SHOULDER INNOVATIONS, INC.

Previous wording

We have experienced significant growth in recent years, primarily driven by growth in our net revenue from the sale of our advanced implant systems sold.

Current wording

We have experienced significant growth in recent years, primarily driven by growth in our net revenue from the sale of our advanced implant systems.

Previous wording

•Continued investments in product development, innovation and growth. We expect to continue to focus on long-term revenue growth through investments in our ecosystem and expansion of our operations. In research and development, we continually invest in improving our technologies, developing new products and further expanding our cleared indications. For example, we began using ProVoyance in 2021 and have developed a product line to include certain fracture indications and commercially launched the InSet 70 in September of 2025. In December 2025, the Company announced the development of a robotics platform to design a transformative shoulder-specific micro-robotic solution designed to further enhance shoulder surgical precision, workflow efficiency, and enable exciting, new clinical approaches in the aTSA and rTSA markets. The robotic solution is designed to be integrated with the Company’s ProVoyance platform to deliver a comprehensive technology solution. We are also evaluating expansion into adjacent areas in shoulder surgical care, which may include sports medicine and shoulder trauma markets. In January 2026, we received FDA 510(k) clearance for products designed for patients with metal sensitivity and products that expand our I-Series humeral stem product line to include additional fracture indications. We anticipate we will continue to invest significantly in product development, including with respect to our supporting technologies, in order to further bolster our ecosystem. While research and development are time consuming and costly and therefore negatively impact our results of operations in the near term, we believe expanding into new areas, implementing product improvements and continuing to demonstrate the efficacy, safety and cost effectiveness of our products through clinical data and surgeon education are all critical to increasing the adoption of our implant systems and to the success of our business over the long term. As we expand our operations in line with our anticipated growth, we will be required to maintain sufficient levels of inventory and instrumentation to meet our estimated demand, which we expect will increase expenses.

Current wording

•Continued investments in product development, innovation and growth. We expect to continue to focus on long-term revenue growth through investments in our ecosystem and expansion of our operations. In research and development, we continually invest in improving our technologies, developing new products and further expanding our cleared indications. For example, we began using ProVoyance in 2021 and have developed a product line to include certain fracture indications and commercially launched the InSet 70 in September of 2025. In December 2025, the Company announced the development of a robotics platform to design a transformative shoulder-specific micro-robotic solution designed to further enhance shoulder surgical precision, workflow efficiency, and enable exciting, new clinical approaches in the aTSA and rTSA markets. The robotic solution, known as InSet Neo, is designed to be integrated with the Company’s ProVoyance platform to deliver a comprehensive technology solution. We are planning FDA submission for InSet Neo in the first half of 2027. We are also evaluating expansion into adjacent areas in shoulder surgical care, which may include sports medicine and shoulder trauma markets. In January 2026, we received FDA 510(k) clearance for products designed for patients with metal sensitivity and products that expand our I-Series humeral stem product line to include additional fracture indications. In April 2026, we announced the full commercial launch of the InSet™ I-135RFX Humeral Stem. We have filed a 510(k) with the FDA related to additive manufacturing of certain products, which will add additional supply chain capacity and cost reductions of up to 30% on certain products beginning in 2027. Beginning in the third quarter of 2026, the InSet Clutch guide system for anatomic and reverse glenoid procedures will be available to surgeons, and we also expect a limited user release for a new subscapularis sparing technique initiative. We expect the first surgical cases using our streamlined InSet anatomic glenoid implant, the InSet Go, in the fourth quarter of 2027 which will further reduce surgical steps. Additionally, we are targeting FDA submission in 2027 for a new concept for reverse procedures, branded InSet One. We anticipate we will continue to invest significantly in product development, including with respect to our supporting technologies, in order to further bolster our ecosystem. While research and development are time consuming and costly and therefore negatively impact our results of operations in the near term, we believe expanding into new areas, implementing product improvements and continuing to demonstrate the efficacy, safety and cost effectiveness of our products through clinical data and surgeon education are all critical to increasing the adoption of our implant systems and to the success of our business over the long term. Our clinical data collection efforts within the registry are ahead of our expectations. As we expand o…

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Previous wording

In addition to our results and measures of performance determined in accordance with U.S. GAAP, we believe that non-GAAP financial measures can be useful in evaluating and comparing our financial and operational performance over multiple periods, identifying trends affecting our business, formulating business plans and making strategic decisions. We use and present Adjusted EBITDA for these purposes. We define Adjusted EBITDA as net loss before interest (income) expense, net, income tax expense, depreciation and amortization, and stock-based compensation expense.

Current wording

In addition to our results and measures of performance determined in accordance with U.S. GAAP, we believe that non-GAAP financial measures can be useful in evaluating and comparing our financial and operational performance over multiple periods, identifying trends affecting our business, formulating business plans and making strategic decisions. We use and present Adjusted EBITDA for these purposes. We define Adjusted EBITDA as net loss before interest (income) expense, net, income tax expense, loss on extinguishment of debt, depreciation and amortization, and stock-based compensation expense.

Previous wording

We currently derive our net revenue from the sale of our aTSA and rTSA implant systems, which generally consist of our InSet Glenoid and humeral stem products. We sell our implants to hospitals, outpatient centers and ASCs in the United States through a dedicated commercial leadership team and a network of external independent distributors. Net revenue is recognized when the performance obligation to deliver these implant systems to our customers is satisfied and we transfer control of the implants to our customers, which is generally when we have received a purchase order and appropriate notification that the procedure has been used or implanted. Revenue is recognized in the amount of the consideration received net of any sales taxes that we expect to collect from customers. We also record shipping and handling costs as revenue. Our average sales price for our implant systems was $7,650 and $7,022 for the three months ended March 31, 2026 and 2025, respectively. No single customer accounted for more than 10% of our net revenue during the three months ended March 31, 2026 and 2025, respectively. We expect our net revenue to increase for the foreseeable future as we expand our commercial organization, add new customers, expand our sales territories, introduce new products, as existing customers perform more procedures using our systems and as we generally expand awareness of our systems with new and existing customers. While industry trends have resulted in increased downward pricing pressure on medical services and products, we have not experienced a material impact on our net revenue to date; however, we cannot assure you that our net revenue will not be impacted in the future by these industry trends. Our net revenue may fluctuate from quarter to quarter due to a variety of factors, such as the size and success of our dedicated commercial leadership team, the number of hospitals and physicians who are aware of and use our systems and seasonality.

Current wording

We currently derive our net revenue from the sale of our aTSA and rTSA implant systems, which generally consist of our InSet Glenoid and humeral stem products. We sell our implants to hospitals, outpatient centers and ASCs in the United States through a dedicated commercial leadership team and a network of external independent distributors. Net revenue is recognized when the performance obligation to deliver these implant systems to our customers is satisfied and we transfer control of the implants to our customers, which is generally when we have received a purchase order and appropriate notification that the procedure has been used or implanted. Revenue is recognized in the amount of the consideration received net of any sales taxes that we expect to collect from customers. We also record shipping and handling costs as revenue. Our average sales price for our implant systems was $7,674 and $7,330 for the three months ended June 30, 2026 and 2025, respectively. Our average sales price for our implant systems was $7,662 and $7,179 for the six months ended June 30, 2026 and 2025, respectively. No single customer accounted for more than 10% of our net revenue during the three or six months ended June 30, 2026 and 2025, respectively. We expect our net revenue to increase for the foreseeable future as we expand our commercial organization, add new customers, expand our sales territories, introduce new products, as existing customers perform more procedures using our systems and as we generally expand awareness of our systems with new and existing customers. While industry trends have resulted in increased downward pricing pressure on medical services and products, we have not experienced a material impact on our net revenue to date; however, we cannot assure you that our net revenue will not be impacted in the future by these industry trends. Our net revenue may fluctuate from quarter to quarter due to a variety of factors, such as the size and success of our dedicated commercial leadership team, the number of hospitals and physicians who are aware of and use our systems and seasonality.

Previous wording

Cost of goods sold consists primarily of the cost of components, packaging and sterilization, and obsolete inventory adjustments. Our systems are manufactured to our specifications primarily by third-party suppliers in the United States and are generally ordered on a purchase order basis. Cost of goods sold is recognized at the time the related revenue is recognized. Prior to use in surgery, the cost of our products is recorded as inventories, net of obsolescence reserve on our condensed balance sheets. Cost of goods sold does not include depreciation expense for instruments, which is included in selling, general and administrative expenses. Depreciation expense for instruments was $1,057 thousand and $593 thousand for the three months ended March 31, 2026 and 2025, respectively. See Note 8 to our unaudited condensed financial statements included elsewhere in this Quarterly Report for additional information. We expect cost of goods sold to increase as our net revenue increases and more of our implant systems are sold.

Current wording

Cost of goods sold consists primarily of the cost of components, packaging and sterilization, and obsolete inventory adjustments. Our systems are manufactured to our specifications primarily by third-party suppliers in the United States and are generally ordered on a purchase order basis. Cost of goods sold is recognized at the time the related revenue is recognized. Prior to use in surgery, the cost of our products is recorded as inventories, net of obsolescence reserve on our condensed balance sheets. Cost of goods sold does not include depreciation expense for instruments, which is included in selling, general and administrative expenses. Depreciation expense for instruments was $1,086 thousand and $623 thousand for the three months ended June 30, 2026 and 2025, respectively. See Note 7 to our unaudited condensed financial statements included elsewhere in this Quarterly Report for additional information. We expect cost of goods sold to increase as our net revenue increases and more of our implant systems are sold.

Previous wording

Our other (income) expense consists of (i) interest (income) expense, net, and (ii) other (income) expense, net.

Current wording

Our other (income) expense consists of (i) interest (income) expense, net, (ii) change in fair value of Series E purchase option, (iii) loss on extinguishment of debt, and (iv) other (income) expense, net.

Previous wording

Interest (income) expense, net consists of interest expense related to our term loan facility (the “Trinity Loan Agreement”) with Trinity Capital Inc. (“Trinity Capital”), interest expense related to our convertible notes, and non-cash interest related to the amortization of debt discount, issuance costs and deferred interest associated with our indebtedness, as well as interest income earned on our cash, cash equivalents and marketable securities.

Current wording

Interest (income) expense, net consists of interest expense related to the Trinity Loan Agreement (as defined below), the Loan Agreement (as defined below), interest expense related to our convertible notes, and non-cash interest related to the amortization of debt discount, issuance costs and deferred interest associated with our indebtedness, as well as interest income earned on our cash, cash equivalents and marketable securities.

Previous wording

Other (income) expense, net consists primarily of adjustment in the fair market value of marketable securities and change in fair value of warrant liabilities.

Current wording

Other expense, net consists primarily of adjustment in the fair market value of marketable securities and change in fair value of warrant liabilities.

Previous wording

(1)Includes stock-based compensation expense of $726 thousand and $127 thousand for the three months ended March 31, 2026 and 2025, respectively.

Current wording

(1)Includes stock-based compensation expense of $1,081 thousand and $190 thousand for the three months ended June 30, 2026 and 2025, respectively.

Previous wording

Net Revenue. Net revenue increased $6,576 thousand, or 64.9%, to $16,708 thousand for the three months ended March 31, 2026, compared to $10,132 thousand for the three months ended March 31, 2025. The increase in net revenue was due to an increase in the number of implant systems sold, as well as an increase in the number of customers.

Current wording

Net Revenue. Net revenue increased $6,162 thousand, or 56.0%, to $17,175 thousand for the three months ended June 30, 2026, compared to $11,013 thousand for the three months ended June 30, 2025. The increase in net revenue was due to an increase in the number of implant systems sold, as well as an increase in the number of customers.

Previous wording

Cost of Goods Sold and Gross Margin. Cost of goods sold increased $1,381 thousand, or 59.0%, to $3,722 thousand for the three months ended March 31, 2026, compared to $2,341 thousand for the three months ended March 31, 2025. This increase in cost of goods sold was primarily due to the increase in the number of our systems sold. Gross margin for the three months ended March 31, 2026 increased to 77.7%, compared to 76.9% for the three months ended March 31, 2025.

Current wording

Cost of Goods Sold and Gross Margin. Cost of goods sold increased $1,114 thousand, or 42.5%, to $3,734 thousand for the three months ended June 30, 2026, compared to $2,620 thousand for the three months ended June 30, 2025. This increase in cost of goods sold was primarily due to the increase in the number of our systems sold. Gross margin for the three months ended June 30, 2026 increased to 78.3%, compared to 76.2% for the three months ended June 30, 2025.

Previous wording

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased $7,706 thousand, or 73.4%, to $18,208 thousand for the three months ended March 31, 2026, compared to $10,502 thousand for the three months ended March 31, 2025. This increase in selling, general and administrative expenses was primarily due to a $3,246 thousand increase in personnel-related expenses as a result of increased headcount of our commercial organization, a $2,170 thousand increase in commissions and sales related costs due to higher sales of our systems, a $1,228 thousand increase in general corporate costs such as information technology, business development and insurance costs including costs associated with becoming a public company, a $598 thousand increase in stock-based compensation expense, and a $464 thousand increase in depreciation of surgical instruments.

Current wording

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased $7,237 thousand, or 56.3%, to $20,086 thousand for the three months ended June 30, 2026, compared to $12,849 thousand for the three months ended June 30, 2025. This increase in selling, general and administrative expenses was primarily due to a $3,066 thousand increase in personnel-related expenses as a result of increased headcount of our commercial organization, a $2,079 thousand increase in commissions and sales related costs due to higher sales of our systems, a $891 thousand increase in stock-based compensation expense, a $736 thousand increase in general corporate costs such as information technology, business development and insurance costs including costs associated with becoming a public company and a $465 thousand increase in depreciation primarily of surgical instruments.

Previous wording

Research and Development Expenses. Research and development expenses increased $2,171 thousand, or 137.1%, to $3,754 thousand for the three months ended March 31, 2026, compared to $1,583 thousand for three months ended March 31, 2025. The increase in research and development expenses was due to our investment in new product development efforts, including an increase in external consulting fees of $2,279 thousand primarily related to the robotic platform strategic partnership.

Current wording

Research and Development Expenses. Research and development expenses increased $1,985 thousand, or 141.2%, to $3,391 thousand for the three months ended June 30, 2026, compared to $1,406 thousand for three months ended June 30, 2025. The increase in research and development expenses was due to our investment in new product development efforts, including an increase in external consulting fees of $1,499 thousand primarily related to the robotic platform strategic partnership.

Previous wording

Interest (Income) Expense, Net. Interest expense, net decreased $803 thousand, or 218.8%, to interest income, net of $436 thousand for the three months ended March 31, 2026, compared to interest expense, net of $367 thousand for the three months ended March 31, 2025. This decrease in interest expense, net was due to higher interest earned on marketable securities.

Current wording

Interest (Income) Expense, Net. Interest expense, net decreased $889 thousand, or 411.6%, to interest income, net of $673 thousand for the three months ended June 30, 2026, compared to interest expense, net of $216 thousand for the three months ended June 30, 2025. This decrease in interest expense, net was due to higher interest earned on marketable securities.

Previous wording

To date, our primary sources of capital have been from net revenue received from the sale of our implant systems, the sale of common stock in our IPO, proceeds from private placements of our convertible preferred stock and debt financing arrangements. On August 1, 2025, we completed our IPO, selling 5,000,000 shares of our common stock at $15.00 per share. Upon completion of our IPO, we received net proceeds of approximately $64,212 thousand, after deducting underwriting discounts and commissions and offering expenses. Since inception, we have raised a total of $114,600 thousand in net proceeds from private placements of our convertible preferred stock. As of March 31, 2026, we had cash, cash equivalents and marketable securities of $108,538 thousand and $15,000 thousand of principal outstanding under our Trinity Loan Agreement.

Current wording

To date, our primary sources of capital have been from net revenue received from the sale of our implant systems, the sale of common stock in our IPO, proceeds from private placements of our convertible preferred stock and debt financing arrangements. On August 1, 2025, we completed our IPO, selling 5,000,000 shares of our common stock at $15.00 per share. Upon completion of our IPO, we received net proceeds of approximately $64,212 thousand, after deducting underwriting discounts and commissions and offering expenses. Since inception, we have raised a total of $114,600 thousand in net proceeds from private placements of our convertible preferred stock. As of June 30, 2026, we had cash, cash equivalents and marketable securities of $98,993 thousand and $15,000 thousand of principal outstanding under the Loan Agreement.

Previous wording

We have generated losses from our operations since our inception as reflected in our accumulated deficit of $105,779 thousand as of March 31, 2026. Our losses primarily resulted from the costs incurred in the development, sales, and marketing of our systems and providing support for our operations. We expect to continue to incur losses for the foreseeable future and to expend significant amounts of cash for the foreseeable future as we continue to scale our business, increase selling, general and administrative expenses to support the expansion of our commercial organization and efforts, increase general and administrative expenses to support being a publicly-traded company and invest in research and development activities.

Current wording

We have generated losses from our operations since our inception as reflected in our accumulated deficit of $115,932 thousand as of June 30, 2026. Our losses primarily resulted from the costs incurred in the development, sales, and marketing of our systems and providing support for our operations. We expect to continue to incur losses for the foreseeable future and to expend significant amounts of cash for the foreseeable future as we continue to scale our business, increase selling, general and administrative expenses to support the expansion of our commercial organization and efforts, increase general and administrative expenses to support being a publicly-traded company and invest in research and development activities.

Previous wording

As of March 31, 2026, we were in compliance with all covenants contained in the Trinity Loan Agreement.

Current wording

As of June 30, 2026, the Company was in compliance with all covenants contained in the Loan Agreement.

Previous wording

Based on our current operating plan, we believe that the expected cash generated from the sale of our systems, our existing cash, cash equivalents and marketable securities and amounts under our Trinity Loan Agreement, will be sufficient to fund our planned operating expenses and capital expenditure requirements for at least 12 months from the date hereof. We have based this estimate on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we expect. We may experience lower than expected cash generated from operating activities or greater than expected capital expenditures, cost of goods sold, or operating expenses, and may need to raise additional capital to fund operations, increase our commercial organization and efforts, further research and development activities, or acquire, invest in, or in-license other businesses, assets, or technologies.

Current wording

Based on our current operating plan, we believe that the expected cash generated from the sale of our systems, our existing cash, cash equivalents and marketable securities and amounts under our Loan Agreement, will be sufficient to fund our planned operating expenses and capital expenditure requirements for at least 12 months from the date hereof. We have based this estimate on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we expect. We may experience lower than expected cash generated from operating activities or greater than expected capital expenditures, cost of goods sold, or operating expenses, and may need to raise additional capital to fund operations, increase our commercial organization and efforts, further research and development activities, or acquire, invest in, or in-license other businesses, assets, or technologies.

Previous wording

We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect. If we are unable to satisfy our liquidity requirements, including because of the risks described in Part I, “Risk Factors” included in “Risk Factors” contained in Part I, Item 1A of the Company’s 2025 Annual Report, we may seek to raise any necessary additional capital through public or private equity offerings or debt financings, credit or loan facilities or a combination of one or more of these or other funding sources. Additional funds may not be available to us on acceptable terms or at all. If we fail to obtain necessary capital when needed on acceptable terms, or at all, we could be forced to delay, limit, reduce or terminate our product development programs, commercialization efforts or other operations. If we raise additional funds by issuing equity securities or convertible debt, our stockholders will suffer dilution and the terms of any financing may adversely affect the rights of our stockholders. In addition, as a condition to providing additional funds to us, future investors may demand, and may be granted, rights superior to those of existing stockholders. If we raise additional capital through collaborations agreements, licensing arrangements or marketing and distribution arrangements, we may have to relinquish valuable rights, future revenue streams, research programs or product or grant licenses that may not be favorable to us. Debt financing, if available, is likely to involve restrictive covenants limiting our flexibility in conducting future business activities, and, in the event of insolvency, debt holders would be repaid before holders of our equity securities received any distribution of our corporate assets.

Current wording

We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect. If we are unable to satisfy our liquidity requirements, including because of the risks included in “Risk Factors” contained in Part I, Item 1A of the Company’s 2025 Annual Report, we may seek to raise any necessary additional capital through public or private equity offerings or debt financings, credit or loan facilities or a combination of one or more of these or other funding sources. Additional funds may not be available to us on acceptable terms or at all. If we fail to obtain necessary capital when needed on acceptable terms, or at all, we could be forced to delay, limit, reduce or terminate our product development programs, commercialization efforts or other operations. If we raise additional funds by issuing equity securities or convertible debt, our stockholders will suffer dilution and the terms of any financing may adversely affect the rights of our stockholders. In addition, as a condition to providing additional funds to us, future investors may demand, and may be granted, rights superior to those of existing stockholders. If we raise additional capital through collaboration agreements, licensing arrangements or marketing and distribution arrangements, we may have to relinquish valuable rights, future revenue streams, research programs or product or grant licenses that may not be favorable to us. Debt financing, if available, is likely to involve restrictive covenants limiting our flexibility in conducting future business activities, and, in the event of insolvency, debt holders would be repaid before holders of our equity securities received any distribution of our corporate assets.

Previous wording

For the three months ended March 31, 2026, net cash used in operating activities was $12,358 thousand, consisting primarily of a net loss of $8,379 thousand and net cash used by changes in our operating assets and liabilities of $5,846 thousand, partially offset by non-cash charges of $1,867 thousand. The non-cash charges primarily consisted of depreciation and amortization expense of $1,132 thousand and stock-based compensation expense of $726 thousand. Net cash used by changes in our operating assets and liabilities primarily consisted of a decrease of $3,219 thousand in accounts payable, an increase of $2,389 thousand in trade accounts receivable, an increase of $238 thousand to inventory, and an increase of $187 thousand in prepaid expenses, partially offset by an increase of $187 thousand in other current liabilities.

Current wording

For the six months ended June 30, 2026, net cash used in operating activities was $19,750 thousand, consisting primarily of a net loss of $18,532 thousand and net cash used by changes in our operating assets and liabilities of $6,311 thousand, partially offset by non-cash charges of $5,093 thousand. The non-cash charges primarily consisted of depreciation and amortization expense of $2,265 thousand, stock-based compensation expense of $1,807 thousand and loss on extinguishment of debt of $589 thousand. Net cash used by changes in our operating assets and liabilities primarily consisted of an increase of $2,857 thousand in trade accounts receivable, a decrease of $2,222 thousand in accounts payable, an increase of $1,329 thousand to inventory, and an increase of $811 thousand in prepaid expenses, partially offset by an increase of $908 thousand in other current liabilities.

Previous wording

For the three months ended March 31, 2025, net cash used in operating activities was $6,477 thousand, consisting primarily of a net loss of $4,662 thousand and net cash used by changes in our operating assets and liabilities of $2,511 thousand, partially offset by non-cash charges of $696 thousand. The non-cash charges primarily consisted of depreciation and amortization expense of $668 thousand and stock-based compensation expense of $127 thousand, partially offset by realized gain on marketable securities of $162 thousand. Net cash used by changes in operating assets and liabilities primarily consisted of a decrease of $2,122 thousand in accounts payable and an increase in accounts receivable of $1,459 thousand, partially offset by a decrease of $851 thousand in inventory.

Current wording

For the six months ended June 30, 2025, net cash used in operating activities was $11,274 thousand, consisting primarily of a net loss of $23,858 thousand and net cash used by changes in our operating assets and liabilities of $2,270 thousand, partially offset by non-cash charges of $14,854 thousand. The non-cash charges primarily consisted of changes in the fair value of our preferred stock warrant liability and Series E purchase option of $13,134 thousand, depreciation and amortization expense of $1,385 thousand and stock-based compensation expense of $317 thousand, partially offset by realized gain on marketable securities of $207 thousand. Net cash used by changes in operating assets and liabilities primarily consisted of an increase of $3,126 thousand in inventory and an increase in accounts receivable of $1,820 thousand, partially offset by an increase of $1,954 thousand in other current liabilities and an increase of $982 thousand in accounts payable.

Previous wording

For the three months ended March 31, 2026, net cash used in investing activities was $3,122 thousand, consisting primarily of purchases of $18,170 thousand in marketable securities and $2,735 thousand in fixed assets purchases, partially offset by proceeds of $17,783 thousand from sales of our marketable securities.

Current wording

For the six months ended June 30, 2026, net cash provided by investing activities was $17,322 thousand, consisting primarily of proceeds of $40,384 thousand from sales of our marketable securities, partially offset by purchases of $18,170 thousand in marketable securities and $4,892 thousand in fixed assets purchases.

Previous wording

For the three months ended March 31, 2025, net cash used in investing activities was $13,070 thousand, consisting primarily of purchases of $20,060 thousand in marketable securities and $843 thousand in fixed assets purchases, partially offset by cash proceeds of $7,833 thousand from sales of our marketable securities.

Current wording

For the six months ended June 30, 2025, net cash used in investing activities was $5,879 thousand, consisting primarily of purchases of $20,477 thousand in marketable securities and $2,311 thousand in fixed assets purchases, partially offset by cash proceeds of $16,909 thousand from sales of our marketable securities.

Previous wording

For the three months ended March 31, 2026, net cash provided by financing activities was $101 thousand, resulting from proceeds received from the exercise of common stock options.

Current wording

For the six months ended June 30, 2026, net cash provided by financing activities was $17 thousand, resulting from proceeds of $15,000 thousand from debt issuance and proceeds of $524 thousand from exercise of common stock options, partially offset by payments of $15,000 thousand of payments of long-term debt and $507 thousand of payments of debt issuance and extinguishment costs.

Previous wording

For the three months ended March 31, 2025, net cash provided by financings activities was $19,794 thousand, consisting of proceeds of $19,632 thousand from the issuance and sale of shares of our Series E convertible preferred stock, proceeds of $130 thousand from the exercise of warrants for our Series Seed preferred stock and proceeds of $32 thousand from the exercise of common stock options.

Current wording

For the six months ended June 30, 2025, net cash provided by financing activities was $38,084 thousand, consisting of proceeds of $39,553 thousand from the issuance and sale of shares of our Series E convertible preferred stock, proceeds of $362 thousand from the exercise of warrants for our Series Seed preferred stock and proceeds of $151 thousand from the exercise of common stock options, partially offset by $1,982 thousand of payments of deferred IPO costs.

Previous wording

Our contractual commitments will have an impact on our future liquidity. These commitments include future payments on our Trinity Loan Agreement, future payments on facility leases and certain royalty obligations. Where applicable, we calculate our obligation based on termination fees that can be paid to exit the contract.

Current wording

Our contractual commitments will have an impact on our future liquidity. These commitments include future payments on our Loan Agreement, future payments on facility leases and certain royalty obligations. Where applicable, we calculate our obligation based on termination fees that can be paid to exit the contract.

Previous wording

The principal outstanding under our Trinity Loan Agreement was $15,000 thousand as of March 31, 2026, however, we are required to make monthly payments of interest only through the Maturity Date of the term loans. The unpaid balance of principal and accrued interest is due on the Maturity Date.

Current wording

The principal outstanding under the Loan Agreement was $15,000 thousand as of June 30, 2026, however, we are required to make monthly payments of interest only through July 1, 2029 followed by twenty-four equal monthly installments of principal plus accrued interest. The unpaid balance of principal and accrued interest is due on the maturity date.

Previous wording

We have entered into an operating lease for office space in Michigan. The lease has a five-year term, which commenced in July 2021 and is renewable for one additional five-year term upon expiration, and was renewed in April 2026. We have also entered into an operating lease for warehouse space in California. The lease has a three-year term, which commenced in March 2025 and is renewable for one additional one-year term upon expiration. In April 2026, we entered into a new lease, which includes the construction of a new commercial building in Michigan that is expected to be substantially completed around the fourth quarter of 2027, which we intend to use as our corporate headquarters. As of March 31, 2026, the operating lease obligations under these operating leases were $93 thousand.

Current wording

We have entered into an operating lease for office space in Michigan. The lease has a five-year term, which commenced in July 2021 and is renewable for one additional five-year term upon expiration, and was renewed in April 2026. We have also entered into an operating lease for warehouse space in California. The lease has a three-year term, which commenced in March 2025 and is renewable for one additional one-year term upon expiration. In April 2026, we entered into a new lease, which includes the construction of a new commercial building in Michigan that is expected to be substantially completed around the fourth quarter of 2027, which we intend to use as our corporate headquarters. As of June 30, 2026, the operating lease obligations under these operating leases were $71 thousand.

Previous wording

On October 22, 2020, we entered into a software license agreement with Genesis Software Innovations, LLC (“Genesis Software”), which was amended and restated on January 1, 2023 and subsequently amended and restated on June 10, 2025 (as amended and restated, the “License Agreement”), pursuant to which we are required to pay Genesis Software certain payments, including royalty payments, until such time we have paid Genesis Software an aggregate of $7,000 thousand under the License Agreement. As of March 31, 2026, we have paid an aggregate of $6,262 thousand of the total $7,000 thousand, including royalties of $575 thousand and $343 thousand in the three months ended March 31, 2026 and 2025, respectively.

Current wording

On October 22, 2020, we entered into a software license agreement with Genesis Software Innovations, LLC (“Genesis Software”), which was amended and restated on January 1, 2023, and subsequently amended and restated on June 10, 2025 (as amended and restated, the “License Agreement”), pursuant to which we are required to pay Genesis Software certain payments, including royalty payments, until such time we have paid Genesis Software an aggregate of $7,000 thousand under the License Agreement. As of June 30, 2026, we have paid an aggregate of $7,000 thousand of the total $7,000 thousand, including royalties of $666 thousand and $398 thousand in the three months ended June 30, 2026 and 2025, respectively.