future, which could negatively impact our ability to meet customer demand on a timely basis, result in customer dissatisfaction and adversely impact our operating margins and results of operations.

Current wording

For example, we have worked closely with our manufacturing partners and suppliers to enable us to source key components and maintain appropriate inventory levels to meet customer demand, and have not experienced material disruptions in our supply chain to date. However, macroeconomic factors such as rising inflation, increasing labor costs, and surges and shifts in consumer demand, have disrupted the operations of certain of our third-party suppliers, resulting, in some cases, in increased lead times and higher component costs. Moreover, we believe that localizing production of a substantial majority of Tablo cartridges in Mexico (in-house at our manufacturing facility) has helped achieve cost reductions through lower freight costs, further our long-term gross margin expansion and supply continuity strategies and improve the flexibility of our operations. However, we may face increased supply chain constraints or the impact of tariffs in the future, which could negatively impact our ability to meet customer demand on a timely basis, result in customer dissatisfaction and adversely impact our operating margins and results of operations.

Previous wording

If we fail to effectively retain our commercial team and optimize our sales processes, or fail to expand the utilization of Tablo as we focus more heavily on enterprise selling, we may not be able to generate revenue growth.

Current wording

If we fail to expand the adoption of Tablo as we focus more heavily on enterprise selling, we may not be able to generate revenue growth.

Previous wording

Moreover, we may periodically adjust our sales organization or sales strategies in response to market shifts or opportunities, changes in our current or prospective customers, competitive threats, management changes, sales headcount changes, product and service introductions or enhancements, sales performance, cost reduction initiatives, and other internal and external considerations. Any such changes may result in disruptions in our sales cycle or a reduction of productivity, which could negatively impact our revenue growth. For example, during the second quarter of 2024, we observed a further elongation of our sales cycle, which contributed to an adverse impact on our revenues for the quarter, and which we believe was due in part to our transition beyond earlier stage adoption of Tablo. We identified a need to evolve our sales strategy to focus more heavily on enterprise selling, which often requires approvals and commitment across a larger base of stakeholders within a health system including clinical, financial and operational executives, and can elongate the sales cycle. We determined that this shift requires additional training, skill-building and optimization of our sales team and sales processes. In connection with steps we are taking to help optimize our commercial organization, and to help improve operational efficiencies and reduce operating expenses to align with anticipated revenue growth, in the third quarter of 2024, we completed a restructuring primarily impacting our commercial organization. These actions could result in short-term or long-term disruption of our sales cycle and may not produce the cost savings, efficiencies and other benefits we anticipate or desire. Our ability to achieve the anticipated cost savings, efficiencies and other benefits from these actions on the timeframe we expect, or at all, is subject to estimates and assumptions, which are subject to uncertainties. If our estimates and assumptions are incorrect, if we are unsuccessful at implementing these changes or if we otherwise encounter deficiencies or inefficiencies in our infrastructure or processes which we did not anticipate, it could harm our business, financial condition, results of operations and, ultimately, our future growth and profitability. In addition, these actions may heighten certain of the risks described above, in particular, our ability to attract and retain talented sales and marketing personnel may be adversely impacted, which could harm our business.

Current wording

We may periodically adjust our sales organization or sales strategies in response to market shifts or opportunities, changes in our current or prospective customers, competitive threats, management changes, sales headcount changes, product and service introductions or enhancements, sales performance, cost reduction initiatives, and other internal and external considerations. Any such changes may result in disruptions in our sales cycle or a reduction of productivity, which could negatively impact our revenue growth. For example, during the second quarter of 2024, we observed a further elongation of our sales cycle, which contributed to an adverse impact on our revenues for the quarter, and which we believe was due in part to our transition beyond earlier stage adoption of Tablo. We identified a need to evolve our sales strategy to focus more heavily on enterprise selling, which often requires approvals and commitment across a larger base of stakeholders within a health system including clinical, financial and operational executives, and can elongate the sales cycle. We determined that this shift requires additional training, skill-building and optimization of our sales team and sales processes. In connection with our initiatives to help optimize our commercial organization, and to help improve operational efficiencies and reduce operating expenses to align with anticipated revenue growth, in the third quarter of 2024, we completed a restructuring primarily impacting our commercial organization. These actions could result in short-term or long-term disruption of our sales cycle and may not produce the cost savings, efficiencies and other benefits we anticipate or desire. Our ability to achieve the anticipated cost savings, efficiencies and other benefits from these actions on the timeframe we expect, or at all, is subject to estimates and assumptions, which are subject to uncertainties. If our estimates and assumptions are incorrect, if we are unsuccessful at implementing these changes or if we otherwise encounter deficiencies or inefficiencies in our infrastructure or processes which we did not anticipate, it could harm our business, financial condition, results of operations and, ultimately, our future growth and profitability. For example, as we continued to focus more heavily on enterprise selling in 2025, sales cycles for these enterprise customers were longer than expected, which contributed to an adverse impact on our revenues during the period.

Previous wording

We need to maintain and continuously improve the performance and reliability of Tablo to achieve our profitability objectives. Poor product performance and reliability could lead to customer dissatisfaction, adversely affect our reputation, lower the rates at which customers purchase consumables, reduce our service revenue, or increase our service and distribution costs and working capital requirements. Software and hardware incorporated into Tablo may contain errors or defects, especially when first introduced and while we have made efforts to test this software and hardware extensively, we cannot assure that the software and hardware, or software and hardware developed in the future, will not experience errors or performance problems. In addition, with our relatively recent transition to manufacturing Tablo consoles and a majority of Tablo cartridges at our facility in Mexico operated in collaboration with TACNA, we are more exposed to risks relating to product quality and reliability as we continue to refine our manufacturing processes. Like all transitions of this nature, they could increase our costs in the near-term and accordingly adversely affect our business, financial condition and results of operations.

Current wording

We need to maintain and continuously improve the performance and reliability of Tablo to achieve our profitability objectives. Poor product performance and reliability could lead to customer dissatisfaction, adversely affect our reputation, lower the rates at which customers purchase consumables, reduce our service revenue, or increase our service and distribution costs and working capital requirements. Software and hardware incorporated into Tablo may contain errors or defects, especially when first introduced and while we have made efforts to test this software and hardware extensively, we cannot assure that the software and hardware, or software and hardware developed in the future, will not experience errors or performance problems.

Previous wording

There are a number of dialysis machine manufacturers in the United States, Europe and Asia. Notable competitors in the United States include Fresenius Medical Care AG & Co. KGaA (Fresenius), Vantive, formerly the Baxter kidney care segment, and B. Braun Medical Inc. (B. Braun). In addition, Quanta Dialysis Technologies Ltd’s (Quanta) dialysis system received FDA 510(k) clearance for use in acute and/or chronic and home settings. Of these competitors, Fresenius is the largest and it supplies dialysis products, operates a significant number of dialysis clinics and provides outsourced dialysis services in many hospitals. Fresenius, Vantive and B. Braun all supply machines and supplies in both the acute and home care settings, and Quanta received FDA 510(k) clearance for home use in 2024. With the exception of Quanta, all of these organizations are currently significantly larger with greater financial and personnel resources than us, enjoy significantly greater market share than ours and have greater resources than we do. As a consequence, they are able to spend more on product development, marketing, sales and other product initiatives than we can. Additionally, companies with dialysis machine development programs include Medtronic. Some of our competitors have:

Current wording

There are a number of dialysis machine manufacturers and dialysis service providers in the United States, Europe and Asia. Notable competitors in the United States include Fresenius; DaVita, a dialysis service provider; Mozarc Medical, a dialysis products joint venture formed by DaVita and Medtronic; and B. Braun. Vantive, formerly the Baxter kidney care segment, also offers specialized dialysis products that may be used by hospitals for inpatient dialysis. In addition, Quanta’s dialysis system has received FDA 510(k) clearance for use in acute and/or chronic and home settings. Of these competitors, Fresenius is the largest and it supplies dialysis products, operates a significant number of dialysis clinics and provides outsourced dialysis services in many hospitals. In the home hemodialysis setting, competitors primarily include Fresenius (through its acquisition of NxStage) and Quanta. Some of our competitors are significantly larger than us or otherwise possess competitive advantages, including:

Previous wording

Further, we may compete with third party providers of outsourced dialysis services, including Fresenius. These organizations are significantly larger with greater financial, personnel and other resources than us and enjoy significantly greater market share and name recognition than us. As a result, these competitors may be able to adopt more aggressive pricing policies and devote greater resources to the promotion, marketing and sales of their services.

Current wording

substantially greater market share and brand recognition;

Previous wording

broader, deeper or longer-term relations with healthcare professionals, customers and third-party payors;

Current wording

broader, deeper or longer-standing relationships with healthcare professionals, customers and third-party payors;

Previous wording

In addition, competitors, including those with greater financial resources than ours, could acquire, combine with or partner with other companies to gain enhanced name recognition and market share, as well as new technologies, products or services that could effectively compete with our existing solutions, which may cause our revenue to decline and would harm our business. For example, in April 2023, Medtronic and DaVita launched a new independent company focused on kidney care, and in August 2022, Fresenius Health Partners (the value-based care division of Fresenius), InterWell Health and Cricket Health, Inc. merged the three businesses into a new independent company focused on kidney care. In the future, we may also face competition from new entrants or companies spun off from our larger competitors. For example, in February 2025, Baxter International, Inc. completed its previously announced spin off of its kidney care segment into a new independent company named Vantive.

Current wording

In addition, competitors, including those with greater financial resources than ours, could acquire, combine with or partner with other companies to gain enhanced name recognition and market share, as well as new technologies, products or services that could effectively compete with our existing solutions, which may cause our revenue to decline and would harm our business. For example, in 2023, Medtronic and DaVita launched an independent company focused on kidney care named Mozarc Medical, and in 2022, Fresenius Health Partners (the value-based care division of Fresenius), InterWell Health and Cricket Health, Inc. merged the three businesses into a new independent company focused on kidney care. In the future, we may also face competition from new entrants or companies spun off from our larger competitors. For example, in 2025, Baxter International, Inc. completed its spin off of its kidney care segment into a new independent company named Vantive.

Previous wording

In connection with various facets of our business, we collect and use a variety of personal information as part of the Tablo data ecosystem, such as name, street address, email addresses, mobile telephone number, and prescription information. Security breaches, computer malware and computer hacking attacks have become more prevalent across industries and may occur on our systems or those of our third-party service providers, suppliers or other partners. Despite the implementation of security measures, our internal computer systems and those of our third-party service providers, suppliers and other partners are vulnerable to damage from computer viruses, hacking and other means of unauthorized access, denial of service and other attacks, natural disasters, terrorism, war and telecommunication and electrical failures. Attacks upon information technology systems are increasing in their frequency, levels of persistence, sophistication and intensity, and are being conducted by sophisticated and organized groups and individuals with a wide range of motives and expertise. Further, we may face increased cybersecurity risks due to our reliance on internet technology and the number of our employees who may work remotely, which may create additional opportunities for cybercriminals to exploit vulnerabilities. In addition to unauthorized access to or acquisition of personal information, confidential information, intellectual property or other sensitive information, such attacks could include the deployment of harmful malware and ransomware, and may use a variety of methods, including denial-of-service attacks, social engineering and other means, to attain such unauthorized access or acquisition or otherwise affect service reliability and threaten the confidentiality, integrity and availability of information. Any failure to prevent or mitigate security breaches or improper access to, or use or disclosure of, our data or consumers’ personal information, including information hosted by third party service providers such as Amazon Web Services (AWS), could result in significant liability under applicable data protection laws, such as state breach notification laws and the HIPAA and its implementing regulations. Such an incident may also cause a material loss of revenue from the potential adverse impact to our reputation and brand, affect our ability to retain or attract new users of Tablo and potentially disrupt our business, as well as require significant expenditure of resources to contain, mitigate and remediate the incident. Because the techniques used to obtain unauthorized access, disable or degrade service or sabotage systems change frequently or may be designed to remain dormant until a predetermined or other future event and often are not recognized until launched against a target, we and our partners may be unable to anticipate these techniques or to implement adequate preventative measures. Further, we do not have any direct control over the operatio…

Excerpt shortened here; the source contains the full paragraph.

Current wording

In connection with various facets of our business, we collect and use a variety of personal information as part of the Tablo data ecosystem, such as name, street address, email addresses, mobile telephone number, and prescription information. Security breaches, computer malware and computer hacking attacks have become more prevalent across industries and may occur on our systems or those of our third-party service providers, suppliers or other partners. Despite the implementation of security measures, our internal computer systems and those of our third-party service providers, suppliers and other partners are vulnerable to damage from computer viruses, hacking and other means of unauthorized access, denial of service and other attacks, natural disasters, terrorism, war and telecommunication and electrical failures. Attacks upon information technology systems are increasing in their frequency, levels of persistence, sophistication and intensity, and are being conducted by sophisticated and organized groups and individuals with a wide range of motives and expertise. Further, we may face increased cybersecurity risks due to our reliance on internet technology and the number of our employees who may work remotely, which may create additional opportunities for cybercriminals to exploit vulnerabilities. In addition to unauthorized access to or acquisition of personal information, confidential information, intellectual property or other sensitive information, such attacks could include the deployment of harmful malware and ransomware, and may use a variety of methods, including denial-of-service attacks, social engineering and other means, to attain such unauthorized access or otherwise affect service reliability and threaten the confidentiality, integrity and availability of information. Any failure to prevent or mitigate security breaches or improper access to, or use or disclosure of, our data or consumers’ personal information, including information hosted by third party service providers such as Amazon Web Services (AWS), could result in significant liability under applicable data protection laws, such as state breach notification laws and the HIPAA and its implementing regulations. Such an incident may also cause a material loss of revenue from the potential adverse impact to our reputation and brand, affect our ability to retain or attract new users of Tablo and potentially disrupt our business, as well as require significant expenditure of resources to contain, mitigate and remediate the incident. Because the techniques used to obtain unauthorized access, disable or degrade service or sabotage systems change frequently or may be designed to remain dormant until a predetermined or other future event and often are not recognized until launched against a target, we and our partners may be unable to anticipate these techniques or to implement adequate preventative measures.

Previous wording

As of December 31, 2024, we had 354 full-time employees. We may not be able to recruit and train additional qualified personnel and expand our operations in the timeframe that we desire for various reasons which include our limited financial resources, the impact of macroeconomic conditions on us or our customers, or any inability to overcome the adverse impacts of regulatory, competitive or other challenges. Our growth may, instead, require us to leverage and optimize our existing personnel while increasing the scale of our operations in an effort to grow our revenue and expand gross margins. If we are unable to effectively manage our growth in the face of these challenges, the execution of our business plans could be delayed, which would have a material adverse effect on our business, financial condition and results of operations.

Current wording

As of December 31, 2025, we had 310 full-time employees. We may not be able to recruit and train additional qualified personnel and expand our operations in the timeframe that we desire for various reasons which include our limited financial resources, the impact of macroeconomic conditions on us or our customers, or any inability to overcome the adverse impacts of regulatory, competitive or other challenges. Our growth may, instead, require us to leverage and optimize our existing personnel while increasing the scale of our operations in an effort to grow our revenue and expand gross margins. If we are unable to effectively manage our growth in the face of these challenges, the execution of our business plans could be delayed, which would have a material adverse effect on our business, financial condition and results of operations.

Previous wording

For the year ended December 31, 2024, our largest customer accounted for 16% of revenues. There are risks whenever a large percentage of total revenues are concentrated with a limited number of customers. It is not possible for us to predict the level of demand for Tablo that will be generated by any of these customers in the future. In addition, revenues from these larger customers may fluctuate from time to time based on these customers’ business needs and customer experience, the timing of which may be affected by market conditions or other factors outside of our control. Furthermore, because our business model consists of an upfront capital purchase by our customers, and relatively lower annual recurring revenue from future sales of consumables and services, revenues from these larger customers may not represent a substantial portion of our revenues in future periods. These customers could also potentially pressure us to reduce the prices we charge for Tablo, which could have an adverse effect on our margins and financial position and could negatively affect our revenues and results of operations. If any of our largest customers terminates its relationship with us, such termination could negatively affect our revenues and results of operations.

Current wording

For the year ended December 31, 2025, our largest customer accounted for 15% of revenues. There are risks whenever a large percentage of total revenues are concentrated with a limited number of customers. It is not possible for us to predict the level of demand for Tablo that will be generated by any of these customers in the future. In addition, revenues from these larger customers may fluctuate from time to time based on these customers’ business needs and customer experience, the timing of which may be affected by market conditions or other factors outside of our control. Furthermore, because our business model consists of an upfront capital purchase by our customers, and relatively lower annual recurring revenue from future sales of consumables and services, revenues from these larger customers may not represent a substantial portion of our revenues in future periods. These customers could also potentially pressure us to reduce the prices we charge for Tablo, which could have an adverse effect on our margins and financial position and could negatively affect our revenues and results of operations. If any of our large customers terminate their relationship with us, such termination could negatively affect our revenues and results of operations.

Previous wording

To ensure adequate inventory supply, we must forecast inventory needs and manufacture Tablo consoles and Tablo cartridges based on our estimates of future demand for Tablo. Our ability to accurately forecast demand for Tablo could be negatively affected by many factors, including our failure to accurately manage our expansion strategy, product introductions by competitors, an increase or decrease in customer demand for Tablo or for products of our competitors, our failure to accurately forecast customer acceptance of new products, potential disruption in our supply chain from regional or global public health crises such as the COVID-19 pandemic, unanticipated changes in general market conditions or regulatory matters and weakening of economic conditions or consumer confidence in future economic conditions. Inventory levels in excess of customer demand may result in inventory write-downs or write-offs, which would cause our gross margin to be adversely affected and could impair the strength of our brand. Conversely, if we underestimate customer demand for Tablo, our supply chain, manufacturing partners and/or internal manufacturing team may not be able to deliver components and products to meet our requirements, and this could result in damage to our reputation and customer relationships. In addition, if we experience a significant increase in demand, additional supplies of raw materials or additional manufacturing capacity may not be available when required on terms that are acceptable to us, or at all, or suppliers may not be able to allocate sufficient capacity in order to meet our increased requirements, which will adversely affect our business, financial condition and results of operations.

Current wording

To ensure adequate inventory supply, we must forecast inventory needs and manufacture Tablo consoles and Tablo cartridges based on our estimates of future demand for Tablo. Our ability to accurately forecast demand for Tablo could be negatively affected by many factors, including our failure to accurately manage our expansion strategy, product introductions by competitors, an increase or decrease in customer demand for Tablo or for products of our competitors, our failure to accurately forecast customer acceptance of new products, failure of our initiatives to optimize the commercial organization and improve forecasting and order visibility, potential disruption in our supply chain from regional or global public health crises such as the COVID-19 pandemic, unanticipated changes in general market conditions or regulatory matters and weakening of economic conditions or consumer confidence in future economic conditions. Inventory levels in excess of customer demand may result in inventory write-downs or write-offs, which would cause our gross margin to be adversely affected and could impair the strength of our brand. Conversely, if we underestimate customer demand for Tablo, our supply chain, manufacturing partners and/or internal manufacturing team may not be able to deliver components and products to meet our requirements, and this could result in damage to our reputation and customer relationships. In addition, if we experience a significant increase in demand, additional supplies of raw materials or additional manufacturing capacity may not be available when required on terms that are acceptable to us, or at all, or suppliers may not be able to allocate sufficient capacity in order to meet our increased requirements, which will adversely affect our business, financial condition and results of operations.

Previous wording

Tablo. If nurses and dialysis technicians, including those we train directly and those trained by others, or patients and care partners, who are not trained by us directly, use Tablo inappropriately or incorrectly, or with supplies that are not compatible with Tablo or without adhering to or completing training sessions, patient outcomes may not be consistent with expected results. This may result in adverse events, including reduced treatment efficacy, and may negatively impact the perception of patient benefit and safety and limit adoption of Tablo, which would have a material adverse effect on our business, financial condition and results of operations. In addition, we may face liability for inadequate training and training materials for nurses and other providers who use our products.

Current wording

The success of Tablo depends in part on the proper training and use of Tablo by nurses and dialysis technicians in the acute setting and patients and care partners in the home setting. We train nurses and dialysis technicians on the appropriate use of Tablo, as well as how to train other users, including patients and care partners who use Tablo in the home setting, on the appropriate use of Tablo. If nurses and dialysis technicians, including those we train directly and those trained by others, or patients and care partners, who are not trained by us directly, use Tablo inappropriately or incorrectly, or with supplies that are not compatible with Tablo or without adhering to or completing training sessions, patient outcomes may not be consistent with expected results. This may result in adverse events, including reduced treatment efficacy, and may negatively impact the perception of patient benefit and safety and limit adoption of Tablo, which would have a material adverse effect on our business, financial condition and results of operations. In addition, we may face liability for inadequate training and training materials for nurses and other providers who use our products.

Previous wording

general economic and financial market conditions or political instability, including changes in tariff or trade laws and policies, as well as inflationary pressures (whether caused by economic policy or by other disruptions).

Current wording

general economic and financial market conditions or political instability, including changes in tariff or trade laws and policies (such as the tariffs imposed by the current administration on products imported into the United States from Mexico and China), as well as inflationary pressures (whether caused by economic policy or by other disruptions).

Previous wording

While we have raised equity and taken actions to reduce operating expenses and working capital to align with anticipated revenue growth including implementing restructuring plans to streamline our overall organizational structure and renegotiating commitments with suppliers to reduce inventory, we expect to continue to incur operating losses in the near term while we make investments to support our anticipated growth. We also entered into a senior secured credit facility on January 3, 2025, which replaces our prior credit facilities with SLR and provides for up to $125.0 million term loans (the Term Loan Facility) pursuant to a credit agreement and guaranty, dated as of January 3, 2025 (the Credit Agreement) with Perceptive Credit Holdings IV, LP as administrative agent (the Agent) and the lenders from time to time party thereto, under which we have already borrowed $100.0 million of term loan and the additional $25.0 million borrowings under the Term Loan facility is subject to us achieving certain revenue milestone and other customary conditions. We may seek to raise any necessary additional capital through a combination of public or private equity offerings or debt financings. There can be no assurance, however, that we will be successful in acquiring additional funding at levels sufficient to fund our operations or on terms favorable to us. If adequate funds are not available on acceptable terms when needed, we may be required to significantly reduce operating expenses, which may negatively affect our business, financial condition and results of operations. If we do raise additional capital through public or private equity or convertible debt offerings, such offerings could result in dilution, including potentially significant dilution, of the ownership interest of our existing stockholders, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’ rights. If we raise additional capital through debt financing (including through refinancing our existing debt), we may be subject to, among other things, an increase in our interest expense which may negatively affect our cash flow and covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. Additional capital may not be available on reasonable terms, or at all.

Current wording

While we have raised equity and taken actions to reduce operating expenses and working capital to align with anticipated revenue growth including implementing restructuring plans to streamline our overall organizational structure and renegotiating commitments with suppliers to reduce inventory, we expect to continue to incur operating losses in the near term while we make investments to support our anticipated growth. We also entered into a senior secured credit facility on January 3, 2025, which replaces our prior credit facilities with SLR Investment Corp (SLR) and provides for up to $125.0 million term loans (the Term Loan Facility) pursuant to a credit agreement and guaranty, dated as of January 3, 2025 (the Credit Agreement) with Perceptive Credit Holdings IV, LP as administrative agent (the Agent) and the lenders from time to time party thereto, under which we have already borrowed a term loan of $100.0 million. The additional $25.0 million term loan under the Term Loan facility is subject to us achieving certain revenue milestone and other customary conditions. We may seek to raise any necessary additional capital through a combination of public or private equity offerings or debt financings. There can be no assurance, however, that we will be successful in acquiring additional funding at levels sufficient to fund our operations or on terms favorable to us. If adequate funds are not available on acceptable terms when needed, we may be required to significantly reduce operating expenses, which may negatively affect our business, financial condition and results of operations. If we do raise additional capital through public or private equity or convertible debt offerings, such offerings could result in dilution, including potentially significant dilution, of the ownership interest of our existing stockholders, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’ rights. If we raise additional capital through debt financing (including through refinancing our existing debt), we may be subject to, among other things, an increase in our interest expense which may negatively affect our cash flow and covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. Additional capital may not be available on reasonable terms, or at all.

Previous wording

The terms of our credit agreement require us to meet certain operating and financial covenants, place restrictions on our operating and financial flexibility and subject us to interest rate risk, and our ability to access additional borrowings is subject to us achieving certain net revenue milestone and obtaining lenders’ credit approval.

Current wording

The terms of our credit agreement require us to meet certain operating and financial covenants, place restrictions on our operating and financial flexibility and subject us to interest rate risk, and our ability to access additional borrowings is subject to us achieving certain revenue milestone and obtaining lenders’ credit approval.

Previous wording

We entered into the Credit Agreement on January 3, 2025, which provides term loans in an aggregate principal amount of up to $125.0 million, comprised of (i) a term loan of $100.0 million (the Initial Term Loan), which was funded to us on January 8, 2025, and (ii) a delayed draw term loan of up to $25.0 million (the Delayed Draw Loan, and together with the Initial Term Loan, the Loans). The Delayed Draw Loan is available for funding until July 14, 2027, subject to the achievement of a specific revenue milestone and other customary conditions. As a result, we cannot rely on further borrowings under the Term Loan Facility to fund our operations. In addition, outstanding Loans accrue interest at variable interest rates tied to Secured Overnight Financing Rate (SOFR). As a result, our borrowings under the Term Loan Facility are subject to interest rate risk. An adverse change in interest rates for our borrowings would increase our borrowing costs which may restrict our access to capital in the future and, ultimately, could adversely affect our financial condition and results of operations. See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations ‒ Liquidity and Capital Resources ‒ Debt Obligations ‒ Perceptive Credit Agreement.”

Current wording

We entered into the Credit Agreement on January 3, 2025, which provides term loans in an aggregate principal amount of up to $125.0 million, comprised of (i) a term loan of $100.0 million (the Initial Term Loan), which was funded to us on January 8, 2025, and (ii) a delayed draw term loan of up to $25.0 million (the Delayed Draw Loan, and together with the Initial Term Loan, the Loans). The Delayed Draw Loan is available for funding until July 14, 2027, subject to the achievement of certain revenue milestone and other customary conditions. As a result, we cannot rely on further borrowings under the Term Loan Facility to fund our operations. In addition, outstanding Loans accrue interest at variable interest rates tied to Secured Overnight Financing Rate (SOFR). As a result, our borrowings under the Term Loan Facility are subject to interest rate risk. An adverse change in interest rates for our borrowings would increase our borrowing costs which may restrict our access to capital in the future and, ultimately, could adversely affect our financial condition and results of operations. See the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations ‒ Liquidity and Capital Resources ‒ Debt Obligations ‒ Perceptive Credit Agreement.”

Previous wording

On January 8, 2025, we repaid in full all amounts due under our two prior senior secured credit facilities with (i) SLR Investment Corp. and (ii) Gemino Healthcare Finance, LLC d/b/a SLR Healthcare ABL, respectively, each dated as of November 3, 2022 using the proceeds of the Initial Term Loan, together with cash on hand.

Current wording

On January 8, 2025, we repaid in full all amounts due under our two prior senior secured credit facilities with (i) SLR and (ii) Gemino Healthcare Finance, LLC d/b/a SLR Healthcare ABL, respectively, each dated as of November 3, 2022 using the proceeds of the Initial Term Loan, together with cash on hand.

Previous wording

Expedited, reliable shipping and secure warehousing are essential to our operations. We rely heavily on providers of transport services for reliable and secure point-to-point transport of Tablo to our customers and for tracking of these shipments, and from time to time require warehousing for our products. Should a carrier encounter delivery performance issues such as loss, damage or destruction of any systems, it would be costly to replace such systems in a timely manner and such occurrences may damage our reputation and lead to decreased demand for Tablo and increased cost and expense to our business. In addition, any significant increase in shipping or warehousing rates could adversely affect our operating margins and results of operations. For example, in late 2021, surges and shifts in consumer demand as the economy reopened, further exacerbated by COVID-19 outbreaks and protocols, strained the global freight network and placed significant stress on air, ocean and freight ground carriers, resulting in increased freight costs associated with our transportation of Tablo cartridges. If freight costs escalate and/or remain high for a sustained period of time, our operating margins and results of operations would be adversely impacted. Similarly, strikes, severe weather, natural disasters or other service interruptions affecting delivery or warehousing services we use would adversely affect our ability to process orders for Tablo on a timely basis.

Current wording

Expedited, reliable shipping and secure warehousing are essential to our operations. We rely heavily on providers of transport services for reliable and secure point-to-point transport of Tablo to our customers and for tracking of these shipments, and from time to time require warehousing for our products. Should a carrier encounter delivery performance issues such as loss, damage or destruction of any systems, it would be costly to replace such systems in a timely manner and such occurrences may damage our reputation and lead to decreased demand for Tablo and increased cost and expense to our business. In addition, any significant increase in shipping or warehousing rates could adversely affect our operating margins and results of operations. If freight costs escalate and/or remain high for a sustained period of time, our operating margins and results of operations would be adversely impacted. Similarly, strikes, severe weather, natural disasters or other service interruptions affecting delivery or warehousing services we use would adversely affect our ability to process orders for Tablo on a timely basis.