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

The commercial success of our iDose TR and Epioxa products is dependent upon multiple factors, the failure of any one of which could materially impact the prospects of thisthese productproducts and our business.

Our iDose TR travoprost intracameral implant was approved for sale in the U.S. by the FDA in December 2023 and we began commercializing the product in a controlled manner in February 2024. ItsIn October 2025, the FDA approved Epioxa, an innovation in keratoconus care, offering an incision-free alternative to traditional corneal cross-linking procedure, which the Company plans to begin commercializing in early 2026. The ultimate commercial success of these products will depend upon a number of factors, including physician training on and adoption of thetheir use of this product,use, establishment of consistent reimbursement, the availability and maintenance of commercial payor coverage, satisfactory patient outcomes, particularly as we continue our commercial launch, product pricing, duration of efficacy, our ability to manufacture product in volumes sufficient to meet customer demand, marketing in compliance with label restrictions, satisfactory patient outcomes, particularly as we continue our commercial launch, product pricing, duration of efficacy, and the availability of commercial payor coverage and adequate reimbursement for the product.restrictions. Our failure to successfully commercialize the iDose TR or Epioxa based upon these or other factors could materially adversely impact our net sales, our businessbusiness, our stock price or our financial condition.

Recent geopoliticalGeopolitical conflicts, natural disasters and public health crises, suchand aschanges COVID-19,in U.S. trade policies that have occurred in recent years have led to or exacerbated certain unfavorable global and regional macroeconomic conditions, including inflation, volatility in the financial and credit markets, higher interest rates and capital costs, labor shortages, increased energy costs, tariffs, and currency fluctuations,fluctuations. whichThese unfavorable global and regional conditions have had, and could continue to have, an adverse effect on the global economy, the regional economies that we serve and our business, results of operations, financial condition, liquidity and ability to access our existing cash, cash equivalents and investments. Continuation or worsening of these unfavorable global and regional conditions, or similar new events or crises, could have a material adverse effect on our operations, including through foreign exchange rate headwinds, higher operating expensesexpenses, key component shortages, and lower operating margins, and cause us to need to seek additional capital, which may not be available to us on favorable terms or at all.

In recent years, unfavorable economic conditions have also adversely impacted several financial institutions, including some financial institutions with whom we have banking relationships, and somecertain banks have recently failed and gone into receivership. If banks and other financial institutions with whom we have banking relationships enter receivership or become insolvent in the future, we may be unable to access, and we may lose, some or all of our existing cash and cash equivalents to the extent those funds are not insured or otherwise protected by the FDIC.

Public health crises, such as the COVID-19 pandemic,crises have adversely affected, and could in the future adversely affect, our business, results of operations, financial condition, liquidity, and cash flows.

We are subject to risks associated with public heath crises, such as those experienced due to the COVID-19 pandemic. In particular, we have experienced, and may in the future experience, financial orand operational impacts as a result of such public health crisescrises, which may be material, including:

If the supply and/or manufacture of our principal revenue-producing products, the iStent family of products, our Photrexa therapies, or the iDose TRTR, or our recently-approved Epioxa therapies, is materially disrupted, it may adversely affect our ability to manufacture products and could reduce our gross margins and negatively impact our operating results.

Our sole manufacturing location for our iStent and iDose products is an approximately 120,000 square foot campus located in San Clemente, California, where we manufacture, inspect, package, release and ship nearly all of our implanted device products. We conduct substantially all of our research and development (R&D) activities, customer and technical support, and management and administrative functions at our corporate headquarters in Aliso Viejo, California (Aliso Facility). If either of our San Clemente or Aliso Facility suffers a cripplingsignificant eventdisruption, orincluding adue to any natural disaster such as an earthquake, fire or flood, or if we lose insurance coverage for or are unable to renew insurance on these facilities, as some California residents have experienced, this could materially impact our ability to operate.

Our corneal health Photrexa therapies, and our Epioxa pharmaceutical therapies, which are not yetwere approved by the FDA,FDA in October 2025, are produced by a small number of contract manufacturing organizations. The systems that bio-activate our Photrexa and Epioxa therapies are primarily manufactured in Burlington, Massachusetts. Any material disruption to the manufacture of these corneal health products could also adversely affect our operating results and clinical efforts.

Additionally, our net sales have in the past and may in the future experience volatility due to a number of factors, many of which are beyond our control, including, among other things, fluctuating demand, pricing pressures applicable to our products, changes in foreign currency exchange rates, Medicare payment rates established by U.S. Centers for Medicare & Medicaid Services (CMS) or Medicare Administrative Contractors (MACs), or changes in such rates or coverage, commercialization of our new products, the marketing of competitive products, transition-related sales disruptions when introducing new products, results of clinical research and trials, regulatory approval requirements and timings, legislative changes affecting our products, variances in the sales terms, an increase in demand for our patient assistance and/or free drug programs, supply chain and inventory management, shortage or increased cost of raw materials, seasonality in the timing or volume of customer orders, the length of our sales cycle, and reductions in revenue associated with our participation in Medicaid Drug Rebate Program (MDRP), which varies and may be unpredictable. For example, certain local coverage determinations (LCDs) finalized by five of the seven MACs in November 2024 that confirm non-coverage for surgical MIGS procedures in combination with other surgical MIGS procedures disrupted traditional customer ordering patterns and may have adversely impacted U.S. Glaucoma sales in 2024, 2025 and into the future. As a result, you should not rely solely on our results in any past period as an indication of future results and you should anticipate that fluctuations in our quarterly and annual operating results may continue and could generate volatility in the price of our common stock. We believe that quarterly comparisonsComparisons of our past financial results should not be relied upon as an indication of our future performance.

Our primary sales-generating commercial products have been the iStent, the iStent inject and its successor, the iStent inject W, as well as our Photrexa therapies, which we acquired in connection with our acquisition of Avedro, Inc. (Avedro) in 2019.therapies. While we expect to continue to derive a significant portion of our net sales from the iStent, the iStent inject models, the iStent infinite and the Photrexa therapies, as well as our iDose TR product, which was approved by the FDA in December 2023 and which we began commercializing in a controlled manner in February 2024,2024 and our Epioxa therapies, which were approved by the FDA in October 2025 and which we plan to begin commercializing in a controlled manner in early 2026, it is important that we continue to build a more complete product offering. Developing additional products is expensive and time-consuming. Our research programs may fail to yield product candidates for clinical development despite showing initial promise. If we are unable to successfully commercialize additional products, our business prospects would be materially affected. Even if we are successful in developing our additional pipeline products, the success of our new product offerings is inherently uncertain and our productsproducts, or the expansion of labeling of our products, may not receive regulatory approval, may receive approval that requires restrictive labeling, or may not be profitable.profitable, or may be subject to transition-related sales disruptions when we introduce new products that are intended to replace or supersede our existing commercial products. Any current or new products could also quickly be rendered obsolete by changing customer preferences, third party payorpayer reimbursement levels, or the introduction of competing products that (i) embody superior technologies, features, safety, quality or efficacy, (ii) reflect a broader label indication, or (iii) are available at lower prices. Our competitors include large publicly traded companies or divisions thereof and have more resources, greater name recognition, longer operating histories, more established relationships with healthcare professionals, customers and third-party payors,payers, broader products lines, more established sales and marketing programs and distribution networks, and greater experience in obtaining regulatory clearance or approval. Additionally, the period of orphan drug exclusivity with respect to our Photrexa pharmaceutical therapy expired in 2023, which couldhas allowenabled competitivethird productsparties to enterdevelop thatpotentially-competitive market.products.

We believe that ophthalmic surgeons and other healthcare providers will not use our products unless they conclude that our products provide a safe, efficient, effective and preferable alternative to currently available treatment options. Publications of clinical results by us, our competitors and other third parties may impact whether, and the degree to which, our products are used by physicians and the procedures and treatments those physicians choose to administer to their patients. If ophthalmic surgeons determine that any of our products are not sufficiently effective, efficient or safe, whether based on longer-term patient studies or clinical experience or unsatisfactory patient outcomes or patient injury, our sales would be harmed. Surgeons may base such determination on patient outcomes that are the result of other unqualified surgeons performing procedures for which they haven’t been trained. It is also possible that as our products become more widely used, latent defects could be identified, creating negative publicity and liability problems for us and adversely affecting demand for our products. If an increasing number of ophthalmic surgeons do not continue to adopt the use of our products, our operating and financial results will be negatively impacted.

We have and may continue to enter into acquisitions, collaborations, in-licensing agreements, joint ventures, alliances or partnerships with third parties that could fail.fail or result in litigation.

We have and may continue to enter into acquisitions, collaborations, in-licensing agreements, joint ventures and partnerships in order to retain our competitive position within the marketplace, develop new products or expand into new markets. Examples include our acquisitions of Mobius Therapeutics, LLC, DOSE MedicalMedical, and Avedro, as well as our licensing of Santen’s PRESERFLO® Microshunt® (Preserflo MicroShunt), the Intratus drug delivery platform and the Attillaps, iVeena, StuartRipple and RippleStuart pharmaceutical compounds and our collaboration agreement with Radius XR to market its wearable patient engagement and diagnostic system.compounds. However, we cannot assure you that we will be able to successfully complete any future acquisition we may pursue, or that we will be able to successfully integrate any acquired business, product or technology in a cost-effective and non-disruptive manner. Our future successes will depend, in part, on our ability to manage an expanded business, which may pose substantial challenges for our management, such as increased costs and complexity. There can be no assurances that we will be successful in managing such expanded business or that we will realize the expected economies of scale, synergies and other benefits currently anticipated from recent or future acquisitions or strategic transactions. Additionally, these collaborations, joint ventures, and partnerships may fail to result in any commercialized product, including due to delays in or failures to obtain regulatory approvals, such as the failure to receive approval of the PreserFlo MicroShunt in the U.S., and could require us to invest a substantial amount of resources only to ultimately change regulatory strategies or to fail. In addition, these arrangements may be terminated before we are able to realize net sales to sufficiently cover the costs associated therewith, or result in disputes between the parties that ultimately results in litigation, which could materially impact our business. We cannot assure you that any such transaction would result in the benefits expected from the transaction, including revenue growth, increased profitability or an enhancement in our business prospects. Further, pursuing acquisitions, collaborations, in-licensing agreements, joint ventures, alliances or partnerships with third parties, whether or not completed, is costly and time-consuming and could distract Company management from the operation of the business, which could negatively impact our operating results.

Failure to protect our information systems against cybersecurity threats, cybersecurity incidents, service interruptions, or data corruptionloss could materially disrupt our operations and adversely affect our business, operating results, or the effectiveness of our internal controls over financial reporting.

The efficient operation of our global business depends on our information systems, including telecommunications, the internet, network communications, email and various computer hardware and software applications. We rely on our information systems to effectively manage sales and marketing data, accounting and financial functions, inventory management, product development tasks, clinical data, quality systems, customer service and technical support functions. Our information systems are vulnerable to damage ordamage, interruption from earthquakes, fires, floods and other natural disasters, terrorist attacks, power losses, computer system or data network failures, data corruptionloss and security breaches or other cybersecurity incidents, some of which we have experienced and continue to monitor and expect may experience in the future. Cybersecurity incidentsincidents, which might be related to industrial, state-sponsored, and/or economic espionage, or financial cyber extortion or fraud, can include ransomware, computer denial-of-service attacks, worms, covertly introducing malware and spyware, and other malicious software programs introduced to our computerscomputers, networks and networks,products (or to an electronic system operated by a third party for our benefit), including intrusions that are designed to evade detection for an extended period of time,time or impersonate authorized users, phishing attacks, social engineering attacks, and efforts to discover and exploit any design flaws, bugs, security vulnerabilities or weaknesses, as well as intentional or unintentional acts by employees or other insiders with access privileges, intentional acts of vandalism or fraud by third parties and sabotage. Additionally, cybersecurity threats and the techniques used in cyberattacks change, develop and evolve rapidly, including from emerging technologies, such as advanced forms of artificial intelligence (AI) and quantum computing. Further, use of AI by our employees, third-party service providers, strategic partners or other contractors or consultants, whether authorized or unauthorized, increases the risk that our intellectual property and other proprietary information will be unintentionally disclosed. While none of the cybersecurity incidents or service interruptions that we have experienced to date have had a material adverse impact on our business, financial condition or operations, the preventative measures we have implemented to date may not be sufficient to prevent, mitigate or offset a future incident that may materially and adversely impact us and the cybersecurity insurance we have obtained may or may not cover such an incident. In addition, some of our software systems are cloud-based data management applications, hosted by third-party service providers whose security and information technology systems are subject to similar risks. The failure to protect either our or our service providers’ information technology infrastructure could disrupt our entire operation, resulting in decreased sales, increased overhead costs, product shortages, or loss or misuse of intellectual property or data, including proprietary, confidential, sensitive or personal information, all of which could have a material adverse effect on our reputation, business, financial condition and operating results or result in investigations, claims and administrative penalties by regulators.

We continue to provide a valuation allowance against a portion of these tax attributes because we believe that uncertainty exists with respect to their future realization. Utilization of these tax attributes may be subject to annual limitations under IRCInternal Revenue Code Sections 382 and 383 if we experience an ownership change. To the extent available, we intend to use these NOL and credit carryforwards to offset future taxable income and/or income tax liabilities associated with our operations. There can be no assurance that we will generate sufficient taxable income in the carry forward period to utilize the remaining tax attributes before they expire.

Risks Related to IndebtednessFinancing Transactions

In connection with the issuance of the Company's 2.75% convertible notes due 2027 (Convertible Notes,Notes), which were fully exchanged, converted or redeemed in 2024, we entered into capped call transactions with certain option counterparties. The capped call transactions initially covered, subject to customary adjustments, the number of shares of common stock initially underlying the Convertible Notes. The capped call transactions were expected generally to reduce the potential dilution of our common stock upon any conversion of the Convertible Notes or at our election (subject to certain conditions), offset any cash payments we would be required to make in excess of the aggregate principal amount of converted Convertible Notes, as the case may be, with such reduction or offset subject to a cap. We have been advised that the option counterparties or their respective affiliates have established initial hedges of the capped call transaction, and may modify their hedge positions by entering into or unwinding various derivative transactions with respect to our common stock and/or purchasing or selling our common stock or other securities of ours in secondary market transactions prior to the maturity of the Convertible Notes, or following any termination of any portion of the capped call transactions in connection with any repurchase, redemption or early conversion of the Convertible Notes. In December 2024, we unwound a portion of capped call transactions corresponding to fifty percent of the number of shares of the Company’s common stock initially underlying the Convertible Notes. However, the remaining capped call transaction may still modify their hedge positions and such hedge modification activity could impact the market price of our common stock.

The current administration has enacted or proposed legislative, administrative and executive actions and regulatory changes that could affect our ability to profitably sell our commercialized products or products for which we obtain marketing approval. For example, thechanges currentin administration previously enacted several executive actions that could impose pressures on and create uncertainty surrounding the U.S. federal government’sgovernment budget and potential changes in budgetary priorities and spending levels. Such pressures and uncertainty could adversely affect staffingfunding levels and the funding for the FDA and other government agencies could negatively impact the ability of the FDA to review and approve new products due to staffing and other resource limitations, the inability to hire or retain key personnel, as awell result,as the imposition of statutory, regulatory and policy changes. Such changes could prevent or delay marketing approval of our current or future pipeline products, restrict or regulate post-approval activities and affect our ability to profitably sell any product for which we obtain marketing approval, each of which may negatively impact our business. Further, there have been, and may continue to be, legislative and regulatory proposals at the U.S. federal and state levels and in foreign jurisdictions directed at broadening the availability and containing or lowering the cost of healthcare including plans announced by the current administration to reform the U.S. pharmaceutical pricing system significantly through rulemaking and executive orders. In addition, existing legislation aimed at patient affordability in the United States such as the Patient Protection and Affordable Care Act may be repealed or replaced. The continuing efforts of the government, insurance companies and third-party payorspayers to contain or reduce costs of healthcare may adversely affect our ability to set prices for our products that would allow us to achieve or sustain profitability. In addition, governments may impose price controls on any of our products, which may adversely affect our future profitability. These risks may also impact the development decisions we make with respect to our pipeline products.

Our medical devices, drugs, drug/device combination products and other products are subject to extensive government regulation in the U.S. by the FDA, state regulatory authorities and foreign regulatory authorities in the countries in which we conduct business. These regulations relate to, among other things, approval or clearance of our products for sale, R&D, labeling, advertising, promotion, pricing and discounts, recordkeeping, reporting, import and export, post-approval studies and the sale and distribution of our products. See Item 1, Business, “Government Regulation –- U.S. Regulation & Reimbursement” and “International Regulation & Reimbursement” in this Annual Report on Form 10-K for additional information. Our failure to comply with applicable regulatory requirements could result in enforcement action by the FDA, or state or foreign regulatory authorities, which may include, among other things, warning letters, fines, injunctions, recalls, refusals to grant or delays in granting requests, civil fines and penalties, operating restrictions, withdrawal of approvals and even criminal prosecution.

The process of obtaining clearances or approvals to market our products can be expensive and lengthy, and we cannot guarantee that our current products will receive clearance or approval for additional indications or that our future products will receive clearance or approval on a timely basis, or without restrictions, if at all. Additionally, our pipeline products that are determined to be drug-device combination products, such as our iDose TR product, requiresrequire review and coordination by each of FDA’s drug and device centers prior to approval, which may delay approval of our future products. In some instances, we or our partners have pursued, and may in the future pursue, a regulatory clearance or approval that proves unsuccessful, such as the FDA’s failure to approve the PreserFlo Microshunt in the U.S. and our determination to conduct a second pivotal confirmatory study of our Epioxa pharmaceutical therapy based on recommendations from the FDA in pre-NDA submission meetings. When this occurs, the time and financial resources required to obtain FDA or other regulatory approval may substantially increase or new competitive products could reach the market faster than our product candidate, which could materially adversely impact our competitive position and prospects.

Before we can obtain regulatory approval for any product candidate, we may have to undertake complex, time-consuming and expensive clinical testing in humans to demonstrate safety and efficacy, the outcomes of which are inherently uncertain and may never result in approved products or commercial sales. We have experienced in the past, and could experience in the future, delays in the commencement or completion of clinical trials or testing that could significantly affect our product development costs.costs, including delays in enrollment for rare disease clinical trials. We do not know whether planned clinical trials will begin on time, need to be redesigned, enroll an adequate number of patients in a timely manner or be completed on schedule, if at all, or be deemed insufficient by the FDA, which may require additional lengthy, time-consuming and expensive trials, which would further delay approval. We may suffer significant setbacks in clinical trials, even after earlier trials showed promising results, and failure can occur at any time during the clinical trial process. We, the clinical trial investigators, the independent review board overseeing the trial, the FDA, or another regulatory authority may suspend, delay or terminate clinical trials at any time due to a number of factors, including failure to conduct the trial in accordance with applicable regulatory requirements or trial protocols, failure to demonstrate a benefit from using the product, lack of sufficient funding, medical device product malfunctions, adverse events, or to avoid exposing trial participants to unacceptable health risks. Any delay or failure in clinical trials would delay or prevent our ability to obtain necessary regulatory approvals, which would have a material adverse effect on our business, financial condition and prospects.

We have ongoing responsibilities under FDA regulations and applicable foreign laws and regulations and we may also be required to seek additional regulatory approvals to modify our approved products or their manufacturing processes or indications, which may entail significant time and expense. We and our suppliers are subject to extensive post-marketing regulatory requirements and failure to comply with applicable requirements in a timely manner could subject us to enforcement actions, including recall or product approval withdrawals. Compliance with applicable regulatory requirements is subject to continual review and is monitored rigorously through periodic inspections by the FDA. Other post-market requirements on our products include reporting of adverse events and device malfunctions, product tracing, reporting of corrections and removals (recalls), labeling requirements, and promotional restrictions. See Item 1, Business, “Government Regulation – U.S. Regulation & Reimbursement – Post-Market Regulation” in this Annual Report for additional information. Additionally, any recall or product withdrawal, whether required by the FDA, another regulatory authority or initiated by us, could harm our reputation with customers, cause us to incur significant expense and negatively affect our sales.

In addition, our promotional materials, sales techniques, pricing programs and training methods must comply with FDA and other applicable laws and regulations.regulations, including increased scrutiny on direct to consumer advertising of pharmaceutical products. The FDA or other regulatory authorities may limit the indications for use of our products, thereby restricting our ability to promote the drug or device. Physicians may use our products, particularly newly-approved products, off-label or in combination with other products that are not indicated or appropriate, as the FDA does not restrict or regulate a physician's choice of treatment within the practice of medicine. However, if the FDA determines that our promotional materials, sales techniques, pricing programs or training constitutes promotion of an off-label use or encourages over-utilization of our products or use of our products in combinations that are not indicated or appropriate, it could request that we modify our materials, techniques, programs or training or subject us to enforcement actions.

We are subject to healthcare fraud and abuse, anti-kickback, false claims and transparency laws and regulations, among others, which are enforced by federal, state and international governments with respect to our marketing, training, customer arrangements, discount, rebate and pricing programs, product bundling, financial arrangements with physicians, patient assistance programs, reimbursement support services, and other practices. See Item 1, Business, “Government Regulation –- U.S. Regulation & Reimbursement” and “International Regulation & Reimbursement” contained in this Annual Report on Form 10-K for additional information about the laws and regulations which apply to us. The U.S. Department of Justice has increased its scrutiny of interactions between manufacturers and healthcare providers, as well as various patient, product and reimbursement support programs and speaker bureaus, which has led to a number of investigations, prosecutions, convictions and settlements in the healthcare industry. Although we try to structure our arrangements within available safe harbors whenever possible, we may nevertheless become subject to government scrutiny or investigation. Violations may result in civil monetary penalties, criminal penalties, and exclusion from participation in government healthcare programs, including Medicare and Medicaid, all of which would have an adverse effect on our business.

In the U.S. and in certain states and foreign jurisdictions, there have been a number of legislative and regulatory proposals and adoptions to change the healthcare systems in ways that could impact our ability to sell our products profitably, if at all. In addition, new regulations and interpretations of existing healthcare statutes and regulations are frequently adopted and we may not be able to comply with the changed laws, they could increase the cost of manufacturing, marketing or selling our product,products, couldlower the prices we can charge for our products, or make approvals of pipeline products more difficult or prevent us from selling at all. We expect there will continue to be a number of legislative and regulatory changes to the U.S. health care system that could significantly change the statutory provisions governing the regulatory approval, manufacture and marketing of regulated products or the reimbursement thereof and may impose additional costs or lengthen review times of planned or future products. It is also difficult to predict whether and how the policies and priorities of a new administration could materially impact the regulation governing our products. A new U.S. administration may propose policy changes that create additional uncertainty for our business, such as changes to the level of scrutiny to enforce the 340B drug pricing program (340B program) non-compliance, new price restrictions on products we sell to Medicaid, Medicare or other government purchasers, or other regulatory changes impacting reimbursement or competitive dynamics in the markets in which we operate. The extent to which such policy changes impact the healthcare regulatory environment remains uncertain and could materially impact our business and operations.

We are an ophthalmic pharmaceutical and medical technology company focused on developing novel, dropless platform therapies and commercializing associated products for the treatment of glaucoma, corneal disorders,disorders and retinal disease. We first developed Micro-Invasive Glaucoma Surgery (MIGS) as an alternative to the traditional glaucoma treatment paradigm, launching our first MIGS device commercially in 2012. In 2024, we commenced commercial launchcommercialization activities for iDose TR, an intracameral procedural pharmaceutical implant designed to continuously deliver therapeutic levels of a proprietary formulation of travoprost inside the eye for extended periods of time. We also offer commercially a proprietary bio-activated pharmaceutical therapy for the treatment of a rare corneal disorder, keratoconus, that was approved by the United States (U.S.) Food and Drug Administration (FDA) in 2016. Beyond our approved products, we continue to develop and advance a robust pipeline of novel, dropless platform technologies designed to advance the standard of care and improve outcomes for patients suffering from chronic eye diseases.

DuringAs a result of the lastongoing twelvemacroeconomic months,conditions, global and regional economies havecontinue experienced,to inexperience connectionvarying withlevels ongoing macroeconomic conditions,of inflation, supply shortages or delays, changes in supply and demand, foreign exchange rate fluctuationsfluctuations, uncertainty around global trade, including new or increased tariffs, and other conditions that have led to disruptions in commerce and pricing stability. Additionally, some of our vendors are continuing to experience supply challenges, both in the acquisition of raw materials as well as due to labor shortages and other disruptions. These challenges have occasionally led to longer lead times and delays of certain components needed for the manufacture of our products, in some cases requiring us to find alternative sources for materials. As a result of these supply chain challenges and ongoing inflationary pressures, we have experienced higher costs for certain components and raw materials. While these supply challenges have generally stabilized over the course of 2024,2025, if these supply issues persist or worsen in the future, they could impact our gross margin, our ability to ship some of our products to our customers, or bring some of our pipeline products to market, in a timely manner. We expect some supply challenges and higher costs of certain components and raw materials to continue throughout 2025. Additionally, while the U.S. government has recently made statements and taken certain actions that have created significant uncertainty about the future relationship between the U.S. and various other countries with respect to trade policies, treaties, government regulations and tariffs, we believe our exposure to such potential policies, tariffs and restrictions is limited as we do not source a material amount of our raw materials and product components from countries other than the U.S.

Additionally, theThe effects of foreign currency fluctuations were most notably experienced in our international glaucoma business. Our annual growth rate of net sales of our international glaucoma franchise for the year ended December 31, 20242025 was negativelypositively affected by approximately 185208 basis points, primarily related to the Japanese Yen.Euro. For the year ended December 31, 2023,2024, net sales of our international glaucoma business were negatively impacted by approximately 145185 basis points, primarily related to the Japanese Yen.

In the U.S., healthcare providers use separate billing codes to report the provision of medical procedures and use of supplies to third-party payors,payers, such as government programs or private insurance, and seek reimbursement for all or a portion of those costs. Physician fee payment rates for productsprocedures covered by temporary Current Procedural Terminology (CPT) codes,codes in the Medicare Fee for Service setting, such as oura standalone trabecular micro-bypass procedure utilizing the iStent infinite andor the implanting of iDose TR products, are set by the multi-state, regional contractors, or Medicare Administrative Contractors (MACs), of which there are currently seven, that are responsible for administering Medicare claims. As of December 31, 2025, the professional fees associated with an iDose TR procedure have been formally published by four of the seven MACs. MACs have in the past, and may in the future, change coverage terms, and there can be no assurance that coverage and adequate reimbursement will be obtained from, or maintained by, the MACs.

On April 2, 2024, CMS assigned aThe unique, permanent Healthcare Common Procedure Coding System J-code for iDose TR indicated for the reduction of intraocular pressure in patients with open-angle glaucoma or ocular hypertension. The new(HCPCS) J-code for iDose TR, J7355, became effective July 1, 2024. J-codes are used by U.S. government and commercial payers, as well as surgeons,payers to streamline the billing and reimbursement process for procedural pharmaceuticals administered by a healthcare professional, such as iDose TR, along with other certain treatments.TR. In addition to the J-code, on March 21, 2024, CMS assigned the temporary CPT codes that are designed to be used to cover the procedural component of iDose TR, 0660T and 0661T, to ambulatory payment classificationAPC 5492 (Level 2 Intraocular Procedures), retroactively effective as of January 1, 2024. The professional fees associated with an iDose TR procedure have been published by three of the seven MACs.

We estimate that approximately 80% of procedures utilizing our iDose TR and iStent family of products in the U.S. arehave been performed in the ASC setting and the remaining estimated 20% of procedures arehave been performed in the hospital.

CMS physician fee payment rate decreasesdecreases, along with the finalization in late 2024 of recent LCDs issued by five of the seven MACs, have disrupted traditional customer ordering patterns and may have resulted in certain of our customers’ utilization of competitive products, which may havehas reduced U.S. Glaucoma sales volumes of our iStent family of products used in conjunction with cataract surgery in each of the three years ended December 31, 2024, December 31, 2023 and December 31, 2022. Our corneal health sales have experienced sporadic headwinds in recent years due to U.S. commercial payer volatility. We believe investments in our market access organization were successful in reducing volatility during the years ended2025, December 31, 2024 and December 31, 2023,2023. althoughAdditionally, the royalty income we cannotreceived predictpursuant whetherto sucha successsettlement willagreement continue.entered into during 2021 with Ivantis, Inc. (acquired by Alcon in 2022) relating to sales of the Hydrus® Microstent contractually expired on April 26, 2025.

Our net sales are generated primarily from sales of iDose TR, our iStent family of products to customers,products, Photrexa and other associated drug formulations, and our proprietary bioactivation systems and royalty income. We also began commercializing iDose TR in a controlled manner in February 2024.systems. Customers are primarily comprised of ambulatory surgery centers, hospitals and physician private practices, with independent distributors being used in certain international locations where we currently do not have a direct commercial presence. We currently operate in one operating and reportable segment and our primary business activity is the development and commercialization of therapies across several end markets within ophthalmology.

We sell the majority of our products through a direct sales organization in the United States. Internationally, we sell our products primarily through direct sales subsidiaries and through independent distributors in certain countries in which we do not have a direct presence or only maintain a modest commercial presence. The primary end-userend‑user customers for our products are surgery centers, hospitals and physician private practices.

Revenue is recognized when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration to which we expect to be entitled in exchange for those products or services, which includes estimates of reductions to revenue for commercial and governmental rebates owed, variable consideration for product returns and warranty replacements and other discounts and incentives.

We manufacture our iStent family of products and iDose TR at our facilities in San Clemente, California and our KXLproprietary bioactivation systems at our manufacturing facility in Burlington, Massachusetts. We contract with third-party manufacturers in the U.S. and Germany to produce our Photrexa and other associated drug formulations. We currently intend to maintain our manufacturing facilities at our San Clemente and Burlington locations for the foreseeable future.

Due to the relatively low production volumes of our iStent family of products, iDose TR and our KXLproprietary bioactivation systems compared to our potential capacity for those products, a significant portion of our per unit costs is comprised of manufacturing overhead expenses. These expenses include quality assurance, material procurement, inventory control, facilities, equipment and operations supervision and management.

Cost of sales hasalso includedincludes amortization of the $252.2 million developed technology intangible assets recorded as a result of our acquisitionacquisitions of Avedro, Inc (Avedro) and Mobius, respectively, and our sales agreement with Celanese Agreement.Canada ForULC the(Celanese yearAgreement). ended December 31, 2024, the amortizationAmortization expense was $26.8 million, $22.2 million and $22.1 million for each of the years ended December 31, 2023,2025, December 31, 2022,2024, theand amortizationDecember expense31, was2023, $22.1 million.respectively.

Our future gross profit as a percentage of net sales, or gross margin, will be impacted by numerous factors including commencement of sales of new products currently in our pipeline, or any other future products, which may have higher pricing, or conversely, higher product costs. Our gross margin will also be affected by manufacturing or supply chain costs, disruptions or inefficiencies that we may experience as we attempt to manufacture our products on a larger scale, manufacture new products and change our manufacturing capacity, processes or output. Additionally, our gross margin will continue to be affected by amortization of Avedro and Mobius developed technology and Celanese Agreement intangible assets, the impact of rebates and allowances associated with government and commercial programs and by royalty expenses on current or future products associated with various licensing agreements. Our gross margin in future periods may also be impacted by other factors adversely affecting our net sales in future periods such as the impact of government pricing programs and reductions of payment rates for certain of our productsproducts, and related services and inflationary pressures.

Our selling, general and administrative (SG&A) expenses primarily consist of personnel-related expenses, including salaries, sales commissions, bonuses, fringe benefits and stock-based compensation for our executive, sales, marketing, market access, financial, legal, information technology and other administrative functions. Other significant SG&A expenses include marketing programs; advertising; post-approval clinical studies; conferences and congresses; travel expenses; costs associated with obtaining and maintaining our patent portfolio; professional fees for accounting, auditing, consulting and legal services; costs associated with our global enterprise systems and information systems; and allocated facility expenses.

SG&A expenses also include amortization of the $14.1 million and $0.4 million customer relationships intangible assets recorded as a result of our acquisitionacquisitions of Avedro, Inc. (Avedro). and Mobius, respectively, as well as the $0.7 million in-place lease intangible asset from the Aliso Building acquisition. Amortization expense was $2.5 million for the year ended December 31, 2024, and $2.8 million for each of the years ended December 31, 20232025, December 31, 2024 and December 31, 2022.2023 was $0.4 million, $2.5 million and $2.8 million, respectively. The Avedro customer relationship intangible asset was fully amortized as of December 31, 2024.

We expect SG&A expenses to continue to grow as we increase our infrastructuresinfrastructure for our global sales and marketing functions, commercial support organizations, and general administration departments. We also expect other non-employee‐relatednon-employee-related costs, including sales and marketing program activities for new products, market access efforts, outside services, enhancements in our global enterprise systems, accounting services and general legal costs to increase as our overall operations grow. The timing of these increased expenditures and their magnitude are primarily dependent on the commercial success and sales growth of our products, as well as on the timing of any new product launches and other potential business and operational activities.

Our research and development (R&D) activities primarily consist of new product development projects, pre-clinical studies, Investigational New Drug studies, and clinical trials. Our R&D expenses primarily consist of personnel-related expenses, including salaries, fringe benefits and stock-based compensation for our R&D employees; research materials; supplies and services; in-licenses, including event-based milestones; and the costs of conducting clinical studies, which include payments to investigational sites and investigators, clinical research organizations, consultants, and other outside technical services; and the costs of materials, supplies and travel. We expense R&D costs as they are incurred. We expect our R&D expenses to continue to increase as we initiate and advance our development programs, including our expanding pharmaceutical development efforts and clinical trials across the glaucoma, corneal health and retinal disease spectrums.disease.

Our IPR&D for the years ended December 31, 2024,2024 and December 31, 2023 and December 31, 2022 totaled $14.2 million, $5.0 million and $10.0$5.0 million, respectively, relating to one-time upfront payments and stock issuances associated with our exclusive licensing agreements with various third-parties, whereby we were granted the exclusive, worldwide licenses for certain technologies that are in development. There were no IPR&D expenses during the year ended December 31, 2025.

Non-Operating Expense,Income (Expense), Net

Non-operating expense,income (expense), net primarily consists of charges associated with our Convertible Note exchange, interest expense associated with our finance lease for our Aliso Facility and for our previously-outstanding 2.75% convertible notes due 2027 (Convertible Notes,Notes), interest income derived from our short-term investments and unrealized gains and losses arising from exchange rate fluctuations on transactions denominated in a currency other than the U.S. dollar, primarily related to intercompany loans.

Our tax (benefit) provision is primarily comprised of U.S. federal and state deferred taxes from a reduction of the valuation allowance associated with intangible assets changing from indefinite-lived to definite-lived for financial reporting purposes, as well as state and foreign income taxes offset by release of uncertain tax positions for which the statute of limitations has expired. Our net deferred tax liability of $6.9$0.4 million at December 31, 20242025 primarily represents the excess of our indefinite-lived deferred tax liabilities over our indefinite-lived deferred tax assets. We continue to provide a full valuation allowance against our other net deferred tax assets.

Net sales for the years ended December 31, 20242025 and December 31, 20232024 were $383.5$507.4 million and $314.7$383.5 million, respectively, reflecting an increase of $68.8$123.9 million or 22%.32% primary related to the factors listed below.

Net sales of glaucoma products in the United States were $199.6$298.6 million and $151.5$199.6 million for the years ended December 31, 20242025 and December 31, 2023,2024, respectively, increasing by approximately 32%.50%. This increase is primarily due to the introduction of iDose TR as well as higher volumes soldof sales iDose TR, which has a higher net sales price than our other products, partially offset by a single digit decline in the net sales of our iStentnon-iDose familyproducts, of productsprimarily due to higherthe demand,MIGS primarilyrestrictions iStentassociated infinite.with the final LCD issued by the five MACs as described above in the Market and Business section.

International sales of glaucoma products for the years ended December 31, 20242025 and December 31, 20232024 were $103.7$122.5 million and $85.6$103.7 million, respectively, increasing by approximately 21%.18%. The increase in international sales reflects continued broad-based growingvolume volumegrowth in many key international markets for glaucoma procedures, primarily France, Japan, the United KingdomKingdom, and Australia,Japan, the dollar-based results of which were slightly affected by unfavorablefavorable foreign exchange rates over the course of the year, primarily related to the Japanese Yen,Euro, during the year ended December 31, 20242025 as compared to the year ended December 31, 2023.2024.

Net sales of corneal health products were $80.2$86.4 million and $77.7$80.2 million for the years ended December 31, 20242025 and December 31, 2023,2024, respectively, increasing by 3%.8%. Of the approximately $2.5$6.2 million increase in net sales generated by our corneal health products, $2.3$6.3 million related to an increase in U.S. net sales of Photrexa using direct sales operations, which was positively impacted by higher realized average sales prices of Photrexa along with increases in sales to existing customers and new account starts, mostlypartially offset by accrued rebates related to the impact of our participation in the Medicaid Drug Rebate Program (MDRP).MDRP. Our net sales of iLink devices in the U.S. increaseddecreased $0.3$0.4 million for the year ended December 31, 20242025 as compared to the year ended December 31, 2023.2024. Our international corneal health sales decreasedincreased $0.1$0.2 million from net sales in countries outside the U.S. during the year ending December 31, 20242025 as compared to the year ended December 31, 2023.2024.

Cost of sales for the years ended December 31, 20242025 and December 31, 20232024 were $94.0$224.7 million and $75.6$94.0 million, respectively, reflecting an increase of approximately $18.5$130.7 million or 24%139%. thatOf the total increase of $130.7 million, the impact of the aforementioned Photrexa developed technology impairment was $112.9 million. The remaining increase in cost of sales of $17.8 million is generally proportionate to the increase in net sales for the corresponding period, offsetas bywell certainas newcontributions productfrom launch manufacturing costs associated withincreased iDose TR alongproduction withand aniDose inventoryTR write-downnet charge associated with product line optimizations.sales. Our gross margin was approximately 75%56% and 76%75% for the years ended December 31, 20242025 and December 31, 2023,2024, respectively.

The remaining increase of $18.1$43.4 million primarily relates to discretionary expenses supporting the above personnel growth as well as our ongoing administrative operations, inclusive of information technology, facilities and allocated expenses.expenses; as well as reserves for accounts receivable, which are calculated based on our accounts receivable reserve methodology.

R&D expenses for the years ended December 31, 20242025 and December 31, 20232024 were $136.4$150.6 million and $138.8$136.4 million, respectively, reflecting aan decreaseincrease of $2.3$14.2 million or 2%.10%.

For the year ended December 31, 2024,2025, we incurred $84.6$107.1 million in core R&D expenses and $51.8$43.5 million in clinical expenses, comprised of $79.9$91.3 million in compensation and related employee expenses, $2.0 million of which was related to increased stock-based compensation, with the remaining $56.5$59.3 million spent on the continued research and development, clinical studies, regulatory activities, quality assurance, clinical inventory and supplies for surgical glaucoma product candidates and pharmaceutical projects, such as next generation iDose and Epioxa products; Epioxa, a pharmaceutical therapeutic system for the treatment of keratoconus without the removal of the epithelium (also referred to as “epi-on”); and our earlier stage programs for glaucoma, corneal, retinal and other therapeutic investments. For the year ended December 31, 2023,2024, we incurred $86.3$84.6 million in core R&D expenses and $52.5$51.8 million in clinical expenses, comprised of $77.9$79.9 million in compensation and related employee expenses with the remaining $60.9$56.5 million spent on the abovementionedabove-mentioned programs.

There was no IPR&D expense for the year ended December 31, 2025. During the year ended December 31, 20242024, we issued $5.0 million of our common stock, paid approximately $5.1 million in cash, and incurred $1.6 million of contingent consideration in connection with the asset acquisition of 100% of the outstanding equity interests in a clinical stage biopharma company focused on developing novel therapeutics for ophthalmic diseases, including all related patents and patent applications, technology and know-how. Also included in IPR&D for the year ended December 31, 2024 is a $2.5 million payment related to an additional license agreement pursuant to which we obtained an exclusive, worldwide license to develop and commercialize drug products incorporating certain proprietary technology.

Non-Operating Expense,Income (Expense), Net

We had non-operating expense, netincome of $23.2$6.6 million and $5.0non-operating expense of $23.2 million for the years ended December 31, 20242025 and December 31, 2023,2024, respectively. The $18.2$29.8 million increasechange primarily relates to charges associated with our Convertible Note Exchange.Exchange during the year ended December 31, 2024.

Income Tax (Benefit) Provision

Our effective tax rate for the year ended December 31, 20242025 was (0.50)%.2.8%. For the year ended December 31, 20242025, we recorded a (benefit) for income taxes of $(5.4) million, which was primarily comprised of U.S. federal and state deferred taxes from a reduction of the valuation allowance associated with intangible assets changing from indefinite-lived to definite-lived for financial reporting purposes, as well as state and foreign income tax expense offset by release of uncertain tax positions for which the statute of limitations has expired. For the year ended December 31, 2023,2024, we recorded a provision for income taxes of $0.8 million and $0.9 million, respectively. For the years ended December 31, 2024 and December 31, 2023, our tax provisionwhich was primarily comprised of state and foreign income tax expense offset by release of uncertain tax positions for which the statute of limitations has expired.

The risks and uncertainties discussed below update, supersede and replace the risks and uncertainties previously disclosed in Part I, Item IA1A of our Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the United States (U.S.) Securities and Exchange Commission (SEC) on February 23, 2026 (Annual Report). These risks and uncertainties are not the only ones facing our business but do represent those risks that we believe are material to us. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also harm our business. PleaseSee read"Note theRegarding cautionaryForward-Looking notice regarding forward-looking statementsStatements" preceding Part I, Item 1 in this Quarterly Report on Form 10-Q.

Geopolitical conflicts, natural disasters and public health crises, and changes in U.S. trade policies that have occurred in recent years have led to or exacerbated certain unfavorable global and regional macroeconomic conditions, including inflation, volatility in the financial and credit markets, higher interest rates and capital costs, labor shortages, increased energy costs, tariffs, and currency fluctuations. These unfavorable global and regional conditions have had, and could continue to have, an adverse effect on the global economy, the regional economies that we serve and our business, results of operations, financial condition, liquidity and ability to access our existing cash, cash equivalents and investments. For example, the ongoing conflict between the U.S. and Iran and the related blockade of the Strait of Hormuz have resulted in increased oil prices, which could increase our transportation costs and other costs in our supply chain. Continuation or worsening of these unfavorable global and regional conditions, or similar new events or crises, could have a material adverse effect on our operations, including through foreign exchange rate headwinds, higher operating expenses, key component shortages, supply delays and lower operating margins, and cause us to need to seek additional capital, which may not be available to us on favorable terms or at all.

If the supply and/or manufacture of our principal revenue-producing products, the iStent family of products, our Photrexa therapies, or the iDose TR, or our recently-approved Epioxa therapies, is materially disrupted, it may adversely affect our ability to manufacture products and could reduce our gross margins and negatively impact our operating results.

Our sole manufacturing location for our iStent and iDose products is an approximately 120,000 square foot campus located in San Clemente, California, where we manufacture, inspect, package, release and ship nearly all of our implanted device products. We conduct substantially all of our research and development (R&D) activities, customer and technical support, and management and administrative functions at our corporate headquarters in Aliso Viejo, California (Aliso Facility). Additionally, the systems that bio-activate our Epioxa therapies are primarily manufactured in Burlington, Massachusetts. If either of our San ClementeClemente, Burlington or Aliso Facility suffers a significant disruption, including due to any natural disaster such as an earthquake, fire or flood, or if we lose insurance coverage for or are unable to renew insurance on these facilities, as some California residents have experienced, this could materially impact our ability to operate.

Additionally, we rely on a limited number of third-party suppliers, in some cases sole suppliers, to supply components for the iStent, the iStent inject models, the iStent infinite, the iDose TR, our Epioxa therapies, and our other pipeline products. If any one or more of our suppliers cease to provide us with sufficient quantities of components or drugs in a timely manner or on terms acceptable to us, we would have to seek alternative sources of supply. Because of factors such as the proprietary nature of our products, our domestic and international quality control standards and regulatory requirements including the FDA’s Quality System Regulation, the European Union’s Medical Device Regulation, and Current Good Manufacturing Practices (cGMP) regulations, we may be unable to obtain components or quickly engage replacement suppliers, who may not have access to previous suppliers’ proprietary processes, if our component suppliers are found to be in violation of such standards, which could delay or impact our business, including regulatory approval timelines. If our manufacturing facilities or those of any of our component suppliers or contract facilities are found to be in violation of applicable laws and regulations or fail to adequately remediate any issues discovered during an audit, the FDA or other regulatory bodies could take enforcement action. Despite our efforts to maintain an adequate supply of inventory, the loss of these suppliers, or their inability to provide us with an adequate supply of components or products, could cause delay in the manufacture of our products, thereby impairing our ability to meet the demand of our customers and causing significant harm to our business. Any disruption of this nature or increased expense could harm our commercialization efforts and adversely affect our operating results.

Since the Company’s inception in 1998, we have incurred significant operating losses. Although we have been profitable for certain periods in our operating history, there can be no assurance that we will be profitable or generate cash from operations in the future. As of MarchJune 31,30, 2026, we had an accumulated deficit of approximately $952.9$971.3 million, principally comprised of costs incurred in our clinical trials, R&D programs, our selling, general and administrative expenses, and from amortization expense related to our acquired developed technology intangible assets included in cost of sales. We have funded our operations to date from the sale of equity securities, including our June 2015 initial public offering, the issuance of notes payable, cash exercises of stock options and warrants to purchase equity securities, cash generated from commercial operations and the issuance of the Company’s 2.75% convertible notes due 2027 (Convertible Notes), which were fully exchanged, converted or redeemed in 2024. Our operations to date have been, and our future growth and success will be, impacted by our ability to expand our business, including the success of our marketing and sales efforts, our timely satisfaction of regulatory requirements, and our overall ability to maintain a competitive position. To implement our global business strategies we have made, and expect to continue to make, significant investments in R&D activities, clinical studies, expanding our manufacturing capabilities, growing our sales and marketing organization, engaging in market access activities, enforcing and defending our intellectual property rights, acquiring companies or in-license products and intellectual property, building our general and administrative infrastructure, and obtaining regulatory clearance or approval to commercialize our pipeline product globally and expand our existing products into international markets or productsproducts. We expect our expenses will continue to increase as we pursue these objectives. While we believe we have sufficient cash to fund our operations for at least the next 12 months from the date our condensed consolidated financial statements for the three and six months ended MarchJune 31,30, 2026 are made publicly available, our ability to reach sustained profitability and generate positive cash flow in the future is highly uncertain.

Additionally, our net sales have in the past and may in the future experience volatility due to a number of factors, many of which are beyond our control, including, among other things, fluctuating demand, pricing pressures applicable to our products, changes in foreign currency exchange rates, Medicare payment rates established by U.S. Centers for Medicare & Medicaid Services (CMS) or Medicare Administrative Contractors (MACs) or changes in such rates or coverage, commercialization of our new products, the marketing of competitive products, transition-related sales disruptions when introducing new products, results of clinical research and trials, regulatory approval requirements and timings, legislative changes affecting our products, variances in the sales terms, an increase in demand for our patient assistance and/or free drug programs, supply chain and inventory management, shortage or increased cost of raw materials, seasonality in the timing or volume of customer orders, the length of our sales cycle, and reductions in revenue associated with our participation in Medicaid Drug Rebate Program (MDRP), which varies and may be unpredictable. For example, certain local coverage determinations (LCDs) finalized by five of the seven MACs in November 2024 that confirm non-coverage for surgical MIGS procedures in combination with other surgical MIGS procedures disrupted traditional customer ordering patterns and may have adversely impacted U.S. Glaucoma sales in 2024, 20252024 and into2025, and the future.proposed LCDs issued by five of the seven MACs in May 2026 could impose conditions on the use of our iDose TR therapy that may impact U.S. Glaucoma sales in the future if they are finally adopted. As a result, you should not rely solely on our results in any past period as an indication of future results and you should anticipate that fluctuations in our quarterly and annual operating results may continue and could generate volatility in the price of our common stock. Comparisons of our past financial results should not be relied upon as an indication of our future performance.

Our primary sales-generating commercial products have been the iStent, the iStent inject and its successor, the iStent inject W, our iDose TR product, which we began commercializing in a controlled manner in February 2024, as well as our Photrexa therapies. While we expect to continue to derive a significant portion of our net sales from the iStent, the iStent inject models, the iStent infinite and the Photrexa therapies, as well as our Epioxa therapies, which were approved by the FDA in October 2025 and which we began commercializing in a controlled manner in early 2026, it is important that we continue to build a more complete product offering. Developing additional products is expensive and time-consuming. Our research programs may fail to yield product candidates for clinical development despite showing initial promise. If we are unable to successfully commercialize additional products, our business prospects would be materially affected. Even if we are successful in developing our additional pipeline products, the success of our new product offerings is inherently uncertain and our products, or the expansion of labeling of our products, may not receive regulatory approval, may receive approval that requires restrictive labeling, may not be profitable, or may be subject to transition-related sales disruptions when we introduce new products that are intended to replace or supersede our existing commercial products. Any current or new products could also quickly be rendered obsolete by changing customer preferences, third party payer reimbursement levels, or the introduction of competing products that (i) embody superior technologies, features, safety, quality or efficacy, (ii) reflect a broader label indication, or (iii) are available at lower prices. Our competitors include large publicly traded companies or divisions thereof and have more resources, greater name recognition, longer operating histories, more established relationships with healthcare professionals, customers and third-party payers, broader products lines, more established sales and marketing programs and distribution networks, and greater experience in obtaining regulatory clearance or approval. Additionally, the period of orphan drug exclusivity with respect to our Photrexa pharmaceutical therapy expired in 2023, which has enabled third parties to develop potentially-competitive products.

Our existing foreign operations, as well as our planned international growth, expose us to additional uncertainty and risks beyond regulatory authorization and reimbursement levels. We sell our products through direct sales organizations and a network of third-party distribution partnersdistributors in other markets. These international operations expose us and our subsidiaries and third-party distributors to a variety of risks including, without limitation, the following:

Since the commercial launch of the iStent in 2012, we have seen significant period-to-period growth in our business, both organically and through transactions, and we must continue to grow in order to meet our business and financial objectives. However, continued growth creates numerous challenges, including, among others, new and increased responsibilities for our management team; increased competition; increased and, with respect to newer products such as the iDose TR,TR and Epioxa therapies, uncertain product demand which could strain our manufacturing capacity or create product shortages; the management of an increasing number of customer, supplier and other relationships; increased pressure on our operating, financial and reporting systems; entry into new international territories with unfamiliar regulations and business approaches; and the need to hire, train and manage additional qualified personnel. If we fail to manage any of these challenges effectively, our business may be harmed.

Failure to protect our information systems against cybersecurity threats, cybersecurity incidents, service interruptions, or data loss could materially disrupt our operations and adversely affect our business, operating results, or the effectiveness of our internal controlscontrol over financial reporting.

Several laws have been enacted at the U.S. state level that regulate the development and deployment of AI platforms and systems. Federal agencies in the U.S. are applying existing laws to address AI-related risks. An Executive Order issued in December 2025 seeks to establish uniform federal standards and challenge state laws that regulate AI.AI, although various state and federal regulators are continuing to issue guidance and focus enforcement efforts on the use of AI in regulated sectors. The FDA, for example, issued draft guidance on the use of AI in regulatory decision-making for drug and biological products that centers on establishing and evaluating AI model outputs intended to support regulatory decision-making. As with data privacy laws, these state laws and possible federal regulation could have significant effects on us and require us to change our AI practices and incur substantial costs and expenses in order to comply. Additionally, many countries and regions, including the EU, have proposed or passed new and evolving regulations related to the use of AI and machine learning technologies. The regulations may impose onerous obligations and may require us to unexpectedly rework or reevaluate improvements to be compliant. In particular, the EU Artificial Intelligence Act, which was adopted on June 13, 2024, with additional provisions becoming effective on August 2, 2026, may affect our use of AI technologies, may require additional compliance measures and changes to our operations and processes, and expose us to increased risk of regulatory enforcement and litigation. Furthermore, some of the AI features involve the processing of personal data and may be subject to laws, policies, legal obligations, and codes of conduct related to privacy and data protection, and could subject us to competitive harm, regulatory enforcement, increased cyber risks, reputational harm, and legal liability.

Additionally, the U.S. government recently announcedongoing changes to itsU.S. trade policies, including increasingconcerning tariffs on imports, in some cases significantly, and potentially negotiating or terminating existing trade agreements.agreements, Thehave currentresulted tariffin environment isa dynamic and uncertain, as the U.S. government has imposed, modified and paused tariffs multiple times since the beginning of 2025, and on February 20, 2026, the U.S. Supreme Court struck down the international tariffs imposed by President Trump in 2025, and President Trump subsequently expressed his intent to reinstate the tariffs through other means which have not yet been disclosed. Changes to tariffs and otheruncertain trade restrictionsenvironment. canThrough be announced at any time with little or no notice. Wewe cannot predict with certainty the future trade policy of the U.S. or other countries or the impact of thesuch recent developments discussed above, however,developments, we believe our exposure to the currentchanging tariff environmentrates is generally limited as we primarily source products and product components from the U.S. Nevertheless, such tariffs, or uncertainty regardingand changes to tariff policy,policy may cause (i) increases in manufacturing costs, (ii) disruptions or delays to our supply chain, (iii) limitations on our ability to sell our products domestically or abroad, and (iv) reductions in sales volumes and gross margins for our products, any of which could negatively affect our business, results of operations and financial condition.

If our facilities, or those of our third-party manufacturers or suppliers, fail to meet the FDA’s Quality System Regulation or cGMP regulations, as applicable, or other standards required by the FDA, we could experience a delay in obtaining the necessary regulatory clearances or approvals to commercialize our pipeline products, which could have a material adverse effect on our business and financial condition and results. On February 2, 2026, the FDA’s final rule implementing the Quality Management System Regulation (QMSR) became effective. The QMSR, which replaced the FDA’s former Quality System Regulation, sets for the FDA’s cGMP requirements for medical devices and incorporates by reference the medical device quality management system requirements of ISO 13485:2016. Any disclosure of our proprietary or trade secret information in connection with our compliance with the QMSR could have a material adverse effect on our business and financial condition and results.

Additionally, the U.S. Inflation Reduction Act of 2022, which is designed to, among other things, have a direct impact on drug prices and reduce drug spending by the federal government, requires drug manufacturers to pay rebates to Medicare if they increase prices faster than inflation for certain drugs used by Medicare beneficiaries. The expansion of inflation-based rebates may complicate our pricing strategies. See Item 1, Business, “Government Regulation - U.S. Regulation & Reimbursement” in the Annual Report for more information on the MDRP. To the extent applicable, these and other similar legislation or regulations will reduce the prices we can charge, and impact the rebate amount we must pay, on sales of our products subject to that act, particularly on sales to our customers if they qualify as covered entities eligible to receive the discounted 340B ceiling price. Compliance with these laws and programs may reduce our net sales, and could require significant resources, which would reduce our profitability. Further, we cannot predict how our participation in, or how future CMS guidance or rules governing, MDRP will affect our profitability (including the potential for increases in our overall Medicaid rebate liability and the obligation to charge reduced prices to covered entities). Any changes to the limitations, calculations, or scope of these programs could negatively impact the results of our operations. Additionally, pricing and rebate calculations are complex and often subject to interpretation by the manufacturer, governmental agencies and courts. A manufacturer that becomes aware that its Medicaid reporting for a prior period was incorrect or has changed as a result of a recalculation of pricing data is obligated to resubmit corrected data up to three years after the data was originally due. Restatements and recalculations may result in an overage or shortfall in our rebate liability for prior periods, and may affect our 340B ceiling price and therefore liability under the 340B program.

In addition to uncertainties surrounding coverage policies, there are uncertainties regarding appropriate reimbursement for the procedures associated with certain of our products like iStent infinite and iDose TR, as well as sporadic volatility in reimbursement levels of existing products, including our Photrexa therapyproducts and the procedures associated with our existing products, such as our iStent family of products. For example, in 2022 the CMS’ payment rates significantly lowered the Medicare physician fee payment rates and slightly lowered the Medicare facility fee payment rates related to the implantation of trabecular bypass stents, such as our iStent family of products, in conjunction with cataract surgery, furnished in the ambulatory surgery center setting, which we believe disrupted traditional customer ordering patterns and resulted in certain of our customers’ utilization of competitive products, causing reduced glaucoma sales volumes in the U.S. in 2022 and 2023. Additionally, the facility fee payment rates for the standalone procedure that hospitals and ambulatory surgery centers will use with Glaukos’ iStent infinite product were lower than anticipated for 2022 and were not significantly modified by CMS for 2023 facility fee payment rates, which had an adverse impact on procedural iStent family product volumes and our revenues and net income.

We have been and may in the future become involved in patent and other intellectual property disputes, litigation or administrative proceedings relating to our intellectual property rights, which could be costly, time consuming and unsuccessful and could interfere with our ability to successfully commercialize our products.

There is no guarantee that we would be successful enforcing or defending our intellectual property rights in court. A court could hold that some or all of our asserted intellectual property rights are not infringed, or could invalidate our rights, hold our rights unenforceable, or substantially narrow the scope of protection. Further, we could be prohibited from manufacturing or selling our products or a court could order us to pay substantial compensatory damages as well as other penalties and fines. Any such adverse result would undermine our competitive position. Regardless of the final outcome, responding to disputes, and any litigationresulting litigation, to enforce our intellectual property rights in patents, copyrights, trade secrets or trademarks is highly unpredictable and could result in substantial costs and diversion of resources, which could have a material adverse effect on our business, financial condition and results of operations.

We are an ophthalmic pharmaceutical and medical technology company focused on developing novel,novel dropless platform therapies and commercializing associated products for the treatment of glaucoma, corneal disorders, and retinal disease. We first developed Micro-Invasive Glaucoma Surgery (MIGS) as an alternative to the traditional glaucoma treatment paradigm, launching our first MIGS device commercially in 2012. Since that time, we have launched additional MIGS products. In 2024, we commenced commercialization activities for iDose TR, a sustained-release pharmaceutical product used in the treatment of glaucoma. We also recently commenced our controlled commercial launch of Epioxa, a proprietary bio-activated and incision-free pharmaceutical therapy for the treatment of a rare corneal disorder, keratoconus, that was approved by the United States (U.S.) Food and Drug Administration (FDA) in 2025. Our first-generation corneal cross-linking therapy, known as Photrexa, which requires removal of the corneal epithelium, received U.S. FDA approval in 2016. All of these products are part of a portfolio of platforms we are developing to support ongoing pharmaceutical and medical device innovations. Products or product candidates for each of these platforms are designed to advance the standard of care through better treatment options across the areas of glaucoma; corneal disorders such as keratoconus, dry eye and refractive vision correction; and retinal diseases such as neovascular age-related macular degeneration, diabetic macular edema and retinal vein occlusion.

We incurred net losses for the three and six months ended MarchJune 31,30, 2026 of $18.4 million and March$38.2 31,million, respectively and we incurred net losses for the three and six months ended June 30, 2025 of $19.8$19.7 million and $18.1$37.8 million, respectively. As of MarchJune 31,30, 2026, we had an accumulated deficit of $952.9$971.3 million.

On April 15, 2026, the U.S. Centers for Medicare and Medicaid Service (CMS) assigned a unique, permanent Healthcare Common Procedure Coding System (HCPCS) J-code for Epioxa, J2789. The new J-code for Epioxa is set to becomewas effective on July 1, 2026. J-codes are used by U.S. government and commercial payers, to streamline the billing and reimbursement process for procedural pharmaceuticals administered by a healthcare professional, such as Epioxa. Epioxa represents an advancement in keratoconus care, offering an incision-free alternative to traditional corneal cross-linking procedures. The CompanyWe began a controlled commercial launch of Epioxa in the first quarter of 2026 and as part of the launch, thewe Companyare will transitiontransitioning commercial efforts and manufacturing from Photrexa to EpioxaEpioxa, overwith completion of the coursetransition projected to occur by the end of the third quarter of 2026.

As a result of the ongoing macroeconomic conditions, global and regional economies continue to experience varying levels of inflation, supply shortages or delays, changesvolatility in in supply and demand,demand conditions, foreign exchange rate fluctuations, uncertainty around global trade, including new or increased tariffs, and other conditions that have led to disruptions in commerce and pricing stability. These conditions may be exacerbated by heightened geopolitical tensions in the Middle East, including the ongoing conflict between the U.S. and Iran,Iran and the related blockage of the Straight of Hormuz, which has increased oil prices and may cause downstream effects on our logistics, manufacturing, and raw material costs.

The effects of foreign currency fluctuations were most notably experienced in our international glaucoma business. Our year over year growth rate of net sales of our international glaucoma franchise was positively affected by approximately 77085 basis points and negatively impacted by approximately 380420 basis points for the three and six months ended MarchJune 31,30, 2026 and March 31, 2025, respectively, in both cases primarily related to the Euro.Euro, Australian dollar and the Brazilian Real, partially offset by the Japanese Yen. For the three and six months ended June 30, 2025, net sales of our international glaucoma business were positively affected by approximately 410 and 25 basis points, respectively, primarily related to the Euro and Japanese yen.

In the U.S., healthcare providers use separate billing codes to report the provision of medical procedures and use of supplies to third-party payers, such as government programs or private insurance, and seek reimbursement for all or a portion of those costs. Physician fee payment rates for procedures covered by temporary Current Procedural Terminology (CPT) codes in the Medicare Fee for Service setting, such as a standalone trabecular micro-bypass procedure utilizing the iStent infinite, or the implanting of iDose TR products, are set by the multi-state, regional contractors, or Medicare Administrative Contractors (MACs), of which there are currently seven, that are responsible for administering Medicare claims. As of MarchJune 31,30, 2026, the professional fees associated with an iDose TR procedure have been formally published by five of the seven MACs. MACs have in the past, and may in the future, change coverage terms, and there can be no assurance that coverage and adequate reimbursement will be obtained from, or maintained by, the MACs.

On OctoberJuly 31,2, 20252026 and NovemberJuly 21,14, 2025,2026, the U.S. Centers for Medicare & Medicaid Services (CMS) published its proposed rules onfor 20262027 Medicare physicianhospital feeoutpatient facility payment rates and facilityphysician fee payment rates (20262027 FinalProposed Rules), respectively. The 20262027 FinalProposed Rules reflectedwould amaintain modestthe increaseexisting withambulatory respectpayment toclassification assignments for procedures utilizing our glaucoma products and generally maintain Medicare facility fee payment rates in bothacross the ambulatory surgery center andsetting, while proposing modest increases in hospital outpatient setting over the 2025 Medicaredepartment facility fee payment rates withfor respectcertain to procedures using our glaucoma products.procedures. The 20262027 FinalProposed Rules also reflectedinclude modest reductions with respect to physician fee payment rates over the 2025 Medicarein physician payment rates with respectrelative to 2026 for several Category I CPT codes across ophthalmology generally,ophthalmology, including forcertain cataract and surgical MIGS procedures specifically.procedures. The proposed physician fee rules contained in the 2026 Final Ruleschanges do not affect the physician feespayment paid under temporary CPT codesrates for iDose TR and iStent infinite, becausewhich ascontinue explainedto above,be thosereimbursed under temporary CPT codes with payment rates are determinedestablished on a MAC-by-MAC basis.

Now that Epioxa, our new corneal collagen cross-linking (CXL) procedure, has been approved by the U.S. FDA, reimbursement is expected to primarily involve updates to third-party commercial insurance policies as the vast majority of patients who are diagnosed with, and then treated for, keratoconus are below the Medicare age.age, with a lesser proportion of patients expected to be treated through Medicaid programs. As an in-office procedure, the procedural component of Epioxa will be covered by a temporary Category III CPT code, 0402T, which is the same code used currently for Photrexa. The professional fees associated with the CXL procedure will be determined by each payer. Reimbursement for physician-administered drugs areis typically accomplished administratively through the use of a HCPCS J-code. A unique, permanent HCPCS J-CodeJ-code for Epioxa, J2789, has been established and is set to becomebecame effective on July 1, 2026. Coverage and reimbursement can differ significantly from payer to payer, and payers can change or deny coverage for new or existing products without notice.

We anticipate some potential disruption within our U.S. Corneal Health franchise during 2026 as the market transitions from Photrexa to Epioxa following itsEpioxa's approval and our ongoing commercialization.commercialization efforts. During this transition, market access pathways for Epioxa continue to be established, while commercial availability of Photrexa is expected to conclude by the end of the third quarter of 2026.

Our net sales are generated primarily from sales of iDose TR, our iStent family of products, PhotrexaPhotrexa, Epioxa and other associated drug formulationsformulations, and our proprietary bioactivation systems. Customers are primarily comprised of ambulatory surgery centers, hospitals, and physician private practices, with independent distributors being used in certain international locations where we currently do not have a direct commercial presence. We currently operate in one operating and reportable segment and our primary business activity is the development and commercialization of therapies across several end markets within ophthalmology.

Cost of sales also includes amortization of the developed technology intangible assets recorded as a result of our acquisitions of Avedro, Inc. (Avedro) and Mobius Therapeutics, LLC (Mobius), respectively, and our sales agreement with Celanese Canada ULC (Celanese Agreement). For each of the three months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025, the amortization expense was $8.8$5.8 million, respectively. For the six months ended June 30, 2026 and June 30, 2025, amortization expense was $14.9 million and $5.6$11.4 million, respectively.

Due to the relatively low production volumes of our iStent family of products, iDose TR, EpioxaTR and our proprietary CXL bioactivation systems compared to our potential capacity for those products, a significant portion of our per unit costs is comprised of manufacturing overhead expenses. These expenses include quality assurance, material procurement, inventory control, facilities, equipment and operations supervision and management.

We expect SG&A expenses to continue to grow as we increase our infrastructure for our global sales and marketing functions, commercial support organizations, and general administration departments. We also expect other non-employee‑related costs, including sales and marketing program activities for new products, market access efforts, outside services, enhancements in our global enterprise systems, accounting services and general legal and litigation costs to increase as our overall operations grow. The timing of these increased expenditures and their magnitude are primarily dependent on the commercial success and sales growth of our products, as well as on the timing of any new product launches and other potential business and operational activities.

Non-Operating (Expense) Income, Net

Non-operating (expense) income, net primarily consists of interest income derived from our short-term investments, interest expense associated with our finance lease for our corporate headquarters in Aliso Viejo, California, interest income derived from our short-term investments, and unrealized gains and losses arising from exchange rate fluctuations on transactions denominated in a currency other than the U.S. dollar, primarily related to intercompany loans.

Our tax provision is primarily comprised of state and foreign income taxes offset by release of uncertain tax positions for which the statute of limitations has expired. Our net deferred tax liability of $0.4 million at MarchJune 30, 2026 and December 31, 20262025 primarily represents the excess of our indefinite-lived deferred tax liabilities over our indefinite-lived deferred tax assets. We continue to provide a full valuation allowance against our other net deferred tax assets.

Comparison of Three Months Ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025 (in thousands):

Net sales for the three months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025 were $150.6$185.6 million and $106.7$124.1 million, respectively, increasing by approximately 41%50% primarily related to the factors listed below.

Net sales of glaucoma products in the United States were $93.5$118.5 million and $59.1$72.3 million for the three months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025, respectively, increasing by 58%.64%. This increase is primarily due to higher sales volume of iDose TR, which has a higher net sales price than our other products, combined with modest growth in the net sales of our non-iDose products.

International sales of glaucoma products for the three months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025 were $35.8$36.6 million and $29.0$31.3 million, respectively, increasing by 23%.17%. The increase in international sales reflects continued broad-based volume growth in many key international markets for glaucoma procedures, primarily France, the United Kingdom and Canada,Australia, partially offset by reimbursement challenges in Germany. Additionally, the dollar-based results of whichour international sales were affected by favorable foreign exchange rates, primarily related to the Euro, Australian dollar and Brazilian Real, partially offset by the Japanese Yen, during the three months ended MarchJune 31,30, 2026, as compared to the three months ended MarchJune 31,30, 2025.

Net sales of corneal health products were $21.3$30.4 million and $18.5$20.6 million for the three months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025, respectively, increasing by 15%.48%. OfThe the $2.8$9.8 million increase in net sales generated by our corneal health products,products $2.1were millionprimarily related to U.S. net sales of Epioxa using direct sales operations, partially offset by a modest decrease in U.S. sales of Photrexa using direct sales operations, whichas wascustomers positivelytransition impactedfrom by increases in salesPhotrexa to existing customers, partially offset by accrued rebates related to the impact of our participation in MDRP.Epioxa. Our net sales of iLink devices in the U.S. also increased bybecause approximatelyof $0.7new millionaccount placements for the three months ended MarchJune 31,30, 2026 as compared to the three months ended MarchJune 31,30, 2025. Our international corneal health sales decreased $0.2 million from net sales in countries outside the U.S. during the three months ended March 31, 2026 as compared to the three months ended March 31, 2025.

Cost of sales for the three months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025 were $33.3$34.0 million and $24.3$26.9 million, respectively, reflecting an increase of approximately $9.0$7.1 million, which is generally proportionate to the increase in net sales for the corresponding period, as well as contributions from increased iDose TR production and net sales of iDose TR netand sales.Epioxa. Our gross margin was 78%82% for three months ended MarchJune 31,30, 2026 and 77%78% for the three months ended MarchJune 31,30, 2025.

SG&A expenses for the three months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025 were $92.9$116.1 million and $70.7$83.4 million, respectively, reflecting an increase of $22.3$32.7 million or 32%.39%.

Of the total $22.3$32.7 million increase in SG&A expenses for the three months ended MarchJune 31,30, 2026 as compared to the three months ended MarchJune 31,30, 2025, $13.6$17.5 million related to increased compensation and related employee costs, with $5.2$9.4 million of the incremental amount related to an increase in stock-based compensation expense, the majority of which was associated with certain performance equity awards that were achieved during the quarter. The residual increase primarily relates to enhancements of various customer and patient support functions, our business intelligence function, and growth in our commercial infrastructure in glaucoma and corneal health, along with increased travel, meetings and accompanying costs as business activities have expanded.

The remaining increase of $8.7$14.8 million primarily relates to discretionary expenses supporting the above personnel growth as well as our ongoing administrative operations, inclusive of information technology, facilities, and allocated expenses; marketing and market access expenses, as well as reserves for accounts receivable, which are objectively calculated based on our accounts receivable reserve methodology.

R&D expenses for the three months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025 were $44.1$51.3 million and $32.4$36.5 million, respectively, reflecting an increase of $11.8$14.8 million or 36%.40%. Of the total $14.8 million increase, $7.1 million and $7.7 million related to core R&D and clinical expenses, respectively.

During the three months ended March 31, 2026, we incurred $29.0 million in core R&D expenses and $15.2 million in clinical expenses, comprised of $24.8 million in compensationCompensation and related employee expenses,expenses $0.7increased $4.6 million, $1.1 million of which was related to increased stock-based compensation,compensation. with theThe remaining $19.2increase in R&D expenses of $10.2 million was spent on the continued research and development, clinical studies, regulatory activities, quality assurance, clinical inventory and supplies for surgical glaucoma product candidates and pharmaceutical projects, such as next generation iDose and Epioxa products; and our earlier stage programs for glaucoma, corneal, retinal and other therapeutic investments. For the three months ended March 31, 2025, we incurred $22.9 million in core R&D expenses and $9.4 million in clinical expenses, comprised of $21.5 million in compensation and related employee expenses with the remaining $10.8 million spent on the above-mentioned programs.

We had non-operating income, net of $0.6$0.1 million and $2.9$6.1 million for the threesix months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025, respectively. This primarily relates to a change in unrealized foreign currency amounts recognized due to intercompany loan balances denominated in, and impacted by, changes in foreign currency exchange rates, as compared to the threesix months ended MarchJune 31,30, 2025.

Our effective tax rate for the firstsix quartermonths ofended June 30, 2026 and June 30, 2025 was (2.513.08)% and (1.831.54)%, respectively. For the threesix months ended MarchJune 31,30, 2026 and MarchJune 31,30, 2025, we recorded a provision for income taxes of $0.5$1.1 million and $0.3$0.6 million, respectively, which was primarily comprised of state and foreign income tax expense, offset by release of uncertain tax positions for which the statute of limitations has expired.

Our principal sources of liquidity are our existing cash, cash equivalents and short-term investments, and generally cash generated from operating, financing and investing activities. Our primary uses of cash have been for commercial activities, acquired in-process research and development, clinical and research and development programs, general and administrative expenses, acquired in-process research and development, and capital expenditures.

The following table summarizes our cash and cash equivalents, short-term investments and selected working capital data as of MarchJune 31,30, 2026 and December 31, 2025 (in thousands):

As of MarchJune 31,30, 2026, our cash, cash equivalents and short-term investments totaled approximately $276.7$286.2 million and our restricted cash totaled approximately $3.8$3.1 million.

Cash Flow provided by (used in) Operations

For the threesix months ended MarchJune 31,30, 2026, our operating activities usedprovided $12.5$2.3 million in net cash.cash and for the six months ended June 30, 2025 our operating activities used $11.5 million.

Our short-term liquidity requirements primarily consist of regular operating costs, including information technology related costs and support, R&D project funding, capital expenditures as we continue the development of our manufacturing facilities and office spaces, operating and financing lease obligations, government rebate obligations, and other firm purchase commitments. As of MarchJune 31,30, 2026, we had net working capital of $396.3$413.4 million, which indicates that our current assets are sufficient to cover our short-term liabilities.

We expect levels of our capital expenditures to be higher in 2026 than in 2025 as we upgrade certain manufacturing facilities and technologies and continue investing in R&D equipment needed to advance our pipeline.