ESS Tech, Inc.

Previous wording

We believe we have the opportunity to establish attractive margin unit economics if we are able to continue to reduce production costs and scale our operations. Our future financial performance will depend on our ability to deliver on these economies of scale with lower product costs. We believe our business model is positioned for scalability due to the ability to leverage the same core technology in the Energy Base’s modularized form for different project size and duration needs across our customer base. We anticipate significant reduction in our cost of goods through our cost reduction initiatives, including design optimization from value engineering, strategic supply chain projects, and further automation of our manufacturing processes. Additionally, significant improvements in manufacturing scale are expected to decrease the cost of materials and direct labor. We expect our indirect cost of revenue and operating expenses to increase when we ramp up our manufacturing and sales activities. We further expect an increase in expenses related to the implementation of cost reduction projects and initiatives in our supply chain, manufacturing engineering and research and development functions. Achievement of margin targets and cash flow generation is dependent on the execution of these cost out initiatives.

Current wording

We believe we have the opportunity to establish attractive margin unit economics if we are able to continue to reduce production costs and scale our operations. Our future financial performance will depend on our ability to deliver on these economies of scale with lower product costs. We anticipate improvements in our margins through cost reduction initiatives and through product diversification with the addition of sodium-ion technology-based products. Achievement of margin targets and cash flow generation is dependent on the continuation of our cost controlling initiatives and on the realization of improved margins on our new products.

Previous wording

Our near-term and medium-term revenue is expected to be generated primarily from Energy Base and core technology component sales. We believe our unique technology provides a compelling value proposition and an opportunity for favorable margins and unit economics in the energy storage industry in the future.

Current wording

Our near-term and medium-term revenue is expected to be generated primarily from Bridge™ sodium-ion and Energy Base BESS sales. We believe our unique technology provides a compelling value proposition and an opportunity for favorable margins and unit economics in the energy storage industry in the future.

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, 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.

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 United States, Israel and Iran, 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 half of 2026 we experienced supply constraints, and we have experienced in the past and may experience again in the future increased shipping delays for certain customer contracts. 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 (“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.

Current wording

On August 16, 2022, the Inflation Reduction Act (the “IRA”) was enacted, extending the availability of investment tax credits (“ITCs”) and production tax credits (“PTCs”) applicable to solar and energy storage products. The ITC for solar generation projects was extended at that time until at least 2033 and expanded to include stand-alone battery storage projects. On July 4, 2025, the One Big Beautiful Bill Act (H.R. 1) (the “OBBB”) was enacted with 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, including new foreign entity of concern limitations, as discussed further below. We believe the IRA will nevertheless increase demand for our services by improving our customers’ economic returns, while also providing more visibility into the supply chain for materials and components for energy storage systems. We are continuing to evaluate the overall impact and applicability of the IRA and OBBB to our results of operations as guidance is issued and further legislative changes are enacted, including the passage of comparable legislation in other jurisdictions.

Previous 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

Current wording

Section 45X of the Code, as enacted by the IRA, 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 OBBB as discussed further below, including qualifications for integrated components sold after December 31, 2026. The Section 45X PTC may be refundable by the Internal Revenue Service (the “IRS”) or saleable to unrelated third parties. 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. We continue to evaluate the impact of the OBBB on our gross margins, including whether these credits will ultimately have a net positive effect.

Previous wording

Sales and marketing expenses consist primarily of salaries, bonuses, benefits and stock-based compensation for marketing and sales personnel and related support teams. To a lesser extent, sales and marketing expenses also include professional services costs, travel costs, and trade show sponsorships. We expect that our sales and marketing expenses will increase over time as we continue to hire additional personnel to scale our business.

Current wording

Sales and marketing expenses consist primarily of salaries, bonuses, benefits and stock-based compensation for marketing and sales personnel and related support teams. To a lesser extent, sales and marketing expenses also include professional services costs, travel costs, and trade show sponsorships. We expect that our sales and marketing expenses will remain at similar levels despite cost reduction and cash conservation measures as we continue to market our expanding product roadmap.

Previous wording

General and administrative expenses consist of personnel-related expenses for our corporate, executive, finance, legal, and other administrative functions, as well as expenses for outside professional services and insurance costs. Personnel-related expenses consist of salaries, bonuses, benefits and stock-based compensation. To a lesser extent, general and administrative expenses include depreciation and other allocated costs, and supplies. We expect some of our general and administrative expenses to increase as we expand our operations and manufacturing capacity to support the growth of our business, and as a result of operating as a public company, including compliance with the rules and regulations of the SEC, legal, audit, additional insurance expenses, investor relations activities, and other administrative and professional services.

Current wording

General and administrative expenses consist of personnel-related expenses for our corporate, executive, finance, legal, and other administrative functions, as well as expenses for outside professional services and insurance costs. Personnel-related expenses consist of salaries, bonuses, benefits and stock-based compensation. To a lesser extent, general and administrative expenses include depreciation and other allocated costs, and supplies. We expect some of our general and administrative expenses to increase or remain at similar levels despite cost reduction and cash conservation measures as we expand our operations and manufacturing capacity to support the growth of our business, and as a result of operating as a public company, including compliance with the rules and regulations of the SEC, legal, audit, additional insurance expenses, investor relations activities, and other administrative and professional services.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

Comparison of Three and Six Months Ended June 30, 2026 to Three and Six Months Ended June 30, 2025

Previous wording

Revenue decreased by $0.5 million or 79% from $0.6 million for the three months ended March 31, 2025 to $0.1 million for the three months ended March 31, 2026 as a result of decreased sales volume as we continue to wind down existing contracts while developing the next product offering in the Energy Base. For the three months ended March 31, 2026, we recognized revenue for site preparation work and extended warranty services. For the three months ended March 31, 2025, we delivered and recognized revenue for Energy Centers, other related equipment, and extended warranty services.

Current wording

Revenue decreased by $2.3 million, from $2.4 million for the three months ended June 30, 2025 to $0.1 million for the three months ended June 30, 2026, as a result of decreased sales volume as we continue to wind down existing contracts while developing the next product offerings in the sodium-ion Bridge™ BESS and iron flow Energy Base. For the three months ended June 30, 2026, we recognized revenue for extended warranty services and customer reimbursements for freight, travel, and other out-of-pocket expenses. For the three months ended June 30, 2025, we delivered and recognized revenue for Energy Warehouses, Energy Centers, and other related equipment, primarily to related parties. The sales to related parties included both completed and in-process energy storage systems and core technology components.

Previous wording

Cost of revenue decreased by $1.6 million or 18% from $8.7 million for the three months ended March 31, 2025 to $7.2 million for the three months ended March 31, 2026 as a result of fewer deliveries of equipment to customers. The volume driven decreases were partially offset by an increase in depreciation expense of $0.8 million related to abandonment of certain fixed assets as discussed within Note 4, Property and Equipment, Net, as well as an increase in expense related to inventory reserves of $1.0 million in the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Current wording

Cost of revenue decreased by $1.5 million, from $16.2 million for the six months ended June 30, 2025 to $14.7 million for the six months ended June 30, 2026 as a result of fewer deliveries of equipment to customers. The volume driven decreases were partially offset by an increase in depreciation expense of $4.3 million related to abandonment of certain fixed assets as referenced above, and the lack of reoccurrence of benefits from PTCs which offset cost of revenue in the six months ended June 30, 2025 by $884 thousand and did not reoccur in the six months ended June 30, 2026.

Previous wording

Research and development expenses increased by $0.1 million or 6% from $2.5 million for the three months ended March 31, 2025 to $2.6 million for the three months ended March 31, 2026. The increase was driven by purchases of intellectual property of $0.9 million, partially offset by reductions in personnel-related expenses, including stock-based compensation.

Current wording

Research and development expenses increased by $0.8 million or 55% from $1.4 million for the three months ended June 30, 2025 to $2.2 million for the three months ended June 30, 2026. The increase was driven by personnel-related expenses, including stock-based compensation.

Previous 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.

Current wording

Sales and marketing expenses decreased by $2.4 million or 75% from $3.3 million for the six months ended June 30, 2025 to $0.8 million for the six months ended June 30, 2026. The decrease in both periods 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 $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.

Current wording

General and administrative expenses decreased by $0.5 million or 5% from $9.3 million for the six months ended June 30, 2025 to $8.8 million for the six months ended June 30, 2026. The decrease is due to decreases in personnel-related expenses and outside services, partially offset by increases in legal expense associated with contingent liability accruals.

Previous 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.

Current wording

Interest (expense) income, net was $0.6 million of interest expense for the three months ended June 30, 2026, compared to $30 thousand of interest income for the three months ended June 30, 2025. Interest (expense) income, net was $3.1 million of interest expense for the six months ended June 30, 2026, compared to $0.2 million of interest income for the six months ended June 30, 2025. The interest income was earned on our short-term investment portfolio. In the three and six months ended June 30, 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 $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.

Current wording

The change in fair value of common stock warrant liabilities resulted in gains of $166 thousand and of $459 thousand for the three months ended June 30, 2026 and June 30, 2025, respectively. The change in fair value of common stock warrant liabilities resulted in gains of $510 thousand and of $344 thousand for the six months ended June 30, 2026 and June 30, 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 three months ended March 31, 2026, we incurred net losses of $15.9 million and used $13.5 million of cash in operating activities. As of March 31, 2026, we had unrestricted cash and cash equivalents of $15.5 million and short-term investments of $6.0 million, or total liquid assets of $21.5 million.

Current 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 six months ended June 30, 2026, we incurred net losses of $31.5 million and used $22.4 million of cash in operating activities. As of June 30, 2026, we had total unrestricted cash and cash equivalents of $10.8 million.

Previous 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.

Current wording

We have expanded certain cost reduction and cash conservation measures, including ongoing evaluation of workforce staffing requirements and essential business functions 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 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.

Current wording

Despite the cost reductions and cash conservation measures, we will need additional debt or equity financing in the near term 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 and first half of 2026 is predictive of needs in the 12 months following the date of this report, 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 on acceptable terms and conditions, or at all.

Previous wording

Management has taken a variety of steps to mitigate costs, reduce operating expenses and extend our runway while we are evaluating various strategies to obtain additional funding, which may include additional offerings of equity, issuance of debt, or other capital sources. If such financing is not available or if the financing terms are less desirable than we expect, we may be forced to decrease our level of investment in product development or further scale back our operations, which could have an adverse impact on our business and financial prospects.

Current wording

Management has taken a variety of steps to mitigate costs, reduce operating expenses and extend our runway while we are evaluating various strategies to obtain additional funding, which may include additional offerings of equity, issuance of debt, or other capital sources. If we are unable to raise sufficient capital in the near term, or if financing terms are not desirable, we will not have sufficient cash and liquidity to finance our business operations and make required payments. As a result, we may be required to delay, reduce the scope of, limit, curtail or terminate our business activities and product development or may be forced to cease operations or file for bankruptcy protection. In addition, we will have to delay, reduce the scope of, or eliminate some of our business activities, including related operating expenses, which would adversely affect our business prospects and our ability to continue our operations and would have a negative impact on our financial condition and ability to pursue our business strategies. We may also have to liquidate our assets and may receive less than the value at which those assets are carried on our financial statements, and/or seek protection under Chapters 7 or 11 of the United States Bankruptcy Code which could potentially cause us to cease operations and result in a complete or partial loss for our investors.

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 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.

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 automatically extended in successive six-month periods on May 19 and November 19 of each calendar year, unless the beneficiary cancels it or Bank of America elects to not extend it. Based on the terms of the customer agreement, we expect the letter of credit to remain 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 June 30, 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 and six months ended June 30, 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 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.

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 automatically extended in successive one-year periods on May 19 of each calendar year, unless the beneficiary cancels it or Bank of America elects to not extend it. We expect the letter of credit to remain in effect for a period more than a year from the balance sheet date. As of June 30, 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 and six months ended June 30, 2026 and June 30, 2025.

Previous wording

We have a standby letter of credit with Bank of America for $0.3 million as security for our subsidiary’s performance under a 2025 customer agreement. The letter of credit is in effect through the expiration of the customer agreement, which is anticipated to be more than a year from the balance sheet date. As of March 31, 2026, $0.3 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 or since its inception.

Current wording

We have a standby letter of credit with Bank of America for $0.3 million as security for our subsidiary’s performance under a 2025 customer agreement. The letter of credit is automatically extended in successive one-year periods on December 31 of each calendar year until 2037, unless the beneficiary cancels it or Bank of America elects to not extend it. We expect the letter of credit to remain in effect for a period more than a year from the balance sheet date. As of June 30, 2026, $0.3 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 six months ended June 30, 2026 or since its inception.

Previous 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.

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 $37 million of the principal amount of the Promissory Note.

Previous wording

On November 13, 2025, in connection with an “at the market offering” program, we entered into a Sales Agreement (the “Sales Agreement”) with Yorkville Securities, LLC (“Yorkville Securities”), BMO Capital Markets Corp., Canaccord Genuity LLC, Needham & Company, LLC and Stifel, Nicolaus & Company, Incorporated (the “Agents”) pursuant to which we may sell, from time to time, shares of our common stock during the term of the Sales Agreement, through the Agents acting either as agent or principal. We filed a prospectus supplement with the SEC relating to the offer and sale of our common stock having an aggregate gross sales price of up to $75 million pursuant to the Sales Agreement. We intend to use the net proceeds from the offering, if any, in compliance with the terms of the Promissory Note, which generally requires that proceeds first be used to satisfy any installment payments under the Promissory Note due within thirty days. After any such payments, 80% of the remaining proceeds from this offering will be used to satisfy installment payments under the Promissory Note in direct order of maturity until the Promissory Note is repaid in full. In respect of the remaining 20% of proceeds that we may receive while the Promissory Note is outstanding, and all net proceeds we may receive following the repayment of the Promissory Note, we intend to use such net proceeds for working capital and general corporate purposes.

Current wording

On November 13, 2025, in connection with an “at the market offering” program, we entered into a sales agreement (the “Original Sales Agreement”) with Yorkville Securities, LLC (now known as Yorkville Ives & Co., LLC), BMO Capital Markets Corp., Canaccord Genuity LLC, Needham & Company, LLC and Stifel, Nicolaus & Company, Incorporated (the “Agents”) pursuant to which we may sell, from time to time, shares of our common stock during the term of the Original Sales Agreement, through the Agents acting either as agent or principal. On July 16, 2026, the Company entered into an amendment to the Original Sales Agreement (as amended, the “Sales Agreement”) which (i) terminated the original sales agreement with respect to BMO Capital Markets Corp., Canaccord Genuity LLC, Needham & Company, LLC and Stifel, Nicolaus & Company, Incorporated; (ii) added Roth Capital Partners, LLC as an additional sales agent, and (iii) granted Roth Capital Partners, LLC the responsibilities of acting as a “qualified independent underwriter” within the meaning of Rule 5121 of the Financial Industry Regulatory Authority in connection with this offering, replacing Canaccord as “qualified independent underwriter.” In connection with such amendment, we filed an amendment to the prospectus supplement with the SEC relating to the offer and sale of our common stock having an aggregate gross sales price of up to $75 million pursuant to the Sales Agreement. We intend to use the net proceeds from the offering, if any, in compliance with the terms of the Promissory Note, which generally requires that proceeds first be used to satisfy any installment payments under the Promissory Note due within thirty days. After any such payments, 80% of the remaining proceeds from this offering will be used to satisfy installment payments under the Promissory Note in direct order of maturity until the Promissory Note is repaid in full. In respect of the remaining 20% of proceeds that we may receive while the Promissory Note is outstanding, and all net proceeds we may receive following the repayment of the Promissory Note, we intend to use such net proceeds for working capital and general corporate purposes.

Previous 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.

Current wording

Net cash used in operating activities was $22.4 million for the six months ended June 30, 2026, which is comprised of net loss of $31.5 million partially offset by depreciation and amortization expense, including asset abandonment charges, of $7.4 million and non-cash interest expense of $2.8 million. Net changes in operating assets and liabilities used $3.3 million of cash driven by decreases in accounts payable, accrued and other current liabilities, partially offset by a decrease in prepaid expenses and other assets.

Previous 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.

Current wording

Net cash used in operating activities was $30.6 million for the six months ended June 30, 2025, which is comprised of net loss of $29.1 million, and non-cash interest income of $0.2 million, partially offset depreciation and amortization expense of $3.1 million and stock-based compensation of $2.7 million. Net changes in operating assets and liabilities used $7.7 million of cash driven by decreases in deferred revenue, accrued and other current liabilities, and accrued product warranties, partially offset by an increase accounts payable.

Previous wording

Cash flows from investing activities have been comprised primarily of purchases and sales of short-term investments and purchases of property and equipment.

Current wording

Cash flows from investing activities to date have been comprised of purchases and sales of short-term investments and purchases of property and equipment.

Previous 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.

Current wording

Net cash provided by investing activities was $6.2 million for the six months ended June 30, 2026, and $16.9 million for the six months ended June 30, 2025, and in both periods related to maturities of short-term investments partially offset by purchases of property and equipment.

Previous wording

Cash flows from financing activities to date have consisted of the Business Combination and the issuance of debt and equity securities and loan agreements.

Current wording

Cash flows from financing activities in the current and prior year have consisted of the issuance of debt and equity securities and loan agreements.

Previous 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.

Current wording

Net cash provided by financing activities was $12.9 million for the six months ended June 30, 2026, which consisted primarily of proceeds from the issuance of common stock under the Yorkville ATM program and 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 $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.

Current wording

Net cash provided by financing activities was $803 thousand for the six months ended June 30, 2025, which consisted of proceeds from the issuances of common stock under the Baird ATM program and proceeds from our ESPP, offset by repurchases of shares from employees for income tax withholding purposes.

Previous 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

Current wording

Our contractual obligations and other commitments as of June 30, 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 and six months ended June 30, 2026 and 2025. Additionally, we are committed to noncancellable purchase

Previous wording

29 - commitments of $0.1 million as of March 31, 2026 and to reimburse UOP a minimum of $7.9 million for research and development expenses incurred through December 31, 2028 under the JDA (as defined herein).

Current wording

30 - commitments of $0.1 million as of June 30, 2026 and to reimburse UOP a minimum of $7.9 million for research and development expenses incurred through December 31, 2028 under the JDA (as defined herein).