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

Our compliance with FDA and other medical device regulations applicable to our products and operations, including our ability to: recover from disruptions to our business and operations as a result of the warning letter we received from the FDA in 2023 and our prior distribution pause on TabloCart with Prefiltration; obtain and maintain necessary FDA regulatory clearance or approvals for Tablo, related products, or any future product modifications or new products; comply with ongoing FDA requirements, including related to the manufacturing, marketing and promotion of our products, and the ability of our suppliers to so comply; and manage the risks and expenses associated any clinical trials necessary to support future product submissions to the FDA Impact of potential changes to scope of coverage and reimbursement rates for dialysis treatments or healthcare reform measures Impact of potential adverse medical events associated with Tablo, product failures or malfunctions, or our failure to report such events to the FDA Our ability to comply with various laws and regulations regarding healthcare, data privacy and security, and environmental and occupational safety;

Our ability to obtain, maintain, protect and enforce our intellectual property rights, including our patents, copyrights, trademarks and trade secretssecrets.

General economic and financial market conditions;

Substantial resources associated with complying with the laws and regulations affecting public companies Our ability to attract and retain key personnel and maintain our corporate culture Risks associated with potential future acquisitions or investments Our ability to comply with anti-corruption, anti-bribery, anti-money laundering and similar laws Our estimates or judgments relating to our accounting policies Expectations relating to ESG factors The summary risk factors described above should be read together with the text of the full risk factors below and the other information set forth in this Annual Report, including our financial statements and the related notes and the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, as well as in other documents that we file with the SEC. The risks summarized above or described in full below are not the only risks that we face. Additional risks and uncertainties not precisely known to us, or that we currently deem to be immaterial, may also arise and materially impact our business. If any of these risks occur, our business, results of operations and financial condition could be materially and adversely affected and the trading price of our common stock could decline.

We have incurred losses since our inception and expect to continue to incur significant net losses for the foreseeable future. We have incurred net losses of $128.0$81.7 million, $172.8$128.0 million and $163.0$172.8 million for the years ended December 31, 2025, 2024, 2023, and 2022,2023, respectively. As of December 31, 2024,2025, we had $162.0$172.8 million in cash, cash equivalents, restricted cash and short-term investments, and an accumulated deficit of $1.1$1.2 billion. Based on our current planned operations, we believe that our existing cash, cash equivalents and short-term investments, and cash generated from sales, as well as proceeds received from the debt financing and the sale of our Series A Preferred Stock, each of which are described in Note 13, Subsequent Events, to our audited financial statements included in this Annual Report,sales will be sufficient to meet our anticipated needs for at least the next 12 months from the date of this Annual Report. We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect.

While we have recently undertaken various initiatives designed to reduce operating expenses and working capital to align with anticipated revenue growth, including implementing restructuring plans to streamline our overall organizational structure and renegotiating commitments with suppliers to reduce inventory, we expect to continue to incur significant expenses for the foreseeable future and to incur operating losses in the near term while we make investments to support our anticipated growth. Our ability to achieve and sustain profitability will depend on our ability to grow our revenue while expanding gross margins, as well as the success of our efforts to optimize spending and working capital, including inventory. We may never achieve profitability, and even if we do achieve profitability, we cannot be sure that we will remain profitable for any substantial period of time. If we do not achieve or sustain profitability, it will be more difficult for us to finance our business and accomplish our strategic objectives, either of which would have a material adverse effect on our business, financial condition and results of operations.

Over the past several years, we have moved the production of Tablo consoles and a substantial majority of Tablo cartridges in-house to our manufacturing facility in Tijuana, Mexico which we operate in collaboration with our outsourced business administration service provider, TACNA. This has helped further our long-term gross margin expansion and supply continuity strategies while reducing the costs of Tablo console production and improving the flexibility of our operations. We plan to continue to use our design, engineering, supply chain, and manufacturing capabilities to help further advance and improve the efficiency of our manufacturing processes, lower the cost of parts and components, and lower our costs of production. However, there is no guarantee that we will be able to sustain cost reductions, achieve planned cost reductions, or otherwise achieve the anticipated benefits from our various initiatives. For example, we may be unable to sustain the savings associated with producing Tablo consoles at our manufacturing facility with TACNA, or the benefits we anticipate will result from insourcing Tablo cartridge production at this same facility may not materialize or be as significant as projected or realized within the timeframe we currently estimate. Moreover, increased tariffs imposed by the newcurrent administration, including on goods imported into the United States from Mexico and China, could adversely impact our supply chain and distribution costs, as well as our ability to achieve sustainable gross margins. WhileWe wecurrently do not believe we have exposure to these potential tariffs as Tablo, TabloCart and Tablo consumablescartridges are covered under a special exemption,exemption. However, in September 2025, the U.S. Department of Commerce initiated an investigation under Section 232 of the Trade Expansion Act of 1962 to assess the national security implications of imports of personal protective equipment, medical consumables, and medical equipment, including medical devices. The outcome of this investigation could result in additional tariffs or other trade restrictions. While we continue to believe our products will remain exempt, the scope and outcome of the investigation are uncertain and could affect existing exemptions or expand coverage to additional product categories. We cannot predict what actions may ultimately be taken with respect to tariffs or trade relations between the United States and other countries (including Mexico and China), what products may be subject to such actions, or what actions may be taken by the other countries in retaliation. There may also be unforeseen occurrences that increase our costs, such as increased prices of raw materials, changes to labor costs, less favorable terms with third party suppliers, freight providers, or contract manufacturing partners, or disruptions to the operations of our contract manufacturers or third-party suppliers including as a result of public health crises such as the COVID-19 pandemic. If we are unable to reduce our costs or if cost reductions or other anticipated benefits are less significant or less timely than projected, we will not be able to achieve sustainable gross margins, which would adversely affect our ability to invest in and grow our business and adversely impact our business, financial condition and results of operations.

Our success will depend, in part, on thegrowing acceptance of Tablo as safe, easy to learn, easy to use, clinically flexible, operationally versatile and, with respect to providers, cost effective. We began commercializing Tablo throughoutin the United States in 2018 and beganexpanded the processcommercialization to commercialize Tablo forsupport home-based dialysis in 2020. OurWhile relativelywe limitedhave commercializationgained commercial experience makesand itexpanded moreour installed base since that time, we must continue to demonstrate the financial, clinical and operational benefits of our technology and services to achieve broader and sustained market acceptance. It remains difficult to evaluate our currentlong-term business performance and predict our future prospects.prospects, It is difficult to predictincluding how quickly, ifor atwhether, all,our technology and services will achieve broader market acceptance, adoption and utilization among providers and patients will accept Tablo or, if accepted, how frequently it will be used.patients. These constituents must believe that TabloTablo, offersand insourcing with Tablo, offer benefits over traditional machines.machines or outsourced dialysis offerings. The degree of market acceptance of Tablo and our service offerings will depend on a number of factors, including:

the costpotential and perceived advantages of treatment,Tablo, and convenienceinsourcing andwith easeTablo, of use of Tablo in the acute setting relativecompared to traditional machines or outsourcing dialysis services to third-party providersproviders, including cost of treatment, convenience, ease of use and maintenance;

Additionally, even if Tablo achieves widespread market acceptance, it may not maintain that market acceptance over time if competing products or technologies, whichthat are more cost effective or received more favorably, are introduced. Failure to achieve or maintain broader market acceptance and/or market share would limit our ability to generate revenue and would have a material adverse effect on our business, financial condition and results of operations.

Our customers may face financial pressures including, but not limited to, capital budget constraints, staffing shortages and increased costs,costs arising from macroeconomic conditions, evolving policy changes or other factors, that have had, and may continue to have, a negative impact on our financial condition or results of operations.

In March 2020, Tablo was cleared by the FDA for patient use in the home of patients with acute and/or chronic renal failure, with or without ultrafiltration, and we intend to expand within the home market. However, this goal is subject to certain risks, including our ability to attract, retain and manage patients, as well as our ability to further evolve our commercial infrastructure and sales processes as we scale our business in the home market. Our business strategy, including our pricing of Tablo, while informed by our relatively limited history of selling Tablo in the home care setting, continues to be based in part on certain assumptions about the adoption of Tablo by home dialysis patients, as well as patient retention. If these assumptions about the home market are inaccurate and we are unable to increase our share of the home dialysis market by attracting new patients, or retain such market share once achieved, we would need to significantly change certain aspects of our business strategy, including the pricing of the Tablo console, associated consumables and support and maintenance, which could adversely affect our business, financial condition and results of operations.

With a significant portion of our manufacturing operationsoperations, as well as key software development and certain IT personnel, located outside of the United States, we may experience manufacturingoperational disruptions, and be subject to additional risks associated with international manufacturing operations, including uncertain or changing regulatory and/or labor requirements.

We have insourced the production of Tablo consoles, and a substantial majority of Tablo cartridges, at our manufacturing facility in Tijuana, Mexico which we operate in collaboration with our outsourced business administration service provider, TACNA. Under our arrangement with TACNA, we control the operations, engineering, quality and materials supply functions at the facility, while TACNA provides manufacturing space, the workforce, utilities, cross-border logistics, local permits and licenses. We are subject to a number of additional risks associated with operating our Mexico-based manufacturing facility, and many of these risks may heighten to the extent we continue to ramp our cartridge manufacturing capabilities and increase our dependence on our Mexico-based manufacturing operations. We may experience strikes, work stoppages, work slowdowns, high personnel turnover, grievances, complaints, claims of unfair labor practices, other collective bargaining disputes or other labor disputes at our new facility. Our manufacturing operations at the facility may also suffer disruptions from global or regional public health crises such as the COVID-19 pandemic, natural disasters, cyber security attacks, vandalism, terrorism or other political hostilities. Any such occurrences could negatively impact our ability to produce Tablo consoles and cartridges.

We are also subject to a variety of foreign laws and regulations, including trade and labor restrictions and laws relating to importation, exportation and taxation of goods, and U.S. laws and regulations relating to foreign operations, including anti-corruption, anti-bribery and anti-money laundering laws. For example, the newcurrent administration has advocated greater restrictions on trade generally and, in particular, tariff increases on certain goods imported into the United States, including from Mexico and China. In February 2025, the newcurrent administration issued executive orders imposing additional 25% tariffs on products imported from Mexico and additional 10% tariffs on products imported from China. While the tariffs on products from China went into effect in February 2025,2025 (and increased from 10% to 20% in March 2025), the tariffs on products from Mexico were suspended for an additional month. These tariffs could potentially impact certain areas of our supply chain, including raw materials entering Mexico, raw materials entering the United States from China tofor be utilizeduse by our UnitesUnited States-based suppliers, and finished goods imported from Mexico into the United States. WhileWe wecurrently do not believe we have exposure to these potential tariffs as Tablo, TabloCart and Tablo consumablescartridge are covered under a special exemption,exemption. However, in September 2025, the U.S. Department of Commerce initiated an investigation under Section 232 of the Trade Expansion Act of 1962 to assess the national security implications of imports of personal protective equipment, medical consumables, and medical equipment, including medical devices. The outcome of this investigation could result in additional tariffs or other trade restrictions. While we continue to believe our products will remain exempt, the scope and outcome of the investigation are uncertain and could affect existing exemptions or expand coverage to additional product categories. We cannot predict what actions may ultimately be taken with respect to tariffs or trade relations between the United States and other countries (including Mexico and China), whatwhich products may bebecome subject to such actions, or what actions may be taken by thehow other countries may respond in retaliation. The adoption and expansion of trade restrictions, the occurrence of a trade war, other governmental action related to tariffs or trade agreements or policies, or the related uncertainties, has the potential to adversely impact our supply chain and distribution costs, which could in turn adversely affect our business, financial condition, and results of operations, including our ability to expand gross margins. Furthermore, proposals to amend Mexico’s federal labor law, including a reduction in maximum workweek hours from 48 to 40 hours, were rejected by the Mexican Congress in 2024, but are expected to return in future legislative efforts. If passed, these potential legislative changes are expected to increase our labor costs and, ultimately, could potentially negatively impact the productivity of our manufacturing operations to the extent our efforts to mitigate the impact of the changes are not successful. In addition, because certain of our Mexico-based manufacturing operations incur costs that are denominated in Mexican Pesos (MXN), we are exposed to additional risk of currency fluctuations between the U.S. dollars (USD) and MXN, which could increase our product and labor costs, thus reducing our gross profit. Moreover, while certain members of our management team have some manufacturing experience, as an organization, we do not have any prior experience in this type of manufacturing arrangement, and we could accordingly experience other risks, the nature and magnitude of which we are unable to assess precisely at this time. Furthermore, we are subject to increased risks related to changes in export or import regulation, other trade barriers, security measures and uncertainties impacting the cost and the ability to move inventory and manufacturing equipment across the United States-Mexico border. These risks may disrupt our Mexico-based manufacturing operations, subject us to increased costs, restrict or delay our ability to deliver products to our customers and meet our customers’ demand on a timely basis, and result in customer dissatisfaction, all of which would adversely impact our results of operations.

In addition, we purchase supplies through purchase orders and do not have long-term supply agreements with, or guaranteed commitments from all, our suppliers, including single source suppliers. Moreover, while we manufacture a substantial majority of Tablo cartridges in-house, we relycontinue onto utilize a contract manufacturer for the production of a small portion of Tablo cartridges. Many of our suppliers and our contract manufacturer are not obligated to perform services or supply products for any specific period, in any specific quantity or at any specific price, except as may be provided in a particular purchase order. We depend on our suppliers and contract manufacturer to provide us and our customers with materials in a timely manner that meet our and their quality, quantity and cost requirements. These suppliers and contract manufacturer may encounter problems during manufacturing for a variety of reasons, including as a result of public health crises such as the COVID-19 pandemic, labor disputes, work stoppages, damage or interruption from fires, severe weather or other natural disasters, vandalism, terrorism or other political hostilities, any of which could delay or impede their ability to meet our demand. These suppliers and contract manufacturer may cease producing the components we purchase from them or otherwise decide to cease doing business with us. As part of our supply continuity planning, we maintain limited quantities of raw material, work in progress and finished good product at both suppliers and contract manufacturers. However, if we inaccurately forecast demand for finished goods, we may be unable to meet customer demand which could harm our competitive position and reputation. Further, if we fail to effectively manage our relationships with our suppliers and contract manufacturer, we may be required to change suppliers or contract manufacturers. While we believe replacement suppliers exist for all most all materials, components and services necessary to continue manufacturing Tablo, establishing additional or replacement suppliers for any of these materials, components or services could be time-consuming and expensive, may result in interruptions in our operations and product delivery, may affect the performance specifications of Tablo or could require that we modify Tablo’s design. Even if we are able to find replacement suppliers, we will be required to verify that the new supplier maintains facilities, procedures and operations that comply with our quality expectations and applicable regulatory requirements. Any of these events could require that we obtain a new regulatory authority approval before we implement the change, which could result in further delay and which may not be obtained at all. If our third-party suppliers fail to deliver the required commercial quantities of materials on a timely basis and at commercially reasonable prices, and we are unable to find one or more replacement suppliers capable of production at a substantially equivalent cost in substantially equivalent volumes and quality on a timely basis, the continued commercialization of Tablo, the supply of our products to customers and the development of any future products will be delayed, limited or prevented, which could have a material adverse effect on our business, financial condition and results of operations.

Our technology is designed to elevate the dialysis experience for patients and help providers overcome traditional care delivery challenges. Requiring only an electrical outlet and tap water to operate, our Tablo® Hemodialysis System (Tablo) frees patients and providers from the burdensome infrastructure required to operate traditional dialysis machines. The integration of water purification and on-demand dialysate production in a single 35-inch compact console enables Tablo to serveprovide asclinical aand dialysisoperational clinicflexibility onto wheels.customers. With a simple-to-use touchscreen interface, two-way wireless data transmission and a proprietary data analytics platform, Tablo is a holistic approach to dialysis care. Unlike existing hemodialysis machines, which have limited clinical versatility across care settings, Tablo can be used seamlessly across multiple care settings and a wide range of clinical applications. Tablo is cleared by the FDA for use in the hospital, clinic, or home setting.

Tablo leverages cloud technology, making it possible for providers to monitor devices remotely, view treatment data, perform patient and population analytics, and automate clinical recordkeeping. Tablo'sTablo’s wireless connectivity enables us to release training, new features and enhancements over-the-air without interventions by FSEs. Tablo’s connectedness allows continuous streaming of overan 500,000average deviceof approximately 3 million machine performance data points to the cloud for every treatment. We use this data, in conjunction with our diagnostic and predictive algorithms, to monitor device performance, identify and diagnose failures and, in some instances, predict and prevent potential future device failures or malfunctions. In effect, this contributes to a reduction in service hours and an increase in device uptime.

Driving adoption of Tablo in the acute care setting has been our primary focus to date. We have invested in growing our economic and clinical evidence, built a veteran sales and clinical support team with significant expertise, and implemented a comprehensive training and customer experience program. Our experience in the acute care market has demonstrated Tablo’s clinical flexibility and operational versatility, while also delivering meaningful cost savings to the providers. In addition, we are also working with SNFs, LTACHsLTACHs, and other post-acute providers to raise awareness of Tablo’s economic and clinical benefits to them and to patients. We plan to continue leveraging our commercial infrastructure to broaden our installed base in the acute and post-acute care markets, as well as driving utilization and fleet expansion with our existing customers.

Tablo is also utilized for home-based dialysis. We believe our ability to reduce training time, patient dropout, and the supplies and infrastructure required to deliver dialysis in the home can drive efficiency and economic improvements to the home care model. In our home IDE trial, patients reported specific quality of life improvements compared to their experience on the incumbent home dialysis machine. To penetrate this market successfully, we have made investments in and continue to focus on refining our home distribution, logistics and support systems to help ensure they are ready for scale. We are also working with providers, patients, and payors to increase awareness and adoption of TCUs as a bridge to home-based therapy.

We believe that our financial performance has beenbeen, and in the foreseeable future will continue to bebe, primarily driven by the following factors. While we believe each of these factors presents significant opportunities for our business, they also pose important challenges that we must successfully address in order to sustain our growth and improve our results of operations. Our ability to successfully address the factors below is subject to various risks and uncertainties, including those described in the section titled “Risk Factors.”

We plan to further broaden our installed base by continuing to target national and regional IDNsintegrated delivery networks and health systems, as well as SNFs, LTACHs and other post-acute providers. In addition, we focus on driving utilization and fleet expansion with existing customers by providing an exceptional user experience delivered through our commercial team and a steady release of software enhancements that amplify Tablo’s operational reliability and clinical versatility. Our ability to successfully execute on this strategy, and thereby increase our revenue in the acute market, will depend on several factors. These factors include our ability to recover from the adverse impact in the field from the Warning Letter as we resume distribution of TabloCart with Prefiltration, as well as the success of our efforts to further evolve our initiatives to optimize and further evolve our commercial organization, infrastructure and sales processes to support the growth of our business in the acute and post-acute care markets as we focus more heavily on enterprise selling and transition beyond earlier stage adoption of Tablo.

We believe that a significant growth opportunity exists within the home hemodialysis market. We are partnering with innovative dialysis clinic providers, health systems and other adjacent healthcare providers who are motivated to grow their home hemodialysis population, and who share our vision of creating a seamless and supported transition to the home. We are also investing in market development over the longer term to expand the home hemodialysis market itself. The expansion of the home hemodialysis market and our ability to penetrate this market will be an important factor in driving the future growth of our business. In addition, the success of our efforts to expand within the home market, help grow new home programs and increase our revenue generated from home-based dialysis on the timeline that we anticipate will depend on several factors. These factors include the success of our initiatives to optimize and further evolve our commercial organization, infrastructure and sales processes as we scale our business in the home market.

Our ability to expand our gross margins depends on: first, our ability to continue to sell Tablo cartridges, services, and accessories for Tablo consoles; second, our ability to reduce the cost of service and third, our ability to reduce the cost ofto manufacture Tablo consoles. Our ability to expand gross margins will also depend in part on our ability to control the average selling prices of our products and services, including by selling higher-margin accessories, consumables and services. Further, we will continue to utilize our cloud-based data system, as well as enhanced product and support performance, to improve service margin and drive down service costs per console. In addition, over the past several years, we have moved the production of Tablo consoles and a substantial majority of Tablo cartridges in-house to our manufacturing facility in Tijuana, Mexico which we operate in collaboration with TACNATACNA, as part of our cost reduction activities. This has helped further our long-term gross margin expansion and supply continuity strategies while reducing the costs of Tablo console production and improving the flexibility of our operations. We will continue our cost reduction activities by using our design, engineering, supply chain and manufacturing capabilities to help further advance and improve the efficiency of our manufacturing processes, lowering the cost of parts and components and lowering our costs of production. Our ability to expand gross margins depends on our ability to successfully execute these strategies, as well as the impact of macroeconomic factors described below, including the tariffs imposed by the newcurrent administration.

Global macroeconomic conditions, including inflationary pressures, rising interest rates, changes in tariff or trade laws and policies (such as the tariffs imposed by the current administration), increased labor costs, staffing shortages and global supply chain disruptions, may impact our business and results of operations, and those of our customers, manufacturing partners and suppliers. As the duration and severity of these macroeconomic conditions remain uncertain and depend on various factors, we cannot predict what effects these macroeconomic conditions will ultimately have on our business and results of operations, our customers, or our suppliers.

From a supply chain perspective, we have worked closely with our manufacturing partners and suppliers to enable us to source key components and maintain appropriate inventory levels to meet customer demand, and have not experienced material disruptions in our supply chain to date. However, macroeconomic factors such as rising inflation, increasing labor costs, and surges and shifts in consumer demand have disrupted the operations of certain of our third-party suppliers, resulting, in some cases, in increased lead times and higher component costs. We believe that localizing production of a substantial majority of Tablo cartridges in Mexico (in-house at our manufacturing facility) has helped achieve cost reductions through lower freight costs, further our long-term gross margin expansion and supply continuity strategies and improve the flexibility of our operations. However, we may face increased supply chain constraints in the future, which could negatively impact our ability to meet customer demand on a timely basis, result in customer dissatisfaction and adversely impact our operating margins and results of operations. Moreover, increased tariffs imposed by the newcurrent administration, including on goods imported into the United States from Mexico and China, could adversely impact our supply chain and distribution costs, as well as our ability to achieve sustainable gross margins. WhileWe wecurrently do not believe we have exposure to these potential tariffs as Tablo, TabloCart and Tablo consumablescartridge are covered under a special exemption,exemption. However, in September 2025, the U.S. Department of Commerce initiated an investigation under Section 232 of the Trade Expansion Act of 1962 to assess the national security implications of imports of personal protective equipment, medical consumables, and medical equipment, including medical devices. The outcome of this investigation could result in additional tariffs or other trade restrictions. While we continue to believe our products will remain exempt, the scope and outcome of the investigation are uncertain and could affect existing exemptions or expand coverage to additional product categories. We cannot predict what actions may ultimately be taken with respect to tariffs or trade relations between the United States and other countries (including Mexico and China), what products may be subject to such actions, or what actions may be taken by the other countries in retaliation.

ServiceThe increase in service and other revenue increased by $5.9 million, or 22%, for the year ended December 31, 2024 as compared to the prior year. The increase was primarily due to services associated with the growth in our console installed base.

Gross profit increased by $9.6 million, or 33%, for the year ended December 31, 2024 as compared to the prior year. The gross margin percentage improved by 11.75.2 percentage points for the year ended December 31, 20242025 as compared to the prior year. This improvement in gross margin was primarily driven by a higher mix of consumable and service and other revenue in 2024 as compared to the prior year. Consumables have a higherconsole gross margin than consoles and had improved gross margin year over year. The higher consumable gross margin mainly resultedresulting from a lower cost per unit as well as a higher average selling priceprice, fora consumables.higher consumable gross margin mainly resulting from a higher average selling price, and a higher service gross margin.

ResearchThe decrease in research and development expenses decreased by $18.9 million, or 33%, for the year ended December 31, 2024 as compared to the prior year. The decrease was primarily due to an overall decrease in compensation-related and stock-based compensation expense, consulting and materials expense andexpenses, infrastructure costs and consulting expense resulting from our cost reduction efforts implemented in 2024 and the fourth quarter of 2023.efforts.

SalesThe decrease in sales and marketing expenses decreased by $26.2 million, or 27% for the year ended December 31, 2024 as compared to the prior year. The decrease was primarily driven by an overall decrease in compensation-related and stock-based compensation expense,expenses, travel and consultingfreight expenseexpenses resulting from our cost reduction efforts implemented in 2024 and the fourth quarter of 2023.efforts. These decreases were partially offset by higher freightmarketing expenses due to higheran volumeincrease in consumablemarketing sales.activities and higher consulting expense.

GeneralThe decrease in general and administrative expenses decreased by $1.7 million, or 4%, for the year ended December 31, 2024 as compared to the prior year. The decrease was primarily driven by an overall decrease in consulting, compensation-related expenseand stock-based compensation expenses resulting from our cost reduction efforts implemented in 2024 and the fourth quarter of 2023. Our insurance costs also decreased as compared to the prior year.efforts. These decreases were partially offset by $2.4 million increaseincreases in the allowance for credit losses asand comparedlegal fees related to the priorstockholder yearclass period.action and related derivative lawsuits.

The decrease in interest income and other income, net, for the year ended December 31, 20242025 as compared to the prior year was driven by the changes in interest rates.rates and a lower average short-term investment balance in 2025.

The increasedecrease in interest expense for the year ended December 31, 20242025 as compared to the prior year was due to thea increaselower outstanding term loan balance in interest rate and higher outstanding balance under the SLR Term Loan Facility in 2024 as compared to 2023.2025.

Starting January 2025, weWe are required to comply with certain covenants under the Perceptive Credit Agreement, including, among others, requirements as to financial reporting, restrictions on our ability to incur additional indebtedness and to pay any dividends or other distributions on capital stock, maintenance of a minimum cash balance, and achievement of certain specified trailing twelve-month net revenue targets. If we fail to comply with any covenants, payments or other terms of the Perceptive Credit Agreement and such failure constitutes an event of default thereunder, such event of default would give Agent the right to declare all borrowings outstanding, together with accrued and unpaid interest and fees, to be immediately due and payable (see the section entitled "“Debt Obligations"” below).

We believe that our existing cash, cash equivalents and short-term investments, cash generated from sales, and proceeds recently received from the debt financing described below under “Debt Obligations ‒ Perceptive Credit Agreement” as well as proceeds received from the Private Placement described in Note 138 to the financial statements will be sufficient to meet our anticipated needs for at least the next 12 months from the issuance date of this Annual Report.

Net cash used in operating activities of $116.3$46.3 million for the year ended December 31, 20242025 was due to a net loss of $128.0 million, a net cash outflow from the change in our operating assets and liabilities of $25.7$81.7 million, and amortization of premium on investments of $4.7$2.3 million, partially adjusted by the primary non-cash adjustments for stock-based compensation expense of $29.4$15.6 million, loss on extinguishment of term loan of $7.7 million, depreciation and amortization of $5.7$4.3 million, change in provision for credit losses of $3.5 million, non-cash interest expense of $2.6$2.8 million, allowancea fornet creditcash lossesinflow from the change in our operating assets and liabilities of $2.4$2.2 million, and non-cash lease expense of $1.4$1.6 million. The net cash outflowinflow from operating assets and liabilities was primarily due to ana increasedecrease in inventories, a decrease in accrued expenses and other current liabilities, an increase in accounts receivable due to timing of collections and billings, decreasesan increase in accounts payable, accrued compensationexpenses and relatedother benefits, accrued warrantycurrent liabilities, and operating lease liabilities. The net cash outflow from operating assets and liabilities was partially offset by an increase in deferred revenue due to the growth in service agreementsagreements. The net cash inflow from operating assets and aliabilities decreasewas partially offset by decreases in accrued compensation and related benefits, accounts payable, accrued interest, operating lease liabilities and accrued warranty liabilities, and an increase in prepaid expenses and other assets.

Net cash used in operating activities of $131.4$116.3 million for the year ended December 31, 20232024 was due to a net loss of $172.8$128.0 million andmillion, a net cash outflow from the change in our operating assets and liabilities of $0.8$25.7 million, and amortization of premium on investments of $4.7 million, partially adjusted by the primary non-cash adjustments for stock-based compensation expense of $38.6 million, amortization of premium on investments of $6.4$29.4 million, depreciation and amortization of $5.8$5.7 million, non-cash interest expense of $1.8$2.6 million, change in provision for credit losses of $2.4 million, and non-cash lease expense of $1.3$1.4 million. The net cash outflow from operating assets and liabilities was primarily due to an increase in accounts receivable due to timing of collections and billings,inventories, a decrease in accrued expenses and other current liabilities, aan decreaseincrease in accounts receivable due to timing of collections and billings, decreases in accounts payable, accrued compensation and related benefits, accrued warranty liabilities, and a decrease in operating lease liabilities. The net cash outflow from operating assets and liabilities was partially offset by an increase in accounts payable due to timing of vendor payments, an increase in deferred revenue due to the growth in service agreements and a decrease in inventories.prepaid expenses and other assets.

On January 3, 2025, we entered into a senior secured credit facility for borrowings up to an aggregate principal amount of $125.0 million pursuant to the Perceptive Credit Agreement among Perceptive Credit Holdings IV, LP, as administrative agent (Agent),Agent, the lenders from time to time party thereto and the Company.

Pursuant to the terms and conditions of the Perceptive Credit Agreement, the lenders agreed to extend term loans to us in an aggregate principal amount of up to $125.0 million, comprised of (i) a term loan of $100.0 million (the Initial Term Loan), which was funded at the closing of the Perceptive Credit Agreement on January 8, 2025, and (ii) a delayed draw term loan of up to $25.0 million (the Delayed Draw Loan, together with the Initial Term Loan, the Perceptive Term Loan). The Delayed Draw Loan is available for funding until July 14, 2027, subject to the achievement of a specificcertain revenue milestone and other customary conditions.

While the significant accounting policies are more fully described in Note 2 to our audited financial statements included elsewhere in this Annual Report, we believe that the following critical accounting policyestimate is most important to understanding and evaluating our reported financial results.

Our contracts with customers often include multiple performance obligations, such as products and services. We determine the standalone sale prices (SSP) based upon the facts and circumstances of each performance obligation (product or services), which often requires management'smanagement’s judgement.judgment. We use an observable price to estimate SSP for items that are sold separately, including service agreements. In instances where SSP is not directly observable, such as when we do not sell the product or service separately, we determine the SSP using information that may include market conditions and other observable inputs and allocate the contracted transaction price to each distinct performance obligation based upon the relative SSP. When SSP is not directly observable for a performance obligation, we utilize the residual method to allocate revenue. We may offer additional goods or services to customers at the inception of customer contracts at prices not at SSP. If such contracts result in a material right, we allocate part of the transaction price to that right and recognize the associated revenue when those future goods and services are transferred to the customer. SSP is assigned based on the estimated value of the material right. We establish SSP ranges for our products and services and reassess them periodically.

You should carefully consider the risk factors discussed in Part I, “Item 1A. Risk Factors” in our 2025 Annual Report, which could materially affect our business, financial position, or future results of operations. There have been no material changes to the risk factors described in our 2025 Annual Report.Report, except as set forth below. The risks described in our 2025 Annual ReportReport, as updated below, are not the only risks that we face. Additional risks and uncertainties not precisely known to us, or that we currently deem to be immaterial, may also arise and materially impact our business. If any of these risks occur, our business, results of operations and financial condition could be materially and adversely affected and the trading price of our common stock could decline.

We generate revenue from the placement of Tablo consoles along with accessories, and shipping and handling charged to customers, which revenue is recognized up-front. We also earn recurring revenue from sales of consumables, including Tablo cartridge, and services, which generates significant total revenue over the life of Tablo consoles. Our total revenues were $27.9$31.6 million and $29.8$31.4 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively, and $59.5 million and $61.2 million for the six months ended June 30, 2026 and 2025, respectively.

We primarily sell our solutions through our direct sales organization, which covers most major metropolitan markets in the United States. Our sales organization is comprised of our capital sales team, responsible for generating new customer demand for Tablo, and our clinical sales team, responsible for driving utilization and fleet expansion of Tablo at existing customer sites. In addition, our field service team provides maintenance services and product support to our customers. Our field sales and service teams represent 57%47% of our total full-time employees as of MarchJune 31,30, 2026. The same sales organization and field service team drive Tablo penetration in both the acute and home markets. We believe the ability to leverage one team to serve both markets will result in significant productivity and cost optimization as we continue to scale our business.

We plan to further broaden our installed base by continuing to target national and regional integrated delivery networks and health systems, SNFs, LTACHs and other post-acute providers. In addition, we focus on driving utilizationutilization, fleet expansion and fleet expansionrefresh opportunities with existing customers bythrough providingcontinued commercial engagement, an exceptional user experience delivered through our commercial team and a steady release of software enhancements that amplify Tablo’s operational reliability and clinical versatility. Our ability to successfully execute on this strategy, and thereby increase our revenue in the acute market, will depend on several factors. These factors include the success of our initiatives to optimize and further evolve our commercial organization, infrastructure and sales processes to support the growth of our business in the acute and post-acute care markets as we focus more heavily on enterprise selling and transition beyond earlier stage adoption of Tablo.

The following table summarizes our results of operations for the three and six months ended MarchJune 31,30, 2026 and 2025 (in thousands):

Comparison of the Three and Six Months Ended MarchJune 31,30, 2026 and 2025

Product revenue decreased by $2.7$1.2 million, or 13%,5%, for the three months ended MarchJune 31,30, 2026 as compared to the same period in the prior year. This decrease was driven by a $1.7 million decrease in consoleconsumable revenuerevenue, andwhich was offset by a $1.0$0.5 million decreaseincrease in consumableconsole revenue.

Service and otherProduct revenue increaseddecreased by $3.9 million, or 9%, for the threesix months ended MarchJune 31,30, 2026 as compared to the same period in the prior year. TheThis increasedecrease was primarilydriven dueby toa services$2.7 associatedmillion with growthdecrease in ourconsumable revenue and a $1.2 million decrease in console installed base.revenue.

Gross profit increased for the three and six months ended MarchJune 31,30, 2026 as compared to the same periodperiods in the prior year. Gross margin improved by 6.24.2 percentage points for the three months ended MarchJune 31,30, 2026 and 5.2 percentage points for the six months ended June 30, 2026 as compared to the same periodperiods in the prior year. These improvements in gross profit and gross margin were primarily driven by higher average selling prices for consoles and higher gross margin on service and other revenue,revenue. whichSuch improvements were partially offset by thea lower averagemix sellingof priceconsumable forrevenue, consumables.which had a higher gross margin than console and service revenues, as compared to the same periods in the prior year.

Research and development expenses increased for the three and six months ended MarchJune 31,30, 2026 aswere comparedrelatively toconsistent with the same periodperiods in the prior year. The increase was primarilyyear due to increasesongoing inexpense stock-based compensationdiscipline and consultingworking expenses.capital management.

Sales and marketing expenses decreased for the three and six months ended MarchJune 31,30, 2026 as compared to the same periodperiods in the prior year. The decrease was mainlyprimarily driven by lowera decrease in compensation-related and stock-based compensation expenses,expenses and infrastructure costs due to a lower headcount in 2026 compared to the prior year. This decrease was partially offset by higherincreases in freight costs.expense.

General and administrative expenses increased for the three and six months ended MarchJune 31,30, 2026 as compared to the same periodperiods in the prior year. The increase was primarily due to an overall increase in compensation-related and stock-based compensation expense.expenses and higher legal costs related to the stockholder class action and related derivative lawsuits.

The decrease in interest income and other income, net for the three and six months ended MarchJune 31,30, 2026 as compared to the same periodperiods in the prior year waswere driven by a lower average short-term investment balance in 2026.

The interest expense for the three and six months ended MarchJune 31,30, 2026 waswere relatively consistent with the amount in the same periodperiods in the prior year.

Since our inception, we have incurred net losses and negative cash flows from operations. To date, we have financed our operations and capital expenditures primarily through sales of equity securities, revenue from sales, debt financings, and proceeds from employee exercise of stock options and ESPP purchases.

As of MarchJune 31,30, 2026, we had cash, cash equivalents, restricted cash, and short-term investments of $160.5$151.0 million.

We believe that our existing cash, cash equivalents and short-term investmentsinvestments, and cash generated from sales will be sufficient to meet our anticipated needs for at least the next 12 months from the issuance date of this Quarterly Report.

The net cash used in operating activities of $12.8$22.5 million for the threesix months ended MarchJune 31,30, 2026 was due to a net loss of $19.0$37.0 million, the amortization of premiums on investments of $0.4$0.8 million, and provision for credit losses of $0.4$0.7 million, which were adjusted by stock-based compensation expense of $3.5$6.1 million, depreciation and amortization of $1.4 million, non-cash interest expense of $1.4 million, non-cash lease expense of $0.8 million, and a net cash inflow from the change in our operating assets and liabilities of $1.5 million, depreciation and amortization of $0.8 million, non-cash interest expense of $0.7 million, and non-cash lease expense of $0.4$4.7 million. The net cash inflow from operating assets and liabilities was primarily due to decreasesincreases in accounts receivablepayable, accrued expenses, and deferred revenue, and a decrease in prepaid expenses and other assets, and increases in accrued expenses and accounts payable.assets. This net cash inflow from operating assets and liabilities was partially offset by an increase in inventory, a decrease in accrued compensation and related benefits resulting from the payout of 2025 annual cash bonuses, an increase in accounts receivable and decreases in deferred revenue and operating lease liabilities.liabilities and accrued warranty liability.

The net cash provided by investing activities of $7.9$22.1 million for the threesix months ended MarchJune 31,30, 2026 was due to the maturities of short-term investment securities of $30.9$63.8 million, which was partially offset by the purchases of short-term investment securities of $22.9$41.5 million and purchases of property and equipment of $0.2 million.

The net cash provided by financing activities of $0.5$0.4 million for the threesix months ended MarchJune 31,30, 2026 was primarily due to proceeds from ESPP purchases.purchases, partially offset by cash outflow of $0.1 million in payments on finance lease liabilities.