BBNX 10-K & 10-Q changes, risk factors and insider trading

Our quarterly and annual financial condition, operating results andresults, cash flows and key business metrics may fluctuate in the future, which could cause the market price of our stock to decline substantially.

As we continue to build our business, we expect our quarterly and annual financial condition, operating results andresults, cash flows and key business metrics to fluctuate significantly due to a variety of factors including, but not limited to:

changes in the productivity of our sales force, positive or negative coverage in the media or clinical publications of our products or products of our competitors or our industry; and general economic, political, industry and market conditions.

The variability and unpredictability caused by factors such as those described above could also result in our failing to meet the expectations of industry or financial analysts or investors for any period. If our revenue orrevenue, results of operations or key business metrics fall below the expectations of analysts or investors or below any guidance we may provide, or if the guidance we provide is below the expectations of analysts or investors, the price of our common stock could decline substantially. Such a stock price decline could occur even when we have met any previously publicly stated guidance we may provide.

Although we consummated our initial public offering and the concurrent private placement, weWe may need to raise additional funds in the future, and these funds may not be available on acceptable terms, if at all.

the cost of obtaining and maintaining FDA marketing authorization or clearance for other future indications or other product candidates, including for the iLet for T1D using both insulin and glucagon (a bihormonal configurationsystem), the iLet for T2D and the patch pump;

future revenue generated by sales of the iLet and any future products or product candidates, if approved;

Our ability to raise additional funds may also be adversely impacted by potential worsening global economic conditions and the disruptions to, and volatility in, the credit and financial markets in the United States and worldwide resulting from geopolitical tensions, such as the ongoing war in Ukraine, the Israel and Palestine conflict, government actions implemented as a result of either of the foregoing, as well as tensions with and economic uncertainty in China, tariffs,tariffs and other trade measurers, inflation, interest rates, and liquidity concerns at, and failures of, banks and other financial institutions.institutions, Thechanges globalin economy, including creditmonetary and financialfiscal markets, has experienced extreme volatilitypolicy and disruptions,U.S. includingpolitical severely diminished liquiditydevelopments and creditother availability,sources declinesof in economic growth, increases in inflation rates, higher interest rates and uncertainty about economic stability.instability. If the equity and credit markets further deteriorate, or do not improve, it may make any necessary debt or equity financing more difficult, more costly and more dilutive. Market volatility may further adversely impact our ability to access capital as and when needed.

Raising additional capital may cause dilution to our stockholders, including purchasers of common stock in our initial public offering, restrict our operations or require us to relinquish rights to our technologies or iLet.

If our insulin delivery device products do not achieve and maintain widespread market acceptance, we may fail to achieve sales or other business metrics consistent with our projections, in which case our business, financial condition and operating results could be materially and adversely affected.

Our current and future target patient populations and total addressable markets for our current and future products are based on our beliefs and estimates regarding pump adoption rates and the incidence or prevalence of T1D and T2D, including the patient population using intensive insulin therapy for treatment, which are derived from a variety of sources including scientific literature and third-party estimates. Total addressable market is the total overall revenue opportunity that we believe is available for insulin pumps if 100% market share is achieved, and it is not a representation that we will achieve such market share. While we believe our assumptions and the data underlying our estimates are reasonable, our projections may prove to be incorrect and the conditions supporting our assumptions or estimates may change at any time, thereby reducing the predictive accuracy of these estimates. For example, the number of potential patients may turn out to be lower than expected. Because the potential target populations could be smaller than we expect, we may never achieve profitability without obtaining regulatory clearance for the iLet in additional indications, specifically in T2D, which we have not obtained. If the actual number of patients who would benefit from our products, the price at which we can sell products, or the total addressable market for our products is smaller than we anticipated, it may impair our sales growth and have an adverse impact on our business.

The medical device industry is intensely competitive, subject to rapid change and highly sensitive to the introduction of new products, treatment techniques or technologies, or other market activities of industry participants. We primarily compete with a number of companies that manufacture and sell insulin pumps, such as Medtronic, Tandem, and Insulet. The iLet has certain characteristics that other insulin pumps manufactured by such competitors, to our knowledge, do not currently have, such as the ability to be initialized with only the user’s body weight, being enabled by algorithms that determine 100% of the user’s insulin doses, no carb counting, an option for pay-as-you-go pharmacy reimbursement and prefilled cartridges. For more information regarding the current commercial landscape for the iLet, see the section under Part I. Item 1. “Business—The CommercialMarket Opportunity: forManagement theof iLet Bionic Pancreas to Address the Unmet Need.Diabetes.” Outside of the insulin pump market, we face competition from a number of companies, medical researchers and pharmaceutical companies that offer or are pursuing competing delivery devices, technologies and procedures, such as prefilled insulin syringes, insulin pens and inhalable insulin products, as well as companies with approved therapeutics or in-development therapeutic candidates impacting diabetes.

In particular, severe ransomware attacks are becoming increasingly prevalent and can lead to significant interruptions in our operations, ability to provide our products or services, loss of sensitive data and income, reputational harm and diversion of funds. Extortion payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting such payments. It may be difficult and/or costly to detect, investigate, mitigate, contain and remediate a security incident. Our efforts to do so may not be successful. Actions taken by us or the third parties with whom we work to detect, investigate, mitigate, contain and remediate a security incident could result in outages, data losses and disruptions of our business. Threat actors may also gain access to other networks and systems after a compromise of our networks and systems. For example, threat actors may use an initial compromise of one part of our environment to gain access to other parts of our environment, or leverage a compromise of our networks or systems to gain access to the networks or systems of third parties with whom we work, such as through phishing or supply chain attacks.

The FDA has warned that insulin pumps may have cybersecurity vulnerabilities and could be manipulated by hackers, causing danger to PWD. Successful exploitation of any security vulnerabilities in our iLet products may allow attackers to gain access to the iLet to intercept, modify or interfere with the wireless radio frequency communications to or from our iLet products which could allow attackers to read sensitive data, change pump settings or control insulin delivery. While we take steps designed to detect, mitigate, and remediate vulnerabilities in our iLet product and information systems (such as our hardware and/or software, including that of third parties with whom we work), we have not, and may not in the future, detect and remediate all such vulnerabilities including on a timely basis. Further, we have and may in the future experience delays in deploying remedial measures and patches designed to address identified vulnerabilities. Vulnerabilities could be exploited and result in a security incident.

We have limited financial and personnel resources and are placing significant focus on the commercialization of our iLet as an automated insulin dosing system cleared for the treatment of T1D in adults and children six years of age and older, and the development of a bihormonal configurationsystem for the treatment of T1D. We also intend to pursue expanded use of our iLet to treat people with insulin-dependent T2D. These changes will require the successful completion of additional trials, submission of and the FDA’s clearance, approval or granting of marketing authorization applications and significant resources, which may not result in authorization for these uses and configurations. Over time, we may also seek future marketing authorizations or clearances for the use of our iLet in the treatment of a number of related conditions including gestational diabetes, monogenic diabetes, cystic fibrosis-related diabetes, congenital hyperinsulinism, insulinoma syndrome, post-bariatric surgery and metabolic syndrome. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our spending on current and future research and development programs for specific indications may not yield any commercially viable future investigational devices.

As of December 31, 2024,2025, we had 291420 full-time employees and three3 part-time employees. We expect to experience significant growth over time in the number of our employees and the scope of our operations, particularly in the areas of regulatory and clinical affairs and sales, marketing and distribution. To manage our growth activities, we must continue to implement and improve our managerial, operational and financial systems, expand our facilities and continue to recruit and train additional qualified personnel. Due to our limited financial resources and the limited experience of our management team in managing a company with such anticipated growth, we may not be able to effectively manage the expansion of our operations or recruit and train additional qualified personnel, which may result in weaknesses in our infrastructure, give rise to operational mistakes, loss of business opportunities, loss of employees and reduced productivity among remaining employees. As we expand our organization, we may have difficulty identifying, hiring and integrating new personnel. Future growth would impose significant additional responsibilities on our management, including the need to identify, recruit, maintain, motivate and integrate additional employees, consultants and contractors. Also, our management may need to divert a disproportionate amount of its attention away from our day-to-day activities and devote a substantial amount of time to managing these growth activities. Our expected growth could require significant capital expenditures and may divert financial resources from other projects, such as the development of investigational devices. If our management is unable to effectively manage our growth, our expenses may increase more than expected, our ability to generate and/or grow product revenues could be reduced and we may not be able to implement our business strategy. Our future financial performance and our ability to commercialize our investigational devices and compete effectively will depend, in part, on our ability to effectively manage any future growth.

In addition, job candidates and existing employees often consider the value of the stock awards they receive in connection with their employment. If the perceived benefits of our stock awards decline, either because we are a public company or for other reasons, it may harm our ability to recruit and retain highly skilled employees. Many of our employees have become or will soon become vested in a substantial amount of our common stock or a number of common stock options. Our employees may be more likely to leave us if the shares they own have significantly appreciated in value relative to the original purchase prices of the shares, or if the exercise prices of the options that they hold are significantly below the market price of our common stock, particularly after the expiration of the lock-up agreements described herein.stock. Our future success depends on our ability to continue to attract and retain additional executive officers and other key employees. If we fail to attract new personnel or fail to retain and motivate our current personnel, it will negatively affect our business, financial condition and results of operations.

We only have one commercialized device, the iLet, which is an automated insulin dosing system cleared for the treatment of T1D in adults and children six years of age and older. Our business primarily depends on the successful commercialization of the iLet. We currently have no other products cleared for sale and may never be able to develop other marketable products. Our iLet will require additional clinical development, testing and marketing authorization or regulatory clearance before we are permitted to commercialize it in a bihormonal configurationsystem for the treatment of T1D or for any future indications we may pursue. Further, as we develop a bihormonal configurationsystem of the iLet, which is designed to use both insulin and glucagon for the treatment of T1D, we will separately need to develop and obtain approval for our glucagon product candidate as a drug via an NDA submission in order to successfully commercialize our iLet in a bihormonal configuration.system. We expect that the bihormonal configurationsystem will require completion of clinical trials and submission of a 510(k) for both the infusion pump and algorithm. In addition, we expect that the single hormone and bihormonal algorithms will require separate studies to be performed in T1D and T2D populations in order to seek clearance in these patient populations. In addition, we are in the early states of developing an insulin pump, also commonly referred to as a “patch pump,” for which we have engaged with the FDA in pre-submission interactions and intend to seek FDA clearance via a 510(k) submission. The future regulatory and commercial success of our iLet, patch pump and any other product candidate is subject to a number of risks, including the following:

whether we are required by the FDA to conduct additional clinical trials or to modify the design of current or planned trials to support any future application seeking marketing authorization or clearance of the iLet in a bihormonal configurationsystem for the treatment of T1D or for other indications we may pursue, or seeking initial marketing authorization or clearance for any of our other product candidates;

Many of these risks are beyond our control, including the risks related to clinical development, the regulatory submission process, potential threats to our intellectual property rights and the manufacturing, marketing and sales efforts of any future collaborator. If we are not successful in commercializing our iLet or obtaining marketing authorization or clearance for the iLet in its bihormonal configurationsystem for the treatment of T1D or in other indications, such as T2D, the investigational glucagon product, the patch pump, or any other product candidate, or if we experience delays as a result of any of these risks or otherwise, our business could be materially harmed.

Furthermore, even though we have received clearance for our iLet for insulin-only delivery for the treatment of T1D, any other configuration for the treatment of T1D such as a bihormonal configurationsystem using both insulin and glucagon or other indications we may pursue for which we receive marketing authorization or clearance may be subject to limitations on the patient populations for which we may market the product. Even if we are able to obtain the requisite financing to continue to fund our development programs, we cannot assure you that we will successfully develop, obtain marketing authorization or clearance for, and commercialize our iLet in its bihormonal configurationsystem for the treatment of T1D or for any future indication we may pursue, the patch pump, the investigational glucagon product, or any other development-stage products. If we are unable to continue commercializing the iLet for T1D, or if we are unable to develop, or obtain marketing authorization or clearance for, or, if authorized for marketing or cleared, successfully commercialize the iLet for the treatment of any future indications, we may not be able to generate sufficient revenue to continue our business.

The FDA has notified us that the iLet is subject to a mandatory post-market surveillance order under Section 522 of the FDCA, which authorizes the FDA to require a manufacturer to conduct post-market surveillance for devices that meet certain criteria. Specifically, the FDA has asked that we conduct a one-year, prospective single-arm cohort study and has accepted our plan for this study, which will assess the safety and effectiveness of the iLet in commercial users and is expected to enroll 1,875 users. The FDA typically issues a 522 Order for any classClass II device like the iLet that (1) would be reasonably likely to have serious adverse health consequences if it were to fail and (2) is expected to have significant use in pediatric populations. Other classClass II software algorithms used with AID systems meet these two criteria and have therefore been issued similar 522 Orders. In addition, the FDA expressed concern with the limited safety and effectiveness data for design features specific to the iLet (i.e., lack of conventional open-loop mode, the BG-run feature, body weight only initialization, handling of unannounced meals, and use of lower and higher glucose targets for the device). As part of the FDA’s request to conduct a post-market surveillance study, the FDA set forth several criteria to evaluate the iLet toin addressa these specific concerns. We have submittedlarge and diverse patient population, as well as different real-world use settings including the use of features that are unique to the iLet (i.e., lack of conventional open-loop mode, BG-run feature, body weight only initialization, handling unannounced meals, and use of the lower and higher glucose targets). The FDA has accepted our post-market surveillance plan.plan, enrollment began in April 2025, and we continued to enroll patients through December 31, 2025.

Moreover, we have planned modifications to our iLet for which we plan to seek new marketing authorization, such as the proposed bihormonal configuration.system. The FDA may ultimately determine that the 510(k) pathway is not appropriate for the bihormonal configurationsystem of the iLet for the treatment of T1D, or for any other indications we may pursue, and may require us to obtain a PMA or seek de novo classification in order to commercialize the iLet for such uses in the United States. In particular, there are currently no authorized pump therapies that utilize both insulin and glucagon to treat T1D. As such it is difficult to accurately predict the developmental and regulatory challenges we may experience for our iLet in its bihormonal configurationsystem if it proceeds into a pivotal trial. Obtaining a PMA is generally more costly and uncertain than the 510(k) clearance process or the de novo classification process and generally takes from one to three years, or even longer, from the time the application is submitted to the FDA until an approval is obtained, if ever. Additionally, even though the FDA determined that the 510(k) pathway was appropriate for the iLet for insulin-only delivery, different components of the system will require individual marketing authorizations and review of individual components can vary. For example, our iLet Dosing Decision Software utilized in the iLet required a separate 510(k) clearance. If the FDA requires us to go through a lengthier, more rigorous examination for our product candidates or for modifications to existing products than we had expected, product introductions or modifications could be delayed or canceled, which could adversely affect our business. The FDA can delay, limit or deny marketing authorization or clearance of a device for many reasons, including:

we may be required to submit an investigational device exemptionIDE application (IDE) or investigational new drug (IND) to the FDA, which must become effective prior to commencing certain human clinical trials of medical devices and drugs, respectively, and the FDA may reject our IDE or IND and notify us that we may not begin clinical trials, or place restrictions on the conduct of such trials;

delays or failures in reaching agreement on acceptable terms with prospective study sites or other contract research organizations (CROs);

failure of a clinical trial or clinical investigators to be in compliance with Good Clinical Practices (GCPs);

Clinical trials must be conducted in accordance with the laws and regulations of the FDA and other applicable regulatory authorities’ legal requirements, regulations or guidelines, and are subject to oversight by these governmental agencies and IRBs at the medical institutions where the clinical trials are conducted. In addition, clinical trials must be conducted with supplies of our devices and drugs produced under current good manufacturing practices (cGMPs). Furthermore, we rely on CROs, and clinical trial sites to ensure the proper and timely conduct of our clinical trials and while we have agreements governing their committed activities, we have limited influence over their actual performance. We depend on our collaborators and on medical institutions and CROs to conduct our clinical trials in compliance with good clinical practice, or GCP,GCP requirements. To the extent our collaborators or the CROs fail to enroll participants for our clinical trials, fail to conduct the study to GCP standards or are delayed for a significant time in the execution of trials, including achieving full enrollment, we may be affected by increased costs, program delays or both. In addition, conducting clinical trials in various countries may subject us to further delays and expenses as a result of increased shipment costs, additional regulatory requirements and the engagement of non U.S. CROs and other third party contractors, as well as expose us to risks associated with clinical investigators who are unknown to the FDA, and different standards of diagnosis, screening and medical care.

The ability to obtain marketing authorization and to commercialize our iLet in its bihormonal configurationsystem requires FDA approval of a glucagon product for chronic use and to obtain marketing authorization of the bihormonal configurationsystem setting of our iLet. In May 2024, we entered into an exclusive collaboration and license agreement with Xeris to facilitate development of a dual-hormone pump for individuals with T1D, whereby Xeriswe will develop a glucagon product utilizing Xeris’ XeriSol technology for use in our iLet in its bihormonal configuration.system. In September 2025, we completed the PK-PD Trial in Canada. We willbelieve bethat responsiblethe forresults obtainingfrom regulatorythe approvalPK-PD Trial are supportive of the continued development of our glucagon product tocandidate befor utilizeduse in our iLet,bihormonal ifsystem of the bihormonal configuration is authorized for marketing by the FDA.iLet. We are highly dependent on the approval of such glucagon product to be able to successfully commercialize our iLet in its bihormonal configurationsystem for the treatment of T1D, if authorized for marketing by the FDA.

We intend to seek FDA approval through the 505(b)(2) regulatory pathway for our glucagon product candidate that we plan to develop for use with our development of a bihormonal configurationsystem of the iLet for the treatment of T1D, as described in this Annual Report. The Drug Price Competition and Patent Term Restoration Act of 1984, also known as the Hatch-Waxman Act, added Section 505(b)(2) to the Federal Food, Drug and Cosmetic Act (FDCA). Section 505(b)(2) permits the filing of an NDA where at least some of the information required for approval comes from studies that were not conducted by or for the applicant. If the FDA does not allow us to pursue the 505(b)(2) regulatory pathway for our glucagon product candidate as anticipated, we may need to conduct additional clinical trials, provide additional data and information and meet additional standards for regulatory approval. If this were to occur, the time and financial resources required to obtain FDA approval would likely substantially increase. Moreover, the inability to pursue the 505(b)(2) regulatory pathway could result in new competitive products reaching the market faster than our glucagon product candidate, which could materially adversely impact our competitive position and prospects. Even if we are allowed to pursue the 505(b)(2) regulatory pathway, we cannot assure you that we will receive the requisite or timely approvals for commercialization of such product candidate. In addition, it is possible that third parties may file citizens’ petitions with the FDA in an attempt to persuade the FDA that our glucagon product candidate, or the clinical studies that we submit in our applications seeking approval, contain deficiencies. Such actions by our competitors could delay or even prevent the FDA from approving any NDA that we submit under Section 505(b)(2), which would substantially harm our business and could have a material adverse effect on our ability to pursue marketing authorization for the bihormonal configurationsystem of our iLet.

It is important to our business and our long-term growth that we continue to develop and enhance the iLet, including in a bihormonal configuration.system. For example, we have completed over 20 pre-pivotal trials testing the iLet algorithms in order to enhance its learning capabilities. We intend to continue to invest in research and development activities focused on improvements and enhancements to the iLet. Additionally, we intend to pursue marketing authorization or clearance for other indications in the United States in the future.

Maintaining regulatory clearance for our iLet as an automated insulin dosing system for the treatment of T1D and obtaining and maintaining marketing authorization or clearance for a bihormonal configurationsystem for T1D or other indication in one jurisdiction does not mean that we will be successful in obtaining marketing authorization of the iLet in any configuration or indication in other jurisdictions.

Maintaining regulatory clearance for our iLet as an automated insulin dosing system for the treatment of T1D and obtaining and maintaining marketing authorization or clearance for a bihormonal configurationsystem for T1D or other indication in one jurisdiction does not mean that we will be successful in obtaining or maintaining marketing authorization of the iLet in any configuration or indication in any other jurisdiction. For example, even if the FDA grants marketing authorization or clearance, this does not mean that comparable regulatory authorities in foreign jurisdictions would similarly grant marketing authorization or clearance in those countries. Procedures for obtaining marketing authorization or clearance vary among jurisdictions and can involve requirements and administrative review periods different from, and greater than, those in the United States, including additional preclinical studies or clinical trials, as clinical trials conducted in one jurisdiction may not be accepted by regulatory authorities in other jurisdictions. In many jurisdictions outside the United States, products must be approved for reimbursement before they can be approved for sale in that jurisdiction. In some cases, the price that we intend to charge for our products is also subject to approval.

Government authorities and third-party payors, such as private health insurers and health maintenance organizations, decide which drugs and devices they will cover and the amount of reimbursement. Coverage may be more limited than the purposes for which the drug or device is approved by the FDA or comparable foreign regulatory authorities. In the United States, private health insurers and other third-party payors in the U.S. often follow the coverage and reimbursement policies of government payors, including the Medicare or Medicaid programs. The Centers for Medicare & Medicaid Services (CMS),CMS, an agency within the Department of Health and Human Services (HHS) that administers the Medicare program, decides whether and to what extent a new medicine or device will be covered and reimbursed under Medicare. However, no uniform policy of coverage and reimbursement for products exists among third-party payors. Coverage and reimbursement by a third-party payor may depend upon a number of factors, including the third-party payor’s determination that use of a product is:

We may experience pricing pressure or decreasing prices for our products as a result of actions or negotiations by managed care organizations and other third-party payors, increased market power of payors, increased competition within our industry, and increased competition among suppliers, including manufacturing services providers, as the medical device and biotechnology industries consolidate.consolidate, and increased volatility due to international trade policies, including tariffs, sanctions and trade barriers. If the prices for our products decrease and we are unable to reduce our expenses, including the cost of sourcing materials, logistics and the cost to manufacture our products, our business, financial condition, results of operations and cash flows will be adversely affected.

We are a commercial-stage medical device company engaged in the design, development, and commercialization of innovative solutions to improve the health and quality of life of insulin-requiring people with diabetes (PWD) by utilizing advanced adaptive closed-loop algorithms to simplify and improve the treatment of their disease. Diabetes is a serious,chronic chroniccondition that requires ongoing insulin therapy, and oftensuboptimal lifelongglycemic conditioncontrol withremains nocommon knowndespite cure that is characterized by extended periods of elevated levels of glucoseadvances in thetreatment bloodstream (hyperglycemia), resulting from the body’s inability to either produce or effectively utilize the hormone insulin. To treat their diabetes, PWD must undergo a rigorous regimen of daily insulin substitution as elevated levels of glucose in the blood over time can lead to serious and often life-threatening cardiovascular, metabolic and nervous system complications. Despite decades of innovation that have advanced the quality of care available, a significant unmet need remains as the vast majority of PWD still cannot manage their diabetes effectively.technologies. Our product, the iLet, is the first insulin delivery device cleared by the U.S. Food and Drug Administration (FDA) to utilize adaptive closed-loop algorithms to autonomously determine every insulin dose without requiring a userusers to count carbohydrate intake. We believe this marksrepresents a significant advancement over othercurrently available insulin delivery technologiesoptions by offering a differentiated combination ofcombining improved glycemic control andwith a vastly simplified experienceuser for users and caregivers.experience.

The iLet was specifically designed to provide improvements inimproved glycemic control relative to currently available treatment options, such as insulin pumps, including partially automated insulin delivery (AID) systems (also known as hybrid closed-loop systems),systems, and multiple daily injections (MDI), alsowhile reducing the complexityworkload andassociated burden ofwith achieving these improved results for PWD.outcomes. It is enabled byuses adaptive closed-loop algorithms that continuously learn each person’s unique and everchangingchanging insulin requirements and then autonomously deliversdeliver the correctappropriate insulin dosesdose every five minutes throughout the day and night. Only the user’s body weight is required for device initialization and the autonomous determination of all insulin doses,initialization, unlike insulintraditional pumpspump and hybrid closed-loop systems,systems whichthat require anumerous complexuser-defined hostparameters. of parameters to configure. TheThese adaptive closed-loop algorithms are designed to removeeliminate the need to manually adjust insulin pump therapy settings andor variables required by conventional pump therapy and hybrid closed-loop systems, which both require the user to determine the size and timing of bothcalculate meal and correction insulindoses, doses and to adjust basal insulin dosing. Therefore,which we believe the adaptive closed-loop algorithms can makemakes the iLet easier to initiate and use on a daily basis than other available AID systems.

We have also partnered with Dexcom and Abbott—global leaders in popular and easy to use iCGM technology—to integrate the iLet with the Dexcom G6 and G7 iCGMs and with Abbott’s FreeStyle Libre 3 Plus Continuous Glucose Monitor (CGM) sensor. AAn iCGM is a wearable device that works by inserting a small sensor under the skin into fatty tissue and tracks blood sugar levels in real time. The sensor measures glucose levels in the interstitial fluid and sends the information to a receiver, smartphone or insulin pump. The user can view their glucose levels, trends and to what degree their levels are rising or falling. The iCGM is a crucial component of AID systems, and by partnering with these leading global iCGM platforms, we believe we leverage all of the benefits that these CGMs offer in an elegant solution for PWD. Use of the iLet requires the independent purchase of a compatible third-party iCGM to provide real-time data to the iLet user.

The iLet requires the use of single-use products, which we sell separately to our customers. These single -usesingle-use products include cartridges for storing and delivering insulin, as well as infusion sets that connect the insulin pump to a user’s body. The user fills the cartridge with insulin and inserts it into the iLet. The iLet then administers the insulin from the cartridge to the user’s body through a single-use infusion set. These single-use products are generally recommended to be disposed of entirely every 2-3 days, or as directed by a healthcare provider. We also offer a mobile application that includes a share/follow feature which allows data to be shared in real time with a trusted “Bionic Circle” of friends and family members. The mobile application receives information from the iLet and displays that information discreetly to the user. This user-friendly, intuitive mobile application provides real-time glucose readings, trends and graphs. It also allows for cloud-based data storage.

To maximize the commercial value of the iLet opportunity, we have assembled a team across our organization with broad experience in the successful commercialization of innovative technologies in the field of diabetes disease management. While the iLet can be prescribed by any HCP ((primary care physicians ((PCP) or subspecialists), we are promoting sales of the iLet through an internal sales organization where our initial direct sales efforts are focused on high volume endocrinology practices in the United States. Over time, we plan to expand into the more diffuse population of patients with T1D who are treated by PCP. Although we continue to analyze the timing related to this expansion, we do not currently have a specific timeline. These PCP treat an estimated one-half of the T1D population in the United States but do so among a much more diversified patient base than the endocrinologists. We believe that the iLet’s core value proposition of marrying effective glycemic control with the simplicity of use that is brought about by adaptive closed-loop algorithm insulin-dose determination may resonate particularly well among PCP who do not have the subspecialty-level of expertise, the resources, or the clinical bandwidth that is needed to initiate insulin-pump or hybrid closed-loop therapy or for the continual demand (such as adjustments at quarterly visits) those systems place on clinical practices in follow-on care.

The durable machinemedical equipment (DME) and pharmacy benefit plans (PBP) reimbursement channels for the iLet and its single-use products entail different payment outlays and therefore differentially impact PWD and our financial results. DME reimbursement requires the user and insurance carrier to make a large, upfront payment and reimbursement, respectively, for the iLet, which is typically in the thousands of dollars. In order to use the iLet, the user must purchase our single-use products, which are generally sold in a 30-day supply.

By contrast, PBP reimbursement requires the user and insurance carrier to make a small upfront payment and reimbursement, respectively, for the iLet, allowing for a potentially higher rate of adoption by PWD. The insurance carrier then makes larger reimbursement payments for the purchase of single-use products, with the user’s payments for the single-use products being generally consistent with what the user would likely pay for single-use products in DME reimbursement. As a result, we recognize a small amount of revenue at or around the date the iLet is sold in the PBP channel and we absorb initial negative gross margin. iLet sales in the PBP channel are generally expected to then start generating cumulative positive gross margin for us following the third month the user utilizes the iLet and continues to purchase single-use products. For the years ended December 31, 20242025 and December 31, 2023,2024, PBP channel sales represented 10%24% and 6%10% of net sales, respectively.

In addition to our commercialized product and to maintain our competitive position in the marketplace, we intend to continue investing in disruptive technologies through our experienced research and development team. We are in the early stages of developing an insulin pump that adheres directly to the skin and administers insulin without the need for tubing, commonly known in the diabetes industry as a “patch pump.” We are also in the early stages of developing a first-of-its-kind bihormonal configurationsystem of the iLet, which combines automated delivery of insulin and glucagon, the BG-raising hormone that protects against low blood sugar, or hypoglycemia, with adaptive closed-loop algorithms where all doses of both hormones are autonomously determined. As part of our development plans, in September 2025, we completed a clinical trial in Canada assessing the pharmacokinetics (PK) and pharmacodynamics (PD) of our glucagon product candidate (also referred to as the glucagon asset, and referred to herein as the PK-PD Trial). The completion of the PK-PD Trial enables us to bridge our previous bihormonal clinical data, which tested prior formulations of glucagon in three pre-pivotal inpatient and six pre-pivotal outpatient clinical trials, to our glucagon product candidate. We believe that the results from the PK-PD Trial are supportive of the continued development of our glucagon product candidate for use in our bihormonal system of the iLet. In the fourth quarter of 2025, we completed our first-in-human Phase 2a feasibility trial evaluating the integrated bihormonal system and expect to initiate an additional Phase 2a feasibility trial in the first half of 2026 as development progresses. We also intend to pursue the development of the iLet for expanded patient populations and indications, such as people with type 2 diabetes (T2D), as we believe the size and composition of this population make it a compelling opportunity.

InWe consideration for the licenses and other rights granted to us underhave the Collaboration and License Agreement,Agreement with Xeris Pharmaceuticals, Inc. to develop and commercialize a glucagon formulation for use in our bihormonal system. Under this agreement, we paid Xerisan aupfront one-time paymentfee of $0.5 million and a one-time milestone payment of $3.0 million for the achievement of certain development milestones,million, both of which arewere recognized as research and development expense when incurred. In addition, weWe are requiredalso obligated to pay Xeris tiered royalties ofin the low double-digit percentagespercentage basedrange on future net sales of Glucagonglucagon Products by us or our sublicensees,products, subject to certain customary reductions.

As a medical device company, our revenue and results of operations may be impacted byif thewe failureare unable to obtainsecure adequatesufficient coverage or reimbursement from third-party payors for our current andor future productsproducts, fromor third-party payors, as well as changes inif reimbursement structures inchange line withunder our multi-channel strategy.

We are pursuing a multi-channel coverage and reimbursement strategy to maximize access to the iLet within the T1D population, provide flexibility for PWD in choosing their device and provide PWD with advantageous coverage and reimbursement terms. We are working with payors to establish coverage and reimbursement under both the DME and PBP channels as we believe this strategy increases access and optimizes the potential for better medical outcomes for PWD through the adoption of the iLet. The DME and PBP channels for the iLet and its single-use products entail different payment outlays and therefore differentially impact PWD and our financial results. When considering the overall economics over the lifetime of each iLet, sales through the DME channel generally result in higher upfront cash flows from the large, upfront payment and reimbursement for the iLet, but lead to lower cash flows over time as the user purchases the necessary single-use products. By contrast, sales through the PBP channel generally result in lower upfront cash flows from the small payment and reimbursement for the iLet, but lead to higher cash flows over time as the user purchases the necessary single-use products. This is because single- usesingle-use products under the PBP channel are sold at a much higher per unit cost than under the DME. As a result of a small amount of revenue recognized at or around the date the iLet is sold in the PBP channel, we absorb initial negative gross margin. iLet sales in the PBP channel are generally expected to start generating cumulative positive gross margin for us following the third month the user utilizes the iLet and continues to purchase single-use products. For the year ended December 31, 20242025 and 2023,2024, PBP channel sales represented 10%24% and 6%,10%, respectively, of net sales. When comparing sales through the DME and PBP channels, we expect sales through the PBP channel will have a more favorable economic impact on our financial results over the lifetime of the iLet. To the extent that our mix of channel reimbursement fluctuates, our financial results may vary from period to period.

The medical device industry is intensely competitive, subject to rapid change and highly sensitive to the introduction of new products, treatment techniques or technologies. We expect our business to be impacted by the introduction of new diabetes devices and treatments by us or our competitors. In order to maintain our competitive position in the marketplace, we intend, through our experienced research and development team, to continue investing in disruptive technologies, such as a patch pump and bihormonal configurationsystem of the iLet, as well as pursuing the development of the iLet for expanded patient populations and indications such as people with T2D.

The medical devices we manufacture are subject to laws and regulation by numerous regulatory bodies, including the FDA. The laws and regulations govern, among other things, the research and development, design, testing, manufacture, packaging, storage, recordkeeping, approval, labeling, promotion, post-approval monitoring and reporting, distribution and import and export of medical devices. Any adverse event involving any products that we distribute could result in future corrective actions, such as recalls or customer notifications, or regulatory agency action, which could include inspection, mandatory recall or other enforcement action. In the future, we also intend to pursue additional products, such as a patch pump and bihormonal configurationsystem of the iLet, as well as pursue the development of the iLet for expanded patient populations and indications such as people with T2D, which will increase our expenses and subject us to increased regulatory-related risks.

Our costs are subject to fluctuation, and we continue to evaluate contributing factors, specifically those leading to inflationary cost increases in logistics, price of raw materials (components of the iLet), cost of labor, transportation and operating supplies. While we are experiencing higher raw material, labor, transportation, and operating supply costs, we intend to continue to work to improve productivity to help offset these costs as we navigate these global macroeconomic challenges.challenges, including tariffs or other trade measures, future bank failures, increased geopolitical tensions and conflicts, global pandemics, global economic conditions, including changes in monetary and fiscal policy, U.S. political developments and other sources of instability.

Cost of sales includes raw materials, labor costs, manufacturing overhead expenses, royalties, freight, import tariffs, scrap and reserves for expected warranty costs and excess and obsolete inventory. Manufacturing overhead expenses include expenses relating to manufacturing engineering, material procurement, inventory and quality control, facilities, depreciation, amortization, information technology and operations supervision and management.

Our research and development expenses primarily consist ofinclude engineering and researchclinical expensestrial relatedactivities tofor the iLet clinical trials,iLet, regulatory expensesefforts, andpersonnel personnel-related expenses,costs such as salaries, bonuses, stock-based compensation expense and benefits for our employees in the research and development function. We also incur research and development expenses forbenefits, payments made under third-party licensinglicense agreements, supplies, development prototypes, outside design and testing services, depreciation,depreciation and allocated facilities and information services,technology clinicalexpenses, trialall costs,of andwhich otherare indirect costs. We expense research and development costsexpensed as incurred. We do not track research and development expenses by individual product candidate. We expect research and development expenses to increase significantly for the foreseeable future as we advance clinical development, pursue new products and indications including the bihormonal system, patch pump, and potential T2D use, expand technical and operational staffing, make required payments under license arrangements, and establish commercial scale manufacturing capabilities.

We are in the early commercialization stages of the iLet and are focused on driving awareness and adoption among new customers. Sales and marketing expenses are primarily relatedinclude topersonnel costs for our sales and clinical teams, the market development and post-commercial launch activities for the iLet, including the design of infrastructure tocustomer support the customer experience, andinfrastructure, marketing and branding strategy.activities, Markethealthcare developmentconference and post-commercialmarket launchresearch activitiescosts, accountpayer foreducation aand significantmarket portionaccess ofinitiatives, ourdata overallpurchases, website and consulting fees, and facilities, travel, and other related operating expenses and are expensed as they are incurred.expenses. We anticipate a significant increase in sales and marketing expenses for the foreseeable future to support the continued commercialization of the iLet.iLet and our future products.

General and administrative expenses primarily consist ofinclude personnel-related costs, including salaries, bonuses, stock-based compensation expense and benefits for our personnel in executive, legal, finance andfinance, accounting, human resources, information technology, quality assurance and other administrative roles.functions, Weas additionallywell incuras expenses related tofor patent filings, legal feesservices, for patent and corporate matters, as well as other professional fees for accounting, auditing, consultingaccounting and tax services. Other expenses includeservices, insurance, travel, facilities, depreciationfacilities and otherdepreciation. We expect these expenses notto otherwiseincrease includedsignificantly inas researchwe continue operating as a public company, driven by higher professional services costs, director and developmentofficer orinsurance, salesinvestor and marketingpublic expenses.relations activities and compliance with SEC and stock exchange listing requirements. We anticipate a significant increase in general and administrative expenses for the foreseeable future duein order to additionalcontinue coststo associatedscale withthe operating as a public company. These include increased expenses for professional services, directorbusiness and officersupport insurance,future investor and public relations and compliance with U.S. Securities and Exchange Commission (SEC) rules and regulations and exchange listing standards.demand.

Our other income (expense) consists of (i) interest income, (ii) other income (expense) and (iii) change in fair value of warrant liabilities.

Interest income consists of cash interest earned on our cash, cash equivalents and short-term and long-term investment balances.

Other Income (Expense)

Other income (expense) consists of miscellaneous income and expenses unrelated to our core operations.

In connection with our February 2022 Series C preferred stock financing, we granted warrants (Series C Warrants) to certain investors to purchase additional shares of our Series C convertible preferred stock. In connection with our August 2023 Series D preferred stock financing, we granted warrants to certain investors to purchase shares of our Class B common stock (Class B Warrants, and together with the Series C Warrants, the Warrants). These Warrants were classified as liabilities on our balance sheet and initially recorded at fair value on the grant date. They are subsequently remeasured to fair value at the end of each reporting period,period withthrough changestheir exercise in January 2025. Changes in the fair value were recognized as a component of other income (expense), net. We will continuecontinued to recognize changes in fair value of the warrant liabilities until the Warrants are exercised, expire, or qualify for equity classification. The Warrants were exercised prior to the completion of our initialIPO. publicThe offering andWarrants are no longer be outstanding. For additional information, see Part II. Item 8. Note 4 of our audited financial statements included elsewhere in this Annual Report.

Research and development expenses were $26.2 million for the year ended December 31, 2024,2025 were $34.8 million, compared to $17.9$26.2 million during the year ended December 31, 2023.2024. This increase of $8.3$8.6 million was primarily attributable to a $3.5net increase of $5.4 million in Xerispayroll-related milestoneexpenses, paymentsincluding stock-based compensation, driven by an increase in headcount focused on supporting our innovation activities. The remaining increase is attributable to materials and $2.2clinical milliontrial inrelated engineering, materials, and third-party consulting costsexpenses incurred fromfor the development of our patch pump, bihormonal configurationsystem of the iLet and incremental software and product updates. The remaining increase is attributable to a net increase of $2.8 million in payroll-related expenses driven by an increase in R&D personnel headcount offset by a decrease of $0.2 million in facilities-related overhead.

External research and development costs primarily include expenses incurred with third-partiesthird parties such as clinical research organizations conducting the clinical trials and engineering and product development consulting services associated with our development of the iLet.

Refer to the “Item 1A. Risk Factors” section in our Annual Report on Form 10-K for the year ended December 31, 2025 for a discussion of risks to which our business, financial condition, results of operations and cash flows are subject. ThereOther than as described below, there have been no material changes to the risk factors disclosed in the aforementioned Annual Report.

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed financial statements and the related notes included elsewhere in this Quarterly Report, our financial statements and the related notes thereto for the fiscal year ended December 31, 2025 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, which are contained in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our planned investments in our research and development, sales and marketing and general and administrative functions, and our current plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the section titled “Risk Factors,” our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. You should carefully read the section titled “Risk Factors” and “Special Note Regarding Forward-Looking Statements” in both our Annual Report on Form 10-K for the year ended December 31, 2025 and in this Quarterly Report to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements. Unless the context requires otherwise, references in this Quarterly Report to the “Company,”“we,” “us” and “our” refer to Beta Bionics, Inc.

The iLet was specifically designed to provide improvements in glycemic control relative to currently available treatment options, such as insulin pumps, including partially automated insulin delivery (AID) systems (also known as hybrid closed-loop systems), and multiple daily injections (MDI), also reducing the complexity and burden of achieving these improved results for PWD. It is enabled by adaptive closed-loop algorithms that continuously learn each person’s unique and everchangingever-changing insulin requirements and then autonomously delivers the correct insulin doses every five minutes throughout the day and night. Only the user’s body weight is required for device initialization and the autonomous determination of all insulin doses, unlike insulin pumps and hybrid closed-loop systems, which require a complex host of parameters to configure.

Our initial commercialization efforts for the iLet are in type 1 diabetes (T1D), an indication for which we received FDA clearance in patients six and older in May 2023, in the United States. According to the Centers for Disease Control and Prevention (CDC), there are approximately 1.9 million people with T1D currently in the United States, all of whom require daily insulin replacement to manage their disease. We believe that one of the principal causes of suboptimal outcomes as it relates to disease management is the complexity of the user experience with most currently available insulin pumps and hybrid closed-loop systems, which has kept the majority of PWD from adopting them despite the improved disease management they can offer. We believe that approximately one-third of people with T1D in the United States utilize insulin pumps or hybrid closed-loop systems to receive their daily insulin, while the majority receive their daily insulin via MDI, which is less complex, but often less effective, and has been shown to be associated with higher HbA1c levels. Our initial commercial results suggest that the iLet’s value proposition is resonating strongly within the MDI population as approximately 70%69% and 71% of the iLet’s adoption during the threesix months ended MarchJune 31,30, 2026 and 2025, respectively, came from PWD who were previously utilizing MDI.

By contrast, PBP reimbursement requires the user and insurance carrier to make a small upfront payment and reimbursement, respectively, for the iLet, allowing for a potentially higher rate of adoption by PWD. The insurance carrier then makes larger reimbursement payments for the purchase of single-use products, with the user’s payments for the single-use products being generally consistent with what the user would likely pay for single-use products in DME reimbursement. As a result, we recognize a small amount of revenue at or around the date the iLet is sold in the PBP channel and we absorb initial negative gross margin. iLet sales in the PBP channel are generally expected to then start generating cumulative positive gross margin for us following the third month the user utilizes the iLet and continues to purchase single-use products. For the threesix months ended MarchJune 31,30, 2026 and 2025, PBP channel sales represented 39%37% and 22%21% of net sales, respectively.

In addition to our commercialized product and to maintain our competitive position in the marketplace, we intend to continue investing in disruptive technologies through our experienced research and development team. We are in the early stages of developing an insulin pump that adheres directly to the skin and administers insulin without the need for tubing, commonly known in the diabetes industry as a “patch pump.” We are also in the early stages of developing a first-of-its-kind bihormonal system of the iLet, which combines automated delivery of insulin and glucagon, the BG-raising hormone that protects against low blood sugar, or hypoglycemia, with adaptive closed-loop algorithms where all doses of both hormones are autonomously determined. As part of our development plans, in September 2025, we completed a clinical trial in Canada assessing the pharmacokinetics (PK) and pharmacodynamics (PD) of our glucagon product candidate (also referred to as the glucagon asset, and referred to herein as the PK-PD Trial). The completion of the PK-PD Trial enables us to bridge our previous bihormonal clinical data to our glucagon product candidate. We believe that the results from the PK-PD Trial are supportive of the continued development of our glucagon product candidate for use in our bihormonal system of the iLet. In the fourth quarter of 2025, we completed our first-in-human Phase 2a feasibility trial in New Zealand evaluating the integrated bihormonal system, including the glucagon formulation, pump, and dosing algorithms. In the first quarter of 2026, we initiated an additional Phase 2a feasibility trial to further evaluate the systemsystem, asincluding the glucagon formulation, pump, and dosing algorithms. Based on the results from this feasibility work, we advanceidentified development.opportunities to improve the system, including the glucagon asset’s excipient profile and dosing algorithms. We are also intend to pursuepursuing the development of the iLet for expanded patient populations and indications, such asincluding people with type 2 diabetes (T2D),. asIn July 2026, we believebegan enrolling adults with T2D in a pivotal trial in the sizeUnited andStates, compositionwith the goal of thisexpanding populationthe makeiLet’s itindications afor compellinguse opportunity.to include adults with T2D around mid-year 2027, subject to regulatory clearance by the FDA.

We have a Device License Agreement with Boston University (BU) that requires ongoing royalty payments and other financial obligations related to products incorporating BU-licensed technology. Under the agreement, we are required to pay (i) quarterly royalties in the mid-single-digit percentage range based on net sales of licensed products by us and our affiliates, (ii) quarterly royalties in the low double-digit percentage range based on net sales by sublicensees, which are creditable against a minimum annual royalty amount, and (iii) quarterly lump-sum payments in the low double-digit percentage range based on certain non-royalty sublicensing revenue. We are also responsible for reimbursing BU for patent-related costs and may be required to pay an assignment fee in the event of a sale of substantially all assets related to the licensed technology. During the threesix months ended MarchJune 31,30, 2026, we continued to incur royalty and license-related costs under this agreement which were recorded as cost of goods soldsales or operating expenses, as applicable, and expect these costs to increase as sales volumes grow.

We have a Control Algorithm license agreement with BU covering automated control system technology incorporated into the iLet. Under the financial terms of the agreement, we are required to pay BU (i) quarterly royalties of a mid-single-digit percentage based on net sales by us and our affiliates, (ii) quarterly royalties of a low double-digit percentage based on net sales by sublicensees, in each case of (i) and (ii) creditable against a minimum annual royalty amount, and (iii) quarterly lump-sum payments of a low double-digit percentage of certain non-royalty sublicensing revenue received from sublicensees. We are also responsible for reimbursing patent-related costs and are required to make a one-time change-of-control payment of $65,000 if such an event occurs. During the threesix months ended MarchJune 31,30, 2026, we continued to incur royalty and license-related costs under this agreement and expect these costs to increase as sales volumes grow.

In connection with clinical development activities, we entered into the Clinical Supply Agreement with Xeris and incurred $0.9 million of costs for Phase 2 clinical materials during 2024, with the remaining balance paid in early 2025. In May 2026, we entered into a letter agreement under the Clinical Supply Agreement with Xeris for additional Phase 2 clinical material to support ongoing development activities for our bihormonal system. We expect to incur up to $5.1 million in additional development and manufacturing costs related to Phase 3 activities, of which $4.0 million had been paid as of MarchJune 31,30, 2026. Amounts are recorded as prepaid expenses and expensed to research and development as services are performed. TheseThe agreementsCompany aremay expectedincur to continue to driveadditional research and development expenseexpenses andand, futureupon commercialization, royalty obligations.obligations under these agreements

We have a Commercialization Agreement and Development and Commercialization Agreement with DexCom, Inc. and Abbott Diabetes Care Inc., respectively, related to integrated automated insulin delivery systems. These agreements primarily involve shared development responsibilities and cross-licensing of technology and trademarks and do not require upfront payments, milestone payments, or ongoing royalty obligations. As a result, these arrangements have not had a material direct impact on our results of operations or cash flows to date, though they may affect future operating expenses associated with development, regulatory activities, and commercialization. As of MarchJune 31,30, 2026, there have been no material changes to the terms of these agreements or their impact on our results of operations or cash flows.

Our ability to successfully address the factors below is subject to various risks and uncertainties, including those described in the section titled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025.2025, and the risk factors described in Part II, Item 1A. “Risk Factors” in this Quarterly Report on Form 10-Q.

We are pursuing a multi-channel coverage and reimbursement strategy to maximize access to the iLet within the T1D population, provide flexibility for PWD in choosing their device and provide PWD with advantageous coverage and reimbursement terms. We are working with payors to establish coverage and reimbursement under both the DME and PBP channels as we believe this strategy increases access and optimizes the potential for better medical outcomes for PWD through the adoption of the iLet. The DME and PBP channels for the iLet and its single-use products entail different payment outlays and therefore differentially impact PWD and our financial results. When considering the overall economics over the lifetime of each iLet, sales through the DME channel generally result in higher upfront cash flows from the large, upfront payment and reimbursement for the iLet, but lead to lower cash flows over time as the user purchases the necessary single-use products. By contrast, sales through the PBP channel generally result in lower upfront cash flows from the small payment and reimbursement for the iLet, but lead to higher cash flows over time as the user purchases the necessary single-use products. This is because single-use products under the PBP channel are sold at a much higher per unit cost than under the DME. As a result of a small amount of revenue recognized at or around the date the iLet is sold in the PBP channel, we absorb initial negative gross margin. iLet sales in the PBP channel are generally expected to start generating cumulative positive gross margin for us following the third month the user utilizes the iLet and continues to purchase single-use products. For the threesix months ended MarchJune 31,30, 2026 and 2025, PBP channel sales represented 39%37% and 22%,21%, respectively, of net sales. When comparing sales through the DME and PBP channels, we expect sales through the PBP channel will have a more favorable economic impact on our financial results over the lifetime of the iLet. To the extent that our mix of channel reimbursement fluctuates, our financial results may vary from period to period.

We have invested, and will continue to invest, significantly in our manufacturing capabilities and commercial and customer support infrastructure. We expect that our 50,000 square foot facility in Irvine, California, which commenced operations in 2020, will have sufficient production capacity to support our anticipated clinical and commercial demand for the foreseeable future. We also plan to invest in sales and marketing activities, expect to incur additional general and administrative expenses and to have higher stock- basedstock-based compensation expenses as we support our growth and our transition to becoming a publicly traded company.growth.

The medical device industry is intensely competitive, subject to rapid change and highly sensitive to the introduction of new products, treatment techniques or technologies. We expect our business to be impacted by the introduction of new diabetes devices and treatments by us or our competitors. In order to maintain our competitive position in the marketplace, we intend, through our experienced research and development team, to continue investing in disruptive technologies, such as a patch pump and a bihormonal system of the iLet, as well as pursuing the development of the iLet for expanded patient populations and indications such as people with T2D.

The medical devices we manufacture are subject to laws and regulation by numerous regulatory bodies, including the FDA. The laws and regulations govern, among other things, the research and development, design, testing, manufacture, packaging, storage, recordkeeping, approval, labeling, promotion, post-approval monitoring and reporting, distribution and import and export of medical devices. Any adverse event involving any products that we distribute could result in future corrective actions, such as recalls or customer notifications, or regulatory agency actions, which could include warning letters, inspection, mandatory recalls or other enforcement actions. For example, in January 2026, we received a Warning Letter (“Warning Letter”) from the FDA following inspection of our facility in Irvine, California that occurred from June 9, 2025 through June 26, 2025. In the Warning Letter, the FDA cited deficiencies in the response letters we sent to the FDA following the FDA’s issuance of a Form 483, List of InvestigationalInspectional Observations (“Form 483”) in June 2025. The Warning Letter highlights non-conformities observed by the FDA in relation to our Quality Management System, Medical Device Reporting, and Correction and Removals, which were previously communicated by the FDA in the Form 483. We have responded to the FDA regarding the Warning Letter and continue to work to address the FDA’s observations. In the future, we also intend to pursue additional products, such as aMint, our patch pumppump, and a bihormonal system of the iLet, as well as pursue the development of the iLet for expanded patient populations and indications such as people with T2D, which will increase our expenses and subject us to increased regulatory-related risks.

For additional information regarding regulatory approval and actions, including the Warning Letter and the Form 483, see the section titled “Business—Government Regulation and Product Approval” in Part I, Item 1. “Business” in our in our Annual Report on Form 10-K for the year ended December 31, 2025 and2025, the related risk factors described in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025.2025, and the risk factors described in Part II, Item 1A. “Risk Factors” in this Quarterly Report on Form 10-Q.

Our costs are subject to fluctuation, and we continue to evaluate contributing factors, specifically those leading to inflationary cost increases in logistics, price of raw materials (components of the iLet),materials, cost of labor, transportation and operating supplies. While we are experiencing higher raw material, labor, transportation, and operating supply costs, we intend to continue to work to improve productivity to help offset these costs as we navigate these global macroeconomic challenges, including tariffs or other trade measures, future bank failures, increased geopolitical tensions and conflicts, global pandemics, global economic conditions, including changes in monetary and fiscal policy, U.S. political developments and other sources of instability.

We currently rely on a number of suppliers who manufacture the components of the iLet and obtain them on a purchase order basis. We have a supply agreement with Unomedical for the production of infusion sets for our iLet, a contract manufacturing agreement with PMC SMART Solutions LLC (PMC) for the manufacture of our cartridge connectors and a supplier quality agreement with Maxon Precision Motors, Inc. (Maxon) for the supply of pump motors for our iLet. Unomedical, PMC and Maxon are our only suppliers of infusion sets, cartridge connections and pump motors, respectively. For additional information regarding the risks of our reliance on these suppliers, please see the risk factors described in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025.2025, and the risk factors described in Part II, Item 1A. “Risk Factors” in this Quarterly Report on Form 10-Q.

To date, we have beennot ableexperienced toa successfullymaterial mitigateinterruption the challenges described above and ensure uninterruptedin supply to our customers. However, there may be times at which we determine that our inventory does not meet our product requirements or we maintain an insufficient level of inventory. We may also over- or underestimate the quantities of required components, in which case we may expend extra resources or be constrained in the amount of end product that we can procure. These factors subject us to the risk of obsolescence and expiration, which may lead to impairment charges.

In May 2023, the iLet was cleared by the FDA for the treatment of T1D and we began commercializing the iLet in the United States. We generate product revenue from the sale of the iLet and single-use products that are used together with the iLet, including cartridges for storing and delivering insulin, and infusion sets that connect the insulin pump to a user’s body. We are able to recognize revenue when control of the promised goods andor services is passedtransferred to the customer, which we have identified as our distributor and pharmacy partners. Revenue is recognizedpartners, in thean amount ofthat reflects the consideration receivedwe expect to receive, net of any estimated returns and estimated variable consideration adjustments, including rebates, chargebacks and patient assistance, all of which differ by product and sales mix. Revenue is recognized either over time or at a point in time, depending on when control of the associated performance obligation is transferred to the customer.

Our operating expenses consist of (i) research and development expensesexpenses, (ii) sales and marketing expenses and (iii) general and administrative expenses.

Our research and development expenses include engineering and clinical trial activities for the iLet, regulatory efforts, personnel costs such as salaries, bonuses, stock-based compensation and benefits, payments under third-party license agreements, supplies, development prototypes, design and testing services, depreciation and allocated facilities and information technology expenses, all of which are expensed as incurred. We track research and development expenses by individual product candidate. We expect research and development expenses to increase significantly for the foreseeable future as we advance clinical development, pursue new products and indications including the bihormonal system, Mint, our patch pump, and potential T2D use, expand technical and operational staffing, make required payments under license arrangements, and establish commercial scale manufacturing capabilities.

Other income (expense) consists of miscellaneous income or expenses unrelated to our core operations.

Comparison of the three and six months ended MarchJune 31,30, 2026 and 2025

Net sales for the three months ended MarchJune 31,30, 2026 was $27.6$32.0 million, compared to $17.6$23.2 million for the three months ended MarchJune 31,30, 2025. ThisThe increase in net sales of $10.0$8.8 million was primarily driven by an increase in the number of single-use products sold, correlated to the growth in our installed base, and growth in new patient starts. For the three months ended MarchJune 31,30, 2026, single-use products accounted for 62%60% of net sales, up from 43%41% of net sales as offor the three months ended MarchJune 31,30, 2025.

For the three months ended MarchJune 31,30, 2026, 61%64% of net sales were generated through the DME channel and 39%36% through the PBP channel, compared to 78%80% and 22%,20%, respectively, for the three months ended MarchJune 31,30, 2025. The shift toward the PBP channel was driven by expanded pharmacy benefit coverage,coverage enabled through contracts with PBMs and their affiliated health plans, resulting in a largerhigher percentageproportion of new patient starts being reimbursed through this channel.

Cost of sales for the three months ended MarchJune 31,30, 2026 was $11.2$13.1 million, compared to $8.7$10.7 million for the three months ended MarchJune 31,30, 2025. This increase of $2.5$2.4 million was primarily attributable to increased volumes of single-use products and pharmacy iLets.

GrossCost profitof sales for the threesix months ended MarchJune 31,30, 2026 was $16.4$24.3 million, compared to $9.0$19.4 million for the threesix months ended MarchJune 31,30, 2025. GrossThis marginincrease of $4.9 million was 59% for the three months ended March 31, 2026, compared to 51% in the three months ended March 31, 2025. Gross profit increased by $7.4 million, primarily driven by higher sales volume. Gross margin improved year over year dueattributable to increased productionvolumes scaleof single-use products and improvedpharmacy cost absorption.iLets.

Research and development expenses for the three months ended MarchJune 31,30, 2026 was $10.4$10.2 million, compared to $7.6$8.9 million for the three months ended MarchJune 31,30, 2025. The increase of $2.8$1.3 million was primarily attributable to a net increase of $1.5 million in payroll-related expenses, including stock-based compensation, driven by an increase in headcount focused on supporting our innovation activities. The remainingThis increase iswas attributablepartially tooffset by lower materials and clinical trial relatedtrial-related expenses incurred forin the development of Mint, our patch pump, the bihormonal system of the iLet and incremental software and product updates.updates, primarily due to the timing of development activities and the completion of certain milestones.

External research and development costs primarily include expenses incurred with third-partiesthird parties such as clinical research organizations conducting the clinical trials and engineering and product development consulting services associated with our development of the iLet.

Sales and marketing expenses for the three months ended MarchJune 31,30, 2026 was $20.7$24.6 million, compared to $13.4$15.6 million for the three months ended MarchJune 31,30, 2025. The increase of $7.3$9.0 million was primarily attributable to an increase of $5.3$6.0 million in payroll-related costs, including salaries and wages, sales incentive bonuses, and stock-based compensation due to an increase in headcount of our sales force and customer care team in connection with the expansion of our sales territories within the United States. The remaining increase includes healthcare provider (HCP)-related marketing and training and travel-related costs to support our business growth.

General and administrative expenses for the three months ended MarchJune 31,30, 2026 was $9.6 million, compared to $6.6$7.9 million for the three months ended MarchJune 31,30, 2025. The increase of $3.0$1.7 million was primarily attributable to an increase of $1.4 million in payroll-related expenses, including stock-based compensation.compensation, Thedue remainingto an increase wasin attributableheadcount, toas well as increases in software-related expenses and legal fees. These increases were partially offset by a decrease in accounting and other professional fees,service including legal services and software-related expenses, and quality system remediation expenses.fees.

Total other income (expense), net for the three months ended MarchJune 31,30, 2026 was $2.4$2.2 million of income, compared to $10.0$3.0 million of expenseincome for the three months ended MarchJune 31,30, 2025. This change of $12.4$0.8 million was primarily attributable to thelower absenceinterest ofincome on investments, reflecting a loss from the changereduction in fairinvested value of warrant liabilities in the current period,balances as theIPO warrantsproceeds were remeasuredused andto netfund exercisedoperating in connection with the Company’s initial public offering in January 2025.activities.

The following tables set forth our selected unaudited quarterly statements of operations data for each of the eight quarters in the period ended MarchJune 31,30, 2026. The information for each of these quarters has been prepared in accordance with GAAP, on a basis consistent with our unaudited condensed financial statements included elsewhere in this Quarterly Report and our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025 and include, in our opinion, all normal recurring adjustments necessary for the fair presentation of the results of operations for the periods presented, with the exception of adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), which is a non-GAAP financial measure discussed below. Our historical quarterly results are not necessarily indicative of the results that may be expected in the future and these quarterly results are not necessarily indicative of our operating results for a full year. The following quarterly financial information should be read in conjunction with our financial statements and related notes thereto included elsewhere in this Quarterly Report.

The following table presents a reconciliation of adjusted EBITDA from the most comparable GAAP measure, net loss, for the eight quarters in the period ended MarchJune 31,30, 2026:

Amounts presented under “Quality system remediation” for the three months ended December 31, 2025 and2025, March 31, 2026, and June 30, 2026 reflect the same category of expenses previously labeled “Other non-recurring” in our Form 10-K for the year ended December 31, 2025. These expenses relate to our one-time remediation efforts in response to the Form 483 and the Warning Letter, including contractor support and the various updates to our quality system to meet FDA expectations.

Gross margin generally improved fromacross the firstperiods quarter of 2025 through the first quarter of 2026,presented, driven by material cost savings, increased production volumes, and improved manufacturing cost absorption. While grossGross margin declinedremained relatively consistent at approximately 59% from the fourth quarter of 20242025 tothrough the firstsecond quarter of 2025 due to seasonality, the overall trend reflects operational efficiencies and scale benefits.2026.

Research and development expenses generally increased over the periods presented, reflecting higherthe timing of various clinical trial relatedtrial-related expenses, as well as increased engineering, materials, third-party consulting and payroll-related costs to support ongoing product development and enhancement efforts.efforts, including Mint, our patch pump, bihormonal system of the iLet and incremental software and product updates.

Adjusted EBITDA declinedfluctuated inacross the firstperiods quarterpresented, reflecting the impact of 2026revenue and 2025 compared to the fourth quarter of 2025 and 2024, primarily reflecting lower net sales due to seasonal factors andseasonality, continued increasesinvestment in operating expenses, including stock-based compensation and headcount-relatedchanges costs.in Acrossgross margin. Adjusted EBITDA improved through the remainingsecond periods,half adjustedof EBITDA generally improved2025 as revenue growth, improving gross margins and operating leverage more than offset increases in operating expenses.expenses, but declined in the first half of 2026 compared to the fourth quarter of 2025 primarily due to seasonal factors and higher operating expenses to support continued commercial growth. Variability across prior periods was also impacted by discrete items, including a milestone payment to Xeris in the fourth quarter of 2024 and quality system remediation expenses in the fourth quarter of 2025 and first quarterhalf of 2026.

Since our inception, we have incurred significant operating losses. To date, research and development, market development and commercial launch activities have accounted for a significant portion of our overall operating expenses. We expect to incur significant expenses and operating losses for the foreseeable future as we advance the commercialization of our iLet, including future development of theMint, our patch pumppump, and the bihormonal system of the iLet.

To date, we have funded our operations primarily through equity financings, including our initial public offeringIPO completed in January 2025, as well as revenue generated from the sale of the iLet and related single-use products. We have also received payments under collaboration agreements and government grants. As of MarchJune 31,30, 2026, we had cash, cash equivalents and short-term and long-term investments of $239.5$225.2 million.

Net cash used in operating activities was $23.8$38.5 million for the threesix months ended MarchJune 31,30, 2026, compared to $20.0$33.6 million for the threesix months ended MarchJune 31,30, 2025. The increase in net cash used of $3.8$4.9 million was primarily driven by the impact of a $12.5 million non-cash benefitadjustment from the change in fair value of warrant liabilities in the prior year periodperiod, thatwhich did not recur in the current period due to the net exercise of warrant liabilities upon our IPO in January 2025, partially offset by higher stock-based compensation expense, a favorable change in amortization of premiums and discounts on investments, higher depreciation expense, and a lower net loss and higher stock-based compensation expense in the current period. Working capital usedactivity $8.2was millionrelatively ofconsistent cashyear-over-year, as favorable changes in theprepaid threeexpenses monthsand endedother Marchcurrent 31, 2026, compared to $6.5 million in the prior year period. The increase in cash outflow for working capital was primarilyassets due to $3.2timing millionof morepayments spendon insoftware licenses and prepaid inventory, were mostly offset by higher cash outflows from accrued expenses and other current liabilities due to timing of services incurred and accounts payable due to timing of vendor payments, $1.6mainly millionon decrease to accounts receivable driven by higher net sales partially offset by improved collections,inventory and $0.3progress millionbillings lesson of an increase to deferred revenue compared to the prior year period. These increases to cash outflows were offset by a $2.5 million increase to prepaid expenses due to an increase in prepaid materials due to long lead times and $0.8 million reduction in inventory-related cash outflows, driven by improved demand visibility and more efficient scaling of inventorycapital purchases.