QT IMAGING HOLDINGS, INC.

Previous wording

Since our inception, we have devoted substantially all our financial resources to acquiring and developing the base technology for our body imaging systems, conducting research and development activities, securing related intellectual property rights, and for managing corporate operations and growth. On June 6, 2017, the FDA, in response to QT Imaging’s Section 510(K) Summary of Safety and Effectiveness premarket notification, determined that the Breast Acoustic CT Scanner is substantially equivalent to the predicate device. Our use of the words “safe,” “safety,” “effectiveness,” and “efficacy” in relation to the Breast Acoustic CT Scanner in this Management's Discussion and Analysis and all other documents related to us is limited to the context of the Section 510(K) Summary of Safety and Effectiveness that was reviewed and responded to by the FDA.

Current wording

Since our inception, we have devoted substantially all our financial resources to acquiring and developing the base technology for our body imaging systems, conducting research and development activities, securing related intellectual property rights, and for managing corporate operations and growth. On June 6, 2017, the FDA, in response to QT Imaging’s Section 510(K) Summary of Safety and Effectiveness premarket notification, determined that the Breast Acoustic CT Scanner is substantially equivalent to the predicate device. Our use of the words “safe,” “safety,” “effectiveness,” and “efficacy” in relation to the Breast Acoustic CT Scanner in this Management’s Discussion and Analysis of Financial Condition and Results of Operations and all other documents related to us is limited to the context of the Section 510(K) Summary of Safety and Effectiveness that was reviewed and responded to by the FDA.

Previous wording

We have incurred net operating losses and negative cash flows from operations since our inception and had an accumulated deficit of $56.4 million as of March 31, 2026. During the three months ended March 31, 2026, we incurred a net loss of $3.4 million and used $3.7 million of cash in operating activities. We continue to incur losses, and our ability to achieve and sustain profitability will depend on the achievement of sufficient revenue to support our cost structure. We may never achieve profitability and, unless and until we do, we will need to continue to raise additional capital.

Current wording

We have incurred net operating losses and negative cash flows from operations since our inception and had an accumulated deficit of $67.5 million as of June 30, 2026. During the three and six months ended June 30, 2026, we incurred a net loss of $11.1 million and had a net operating cash outflow of $8.5 million. We continue to incur losses, and our ability to achieve and sustain profitability will depend on the achievement of sufficient revenue to support our cost structure. We may never achieve profitability and, unless and until we do, we will need to continue to raise additional capital.

Previous wording

Research and development expenses consist primarily of costs incurred in connection with the research and development of our products, which include payroll and payroll related costs, stock-based compensation expenses, consultant costs, professional services costs, material and supplies costs, clinical study costs, and direct or allocated expenses for rent, maintenance of facilities, insurance, and other overhead.

Current wording

Research and development expenses consist primarily of costs incurred in connection with the research and development of our products, which include compensation and benefits expenses (including payroll and payroll related costs and stock-based compensation expenses), consultant costs, professional services costs, material and supplies costs, clinical study costs, and direct or allocated expenses for rent, maintenance of facilities, insurance, and other overhead.

Previous wording

Selling, general and administrative expenses consist primarily of payroll and payroll related costs, stock-based compensation expenses, consultant costs, professional services costs, which include legal, investor relations, intellectual property, audit, accounting, and tax services, marketing costs, and direct or allocated expenses for rent, maintenance of facilities, insurance, and other overhead.

Current wording

Selling, general and administrative expenses consist primarily of compensation and benefits expenses (including payroll and payroll related costs and stock-based compensation expenses), consultant costs, professional services costs, which include legal, investor relations, intellectual property, audit, accounting, and tax services, marketing costs, and direct or allocated expenses for rent, maintenance of facilities, insurance, and other overhead.

Previous wording

Revenue increased by $3.7 million to $6.5 million during the three months ended March 31, 2026 from $2.8 million during the three months ended March 31, 2025. The increase was primarily due to the sale of 13 Breast Acoustic CT Scanners during the three months ended March 31, 2026, as compared with six scanners sold during the three months ended March 31, 2025, in accordance with MOQs per the Amended NXC Distribution Agreement.

Current wording

Revenue increased by $3.8 million to $7.4 million during the three months ended June 30, 2026 from $3.7 million during the three months ended June 30, 2025. The increase was primarily due to the sale of 15 Breast Acoustic CT Scanners during the three months ended June 30, 2026, as compared with eight scanners sold during the three months ended June 30, 2025, in accordance with MOQs per the Amended NXC Distribution Agreement.

Previous wording

Research and development expenses increased by $0.9 million to $1.7 million during the three months ended March 31, 2026 from $0.9 million during the three months ended March 31, 2025. The increase was primarily due to an increase in professional service costs of $0.6 million and an increase in payroll and payroll-related expenses of $0.2 million due to higher headcount.

Current wording

Research and development expenses increased by $0.7 million to $1.6 million during the three months ended June 30, 2026 from $0.9 million during the three months ended June 30, 2025. The increase was primarily due to an increase in professional service costs of $0.4 million and an increase in compensation and benefits expenses of $0.4 million due to higher headcount and merit-related salary increases.

Previous wording

Selling, general and administrative expenses increased by $1.3 million to $3.3 million during the three months ended March 31, 2026 from $2.0 million during the three months ended March 31, 2025. The increase was primarily due to an increase in payroll and payroll-related expenses of $1.1 million due to higher headcount and an increase in professional services costs of $0.2 million, partially offset by an increase in the allocation of overhead of $0.3 million from selling, general and administrative expenses to cost of revenue.

Current wording

Selling, general and administrative expenses increased by $1.3 million to $3.3 million during the three months ended June 30, 2026 from $2.0 million during the three months ended June 30, 2025. The increase was primarily due to an increase in compensation and benefits expenses of $1.1 million due to higher headcount and merit-related salary increases, an increase in marketing expenses of $0.2 million, and an increase in professional services costs of $0.1 million.

Previous wording

Change in the fair value of earnout liability changed by $0.1 million to income of $50 thousand during the three months ended March 31, 2026 from expense of $50 thousand during the three months ended March 31, 2025. The change was primarily due to changes in the probability of outcome related to our revenue assumptions.

Current wording

Change in the fair value of earnout liability changed by $0.5 million to expense of $0.3 million during the three months ended June 30, 2026 from income of $0.2 million during the three months ended June 30, 2025. The change was primarily due to changes in the probability of outcome related to our revenue assumptions.

Previous wording

Cost of revenue increased by $2.9 million to $3.9 million during the three months ended March 31, 2026 from $1.0 million during the three months ended March 31, 2025. The increase was primarily due to the sale of 13 Breast Acoustic CT Scanners during the three months ended March 31, 2026, as compared with six scanners sold during the three months ended March 31, 2025, including one scanner that had been repurchased at a lower cost and one depreciated scanner that had been repurposed for sale.

Current wording

Cost of revenue increased by $5.4 million to $8.2 million during the six months ended June 30, 2026 from $2.8 million during the six months ended June 30, 2025. The increase was primarily due to the sale of 28 Breast Acoustic CT Scanners during the six months ended June 30, 2026, as compared with 14 scanners sold during the six months ended June 30, 2025, including one scanner that had been repurchased at a lower cost and one depreciated scanner that had been repurposed for sale.

Previous wording

Interest expense, net increased by $0.2 million to $0.9 million during the three months ended March 31, 2026 from $0.7 million during the three months ended March 31, 2025. The increase was primarily due to the increase in accrued interest and debt discount amortization of $0.9 million for the Lynrock Lake Term Loan, partially offset by the decrease in Yorkville Note interest of $0.5 million as a result of the termination of the Yorkville Note in the first quarter of 2025 and an increase in interest income of $0.1 million.

Current wording

Interest expense, net increased by $0.6 million to $1.7 million during the six months ended June 30, 2026 from $1.1 million during the six months ended June 30, 2025. The increase was primarily due to the increase in interest and debt discount amortization of $1.3 million for the Lynrock Lake Term Loan, partially offset by the decrease in Yorkville Note interest of $0.5 million as a result of the termination of the Yorkville Note in the first quarter of 2025.

Previous wording

Change in the fair value of derivative liability changed by $0.1 million to nil for during three months ended March 31, 2026 from income of $0.1 million during the three months ended March 31, 2025. The change was due to the extinguishment of the derivative liability during the three months ended March 31, 2025 as a result of the extinguishment of the Yorkville Note.

Current wording

Change in the fair value of derivative liability changed by $0.1 million to nil during the six months ended June 30, 2026 from income of $0.1 million during the six months ended June 30, 2025. The change was due to the extinguishment of the derivative liability during the six months ended June 30, 2025 as a result of the extinguishment of the Yorkville Note.

Previous wording

Other expense, net decreased by $8.7 million to $4 thousand during the three months ended March 31, 2026 from $8.7 million during the three months ended March 31, 2025. The decrease was primarily due to $6.6 million in noncash expense incurred at the issuance of the Lynrock Lake Term Loan, and $2.2 million due to an extinguishment loss and modification charges for the Yorkville Note and Cable Car Note during the three months ended March 31, 2025.

Current wording

Loss on issuance of debt decreased $6.6 million to nil during the six months ended June 30, 2026 from $6.6 million during the six months ended June 30, 2025. The decrease was due to $6.6 million in noncash expense incurred at the issuance of the Lynrock Lake Term Loan during the six months ended June 30, 2025.

Previous wording

As of March 31, 2026, we had cash and cash equivalents of $7.0 million. We have incurred net operating losses and negative cash flows from operations since our inception and had an accumulated deficit of $56.4 million as of March 31, 2026. During the three months ended March 31, 2026, we incurred a net loss of $3.4 million and used $3.7 million of cash in operating activities. We expect to continue to incur losses, and our ability to achieve and sustain profitability will depend on the achievement of sufficient revenue to support our cost structure. We may never achieve profitability and, unless and until we do, we will need to continue to raise additional capital.

Current wording

As of June 30, 2026, we had cash and cash equivalents of $10.9 million. We have incurred net operating losses and negative cash flows from operations since our inception and had an accumulated deficit of $67.5 million as of June 30, 2026. During the six months ended June 30, 2026, we incurred a net loss of $14.5 million and used $8.5 million of cash in operating activities. We expect to continue to incur losses, and our ability to achieve and sustain profitability will depend on the achievement of sufficient revenue to support our cost structure. We may never achieve profitability and, unless and until we do, we will need to continue to raise additional capital.

Previous wording

On February 26, 2025, we entered into the Lynrock Lake Credit Agreement that provided the Lynrock Lake Term Loan in the aggregate principal amount of $10.1 million. On August 26, 2025, we and Lynrock Lake entered into the Lynrock Lake Amended Credit Agreement to add Tranche B in the amount of $5.0 million to the Lynrock Lake Term Loan and increase the aggregate principal amount of the Lynrock Lake Term Loan to $15.1 million. The proceeds of Tranche B were used to repurchase the Yorkville Warrant. On October 6, 2025, we repaid the $5.0 million under Tranche B of the Lynrock Lake Term Loan, plus accrued interest and the Tranche B Premium. On May 12, 2026, we and Lynrock Lake entered into the Second Amended Credit Agreement to extend the maturity date of the Lynrock Lake Term Loan from March 31, 2027 to March 31, 2029, and to increase the interest rate from 10% to 12% per annum.

Current wording

On February 26, 2025, we entered into the Lynrock Lake Credit Agreement that provided the Lynrock Lake Term Loan in the aggregate principal amount of $10.1 million. On August 26, 2025, we and Lynrock Lake entered into the Lynrock Lake First Amended Credit Agreement to add Tranche B in the amount of $5.0 million to the Lynrock Lake Term Loan and increase the aggregate principal amount of the Lynrock Lake Term Loan to $15.1 million. The proceeds of Tranche B were used to repurchase the Yorkville Warrant. On October 6, 2025, we repaid the $5.0 million under Tranche B of the Lynrock Lake Term Loan, plus accrued interest and the Tranche B Premium. On May 12, 2026, we and Lynrock Lake entered into the Lynrock Lake Second Amended Credit Agreement to extend the maturity date of the Lynrock Lake Term Loan from March 31, 2027 to March 31, 2029, and to increase the interest rate from 10% to 12% per annum.

Previous wording

During the year ended December 31, 2025 and the three months ended March 31, 2026, we completed a series of PIPE transactions, where we received cash in exchange for the issuance of shares of common stock plus warrants for the purchase of common stock.

Current wording

During the year ended December 31, 2025 and the six months ended June 30, 2026, we completed a series of PIPE transactions and the May 2026 Public Offering, where we received cash in exchange for the issuance of shares of common stock plus warrants for the purchase of common stock.

Previous wording

During the years ended December 31, 2025 and 2024 and the three months ended March 31, 2026, we entered into several distribution agreements which provided us with MOQs as follows:

Current wording

During the years ended December 31, 2025 and 2024 and the six months ended June 30, 2026, we entered into several distribution agreements which provided us with MOQs as follows:

Previous wording

•On June 18, 2024, as amended on December 11, 2024 and further amended on March 28, 2025, we entered into the Amended NXC Distribution Agreement, which provides us with MOQs of 60 scanners in 2026, representing revenue of more than $28 million in 2026.

Current wording

•On June 18, 2024, we entered into the Amended NXC Distribution Agreement between QT Imaging and NXC, as first amended on December 11, 2024 and further amended on March 28, 2025 which provides us with MOQs of 60 scanners in 2026, representing revenue of more than $28 million in 2026.

Previous wording

•On August 21, 2025, we entered into the Gulf Medical Distribution Agreement for an initial term of three years. Under the terms of the Gulf Medical Distribution Agreement, we granted to GMC the exclusive right to market, advertise, and sell our Breast Acoustic CT Scanner and the QTI Cloud SaaS platform subscriptions in Saudi Arabia, with MOQs of 20 scanners in 2026, 32 scanners in 2027, and 40 scanners in 2028, for a total minimum of 92 scanners, representing revenue of more than $51 million in 2026 through 2028, upon regulatory approval from the SFDA in Saudi Arabia.

Current wording

•On August 21, 2025, we entered into the Gulf Medical Distribution Agreement for an initial term of three years. Under the terms of the Gulf Medical Distribution Agreement, we granted to GMC the exclusive right to market, advertise, and sell our Breast Acoustic CT Scanner and the QTI Cloud SaaS platform subscriptions in the Kingdom of Saudi Arabia (“Saudi Arabia”), with MOQs of 20 scanners in 2026, 32 scanners in 2027, and 40 scanners in 2028, for a total minimum of 92 scanners, representing revenue of more than $51 million in 2026 through 2028, upon regulatory approval from the SFDA in Saudi Arabia, which was received on June 2, 2026.

Previous wording

We believe that the additional cash received from the Lynrock Lake Term Loan, the extension of the maturity date of the Lynrock Lake Term Loan to March 2029, the additional cash received from the PIPE Investments, and the expected revenue from MOQs per the Amended NXC Distribution Agreement, the Gulf Medical Distribution Agreement, and the Al Naghi Distribution Agreement will be sufficient to fund our current operating plan for at least the next 12 months.

Current wording

We believe that the additional cash received from the Lynrock Lake Term Loan, the extension of the maturity date of the Lynrock Lake Term Loan to March 2029, the additional cash received from the PIPE Investments and the May 2026 Public Offering, and the expected revenue from our direct sales efforts in the U.S., MOQs per the Amended NXC Distribution Agreement, and direct sales efforts and sales through distributors such as Gulf Medical and Al Nagjhi internationally will be sufficient to fund our current operating plan for at least the next 12 months.

Previous wording

On February 26, 2025, we entered into the Lynrock Lake Credit Agreement that provides the Lynrock Lake Term Loan with Lynrock Lake. The Lynrock Lake Credit Agreement is secured by a first priority lien on substantially all of our assets and provides for a term loan in the aggregate principal amount of $10.1 million at an interest rate of 10.0% per annum, compounded quarterly. Prior to the Second Amended Credit Agreement, the maturity date of the Lynrock Lake Credit Agreement was March 31, 2027 and is now March 31, 2029. The Lynrock Lake Term Loan will be repaid on the maturity date in an amount equal to the aggregate principal amount outstanding, together with all accrued and unpaid interest and any outstanding and payable fees.

Current wording

On February 26, 2025, we entered into the Lynrock Lake Credit Agreement that provides the Lynrock Lake Term Loan with Lynrock Lake. The Lynrock Lake Credit Agreement is secured by a first priority lien on substantially all of our assets and provides for a term loan in the aggregate principal amount of $10.1 million at an interest rate of 10.0% per annum, compounded quarterly.

Previous wording

Subject to the payment of the Make-Whole Amount (as defined in the Lynrock Lake Credit Agreement), we may at any time prior to the maturity date optionally prepay the term loan, in full or in part, upon irrevocable written notice of three business days prior to the proposed prepayment; provided that if such prepayment is to be funded with the proceeds of a refinancing or disposition, such notice of prepayment may be revoked if the financing or disposition is not consummated; provided further, that any such prepayment made in connection with, or in anticipation of, a Change of Control (as defined in the Lynrock Lake Credit Agreement) will also be subject to a prepayment premium equal to 20% of the amount of principal being prepaid (the “Prepayment Premium”).

Current wording

Subject to the payment of the Make-Whole Amount (as defined in the Lynrock Lake Credit Agreement), we may at any time prior to the maturity date optionally prepay the term loan, in full or in part, upon irrevocable written notice of three business days prior to the proposed prepayment; provided that if such prepayment is to be funded with the proceeds of a refinancing or disposition, such notice of prepayment may be revoked if the financing or disposition is not consummated; provided further, that any such prepayment made in connection with, or in anticipation of, a Change of Control (as defined in the Lynrock Lake Credit Agreement) will also be subject to the Prepayment Premium.

Previous wording

In connection with the Lynrock Lake Term Loan, we issued to Lynrock Lake the Lynrock Lake Warrant to purchase 20,333,623 shares of common stock at an exercise price of $1.20 per share. Upon the closing of the October 2025 Private Placement, the number of shares which may be purchased upon exercise of the Lynrock Lake Warrant and the per share exercise price were adjusted to 24,396,416 and $1.0002, respectively. Lynrock Lake may cashless exercise the Lynrock Lake Warrant. The Lynrock Lake Warrant is also subject to anti-dilution adjustments to the exercise price and the number of shares which may be purchased upon exercise of the Lynrock Lake Warrant in the event that we issue shares of common stock (or derivative securities) at a price that is either less than the $1.0002 exercise price or the fair market value of a share of common stock from the immediately prior trading day. The fair value of the Lynrock Lake Warrant at issuance amounted to $16.5 million. On June 11, 2025, the Lynrock Lake Warrant was amended to update the provisions that would trigger cash settlement such that, when such events occur, the holders of the warrants receive the same form of consideration as the underlying stockholders. As equity classification is permitted for an instrument that requires net-cash settlement if the holders of the contract’s underlying shares receive the same form of consideration in transactions outside our control, consequently the warrants were revalued and then reclassified to additional paid-in capital on the consolidated balance sheet upon modification. We determined the fair value of the Lynrock Lake Warrant using the Black-Scholes pricing model through the modification.

Current wording

In connection with the Lynrock Lake Term Loan, we issued to Lynrock Lake the Lynrock Lake Warrant to purchase 20,333,623 shares of common stock at an exercise price of $1.20 per share. The Lynrock Lake Warrant is also subject to anti-dilution adjustments to the exercise price and the number of shares which may be purchased upon exercise of the Lynrock Lake Warrant in the event that we issue shares of common stock (or derivative securities) at a price that is either less than the $1.0002 exercise price or the fair market value of a share of common stock from the immediately prior trading day. Upon the closing of the October 2025 Private Placement, the number of shares which may be purchased upon exercise of the Lynrock Lake Warrant and the per share exercise price were adjusted to 24,396,416 and $1.0002, respectively. Upon the closing of the May 2026 Public Offering, the number of shares which may be purchased upon exercise of the Lynrock Lake Warrant and the per share exercise price were adjusted to 25,313,508 and $0.9639, respectively. Lynrock Lake may cashless exercise the Lynrock Lake Warrant. The Lynrock Lake Warrant is exercisable until February 26, 2035. The fair value of the Lynrock Lake Warrant at issuance amounted to $16.5 million. On June 11, 2025, the Lynrock Lake Warrant was amended to update the provisions that would trigger cash settlement such that, when such events occur, the holders of the warrants receive the same form of consideration as the underlying stockholders. As equity classification is permitted for an instrument that requires net-cash settlement if the holders of the contract’s underlying shares receive the same form of consideration in transactions outside our control, consequently the warrants were revalued and then reclassified to additional paid-in capital on the consolidated balance sheet upon modification. We determined the fair value of the Lynrock Lake Warrant using the Black-Scholes pricing model through the modification.

Previous wording

Upon issuance of the Lynrock Lake Term Loan, we recorded a loss of $6.6 million, including debt issuance costs of $0.2 million, in other expense, net within the unaudited condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2025.

Current wording

Upon issuance of the Lynrock Lake Term Loan, we recorded a loss of $6.6 million, including debt issuance costs of $0.2 million, in other expense, net within the unaudited condensed consolidated statements of operations and comprehensive loss for the six months ended June 30, 2025.

Previous wording

On August 26, 2025, we and Lynrock Lake entered into the Lynrock Lake Amended Credit Agreement to add Tranche B in the amount of $5.0 million to the loan and increase the aggregate principal amount of the Lynrock Lake Term Loan to $15.1 million. The proceeds of Tranche B were used to repurchase the Yorkville Warrant. Tranche B was subject to the Tranche B Premium equal to 6% multiplied by the sum of (i) the principal of Tranche B being repaid plus (ii) all related accrued and unpaid interest. Subject to the payment of the Make-Whole Amount, if we received Net Cash Proceeds (as defined in the Lynrock Lake Credit Agreement) from any sale or issuance of our common stock, then we will, at the option of Lynrock Lake, prepay, or cause to be prepaid, Tranche B on or prior to the date which is thirty days after the date of the receipt by us of such Net Cash Proceeds in an amount equal to the lesser of (i) 100% of such Net Cash Proceeds or (ii) the principal amount of Tranche B on such date of prepayment, together with all accrued and unpaid interest thereon and any outstanding fees or premium, if any, payable in accordance with the Lynrock Lake Term Loan. Additionally, in connection with any mandatory prepayment of Tranche B on or prior to December 31, 2025, such mandatory prepayment will be subject to the payment of the Tranche B Premium instead of the Make-Whole Amount.

Current wording

On August 26, 2025, we and Lynrock Lake entered into the Lynrock Lake First Amended Credit Agreement to add Tranche B in the amount of $5.0 million to the loan and increase the aggregate principal amount of the Lynrock Lake Term Loan to $15.1 million. The proceeds of Tranche B were used to repurchase the Yorkville Warrant. Tranche B was subject to the Tranche B Premium equal to 6% multiplied by the sum of (i) the principal of Tranche B being repaid plus (ii) all related accrued and unpaid interest. Subject to the payment of the Make-Whole Amount, if we received Net Cash Proceeds (as defined in the Lynrock Lake Credit Agreement) from any sale or issuance of our common stock, then we will, at the option of Lynrock Lake, prepay, or cause to be prepaid, Tranche B on or prior to the date which is thirty days after the date of the receipt by us of such Net Cash Proceeds in an amount equal to the lesser of (i) 100% of such Net Cash Proceeds or (ii) the principal amount of Tranche B on such date of prepayment, together with all accrued and unpaid interest thereon and any outstanding fees or premium, if any, payable in accordance with the Lynrock Lake Term Loan. Additionally, in connection with any mandatory prepayment of Tranche B on or prior to December 31, 2025, such mandatory prepayment will be subject to the payment of the Tranche B Premium instead of the Make-Whole Amount.

Previous wording

As of March 31, 2026, the outstanding amount of the Lynrock Lake Term Loan was $1.4 million, net of the unamortized debt discount of $8.7 million, and accrued interest was $1.2 million. Interest expense, including amortization of debt issuance costs, for the three months ended March 31, 2026 and 2025 was $1.0 million and $0.1 million, respectively.

Current wording

As of June 30, 2026, the outstanding amount of the Lynrock Lake Term Loan was $11.4 million and accrued interest was $0.2 million. Interest expense, including amortization of debt issuance costs, was $0.8 million and $0.3 million for the three months ended June 30, 2026 and 2025, respectively, and $1.7 million and $0.4 million for the six months ended June 30, 2026 and 2025, respectively.

Previous wording

The 2020 Notes are convertible, at the holder’s option, into shares of our common stock at the lower of $43.77 per share or the offering price in a financing of at least $5.0 million in equity from unaffiliated parties. As of March 31, 2026, an aggregate of 90,385 shares of common stock would be issued if the entire principal and interest under the 2020 Notes was converted.

Current wording

The 2020 Notes are convertible, at the holder’s option, into shares of our common stock at the lower of $43.77 per share or the offering price in a financing of at least $5.0 million in equity from unaffiliated parties. As of June 30, 2026, an aggregate of 91,344 shares of common stock would be issued if the entire principal and interest under the 2020 Notes was converted.

Previous wording

As of March 31, 2026 and December 31, 2025, the outstanding amount of the 2020 Notes was $3.9 million, and accrued interest was $0.8 million and $0.7 million, respectively.

Current wording

As of June 30, 2026 and December 31, 2025, the outstanding amount of the 2020 Notes was $3.2 million and $3.2 million, respectively, and accrued interest was $0.8 million and $0.7 million, respectively.

Previous wording

Net cash used in operating activities was $3.7 million for the three months ended March 31, 2026 as compared to $3.5 million for the three months ended March 31, 2025. Net cash used for the three months ended March 31, 2026 consisted of a net loss of $3.4 million, adjusted for non-cash expenses primarily including stock-based compensation expense of $0.4 million, non-cash interest of $0.7 million, and change in fair value of warrant liability of $0.2 million, and adjusted for the net change in operating assets and liabilities primarily including an increase in accounts receivable of $0.6 million, an increase in inventory of $1.8 million, an increase in prepaid expenses and other current assets of $0.2 million, and a decrease in accounts payable of $0.5 million, partially offset by an increase in other liabilities of $1.2 million and an increase in accrued expenses and other current liabilities of $0.5 million.

Current wording

Net cash used in operating activities was $8.5 million for the six months ended June 30, 2026 as compared to $5.0 million for the six months ended June 30, 2025. Net cash used for the six months ended June 30, 2026 consisted of a net loss of $14.5 million, adjusted for non-cash expenses primarily including stock-based compensation expense of $1.0 million, non-cash interest of $1.1 million, loss on debt extinguishment and modification of $8.3 million, change in fair value of earnout liability of $0.2 million, and change in fair value of warrant liability of $0.1 million, and adjusted for the net change in operating assets and liabilities primarily including an increase in accounts receivable of $1.6 million, an increase in inventory of $4.1 million, an increase in prepaid expenses and other current assets of $0.4 million, and a decrease in accounts payable of $0.4 million, partially offset by an increase in other liabilities of $0.7 million and an increase in accrued expenses and other current liabilities of $1.0 million.

Previous wording

Net cash used for the three months ended March 31, 2025 consisted of a net loss of $11.1 million, adjusted for non-cash expenses primarily including loss on issuance of the Lynrock Lake Term Loan of $6.6 million, debt extinguishment loss of $2.0 million, non-cash interest of $0.5 million, and change in fair value of warrant liability of $0.7 million, and adjusted for the net change in operating assets and liabilities primarily including an increase in accounts receivable of $2.7 million and an increase in prepaid expenses and other current assets of $0.6 million, partially offset by a decrease in inventory of $0.3 million, and an increase in accrued expenses and other liabilities of $0.5 million.

Current wording

Net cash used for the six months ended June 30, 2025 consisted of a net loss of $15.1 million, adjusted for non-cash expenses primarily including depreciation and amortization of $0.1 million, stock-based compensation of $0.3 million, loss on issuance of the Lynrock Lake Term Loan of $6.6 million, debt extinguishment loss of $2.1 million, non-cash interest of $0.5 million, change in fair value of warrant liability of $3.5 million, change in fair value of derivative liability of $0.1 million, and change in fair value of earnout of $0.2 million, and adjusted for the net change in operating assets and liabilities primarily including an increase in accounts receivable of $3.6 million, an increase in prepaid expenses and other current assets of $1.2 million, an increase in inventory of $0.1 million, partially offset by an increase in accrued expenses and other liabilities of $0.9 million, an increase in accounts payable of $0.8 million, and an increase in other liabilities of $0.4 million.

Previous wording

Net cash used in investing activities was $17 thousand for the three months ended March 31, 2026 due to purchases of property and equipment. There were no investing activities for the three months ended March 31, 2025.

Current wording

Net cash used in investing activities was $0.2 million for the six months ended June 30, 2026 due to purchases of property and equipment. Net cash used in investing activities was $47 thousand for the six months ended June 30, 2025 related to purchases of property and equipment.

Previous wording

During the three months ended March 31, 2026, net cash provided by financing activities was $0.2 million primarily due to net proceeds from the sale of common stock and warrants of $0.2 million, and proceeds from stock option exercises of $0.2 million, partially offset by $0.2 million of stock issuance costs accrued in 2025 but paid during the three months ended March 31, 2026.

Current wording

During the six months ended June 30, 2026, net cash provided by financing activities was $9.2 million primarily due to net proceeds from the sale of common stock and warrants of $9.3 million and proceeds from stock option exercises of $0.2 million, partially offset by $0.3 million of stock issuance costs accrued in 2025 but paid during the six months ended June 30, 2026.

Previous wording

During the three months ended March 31, 2025, net cash provided by financing activities was $5.4 million, primarily due to $10.0 million of net proceeds received from issuance of long-term debt related to the Lynrock Lake Term Loan, partially offset by the repayment of long-term debt of $4.6 million related to the Yorkville Note, Cable Car Note, and the PPP Loans.

Current wording

During the six months ended June 30, 2025, net cash provided by financing activities was $5.9 million, primarily due to $10.0 million of net proceeds received from issuance of long-term debt related to the Lynrock Lake Term Loan and net proceeds from the sale of common stock and warrants of $0.7 million, partially offset by the repayment of long-term debt of $4.7 million related to the Yorkville Note, Cable Car Note, and the Payroll Protection Program Loan (the “PPP Loans”) and payment for debt issuance costs of $0.2 million.

Previous wording

Our ability to continue as a going concern is dependent upon our ability to successfully accomplish these plans and secure sources of financing and attain profitable operations. If we are unable to obtain adequate capital, we could be forced to cease operations. See the section entitled Risk Factors for additional factors and risks associated with our capital requirements.

Current wording

See the section entitled Risk Factors for additional factors and risks associated with our capital requirements.

Previous wording

In addition, we intend to rely on the other exemptions and reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an EGC, we intend to rely on such exemptions, we are not required to, among other things: (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd- Frank Wall Street Reform and Consumer Protection

Current wording

In addition, we intend to rely on the other exemptions and reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth in the JOBS Act, if, as an EGC, we intend to rely on such exemptions, we are not required to, among other things: (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd- Frank Wall Street Reform and Consumer Protection Act; (iii) comply with any requirement that may be adopted by the Public Company Accounting Oversight Board (United States) regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis); and (iv) disclose certain executive compensation-related items such as the correlation between executive compensation and performance and comparisons of the Chief Executive Officer’s compensation to median employee compensation.