TIGO ENERGY, INC.

Previous wording

Revolving Credit Facility. On March 31, 2026, we entered into a revolving credit facility (“Credit Facility”) with Wells Fargo Bank, National Association that provides for up to $10.0 million of borrowing capacity, subject to a borrowing base based on eligible accounts receivable and eligible inventory. The Credit Facility matures on March 31, 2029. As of June 30, 2026, $4.1 million was outstanding under the Credit Facility, and we were in compliance with all applicable covenants. For more information, see Note 7, “Debt” of the notes to condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

Revolving Credit Facility. On March 31, 2026, we entered into a revolving credit facility (“Credit Facility”) with Wells Fargo Bank, National Association that provides for up to $10.0 million of borrowing capacity, subject to a borrowing base based on eligible accounts receivable and eligible inventory. The Credit Facility matures on March 31, 2029. As of September 30, 2026, $2.5 million was outstanding under the Credit Facility, and we were in compliance with all applicable covenants. For more information, see Note 7, “Debt” of the notes to condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Previous wording

Patent Sale. As disclosed in the Company’s 2025 Annual Report, on December 16, 2025, we entered into a patent purchase agreement involving the sale of certain patent rights. We received $15.0 million at the initial closing. On May 14, 2026, we satisfied the specified conditions required to release the holdback payment and received additional consideration of $2.8 million, for total consideration received under the patent purchase agreement of $17.8 million. Net proceeds from the holdback payment were approximately $0.4 million after the repayment of expenses. We recognized a gain of approximately $0.4 million during the three and six months ended June 30, 2026. Additionally, seller-retained royalties under the patent purchase agreement, which entitle us to receive up to $5.0 million of future license proceeds, represent contingent income and will be recognized in other income, net when and if earned. As of June 30, 2026, we have collected $0.7 million in seller-retained royalties. For more information, see Note 14, “Patent Sale” of the notes to condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

Patent Sale. As disclosed in the Company’s 2025 Annual Report, on December 16, 2025, we entered into a patent purchase agreement involving the sale of certain patent rights. We received $15.0 million at the initial closing. On May 14, 2026, we satisfied the specified conditions required to release the holdback payment and received additional consideration of $2.8 million, for total consideration received under the patent purchase agreement of $17.8 million. Net proceeds from the holdback payment were approximately $0.4 million after the repayment of expenses. We recognized a gain of approximately $0.4 million during the nine months ended September 30, 2026. Additionally, seller-retained royalties under the patent purchase agreement, which entitle us to receive up to $5.0 million of future license proceeds, represent contingent income and will be recognized in other income, net when and if earned. As of September 30, 2026, we had collected $0.8 million in seller-retained royalties. For more information, see Note 14, “Patent Sale” of the notes to condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Previous wording

Trade Tariffs. It is uncertain what impact new or existing tariffs, trade restrictions, or retaliatory actions may have on us, the solar industry, and our customers. U.S. net revenue represented 17.8% of our total net revenue for the six months ended June 30, 2026. Substantially all of our MLPE products, which represented 71.6% of U.S. net revenues during the six months ended June 30, 2026, were manufactured in Thailand. Our GO Energy Storage Systems (“GO ESS”) products represented 27.6% of of U.S. net revenues during the six months ended June 30, 2026. Beginning in October 2025, we transitioned production of our GO ESS products for the U.S. market from China to Vietnam. As of June 30, 2026, we were subject to tariffs on all products imported into the United States from the countries in which we manufacture our products. During the three months ended June 30, 2026, we incurred $0.8 million in tariff-related costs, compared to $0.2 million during the same period in 2025. During the six months ended June 30, 2026, we incurred $1.5 million in tariff-related costs, compared to $0.3 million during the same period in 2025.

Current wording

Trade Tariffs. It is uncertain what impact new or existing tariffs, trade restrictions or retaliatory actions may have on us, the solar industry and our customers. U.S. net revenue represented 16.7% of our total net revenue for the nine months ended September 30, 2026. Substantially all of our MLPE products, which represented 71.6% of U.S. net revenues during the nine months ended September 30, 2026, were manufactured in Thailand. Our GO Energy Storage Systems (“GO ESS”) products represented 27.1% of U.S. net revenues during the nine months ended September 30, 2026. Beginning in October 2025, we transitioned production of our GO ESS products for the U.S. market from China to Vietnam. As of September 30, 2026, we were subject to tariffs on all products imported into the United States from the countries in which we manufacture our products. During the three months ended September 30, 2026, we incurred $0.4 million in tariff-related costs, compared to $0.7 million during the same period in 2025. During the nine months ended September 30, 2026, we incurred $1.9 million in tariff-related costs, compared to $1.0 million during the same period in 2025. These amounts exclude the effect of the IEEPA tariff refunds described below.

Previous wording

Managing Supply Chain. We rely on contract manufacturers and suppliers to produce our components, with a significant portion of our supply chain originating in Thailand and China. In October 2025, the Company began manufacturing a mix of its GO ESS products in Vietnam. Our ability to grow depends, in part, on the ability of our contract manufacturers and suppliers to provide high quality services and deliver components and finished products on time and at reasonable costs. While we have diversified our supply chain, some of our suppliers and contract manufacturers are sole-source suppliers. Our concentration of suppliers could lead to supply shortages, long lead times for components and supply changes. In the event we are unable to mitigate the impact of delays and/or price increases in raw materials, electronic components and freight, as a result of new or existing tariffs, trade restrictions, retaliatory actions, or otherwise, it could delay the manufacturing and delivery of our products, which would adversely impact our cash flows and results of operations, including revenue and gross margin. In addition, in a slowing economic environment in the U.S. and worldwide, our inventory levels may continue to increase due to existing purchase commitments and our ability to negotiate volume pricing discounts may be impaired.

Current wording

Managing Supply Chain. We rely on contract manufacturers and suppliers to produce our components, with a significant portion of our supply chain originating in Thailand and China. In October 2025, we began manufacturing a mix of our GO ESS products in Vietnam. Our ability to grow depends, in part, on the ability of our contract manufacturers and suppliers to provide high-quality services and deliver components and finished products on time and at reasonable costs. While we have diversified our supply chain, some of our suppliers and contract manufacturers are sole-source suppliers. Our concentration of suppliers could lead to supply shortages, long lead times for components and supply changes. In the event we are unable to mitigate the impact of delays and/or price increases in raw materials, electronic components and freight, as a result of new or existing tariffs, trade restrictions, retaliatory actions or otherwise, it could delay the manufacturing and delivery of our products, which would adversely impact our cash flows and results of operations, including revenue and gross margin. In addition, in a slowing economic environment in the U.S. and worldwide, our inventory levels may continue to increase due to existing purchase commitments and our ability to negotiate volume pricing discounts may be impaired.

Previous wording

During the six months ended June 30, 2026, production activities commenced through a U.S. based contract manufacturer for certain components that are expected to be used in products supplied under the EG4 arrangement. During the six months ended June 30, 2026, we did not recognize any benefit related to the AMPTC under Section 45X of the Code during the period. There can be no assurance that EG4 will qualify for, receive, monetize or retain any AMPTC, that any products manufactured using our components will satisfy applicable requirements, or that we will receive any amounts under the amended agreement, including as to the timing or amount of any such payments. Changes in the law, additional guidance, FEOC-related restrictions, sourcing requirements, documentation requirements, or interpretations of Section 45X of the Code could affect the expected economics of our agreement with EG4, our sourcing strategy, and our customers’ eligibility for tax credits, which may affect their purchasing decisions and demand for our products.

Current wording

Production activities commenced in 2026 through a U.S.-based contract manufacturer for certain components used in products supplied under the EG4 arrangement, and we recognized net revenue of $0.8 million and $1.9 million from shipments to EG4 for the three and nine months ended September 30, 2026, respectively. Delays in EG4’s go-to-market launch of its optimized inverter products have resulted in a slower ramp of shipments under the arrangement. Because EG4, rather than the Company, is expected to claim any available AMPTC, the timing of any amounts we may receive under the amended agreement depends in part on the timing of EG4’s launch and is uncertain. During the nine months ended September 30, 2026, we did not recognize any benefit related to the AMPTC under Section 45X of the Code. There can be no assurance that EG4 will qualify for, receive, monetize or retain any AMPTC, that any products manufactured using our components will satisfy applicable requirements, or that we will receive any amounts under the amended agreement, including as to the timing or amount of any such payments. Changes in the law, additional guidance, FEOC-related restrictions, sourcing requirements, documentation requirements or interpretations of Section 45X of the Code could affect the expected economics of our agreement with EG4, our sourcing strategy and our customers’ eligibility for tax credits, which may affect their purchasing decisions and demand for our products.

Previous wording

Macroeconomic and Market Conditions. The global macroeconomic and market uncertainty has adversely impacted the U.S. and global economies and may continue to do so. As our global footprint expands, we are increasingly exposed to the effects of this evolving environment, including inflation and input-cost pressures, interest rate levels and volatility, tariffs and changes in trade policy, foreign currency fluctuations, potential economic slowdowns or recessions, geopolitical tensions, and regulatory changes stemming from current and future trade policies. A tighter credit environment could adversely affect installer and end-customer demand, increase price sensitivity, and lead to greater price competition for our products. In addition, several European countries, including Germany, Belgium, Italy, the Netherlands and the United Kingdom, have adopted reductions in or ended their NEM tariffs or feed-in tariffs programs. Certain countries have proposed or enacted taxes levied on renewable energy. These and related developments have significantly impacted the solar industry in Europe and may adversely affect the future demand for solar energy solutions in Europe, which could adversely impact our results of operations. Reductions in customer spending in response to unfavorable or uncertain macroeconomic and market conditions, globally or in a particular region where we operate, have adversely affected, and could continue to adversely affect, our business, results of operations and financial condition.

Current wording

Macroeconomic and Market Conditions. The global macroeconomic and market uncertainty has adversely impacted the U.S. and global economies and may continue to do so. As our global footprint expands, we are increasingly exposed to the effects of this evolving environment, including inflation and input-cost pressures, interest rate levels and volatility, tariffs and changes in trade policy, foreign currency fluctuations, potential economic slowdowns or recessions, geopolitical tensions and regulatory changes stemming from current and future trade policies. A tighter credit environment could adversely affect installer and end-customer demand, increase price sensitivity and lead to greater price competition for our products. In addition, several European countries, including Germany, Belgium, Italy, the Netherlands and the United Kingdom, have adopted reductions in or ended their net energy metering tariffs or feed-in tariff programs. Certain countries have proposed or enacted taxes levied on renewable energy. These and related developments have significantly impacted the solar industry in Europe and may adversely affect the future demand for solar energy solutions in Europe, which could adversely impact our results of operations. Reductions in customer spending in response to unfavorable or uncertain macroeconomic and market conditions, globally or in a particular region where we operate, have adversely affected, and could continue to adversely affect, our business, results of operations and financial condition.

Previous wording

Expansion of Sales, Customers, and Product Offerings. Our ability to grow revenue, in part, depends on expanding both our product and service offerings and our customer base. We primarily acquire new customers through collaboration with industry partners and distributors, and while we expect near-term revenue to remain concentrated among existing customers, we plan to expand our presence in the residential markets in the U.S. and EMEA. While the majority of our North American revenue is currently generated from commercial and industrial markets, we are actively working to grow our presence in the U.S. residential market through offerings with residential solar providers. Internationally, we continue to evaluate and invest in new market opportunities, particularly in the EMEA region, where we have begun offering our residential solutions in Italy and Germany.

Current wording

Expansion of Sales, Customers and Product Offerings. Our ability to grow revenue, in part, depends on expanding both our product and service offerings and our customer base. We primarily acquire new customers through collaboration with industry partners and distributors, and while we expect near-term revenue to remain concentrated among existing customers, we plan to expand our presence in the residential markets in the U.S. and EMEA. While the majority of our North American revenue is currently generated from commercial and industrial markets, we are actively working to grow our presence in the U.S. residential market through offerings with residential solar providers. Internationally, we continue to evaluate and invest in new market opportunities, particularly in the EMEA region, where we offer our residential solutions in Italy and Germany, and in October 2026, we announced plans to expand our GO ESS offering to the Czech Republic.

Previous wording

Additionally, we have made, and plan to continue to make, substantial investments in research and development initiatives to support new product introductions. Although a significant portion of our revenue is derived from our MLPE products, we are continuing to develop and promote additional offerings such as our GO ESS product line and Predict+ service, which we believe will help contribute to long-term revenue growth. We believe that our entry into new markets will facilitate revenue growth and customer diversification, however, we cannot assure you that we will be able to enter into new markets or in expand our product offerings in new and existing markets on the timelines that we expect or at all due to the risks and uncertainties related to such expansion discussed Part I, Item 1A, “Risk Factors” in our 2025 Annual Report.

Current wording

Additionally, we have made, and plan to continue to make, substantial investments in research and development initiatives to support new product introductions. Although a significant portion of our revenue is derived from our MLPE products, we are continuing to develop and promote additional offerings such as our GO ESS product line and Predict+ service, which we believe will help contribute to long-term revenue growth. We believe that our entry into new markets will facilitate revenue growth and customer diversification; however, we cannot assure you that we will be able to enter into new markets or expand our product offerings in new and existing markets on the timelines that we expect or at all due to the risks and uncertainties related to such expansion discussed in Part I, Item 1A, “Risk Factors” in our 2025 Annual Report.

Previous wording

We define gross profit as total net revenue less cost of revenue, and define gross margin, expressed as a percentage, as the ratio of gross profit to revenue. Gross profit and margin can be used to understand our financial performance and efficiency and allow investors to evaluate our pricing strategy and compare it against competitors. We use these metrics to make strategic decisions identifying areas for improvement, set targets for future performance and make informed decisions about how to allocate resources going forward.

Current wording

We define gross profit as total net revenue less cost of revenue, and define gross margin, expressed as a percentage, as the ratio of gross profit to net revenue. Gross profit and margin can be used to understand our financial performance and efficiency and allow investors to evaluate our pricing strategy and compare it against competitors. We use these metrics to make strategic decisions identifying areas for improvement, set targets for future performance and make informed decisions about how to allocate resources going forward.

Previous wording

Net revenue increased by $1.4 million or 5.6% for the three months ended June 30, 2026, as compared to the same period in 2025, which is driven primarily by an increase of $2.0 million or 9.9% in net revenue from our MLPE product line, which is attributable to an increased market acceptance of the products. The increase is partially offset by a decrease in royalty revenue of $0.8 million primarily due to all royalty income now being recognized in other income, net for the three months ended June 30, 2026, following the sale of certain patent rights in December 2025. Royalty income was recognized in net revenue during the three months ended June 30, 2025. For more information on the royalty revenue transition to other income, net, see Note 14, “Patent Sale” of the notes to condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

Net revenue decreased by $6.6 million or 21.5% for the three months ended September 30, 2026, as compared to the same period in 2025. The decrease was primarily driven by decreases of $4.7 million or 17.4% and $1.8 million or 58.6% in net revenue from our MLPE and GO ESS product lines, respectively, reflecting lower demand in the Americas and EMEA regions, partially offset by growth in the APAC region. Net revenue also decreased due to a $0.3 million decrease in royalty revenue, as royalty income is now recognized in other income, net following the sale of certain patent rights in December 2025. For more information on the royalty revenue transition to other income, net, see Note 14, “Patent Sale” of the notes to condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Previous wording

APAC - Net revenue for the APAC region increased by $1.4 million or 113.2% for the three months ended June 30, 2026, as compared to the same period in 2025. The increase was primarily attributable to an increase of $1.3 million in net revenue from our MLPE product line, driven by stronger demand in Australia.

Current wording

APAC - Net revenue for the APAC region increased by $0.6 million or 56.3% for the three months ended September 30, 2026, as compared to the same period in 2025, primarily attributable to an increase of $0.6 million in net revenue from our MLPE product line, driven by stronger demand in Australia.

Previous wording

EMEA - Net revenue for the EMEA region increased by $6.3 million or 21.1% for the six months ended June 30, 2026, as compared to the same period in 2025, which is driven primarily by an increase of $4.9 million and $1.2 million in net revenue from our MLPE and GO ESS product lines, respectively. The growth was primarily driven by higher demand of our MLPE products in Spain, Italy, the Czech Republic and Poland, in addition to the sale of $3.4 million of GO ESS product to a customer in Italy.

Current wording

EMEA - Net revenue for the EMEA region increased by $3.1 million or 6.0% for the nine months ended September 30, 2026, as compared to the same period in 2025, primarily driven by increases of $2.3 million and $0.4 million in net revenue from our MLPE and GO ESS product lines, respectively. The increase reflects higher demand for our MLPE products in Spain and Poland, in addition to the sale of $3.5 million of GO ESS product to a customer in Italy. These increases were partially offset by lower MLPE net revenue in the United Kingdom and the Netherlands. Growth in the region was concentrated in the first half of 2026 and was partially offset by the decrease in net revenue for the three months ended September 30, 2026, driven by lower demand in Italy, the United Kingdom and the Czech Republic, as discussed above.

Previous wording

APAC - Net revenue for the APAC region increased by $1.2 million or 31.6% for the six months ended June 30, 2026, as compared to the same period in 2025. The increase was primarily attributable to an increase of $1.2 million in net revenue from our MLPE product line, driven by stronger demand in Australia.

Current wording

APAC - Net revenue for the APAC region increased by $1.8 million or 37.1% for the nine months ended September 30, 2026, as compared to the same period in 2025, primarily attributable to an increase of $1.8 million in net revenue from our MLPE product line, driven by stronger demand in Australia.

Previous wording

Cost of revenues increased by $2.1 million or 15.9% and gross profit decreased by $0.8 million or 7.1% for the three months ended June 30, 2026, as compared to the same period in 2025. The increase in cost of revenues was primarily driven by a 5.6% increase in net revenue for the three months ended June 30, 2026, compared to the same period in 2025. In addition to higher net revenue, cost of revenues increased due to a $2.9 million decrease in favorable excess and obsolete inventory adjustments and a $0.7 million increase in customs and freight expense compared to the same period in 2025. These increases were partially offset by a $1.1 million decrease in warranty expense primarily due to changes in estimated shipping costs.

Current wording

Cost of revenue increased by $0.2 million or 0.6% and gross profit increased by $0.9 million or 2.9% for the nine months ended September 30, 2026, as compared to the same period in 2025, which was primarily driven by a 1.5% increase in net revenue for the nine months ended September 30, 2026, as compared to the same period in 2025. In addition to higher net revenue, cost of revenue increased due to a $2.9 million decrease in favorable excess and obsolete inventory and scrap adjustments and a $0.9 million increase in customs and freight expense compared to the same period in 2025. These increases were partially offset by a $2.6 million decrease in warranty expense primarily due to lower estimated return rates and changes in shipping cost estimates and to the $0.8 million IEEPA tariff refund discussed above.

Previous wording

Gross margin decreased by 0.7 percentage points for the six months ended June 30, 2026, as compared to the same period in 2025. The decrease was primarily attributable to higher customs and freight expense and less favorable excess and obsolete inventory and scrap adjustments, partially offset by the decrease in warranty expense primarily as a result of changes in estimated shipping costs.

Current wording

Gross margin increased by 0.5 percentage points for the nine months ended September 30, 2026, as compared to the same period in 2025. The increase was primarily attributable to the decrease in warranty expense and the IEEPA tariff refund, partially offset by less favorable excess and obsolete inventory and scrap adjustments and higher customs and freight expense.

Previous wording

Americas - Net revenue for the Americas region decreased by $0.3 million or 6.9% for the three months ended June 30, 2026, as compared to the same period in 2025. This change is primarily driven by a $0.8 million decrease in net revenue from royalty revenue, reflecting the royalty revenue shift to other income, net discussed above. The decrease in net revenue is partially offset by a $0.5 million increase in MLPE product revenue, primarily driven by increased demand in the United States.

Current wording

Research and development expense decreased by $0.3 million or 12.0% for the three months ended September 30, 2026, as compared to the same period in 2025.

Previous wording

Research and development expense increased by $0.7 million or 16.2% for the six months ended June 30, 2026, as compared to the same period in 2025. The increase was primarily attributable to a $0.4 million increase in payroll costs, driven by annual compensation adjustments, a $0.1 million increase in consulting expenses and a $0.1 million increase in software subscription costs during the six months ended June 30, 2026, as compared to the same period in 2025.

Current wording

Research and development expense increased by $0.4 million or 6.1% for the nine months ended September 30, 2026, as compared to the same period in 2025. The increase was primarily attributable to a $0.5 million increase in payroll costs, driven by annual compensation adjustments, partially offset by a $0.3 million decrease in bonus and stock-based compensation expense.

Previous wording

The amount of research and development expenses may fluctuate from period to period due to differing levels and stages of development activity.

Current wording

The amount of research and development expense may fluctuate from period to period due to differing levels and stages of development activity.

Previous wording

Sales and marketing expense decreased by $0.4 million or 8.3% for the three months ended June 30, 2026, as compared to the same period in 2025. The decrease was primarily attributable to a $0.5 million decrease in bonus and stock-based compensation expenses primarily related to reversals of amounts previously accrued and a reduction in equity awards granted during the three months ended June 30, 2026, compared to the same period in 2025. This increase was partially offset by a $0.2 million increase in payroll costs driven by annual compensation adjustments during the three months ended June 30, 2026, compared to the same period in 2025.

Current wording

Sales and marketing expense decreased by $0.6 million or 13.2% for the three months ended September 30, 2026, as compared to the same period in 2025. The decrease was primarily attributable to a $0.4 million decrease in bonus and stock-based compensation expense, due to no bonus accrual for fiscal 2026 and a reduction in stock-based compensation expense resulting from revised estimates of the expected achievement of performance conditions on our performance stock units, and to a $0.3 million decrease in commissions expense. These decreases were partially offset by a $0.2 million increase in payroll costs, driven by increased headcount.

Previous wording

Interest expense decreased by $2.8 million or 99.1% for the three months ended June 30, 2026, as compared to the same period in 2025. The decrease was primarily driven by the extinguishment of the Convertible Promissory Note in December 2025, resulting in no related interest expense during the three months ended June 30, 2026.

Current wording

Interest expense decreased by $2.8 million or 96.5% for the three months ended September 30, 2026, as compared to the same period in 2025. The decrease was primarily driven by the extinguishment of the Convertible Promissory Notes in December 2025, resulting in no related interest expense during the three months ended September 30, 2026. Interest expense for the three months ended September 30, 2026, primarily relates to borrowings and the amortization of debt issuance costs under the Credit Facility.

Previous wording

Interest expense decreased by $5.7 million or 99.5% for the six months ended June 30, 2026, as compared to the same period in 2025. The decrease was primarily driven by the extinguishment of the Convertible Promissory Note in December 2025, resulting in no related interest expense during the six months ended June 30, 2026.

Current wording

Interest expense decreased by $8.5 million or 98.5% for the nine months ended September 30, 2026, as compared to the same period in 2025. The decrease was primarily driven by the extinguishment of the Convertible Promissory Notes in December 2025, resulting in no related interest expense during the nine months ended September 30, 2026. Interest expense for the nine months ended September 30, 2026, primarily relates to borrowings and the amortization of debt issuance costs under the Credit Facility.

Previous wording

Gain on sale of intangible assets of $0.4 million was recorded during the three months ended June 30, 2026 as a result of the sale of certain patents to a third party, as discussed above under “Key Factors That May Influence Future Results of Operations.”

Current wording

Gain on sale of intangible assets of $0.4 million was recorded during the nine months ended September 30, 2026, as a result of the sale of certain patents to a third party, as discussed above under “Key Factors that May Influence Future Results of Operations.”

Previous wording

Other income, net increased by $0.2 million or 231.0% for the three months ended June 30, 2026, as compared to the same period in 2025, primarily due to the royalty revenue shift to other income, net discussed above.

Current wording

Other income, net increased by $0.5 million or 104.4% for the nine months ended September 30, 2026, as compared to the same period in 2025, primarily due to the royalty revenue shift to other income, net discussed above, partially offset by a $0.5 million decrease in interest income because we did not hold marketable securities during 2026.

Previous wording

Three and Six Months ended June 30, 2026, and 2025

Current wording

Three and nine months ended September 30, 2026, and 2025

Previous wording

We recorded income tax benefit of $3.2 million and $3.4 million for the three and six months ended June 30, 2026, respectively. This was primarily related to a valuation allowance release resulting from a change to an intercompany transfer pricing arrangement at the affected foreign subsidiary. We recorded income tax expense of $0.2 million and $0.5 for the three and six months ended June 30, 2025, primarily related to settlement of a foreign tax examination during the period. For more information, see Note 13, "Income Taxes" of the notes to condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

We recorded an income tax benefit of $0.3 million and $3.7 million for the three and nine months ended September 30, 2026, respectively. The benefits for the three and nine months ended September 30, 2026, were primarily related to the valuation allowance release resulting from a change to the intercompany operating model of the affected foreign subsidiary, and to the application of our estimated annual effective tax rate to losses at our foreign subsidiaries. We recorded income tax expense of $0.2 million and $0.7 million for the three and nine months ended September 30, 2025, respectively, primarily related to settlement of a foreign tax examination. For more information, see Note 13, “Income Taxes” of the notes to condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Previous wording

As of June 30, 2026, our principal sources of liquidity were cash and cash equivalents of $16.9 million and total working capital, which we define as current assets less current liabilities, of $36.6 million, and availability under our revolving credit facility. Our principal uses of cash are for funding our operations, capital expenditures, other working capital requirements and other investments. On February 26, 2026, we closed the Registered Direct Offering resulting in gross proceeds of $15.0 million, and net proceeds of approximately $14.0 million, after deducting placement agent fees and offering expenses. We believe that our existing cash and cash equivalents, our expected cash flows from operations, the gross proceeds received from the Registered Direct Offering and our available borrowing capacity under the Credit Facility will provide adequate liquidity for ongoing operations, planned capital expenditures and other investments for at least the next 12 months from the issuance date of this Quarterly Report on Form 10-Q.

Current wording

As of September 30, 2026, our principal sources of liquidity were cash and cash equivalents of $16.8 million, availability under our revolving credit facility and total working capital, which we define as current assets less current liabilities, of $36.0 million. Our principal uses of cash are for funding our operations, capital expenditures, other working capital requirements and other investments. On February 24, 2026, we closed the Registered Direct Offering, resulting in gross proceeds of $15.0 million and net proceeds of approximately $14.0 million after deducting placement agent fees and offering expenses. We believe that our existing cash and cash equivalents, our expected cash flows from operations, the proceeds received from the Registered Direct Offering and our available borrowing capacity under the Credit Facility will provide adequate liquidity for ongoing operations, planned capital expenditures and other investments for at least the next 12 months from the issuance date of this Quarterly Report on Form 10-Q.

Previous wording

Revolving Credit Facility. In March 2026, we entered into the Credit Facility with Wells Fargo that provides for borrowings of up to $10.0 million. As of June 30, 2026, $4.1 million was outstanding under the Credit Facility, and we were in compliance with all applicable covenants. For more information, see Note 7, “Debt” of the notes to condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

Revolving Credit Facility. In March 2026, we entered into the Credit Facility with Wells Fargo which provides for borrowings of up to $10.0 million, subject to borrowing base. As of September 30, 2026, $2.5 million was outstanding under the Credit Facility, and we were in compliance with all applicable covenants. For more information, see Note 7, “Debt” of the notes to condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Previous wording

Operating Leases. We have entered into various non-cancelable operating leases primarily for our facilities with original lease periods expiring through the year 2029, with our most significant leases relating to our facilities in Los Gatos, California and Ra’anana, Israel. As of June 30, 2026, we had total lease obligations of $2.3 million recorded on our condensed consolidated balance sheet. For more information, see Note 11, “Leases” of the notes to condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

Operating Leases. We have entered into various operating leases, primarily for our facilities, which include non-cancelable lease periods and certain renewal and termination options. Our facility lease agreements have contractual expiration dates through 2032, with our most significant leases relating to our facilities in Los Gatos, California, entered into during the second quarter of 2025, and Ra’anana, Israel, entered into during the first quarter of 2023. As of September 30, 2026, we had total lease obligations of $2.2 million recorded on our condensed consolidated balance sheets. For more information, see Note 11, “Leases” of the notes to condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Previous wording

The following table summarizes our cash flows for the periods presented:

Current wording

Cash Flows. The following table summarizes our cash flows for the periods presented:

Previous wording

Cash flows from operating activities consisted of net loss adjusted for certain non-cash reconciling items, such as non-cash interest expense, stock-based compensation expense, provision to write down inventories to net realizable value, depreciation and amortization, and non-cash lease expense, gain on sale and payment of transaction costs related to the sale of intangible assets, deferred income tax benefit and changes in our operating assets and liabilities. Cash provided by operating activities decreased by $17.5 million to cash used in operating activities during the six months ended June 30, 2026, as compared to the same period in 2025.

Current wording

Cash flows from operating activities consisted of net income (loss) adjusted for certain non-cash reconciling items, such as non-cash interest expense, stock-based compensation expense, provision to write down inventories to net realizable value, depreciation and amortization, non-cash lease expense, gain on sale and payment of transaction costs related to the sale of intangible assets, deferred income tax benefit and changes in our operating assets and liabilities. Cash provided by operating activities decreased by $17.0 million to cash used in operating activities during the nine months ended September 30, 2026, as compared to the same period in 2025.

Previous wording

Cash Flows Used in Investing Activities

Current wording

Cash Flows Provided by (Used in) Investing Activities

Previous wording

Net cash provided by investing activities was $2.3 million for the six months ended June 30, 2026, which is primarily attributable to the proceeds from the sale of intangible assets as a result of our satisfaction of the conditions specified in the patent purchase agreement and receipt of an additional holdback payment in May 2026, and was partially offset by the purchase of property and equipment. Net cash used in investing activities was $9.6 million for the six months ended June 30, 2025, which is primarily attributable to the purchase of marketable securities and was partially offset by proceeds received from the sale and maturities of marketable securities.

Current wording

Net cash provided by investing activities was $2.2 million for the nine months ended September 30, 2026, primarily attributable to proceeds from the sale of intangible assets as a result of our satisfaction of the conditions specified in the patent purchase agreement and receipt of an additional holdback payment in May 2026, and was partially offset by the purchase of property and equipment. Net cash used in investing activities was $7.4 million for the nine months ended September 30, 2025, primarily attributable to the purchase of marketable securities, partially offset by proceeds received from the sale and maturities of marketable securities.

Previous wording

Net cash provided by financing activities increased by $16.4 million during the six months ended June 30, 2026, compared to the same period in 2025 which is primarily attributable to the proceeds from the issuance of common stock in the Registered Direct Offering and proceeds from borrowings under the Credit Facility. This is partially offset due to payments of tax withholdings of restricted and performance stock awards, payment of debt issuance costs on the Credit Facility and payment of expenses associated with the Registered Direct Offering.

Current wording

Net cash provided by financing activities increased by $3.8 million during the nine months ended September 30, 2026, as compared to the same period in 2025, which was primarily attributable to the proceeds from the issuance of common stock in the Registered Direct Offering and proceeds from borrowings under the Credit Facility, as compared to proceeds from sales of common stock under our at-the-market offering program in the same period in 2025. This is partially offset due to payments of tax withholdings of restricted and performance stock awards, payment of debt issuance costs on the Credit Facility and payment of expenses associated with the Registered Direct Offering.

Previous wording

During the periods presented, the Company did not have any off-balance sheet arrangements.

Current wording

During the periods presented, we did not have any off-balance sheet arrangements.

Previous wording

For the period ended June 30, 2026, there have been no material changes to our critical accounting estimates from the information reported in our 2025 Annual Report.

Current wording

During the nine months ended September 30, 2026, there have been no material changes to our critical accounting estimates from the information reported in our 2025 Annual Report.