ESS Tech, Inc.

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read together with the condensed financial statements and related notes in this Quarterly Report on Form 10-Q and with our Annual Report on Form 10-K for the year ended December 31, 2024. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include those identified below and those discussed in the section titled “Part II—Item 1A. Risk Factors” of this Quarterly Report on Form 10-Q.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read together with the condensed consolidated financial statements and related notes in this Quarterly Report on Form 10-Q and with our Annual Report on Form 10-K for the year ended December 31, 2025. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include those identified below and those discussed in the section titled “Part II—Item 1A. Risk Factors” of this Quarterly Report on Form 10-Q.

Previous wording

Our long-duration iron flow batteries are the product of nearly 50 years of scientific advancement. Our founders began advancing this technology in 2011 and formed Legacy ESS. Our team has significantly enhanced the technology, improved round-trip efficiency and developed an innovative solution to the hydroxide build-up problem that plagued previous researchers developing iron flow batteries. Our proprietary solution to eliminate the hydroxide formation is known as the Proton Pump, which works by utilizing hydrogen generated by side reactions on the negative electrode. The Proton Pump converts the hydrogen back into protons in the positive electrolyte. This process eliminates the hydroxide and stabilizes the electrolytes’ pH levels.

Current wording

Our long-duration iron flow batteries are the product of nearly 50 years of scientific advancement. Our founders began advancing this technology in 2011 and formed Legacy ESS. Our team has significantly enhanced the technology, improved round-trip efficiency and developed an innovative and patented solution to the hydroxide build-up problem that plagued previous researchers developing iron flow batteries. Our proprietary solution to eliminate the hydroxide formation is known as the Proton Pump, which works by utilizing hydrogen generated by side reactions on the negative electrode. The Proton Pump converts the hydrogen back into protons in the positive electrolyte. This process eliminates the hydroxide and stabilizes the electrolytes’ pH levels.

Previous wording

Our batteries provide flexibility to grid operators and energy assurance for commercial and industrial customers. Our technology addresses energy delivery, duration and cycle-life in a single battery platform that compares favorably to lithium-ion batteries, the most widely deployed alternative technology. Using our iron flow battery technology, we have developed several products, each of which was designed to provide reliable, safe, long-duration energy storage. Our first energy storage product, the Energy Warehouse, was our ‘behind-the-meter’ solution (referring to solutions that are located on the customer’s premises, behind the service demarcation with the utility) that was used for initial testing and technology validation. Our product offering evolved to a larger scale energy storage product with the Energy Center, designed for either ‘behind-the-meter’ or ‘front-of-the-meter’ (referring to solutions that are located outside the customer’s premises, typically operated by the utility or by third-party providers who sell energy into the grid, often known as independent power producers) deployments specifically for utility and large commercial and industrial consumers, before the launch of our 10+ hour Energy Base product earlier this year. We also offer productized versions of our core technology components for integration into third-party systems.

Current wording

Our batteries provide more clean energy every day to utilities, independent power producers, and commercial industrial customers, offering a path to carbon free energy supply. ESS batteries offer flexible, frequent cycling capabilities which can offer higher value clean energy when it is needed, and support a variety of grid conditions. Our technology addresses energy delivery, duration and cycle-life in a single battery platform that compares favorably to lithium-ion batteries, the most widely deployed alternative technology. Using our iron flow battery technology, we have developed a variety of products to provide reliable, safe, long-duration energy storage solutions. Our first energy storage product, the Energy Warehouse, was our ‘behind-the-meter’ solution (referring to solutions that are located on the customer’s premises, behind the service demarcation with the utility) that was used for initial testing and technology validation. Our product offering evolved to a larger scale energy storage product with the Energy Center, designed for either ‘behind-the-meter’ or ‘front-of-the-meter’ (referring to solutions that are located outside the customer’s premises, typically operated by the utility or by third-party providers who sell energy into the grid, often known as independent power producers) deployments specifically for utility and large commercial and industrial consumers, before the launch of our 10+ hour Energy Base product. We also offer productized versions of our core technology components for integration into third-party systems.

Previous wording

We are closely monitoring macroeconomic developments, including global supply chain challenges, foreign currency fluctuations, fluctuations in inflation and interest rates and monetary policy changes, as well as global events, such as the Russia-Ukraine conflict, tensions in the Middle East, and other areas of geopolitical tension around the world, and how they may adversely impact our and our customers’, contractors’, suppliers’ and partners’ respective businesses. In particular, weak economic conditions or significant uncertainty regarding the stability of financial markets related to stock market volatility, inflation, recession, governmental fiscal, monetary and tax policies, or tariffs and trade restrictions, among others, could adversely impact our and our customers’ business, financial condition and operating results. In addition, general and ongoing tightening in the credit market, lower levels of liquidity, increases in rates of default and bankruptcy, and significant volatility in equity and fixed-income markets could all negatively impact our customers, contractors, suppliers and partners. As a result of these macroeconomic forces, during 2024 and the first three quarters of 2025 we experienced supply constraints, increased shipping delays for certain customer contracts, and delays in timing of payments from some of our customers. We believe some or all of these negative trends may continue during the remainder of 2025.

Current wording

We are closely monitoring macroeconomic developments, including global supply chain challenges, foreign currency fluctuations, fluctuations in inflation and interest rates and monetary policy changes, as well as global events, such as the Russia-Ukraine conflict, geopolitical tensions involving China, the conflict between the U.S., Israel and Iran, tensions in the Middle East, tensions in the Middle East, U.S. interventions in Venezuela, and other areas of geopolitical tension around the world, and how they have and may continue to adversely impact our and our customers’, contractors’, suppliers’ and partners’ respective businesses. In particular, weak economic conditions or significant uncertainty regarding the stability of financial markets related to stock market volatility, inflation, recession, governmental fiscal, monetary and tax policies, or tariffs and trade restrictions, among others, could adversely impact our and our customers’ business, financial condition and operating results. In addition, general and ongoing tightening in the credit market, lower levels of liquidity, increases in rates of default and bankruptcy, and significant volatility in equity and fixed-income markets could all negatively impact our customers, contractors, suppliers and partners. As a result of these macroeconomic forces, during 2025 and the first quarter of 2026 we experienced supply constraints, increased shipping delays for certain customer contracts, and delays in timing of payments from some of our customers. Some or all of these negative trends may continue during the remainder of 2026. While the Company has not experienced any significant impacts from these disruptions to date, future impacts are unknown and they could adversely affect our business, supply chain, partners or customers.

Previous wording

On August 16, 2022, the President of the United States signed into law the IRA, which extended the availability of investment tax credits (“ITCs”) and production tax credits and made significant changes to the tax credit regime that applies to solar and energy storage products. As a result of changes made by the IRA, the ITC for solar generation projects was extended until at least 2033 and expanded to include stand-alone battery storage projects. This expansion provided more certainty on the tax incentives available to stand-alone battery storage projects in the future. Subject to recently enacted legislation discussed below, we believe the IRA will increase demand for our services due to the extensions and expansions of various tax credits that are critical for our customers’ economic returns, while also providing more certainty in and visibility into the supply chain for materials and components for energy storage systems. On July 4, 2025, the One Big Beautiful Bill Act (H.R. 1) (the “OBBB”) was signed into law by the President of the United States. The OBBB contains a number of changes to the IRA that significantly impact the availability of the ITCs under Sections 48(a) and 48E of the Code as discussed further below, but the Company’s domestic manufacturing and supply chain structure generally should benefit from the addition of foreign entity of concern limitations. We are continuing to evaluate the overall impact

Current wording

On August 16, 2022, the President of the United States signed into law the IRA, which extended the availability of investment tax credits (“ITCs”) and production tax credits (“PTCs”) and made significant changes to the tax credit regime that applies to solar and energy storage products. As a result of changes made by the IRA, the ITC for solar generation projects was extended until at least 2033 and expanded to include stand-alone battery storage projects. This expansion provided more certainty on the tax incentives available to stand-alone battery storage projects in the future. Subject to recently enacted legislation discussed below, we believe the IRA will increase demand for our services due to the extensions and expansions of various tax credits that are critical for our customers’ economic returns, while also providing more certainty in and visibility into the supply chain for materials and components for energy storage systems. On July 4, 2025, the One Big Beautiful Bill Act (H.R. 1) (the “OBBB”) was signed into law by the President of the United States. The OBBB contains a number of changes to the IRA that significantly impact the availability of the ITCs under Sections 48(a) and 48E of the Code and Section 45X PTCs as discussed further below, but the Company’s domestic manufacturing and supply chain structure generally should benefit from the addition of foreign entity of concern limitations. We are continuing to evaluate the overall impact and applicability of the IRA and OBBB as guidance is issued and further legislative changes are enacted, including the passage of comparable legislation in other jurisdictions, to our results of operations going forward.

Previous wording

As discussed in Note 15, Government Grants, to our condensed financial statements, Section 45X of the Code, as enacted by the IRA, currently provides a PTC that can be claimed on certain battery components manufactured in the U.S. and sold to unrelated U.S. or foreign customers after 2022, through the end of 2032. The tax credits available to manufacturers include a credit for ten percent of the cost incurred to make electrode active materials in addition to credits of $35 per kWh of capacity for battery cells and $10 per kWh of capacity for battery modules. The credits are cumulative, meaning that companies will be able to claim each of the available tax credits based on the battery components produced and sold through 2029, after which the PTC will begin to gradually phase down through the end of 2032, subject to additional qualification requirements in the recently enacted OBBB as discussed further below. The Section 45X PTC may be refundable by the IRS or saleable to unrelated third parties. We continue to evaluate the impact of the OBBB; however, we expect these credits will have a positive impact on our gross margins in the future. Further, on October 28, 2024, Treasury and the IRS issued final regulations providing guidance on requirements that taxpayers must satisfy to qualify for the Section 45X PTC, including the definition of a Section 45X manufacturing facility.

Current wording

Section 45X of the Code, as enacted by the IRA, currently provides a PTC that can be claimed on certain battery components manufactured in the U.S. and sold to unrelated U.S. or foreign customers after 2022, through the end of 2032. The tax credits available to manufacturers include a credit for ten percent of the cost incurred to make electrode active materials in addition to credits of $35 per kWh of capacity for battery cells and $10 per kWh of capacity for battery modules. The credits are cumulative, meaning that companies will be able to claim each of the available tax credits based on the battery components produced and sold through 2029, after which the PTC will begin to gradually phase down through the end of 2032, subject to additional qualification requirements in the recently enacted OBBB as discussed further below, including qualifications for integrated components sold after December 31, 2026 to the effect that any primary component integrated into a secondary component must be produced within the same manufacturing facility, at least 65 percent of the total direct material costs of the secondary component must be attributable to primary components which are domestically mined, produced or manufactured, and the secondary component must be sold to a third party. The Section 45X PTC may be refundable by the Internal Revenue Service (the “IRS”) or saleable to unrelated third parties. We continue to evaluate the impact of the OBBB; however, we expect these credits will have a positive impact on our gross margins in the future. Further, on October 28, 2024, Treasury and the IRS issued final regulations providing guidance on

Previous wording

Cost of revenue is primarily driven by direct material, labor, freight and overhead expenses. Cost of revenue also includes LCNRV charges, warranty costs, losses on unfulfilled noncancellable purchase commitments, obsolescence charges, and fulfillment costs. Cost of revenue does not include inventory previously expensed during the research and development phase of accounting which we transitioned out of in the third quarter of 2023. We expect revenue and cost of revenue to increase when we scale the business and deliver our energy storage products to customers.

Current wording

Cost of revenue is primarily driven by direct material, labor, freight and overhead expenses. Cost of revenue also includes LCNRV charges, warranty costs, losses on unfulfilled noncancellable purchase commitments, obsolescence charges, and fulfillment costs. We expect revenue and cost of revenue to increase when we scale the business and deliver our energy storage products to customers.

Previous wording

Interest (expense) income, net consists primarily of interest expense on our sale-leaseback financing obligation and earned income on our cash equivalents, restricted cash, and short-term investments. These earned income amounts will vary based on our cash, cash equivalents, restricted cash and short-term investment balances, and on market rates.

Current wording

Interest (expense) income, net consists primarily of interest expense on the Promissory Note and our sale-leaseback financing obligation and earned income on our cash equivalents, restricted cash, and short-term investments. These earned income amounts will vary based on our cash, cash equivalents, restricted cash and short-term investment balances, and on market rates.

Previous wording

Gain on revaluation of common stock warrant liabilities consists of periodic fair value adjustments related to our common stock warrants.

Current wording

Gain (loss) on revaluation of common stock warrant liabilities consists of periodic fair value adjustments related to our common stock warrants.

Previous wording

Other (expense) income, net consists primarily of various gains and losses associated with our short-term investments, and other miscellaneous income and expense items.

Current wording

Other income, net consists primarily of various gains and losses associated with our short-term investments, and other miscellaneous income and expense items.

Previous wording

Comparison of Three and Nine Months Ended September 30, 2025 to Three and Nine Months Ended September 30, 2024

Current wording

Comparison of Three Months Ended March 31, 2026 to Three Months Ended March 31, 2025

Previous wording

Sales and marketing expenses decreased by $2.2 million or 86% from $2.5 million for the three months ended September 30, 2024 to $0.4 million for the three months ended September 30, 2025. The decrease is driven by reduced personnel-related expenses, including stock-based compensation, decreased outside services and professional expenses, and marketing and trade show expenses.

Current wording

Sales and marketing expenses decreased by $1.7 million or 87% from $2.0 million for the three months ended March 31, 2025 to $0.3 million for the three months ended March 31, 2026. The decrease is driven by reduced personnel-related expenses, including stock-based compensation, decreased outside services and professional expenses, and marketing and trade show expenses.

Previous wording

General and administrative expenses decreased by $2.4 million or 39% from $6.1 million for the three months ended September 30, 2024 to $3.7 million for the three months ended September 30, 2025. The decrease is due to decreased personnel-related expenses, including stock-based compensation, and decreased director fees and insurance fees.

Current wording

General and administrative expenses decreased by $1.7 million or 31% from $5.6 million for the three months ended March 31, 2025 to $3.9 million for the three months ended March 31, 2026. The decrease is due to decreased outside services and professional expenses.

Previous wording

Interest (expense) income, net was $0.8 million of interest income for the three months ended September 30, 2024 compared to $0.5 million of interest expense for the three months ended September 30, 2025. The interest income for the three months ended September 30, 2024 was earned on our short-term investment portfolio, which was offset in the three months ended September 30, 2025 by interest incurred on our sale-leaseback financing obligation.

Current wording

Interest (expense) income, net was $2.5 million of interest expense for the three months ended March 31, 2026, compared to $0.2 million of interest income for the three months ended March 31, 2025. The interest income was earned on our short-term investment portfolio. In the three months ended March 31, 2026, interest income was offset by interest incurred on the Yorkville Promissory Note and sale-leaseback financing obligation.

Previous wording

The change in fair value of common stock warrant liabilities resulted in gains of zero and $0.3 million for the three months ended September 30, 2025 and September 30, 2024, respectively. The changes in fair value of warrant liabilities were driven by changes in the market price of our common stock over the respective periods.

Current wording

The change in fair value of common stock warrant liabilities resulted in gains of $344 thousand and losses of $115 thousand for the three months ended March 31, 2026 and March 31, 2025, respectively. The changes in fair value of warrant liabilities were driven by changes in the market price of our common stock over the respective periods.

Previous wording

Since our inception, we have financed our operations primarily through the issuance and sale of equity and debt securities and loan agreements. We have incurred losses since inception and have negative cash flows from operations. We anticipate that losses will continue in the near term. During the nine months ended September 30, 2025, we incurred net losses of $39.5 million and used $36.4 million of cash in operating activities. As of September 30, 2025, we had unrestricted cash and cash equivalents of $3.5 million. We have expanded certain cost reduction and cash conservation measures, including ongoing evaluation of workforce staffing requirements and essential business functions, and the implementation of a furlough for a substantial number of our employees as of May 30, 2025 to better align organizational costs with business continuity, further reduction of material purchases by continuing to minimize spending until firm orders are received, refining our focus on R&D and engineering project efforts towards highest priority, greatest return projects and additional reduction in outside vendor spending.

Current wording

We have expanded certain cost reduction and cash conservation measures, including ongoing evaluation of workforce staffing requirements and essential business functions, and the implementation of a furlough for a substantial number of our employees as of May 30, 2025 to better align organizational costs with business continuity, further reduction of material purchases by continuing to minimize spending until firm orders are received, refining our focus on R&D and engineering project efforts towards highest priority, greatest return projects and additional reduction in outside vendor spending.

Previous wording

Despite the cost reductions and cash conservation measures, we will need additional debt or equity financing in order to meet our near-term operating cash flow requirements, and accordingly substantial doubt exists as to our ability to continue as a going concern for 12 months from the issuance of the condensed financial statements included in this Quarterly Report on Form 10-Q. We have based our near-term operating cash flow requirements on certain assumptions, including consistency of cash usage with cash usage in the third quarter of 2025, continued cooperation from vendors with respect to payment plans for outstanding invoices, absence of additional severance costs or other unanticipated contingencies, which may prove to be wrong, and we may use our available capital resources sooner than we currently expect. In addition, we may not be successful in raising additional funds.

Current wording

Despite the cost reductions and cash conservation measures, we will need additional debt or equity financing in order to meet our near-term operating cash flow requirements, and accordingly substantial doubt exists as to our ability to continue as a going concern for 12 months from the issuance of the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. We have based our near-term operating cash flow requirements on certain assumptions, including that cash usage in the latter half of 2025 is predictive of needs in 2026, and no other significant unanticipated contingencies will arise. These assumptions may be inaccurate, and we may use our available capital resources sooner than we currently expect. In addition, we may not be successful in raising additional funds.

Previous wording

We have a standby letter of credit with Bank of America for $0.6 million as security for the performance and payment of the Company’s obligations under a customer agreement. The letter of credit is in effect until the date on which the warranty period under the agreement expires, which is anticipated to be more than a year from the balance sheet date. As of September 30, 2025, $0.6 million was pledged as collateral for the letter of credit and recorded as restricted cash, non-current. There were no draws against the letter of credit during the three and nine months ended September 30, 2025 and 2024.

Current wording

We have a standby letter of credit with Bank of America for $0.6 million as security for the performance and payment of the Company’s obligations under a customer agreement. The letter of credit is in effect until the date on which the warranty period under the agreement expires, which is anticipated to be more than a year from the balance sheet date. As of March 31, 2026, $0.6 million was pledged as collateral for the letter of credit and recorded as restricted cash, non-current. There were no draws against the letter of credit during the three months ended March 31, 2026 and 2025.

Previous wording

We have a standby letter of credit with Bank of America for $0.2 million in support of our customs and duties due on imported materials. The letter of credit is in effect until May 19, 2026. As of September 30, 2025, $0.1 million was pledged as collateral for the letter of credit and recorded as restricted cash, current. There were draws of $0.1 million made against

Current wording

We have a standby letter of credit with Bank of America for $0.2 million in support of our customs and duties due on imported materials. The letter of credit is in effect until May 19, 2026. As of March 31, 2026, $0.1 million was pledged as collateral for the letter of credit and recorded as restricted cash, current. There were no draws against the letter of credit during the three months ended March 31, 2026 and March 31, 2025.

Previous wording

On November 1, 2024, we entered into a Credit Agreement with Export-Import Bank of the United States, as lender, and related agreements related to the financing of two production lines (the “Credit Agreement”). The Credit Agreement provides for a secured loan facility in an aggregate principal amount of up to $22.7 million, of which $20.0 million is available to be borrowed for equipment financing and the balance will be used to finance an exposure fee and transaction expenses. The loan facility has a maturity date of June 30, 2031. Half of the proceeds of the loan facility may be used on a retroactive basis for the financing of our existing automated battery assembly line and the remainder may be used for the financing or refinancing of an additional line upon the closing of an equity raise milestone. As of September 30, 2025 we had no outstanding borrowings under the Credit Agreement. Any obligations under the Credit Agreement will be secured pursuant to a security agreement granting EXIM a first priority security interest in the financed equipment and a securities account containing collateral consisting of cash and cash equivalents in an amount equal to a substantial portion of the disbursements under the Credit Agreement, reportable as restricted cash, that decreases upon the equity raise milestone. See Note 8, Commitments and Contingencies, to our financial statements included elsewhere in this Quarterly Report on Form 10-Q for further discussion.

Current wording

On November 1, 2024, we entered into a Credit Agreement with Export-Import Bank of the United States, as lender, and related agreements related to the financing of two production lines (the “Credit Agreement”). The Credit Agreement provides for a secured loan facility in an aggregate principal amount of up to $22.7 million, of which $20.0 million is available to be borrowed for equipment financing and the balance will be used to finance an exposure fee and transaction expenses. The loan facility has a maturity date of June 30, 2031. Half of the proceeds of the loan facility may be used on a retroactive basis for the financing of our existing automated battery assembly line and the remainder may be used for the financing or refinancing of an additional line upon the closing of an equity raise milestone. As of March 31, 2026, we had no outstanding borrowings under the Credit Agreement. Any obligations under the Credit Agreement are secured pursuant to a security agreement granting EXIM a first priority security interest in the financed equipment and a securities account containing collateral consisting of cash and cash equivalents in an amount equal to a substantial portion of the disbursements under the Credit Agreement, reportable as restricted cash, that decreases upon the equity raise milestone. See Note 9, Commitments and Contingencies, to our financial statements included elsewhere in this Quarterly Report on Form 10-Q for further discussion.

Previous wording

Our current shelf registration statement on Form S-3 pursuant to which we may, from time to time, sell up to an aggregate of $300 million of our common stock, preferred stock, debt securities, depositary shares, warrants, subscription rights, purchase contracts, or units, expires on November 17, 2025; however, we intend to file a replacement shelf registration statement on Form S-3.

Current wording

We also maintain a shelf registration statement on Form S-3 pursuant to which we may, from time to time, sell up to an aggregate of $300 million of our common stock, preferred stock, debt securities, depositary shares, warrants, subscription rights, purchase contracts, or units.

Previous wording

On July 9, 2025, we entered into the SEPA with the Investor, pursuant to which the Investor purchased shares of our common stock in increments up to an aggregate gross sales price of up to $25.0 million. The shares were sold at the Company’s option pursuant to the SEPA at 97% of the Market Price (as defined in the SEPA). During the three months ended September 30, 2025, we sold 2,244,940 shares under the SEPA for total proceeds of $3.6 million. As of October 21, 2025, we completed the offering under the SEPA, having sold an aggregate of 6,458,634 shares under the SEPA for total proceeds of $25 million.

Current wording

On July 9, 2025, we entered into the SEPA with the Investor, pursuant to which the Investor purchased shares of our common stock in increments up to an aggregate gross sales price of up to $25 million. The shares were sold at our option pursuant to the SEPA at 97% of the Market Price (as defined in the SEPA). As of October 21, 2025, we completed the offering under the SEPA, having sold an aggregate of 6,458,634 shares under the SEPA for total proceeds of $25 million.

Previous wording

On October 14, 2025, we entered into an unsecured promissory note with the Investor in the aggregate principal amount of up to $40 million (the “Promissory Note”), in two tranches consisting of a first tranche of $30 million and a second tranche of $10 million, in each case less an original issue discount of 8% and certain fees and expenses. The Promissory Note accrues interest at a rate of 3% per annum, amortizes through maturity and matures on October 14, 2026. As of the date of this report, the Company has repaid $15.0 million of the principal amount of the Promissory Note.

Current wording

On October 14, 2025, we entered into an unsecured promissory note, which was subsequently amended, with Yorkville in the aggregate principal amount of up to $40 million, in two tranches consisting of a first tranche of $30 million and a second tranche of $10 million, in each case less an original issue discount of 8% and certain fees and expenses. The Promissory Note, as amended, accrues interest at a rate of 3% per annum and matures on February 27, 2027. As of the date of this report, we have repaid $33 million of the principal amount of the Promissory Note.

Previous wording

Cash flows used in operating activities to date have primarily consisted of inventory purchases and cost of revenue, costs related to research and development, building awareness of our products’ capabilities and other general and administrative activities.

Current wording

Cash flows used in operating activities to date have primarily consisted of payment of accounts payable and accrued and other liabilities, costs related to research and development, and other general and administrative activities.

Previous wording

Net cash used in operating activities was $36.4 million for the nine months ended September 30, 2025, which is comprised of net loss of $39.5 million partially offset by depreciation and amortization expense of $4.6 million, stock-based compensation of $3.9 million, and non-cash lease expense of $1.1 million. Net changes in operating assets and liabilities used $6.0 million of cash driven by decreases in accrued and other current liabilities, deferred revenue, operating lease liabilities, and accrued product warranties, partially offset by an increase in prepaid expenses and other assets and inventory.

Current wording

Net cash used in operating activities was $13.5 million for the three months ended March 31, 2026, which is comprised of net loss of $15.9 million partially offset by non-cash interest expense of $2.5 million, depreciation and amortization expense of $2.4 million, stock-based compensation of $1.1 million, and non-cash lease expense of $0.4 million. Net changes in operating assets and liabilities used $3.5 million of cash driven by decreases in accounts payable, accrued and other current liabilities, and operating lease liabilities, partially offset by a decrease in prepaid expenses and other assets.

Previous wording

Net cash used in operating activities was $51.7 million for the nine months ended September 30, 2024, which is comprised of net loss of $62.7 million, and noncash interest income of $2.1 million, partially offset by stock-based compensation of $8.5 million and depreciation and amortization expense of $3.3 million. Net changes in operating assets and liabilities provided $0.4 million of cash driven by cash collections on accounts receivable, an increase in accounts payable, and an increase in accrued product warranties, partially offset by decreases in inventory, accrued and other current liabilities, deferred revenue, operating lease liabilities, and an increase in prepaid and other current assets.

Current wording

Net cash used in operating activities was $18.2 million for the three months ended March 31, 2025, which is comprised of net loss of $18.0 million, and non-cash interest income of $0.1 million, partially offset by stock-based compensation of $1.2 million and depreciation and amortization expense of $1.5 million. Net changes in operating assets and liabilities used $3.4 million of cash driven by an increase in accrued and other current liabilities, a decrease in inventory, increases in accrued product warranties, operating lease liabilities and deferred revenue, and an increase in accounts receivable, partially offset by an increase in accounts payable and a decrease in prepaid and other current assets.

Previous wording

Net cash provided by investing activities was $17.3 million for the nine months ended September 30, 2025, which relates to maturities of short-term investments partially offset by purchases of property and equipment.

Current wording

Net cash provided by investing activities was $0.7 million for the three months ended March 31, 2026, and $13.3 million for the three months ended March 31, 2025, and in both periods related to maturities of short-term investments partially offset by purchases of property and equipment.

Previous wording

Net cash provided by financing activities was $8.9 million for the nine months ended September 30, 2025, which consisted of proceeds from the issuances of common stock under the SEPA and an at-the-market offering, proceeds from financing arrangements and proceeds from our ESPP, offset by repurchases of shares from employees for income tax withholding purposes.

Current wording

Net cash provided by financing activities was $14.0 million for the three months ended March 31, 2026, which consisted of proceeds from the issuances of common stock under the ATM and issuances of common stock and pre-funded warrants under the RDO, partially offset by net repayments on financing obligations.

Previous wording

Net cash provided by financing activities was $49 thousand for the nine months ended September 30, 2024, which consisted of proceeds from our ESPP and stock options exercised, offset by repurchases of shares from employees for income tax withholding purposes.

Current wording

Net cash provided by financing activities was $13 thousand for the three months ended March 31, 2025, which consisted of proceeds from stock options exercised offset by repurchases for shares from employees for income tax withholding purposes.

Previous wording

Our contractual obligations and other commitments as of September 30, 2025 consist of lease commitments and two standby letters of credit and the Credit Agreement. The letters of credit serve as security for our performance and payment obligations under a customer agreement and in support of our customs and duties due on imported materials and are secured by a total of $0.7 million pledged as collateral. Financial obligations under the Credit Agreement will be secured pursuant to a security agreement granting EXIM a first priority security interest in the financed equipment and a securities account containing collateral consisting of cash and cash equivalents in an amount equal to a substantial portion of the disbursements under the Credit Agreement that decreases upon the equity raise milestone and will be reported as restricted cash. There were draws of $0.1 million made against the letters of credit during the three and nine months ended September 30, 2025 and no draws against the letters of credit during the three and nine months ended September 30, 2024. Additionally, we are committed to noncancellable purchase commitments of $0.2 million as of September 30, 2025 and to reimburse UOP a minimum of $8.0 million for research and development expenses incurred through December 31, 2028 under the JDA (as defined herein).

Current wording

Our contractual obligations and other commitments as of March 31, 2026 consist of lease commitments and three standby letters of credit and the Credit Agreement. The letters of credit serve as security for our performance and payment obligations under a customer agreement, in support of our customs and duties due on imported materials, and as security for our subsidiary’s performance under a 2025 customer agreement. They are secured by a total of $1.0 million pledged as collateral. Our obligations under the Credit Agreement are secured pursuant to a security agreement granting EXIM a first priority security interest in the financed equipment and a securities account containing collateral consisting of cash and cash equivalents in an amount equal to a certain portion of the disbursements under the Credit Agreement that decreases upon the equity raise milestone and will be reported as restricted cash. There were no draws against the letters of credit during the three months ended March 31, 2026 and 2025. Additionally, we are committed to noncancellable purchase