Ocugen, Inc.: Form 10-Q for the period ended Mar 31, 2026

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q and with our audited financial statements for the year ended December 31, 2025, included in our 2025 Annual Report. Some of the information contained in this discussion and analysis, including information with respect to our plans and strategy for our business and related financing, include forward-looking statements that involve risks, uncertainties, and assumptions. These statements are based on our beliefs and expectations about future outcomes and are subject to risks and uncertainties that could cause our actual results to differ materially from anticipated results. Except as required by law, we undertake no obligation to publicly update these forward-looking statements, whether as a result of new information, future events, or otherwise. You should read the "Risk Factors" section included in our 2025 Annual Report and the "Risk Factors" and "Disclosure Regarding Forward-Looking Statements" sections of this Quarterly Report on Form 10-Q for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Overview

We are a biotechnology company focused on discovering, developing, and commercializing novel gene therapies that improve health and offer hope for patients across the globe.

Our technology pipeline includes:

• Novel Modifier Gene Therapy Platform —

OCU400- Based on the use of nuclear hormone receptors ("NHRs"), we believe our novel modifier gene therapy platform has the potential to address major blindness diseases, including rare genetic diseases such as RP (OCU400), with a gene-agnostic approach. OCU400 is intended for early to advanced cases of RP including clinical and/or genetic diagnosis with both syndromic and non-syndromic forms of the disease. In January 2025, we announced positive two-year data for multiple mutations from the Phase 1/2 clinical trial for OCU400. In February 2025, we announced that the European Commission ("EC") has provided a positive opinion from the European Medicines Agency's ("EMA") Committee for Advanced Therapies for OCU400 Advanced Therapy Medicinal Product ("ATMP") classification. We have completed enrollment in the Phase 3 liMeliGhT clinical trial for OCU400. Positive long-term, 3-year Phase 1/2 data for OCU400 were recently assessed in evaluable subjects and builds on prior 2-year results showing consistent clinically meaningful, approximately 2-line LLVA gain across mutations. OCU400 maintained a favorable durability, safety and tolerability profile with no new treatment-related serious adverse events or adverse events of interest emerged.

Additional data include:

• Visual function benefits were consistently observed over 3 years, with 88% (7/8) of evaluable treated subjects showing improvement or preservation versus untreated fellow eyes.
• Approximately 2-line gain (N=8) observed across multiple mutation types in treated eyes compared to untreated eyes at 3 years.

We expect to begin a rolling BLA submission in the third quarter of 2026 and plan to complete the BLA submission by the second quarter of 2027. We announced OCU400 Phase 3 liMeliGhT enrollment completion (N=140 subjects), reflecting strong interest from investigators and patients.

Topline Phase 3 data is expected in the first quarter of 2027, advancing OCU400 towards potential approval in the fourth quarter of 2027 as a treatment option for early- to late-stage RP.

OCU410ST- We initiated dosing in GARDian3 pivotal confirmatory trial for OCU410ST in July 2025. The OCU410ST Phase 2/3 pivotal confirmatory trial represents our second late-stage clinical program. We plan to submit a BLA for OCU410ST by mid-2027 in alignment with our strategic goal of filing three BLAs by 2028. In November 2024, the EMA granted orphan medicinal product designation ("OMPD") for OCU410ST for the treatment of ABCA4-associated retinopathies (>1200 mutations) including ST, RP 19, and CORD3. In May 2025, we announced that the FDA granted Rare Pediatric Disease Designation ("RPDD") for OCU410ST for the treatment of ABCA4-associated retinopathies including ST, retinitis pigmentosa 19 ("RP19"), and cone-rod dystrophy 3 ("CORD3"). In June 2025, we announced that the FDA has cleared the Investigational New Drug ("IND") amendment to initiate a Phase 2/3 pivotal confirmatory trial of OCU410ST, a modifier gene therapy candidate being developed for all ST

*(*ABCA4-associated retinopathies). In August 2025, we announced that the Committee for Medicinal Products for Human Use ("CHMP") of the EMA reviewed the study design, endpoints and planned statistical analysis of the ongoing pivotal confirmatory OCU410ST Phase 2/3 GARDian3 clinical trial for ST and provided acceptability of a single U.S.-based trial for submission of a Marketing Authorization Application ("MAA").

In January 2026, we announced publication of Phase 1 GARDian1 Trial results for OCU410ST. The study supports favorable safety and tolerability and clinically meaningful functional and structural benefits in patients with ABCA4-associated retinopathies including Stargardt disease.

The OCU410ST Phase 1 clinical trial demonstrated that atrophic lesions grew slower by 54% at 12 months for evaluable treated subjects when compared to untreated fellow eyes. In the secondary endpoint- Best Corrected Visual Acuity (BCVA), treated-eyes showed an improvement with 1-line (6 ETDRS Letter) gain in the visual acuity when compared to untreated fellow eyes. Additionally, 100% of evaluable treated eyes demonstrated stabilization or improvement vs. untreated eyes in visual function. In evaluable subjects (N=6) the rate of ellipsoid zone (EZ) loss was 116% slower in OCU410ST-treated eyes compared to untreated fellow eyes at 12 months, demonstrating preservation or stabilization in photoreceptor integrity. The untreated eyes showed expected decline in atrophy. In April 2026, we announced early completion of dosing in the Phase 2/3 pivotal confirmatory trial (N=63 subjects). GARDian 3 trial enrollment and dosing completed successfully in less than 9 months. We plan to submit the BLA for OCU410ST by mid-2027.

OCU410- We completed dosing in Phase 2 of the Phase 1/2 ArMaDa clinical trial for OCU410 for the treatment of geographic atrophy ("GA"), an advanced form of dAMD. Positive preliminary efficacy and safety data from the Phase 1 dose-escalation portion of the OCU410 Phase 1/2 ArMaDa clinical trial included: no drug-related serious adverse events ("SAEs"), reduced lesion growth, preservation of retinal tissue, and—most importantly—there was a positive effect on the functional visual measure of low luminance visual acuity ("LLVA"). In March 2025, OCU410 and OCU410ST received ATMP classification from the EMA.

In March 2026 we announced positive 12-month topline data from the Phase 2 ArMaDa clinical trial. Key findings from Phase 2 include:

• 31% reduction in lesion growth in the optimal dose (medium) group compared to control (p< 0.05)
• 27% slower rate of ellipsoid zone (EZ) loss compared to control, indicating structural preservation of photoreceptors, which correlates with visual function
• 55% of treated patients demonstrated ≥30% lesion size reduction vs. control
• Subgroup analysis (subjects with baseline GA lesions ≥5 mm2 and ≤17.5 mm2) demonstrates 33% reduction in lesion growth compared to control in medium dose OCU410 with similar reductions in the high dose group

The Phase 2 clinical trial builds directly on the clean safety profile observed in Phase 1 with no OCU410-related serious adverse events observed and no cases of endophthalmitis, retinal detachment, vasculitis, choroidal neovascularization, or ischemic optic neuropathy reported to date.

We expect to meet with FDA/EMA to align on the Phase 3 study design and initiate the Phase 3 study by the third quarter of 2026.

• Other Programs —

Novel Biologic Therapy for Retinal Diseases — OCU200 is a novel recombinant fusion protein consisting of two human proteins, tumstatin and transferrin. OCU200 possesses unique features which potentially enable it to treat vascular complications of diabetic macular edema ("DME"), diabetic retinopathy ("DR"), and wet age-related macular degeneration ("AMD"). Tumstatin is the active component of OCU200 and binds to integrin receptors, which play a crucial role in disease pathogenesis. Transferrin is expected to facilitate the targeted delivery of tumstatin into the retina and choroid and potentially help increase the interaction between tumstatin and integrin receptors. OCU200 Phase 1 clinical trial enrollment was completed in the first quarter of 2026.

Inhaled Mucosal Vaccine Platform — Our next-generation, inhaled mucosal vaccine platform includes OCU500, a COVID-19 vaccine. We have completed IND-enabling studies and GMP manufacturing of clinical trial material for OCU500. The National Institute of Allergy and Infectious Diseases ("NIAID"), part of the National Institutes of Health ("NIH"), intends to initiate a Phase 1 clinical trial for OCU500 in the second quarter of 2026.

Novel Modifier Gene Therapy Platform

We are developing a modifier gene therapy platform designed to fulfill unmet medical needs related to retinal diseases, including IRDs, such as RP, ST; and multifactorial diseases such as dAMD. Our modifier gene therapy platform is based on the use of NHRs, which have the potential to achieve homeostasis — the basic biological processes in the retina to restore a healthy state from a diseased state. Unlike single gene replacement therapies, which only target one genetic mutation, our modifier gene therapy platform, through its use of NHRs, represents a unique, gene-agnostic approach designed to address not just the mutated gene but provide a molecular "reset" of health and survival of gene networks. OCU400, our lead product candidate in our modifier gene therapy platform, has received ODD from the FDA for RP and LCA, a RMAT designation for the treatment of RP associated with NR2E3 and RHO mutations from the FDA, and OMPD from the EC, based on the recommendation of the EMA, for RP and LCA. These broad ODD, RMAT, and OMPD designations further support the broad (gene-agnostic) therapeutic potential of OCU400 to treat RP associated with mutations in multiple genes.

OCU410 and OCU410ST are being developed utilizing the RORA (RAR Related Orphan Receptor A) gene for the treatment of GA secondary to dAMD and ST, respectively. OCU410 is a potential one-time, curative therapy with a single sub-retinal injection that targets multiple pathways associated with AMD pathogenesis, in contrast to products currently approved or under development that treat only one cause of GA, require multiple injections per year, and have safety considerations. OCU410ST has received ODD from the FDA and OMPD from the EMA for the treatment of ABCA4-associated retinopathies (>1200 mutations) including ST, RP19, and cone-rod dystrophy 3 (CORD3), and has the potential to be the first approved therapy to treat ST.

OCU410ST/OCU410 utilizes a first-in-class modifier gene therapy approach by delivering the human RORA gene to diseased retinal tissue via subretinal AAV5 delivery. RORA modulates lipid metabolism, oxidative stress, and inflammation key drivers of retinal degeneration that restores retinal homeostasis by offering a unique four-way disease-modifying potential.

Currently, there is significant economic burden of vision loss diseases in the US. ST and GA are major contributors to vision loss. OCU410 has the potential to reduce treatment costs, prevent vision-related disability, and ease the broader healthcare and societal burden driven by structural and functional vision loss.

In February 2025, we announced that alignment has been reached with the FDA to move forward with a Phase 2/3 pivotal confirmatory clinical trial for OCU410ST which can be the basis of a BLA submission. The GARDian Phase 2/3 clinical trial randomized 63 subjects. The primary endpoint in the clinical trial is change in atrophic lesion size. Secondary endpoints include visual acuity as measured by best corrected visual acuity and LLVA compared to untreated controls. One-year data will be utilized for the BLA filing. The Phase 2/3 pivotal confirmatory trial has adaptive design with sample size re-estimation. OCU410ST is intended for early to advanced cases of ST. The masked interim analysis for the OCU410ST Phase 2/3 GARDian3 trial in Stargardt disease is on track as planned for mid-2026 for 24 subjects (16 treated, 8 controls) who have completed 8 months in the trial.

The latest data from the OCU410ST Phase 1 clinical trial demonstrates that atrophic lesions grew slower by 54% at 12 months for evaluable treated subjects when compared to untreated fellow eyes. In the secondary endpoint- Best Corrected Visual Acuity (BCVA), treated eyes showed an improvement with 1-line (6ETDRS Letter) gain in the visual acuity when compared to untreated fellow eyes. Additionally, 100% of evaluable treated eyes demonstrated stabilization or improvement vs. untreated eyes in visual function.").

In January 2026, the Company announced publication of Phase 1 GARDian1 Trial results for OCU410ST. The study supports the favorable safety, tolerability and efficacy profile of OCU410ST and its potential to provide clinically meaningful functional and structural benefits in ST patients.

The OCU410ST Phase 1 clinical trial demonstrated that atrophic lesions grew slower by 54% at 12 months for evaluable treated subjects when compared to untreated fellow eyes. In the secondary endpoint, Best Corrected Visual Acuity (BCVA), treated eyes showed an improvement with 1-line (6 ETDRS Letter) gain in the visual acuity when compared to untreated fellow eyes. Additionally, 100% of evaluable treated eyes demonstrated stabilization or improvement vs. untreated eyes in visual function. In evaluable subjects (N=6) ellipsoid zone (EZ) loss rate was 116% slower in OCU410ST-treated eyes compared to untreated fellow eyes at 12 months, demonstrating preservation or stabilization in photoreceptor integrity. The untreated eyes showed expected decline in atrophy. In April 2026, the Company announced early completion of dosing in phase 2/3 pivotal confirmatory trial (N=63 subjects). GARDian 3 trial enrollment and dosing completed successfully in less than 9 months. We plan to submit the BLA for OCU410ST by mid-2027.

Novel Biologic Therapy for Retinal Diseases

OCU200 is a novel recombinant fusion protein consisting of two human proteins, tumstatin and transferrin. OCU200 possesses unique features which potentially enable it to treat vascular complications of diabetic macular edema ("DME"), diabetic retinopathy ("DR"), and wet age-related macular degeneration ("AMD"). Tumstatin is the active component of OCU200 and binds to integrin receptors,which play a crucial role in disease pathogenesis. Transferrin is expected to facilitate the targeted delivery of tumstatin into the retina and choroid and potentially help increase the interaction between tumstatin and integrin receptors. OCU200 Phase 1 clinical trial enrollment was completed in the first quarter of 2026.

Inhaled Mucosal Vaccine Platform

We are party to the WU License Agreement with Washington University, pursuant to which we licensed the rights to develop, manufacture, and commercialize a mucosal COVID-19 vaccine for the prevention of COVID-19 in the Mucosal Vaccine Territory. In addition, we internally developed technology related to the flu and COVID-19's vaccine design and filed intellectual property. We are developing a next-generation, inhalation-based mucosal vaccine platform based on a novel ChAd vector, which includes OCU500, a COVID-19 vaccine. NIAID intends to initiate a Phase 1 clinical trial for OCU500 in the second quarter of 2026.

Results of Operations

Comparison of the Three Months Ended March 31, 2026 and 2025

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

We believe the following table provides more transparency as to the type of research and development expenses incurred. The following table summarizes our research and development expenses by product candidate for the three months ended March 31, 2026 and 2025 (in thousands):

Collaborative arrangement revenue

Collaborative arrangement revenue increased by $0.1 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The change was due to our quarterly reassessment of the amount of co-development services provided by us to the business partner in the collaboration agreement.

Research and development expense

Research and development expense increased by $1.7 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was primarily due to $1.5 million in employee-related expenses due to an increase in the number of employees and $1.4 million related to OCU410/410ST clinical activities for confirmatory Phase 2/3 clinical trial. This is offset by decrease in $(0.5) million related to OCU400, which is due to reduced manufacturing service fee, and a decrease in ($0.4) million related to consulting expense as compared to the quarter ended March 31, 2025.

General and administrative expense

General and administrative expense increased by $1.7 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. This increase was primarily due to the increase in the number of employees and related personnel costs.

Interest income

Interest income decreased by $0.2 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The decrease was primarily due to a lower average cash balance for the quarter ending March 31, 2026.

Interest expense

Interest expense, net increased by $0.1 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was primarily due to an increase in interest expense related to the Loan and Security Agreement which was entered in November 2024.

Liquidity and Capital Resources

As of March 31, 2026, we had $31.9 million in cash and cash equivalents. We have not generated revenue from our product candidates to date, and have primarily funded our operations through the sale of common stock, warrants to purchase common stock, the issuance of convertible notes and debt, and grant proceeds. Since our inception and through March 31, 2026, we have raised an aggregate of $427.8 million to fund our operations, of which $383.1 million was from gross proceeds from the sale of our common stock and warrants, $10.3 million was from the issuance of convertible notes, $33.4 million was from the issuance of debt, $0.8 million was from the royalty agreement and $0.2 million was from grant proceeds.

Since our inception, we have devoted substantial resources to research and development and have incurred significant net losses and may continue to incur net losses in the future. We incurred net losses of approximately $19.2 million and $15.4 million for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, we had an accumulated deficit of $427.2 million. In addition, we had accounts payable and accrued expenses and other current liabilities of $14.9 million and indebtedness of $29.2 million.

The following table provides a summary of our cash flows for the three months ended March 31, 2026 and 2025 (in thousands):

On May 7, 2026, we completed our previously announced private offering of $115.0 million aggregate principal amount of 6.75% Convertible Senior Notes due 2034 (the “notes”). The notes are general unsecured obligations and bear interest at a rate of 6.75% per year, payable semi-annually in arrears on May 15 and November 15 of each year, beginning on November 15, 2026. The notes mature on May 15, 2034, unless earlier repurchased, redeemed or converted. We used a portion of the proceeds to fully repay our obligations under the Loan and Security Agreement that the Company is party to with Avenue

Venture Opportunities Fund II, L.P. and Avenue Venture Opportunities Fund, L.P. as lenders and Avenue Capital Management II, L.P. as administrative agent and collateral agent (the “Avenue Loan Agreement”), including payment of the related prepayment fee and expenses, and terminate the Avenue Loan Agreement and all related loan documents. See Note 16—Subsequent Events in the notes to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for additional details regarding the issuance of the notes.

Operating activities

Cash used in operating activities was $21.8 million for the three months ended March 31, 2026, and primarily consisted of a net loss of $19.2 million adjusted for non-cash items including stock-based compensation of $3.4 million, depreciation and amortization of $1.0 million, non-cash lease expense of $0.3 million, other non-cash items of $(0.7) million, and a change in net working capital of $6.6 million.

Cash used in operating activities was $19.4 million for the three months ended March 31, 2025, and primarily consisted of a net loss of $15.4 million adjusted for non-cash items including stock-based compensation of $1.9 million, depreciation and amortization of $0.9 million, non-cash lease expense of $0.3 million, other non-cash items of $0.6 million, and a change in net working capital of $6.5 million.

Investing activities

Cash used by investing activities was immaterial for the three months ended March 31, 2026, and primarily consisted of payments related to the purchases of property and equipment. Cash used by investing activities was $0.1 million for the three months ended March 31, 2025, and primarily consisted of payments related to the purchases of property and equipment.

Financing activities

Cash provided by financing activities was $35.0 million for the three months ended March 31, 2026 compared to cash used in financing activities of $1.2 million for the three months ended March 31, 2025. In January 2026, the Company completed an underwritten registered direct offering of 15.0 million shares of common stock at an offering price of $1.50 per share of common stock, resulting in gross proceeds of $22.5 million. The Company received net proceeds of approximately $20.7 million, after deducting commissions and other offering expenses. During the three months ended March 31, 2026, the holder exercised warrants to purchase 10 million shares of common stock for aggregate net proceeds of approximately $14.2 million. The warrants were exercised at an exercise price of $1.50 per share.

During the three months ended March 31, 2025, cash used by financing activities was $1.2 million primarily consisted of a payment related to the EB-5 Loan Agreement.

Contractual Obligations

We have commitments under certain licensing and development agreements, lease obligations, debt agreements, and consulting agreements. There have been no material changes to our contractual obligations as reported in our 2025 Annual Report.

Funding requirements

We expect to continue to incur significant expenses in connection with our ongoing activities, particularly as we continue research and development, including preclinical and clinical development of our product candidates, prepare to manufacture our product candidates, prepare for the potential commercialization of our product candidates, add operational, financial, and information systems to execute our business plan, maintain, expand, and protect our patent portfolio, explore strategic licensing, acquisition, and collaboration opportunities to expand our product candidate pipeline to support our future growth; expand headcount to support our development, commercialization, and business efforts, and operate as a public company.

Factors impacting our future funding requirements include, without limitation, the following:

• the initiation, progress, timing, costs, and results of clinical trials for our product candidates;
• the preparation and submission of INDs with the FDA for current and future product candidates;
• the outcome, timing, and cost of the regulatory approval process for our product candidates;
• the costs of manufacturing and commercialization;
• the costs related to doing business internationally with respect to the development and commercialization of our product candidates;
• the cost of filing, prosecuting, defending, and enforcing our patent claims and other intellectual property rights;
• the cost of defending intellectual property disputes, including patent infringement actions brought by third parties against us;
• the acquisition of or in-licensing of additional product candidates and technologies;
• the costs of expanding infrastructure to support our development, commercialization, and business efforts, including the costs related to the development of a laboratory and manufacturing facility;
• the costs involved in recruiting and retaining skilled personnel;
• the extent to which we in-license or acquire other products, product candidates, or technologies and out-license our product candidates;
• the impact of geopolitical turmoil, macroeconomic conditions, social unrest, political instability, terrorism, or other acts of war; and
• the changes in tariffs and indirect trade restraints, including increased costs associated with global and retaliatory tariff policies.

As of March 31, 2026, we had cash and cash equivalents of approximately $31.9 million. This amount will not meet our capital requirements over the next 12 months. Due to the inherent uncertainty involved in making estimates and the risks associated with the research, development, and commercialization of biotechnology products, this estimate may be based on assumptions that may prove to be wrong, and our operating plan may change as a result of many factors currently unknown to us.

We are subject to risks and uncertainties frequently encountered by companies in the biotech industry, and while we intend to continue research, development, and commercialization efforts for our product candidates, we will require significant additional funding. If we are unable to obtain additional funding in the future and/or our research, development, and commercialization efforts require higher than anticipated capital, there will be a negative impact on our financial viability. We will continue to explore options to fund our operations through public and private placements of equity and/or debt, payments from potential strategic research and development arrangements, sales of assets, licensing and/or collaboration arrangements with pharmaceutical companies or other institutions, funding from the government, particularly for the development of our novel inhaled mucosal vaccine platform, or funding from other third parties. Such financing and funding may not be available at all, or on terms that are favorable to us. While management believes that we have a plan to fund operations, our plan may not be successfully implemented. If we cannot obtain the necessary funding, we will need to delay, scale back, or eliminate some or all of our research and development programs and commercialization efforts; consider other various strategic alternatives, including a merger or sale; or cease operations. If we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, financial condition, and results of operations could be materially adversely affected.

As a result of these factors, together with the anticipated continued spending that will be necessary to continue to research, develop, and commercialize our product candidates, there is substantial doubt about our ability to continue as a going concern within one year after the date that the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q are issued.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements during the periods presented, and we do not currently have any off-balance sheet arrangements as defined in the rules and regulations of the SEC.

Critical Accounting Policies and Significant Judgments and Estimates

The preparation of financial statements in conformity with GAAP requires us to make judgments, estimates, and assumptions in the preparation of our condensed consolidated financial statements. Actual results could differ from those estimates. There have been no material changes to our critical accounting policies and estimates as reported in our 2025 Annual Report.

Recently Adopted Accounting Pronouncements

For a discussion of recently adopted accounting pronouncements, see Note 2 in the notes to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

Evaluation of Disclosure Controls and Procedures

We have carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of March 31, 2026. Based upon this evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective in ensuring that (a) the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms, and (b) such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosures. In designing and evaluating our disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Except as set forth below, there have been no material changes in our risk factors as previously disclosed in our 2025 Annual Report. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, financial condition, or future results.

Our indebtedness could adversely affect our liquidity, financial condition and our ability to fulfill our obligations and operate our business.

As of March 31, 2026, our total outstanding indebtedness was approximately $28.8 million of indebtedness, all of which was secured, and approximately $0.3 million of finance obligations secured in part by restricted cash. On May 7, 2026, we completed a financing transaction involving the issuance of $115.0 million in aggregate principle amount of convertible senior notes, and we used a portion of the proceeds to fully repay our obligations under the Avenue Loan Agreement, including payment of the related prepayment fee and expenses, and terminate the Avenue Loan Agreement and all related loan documents. However, we continue to have significant indebtedness and debt service obligations, and we may incur additional indebtedness in the future.

Our indebtedness could have negative consequences on our future operations, including:

• we may have difficulty satisfying our obligations with respect to our outstanding debt;
• we may have difficulty obtaining financing in the future for working capital, capital expenditures, acquisitions, or other purposes;
• our vulnerability to general economic downturns and adverse industry conditions could increase;
• our flexibility in planning for, or reacting to, changes in our business and in our industry in general could be limited; and
• our debt and the amount we must pay to service our debt obligations could place us at a competitive disadvantage compared to our competitors, who may have less debt.

Our ability to generate cash to repay our indebtedness is subject to the performance of our business, as well as general economic, financial, competitive, and other factors that are beyond our control. If future borrowings are not available to us in amounts sufficient to enable us to fund our liquidity needs, our operating results and financial condition may be adversely affected. In particular, if we are unable to access the capital markets on acceptable terms, reduce cash burn, improve margins and cash flows, or otherwise raise or generate sufficient liquidity, we may be unable to fund operations, make required capital investments, or satisfy our debt obligations when due.

We have a limited number of authorized shares of common stock available for issuance and will need to seek stockholder approval to amend our certificate of incorporation, as amended, to either effect a reverse stock split or increase the number of authorized shares of common stock.

Immediately following the closing of the offering of our senior convertible notes due 2034, we will not have a sufficient number of authorized and unissued shares to permit conversion of the notes into shares of our common stock. We will seek stockholder approval of an amendment to our certificate of incorporation, as amended, to either (i) increase the number of authorized shares of our common stock that results in a number of authorized and unissued shares of our common stock at least sufficient to cover the maximum number of conversion shares or (ii) effect a reverse stock split, which would have the effect of reducing the number of issued shares and thereby increase the authorized shares of common stock available for issuance to permit the conversion in full of the notes into shares of our common stock. If we do not receive that stockholder approval and reserve a sufficient number of authorized but unissued shares, we will be required to settle all conversions in cash, which could cause a significant cash outflow that would materially impact our liquidity and ability to fund operations.

We may not have the ability to raise the funds necessary to settle conversions of our senior convertible notes in cash or to repurchase the notes upon a fundamental change, repurchase the notes upon exercise of a holder put right, and our future debt may contain limitations on our ability to pay cash upon conversion or repurchase of the notes.

Holders of our senior convertible notes will have the right to require us to repurchase all or a portion of their notes upon the occurrence of a fundamental change before the maturity date at a repurchase price equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest, if any. Additionally, on May 15, 2032, holders of the senior convertible notes will have the right to require us to repurchase for cash all or any portion of their notes at 100% of the principal amount of the notes to be purchased, plus accrued and unpaid interest to, but excluding the specified repurchase date. In addition, upon conversion of the senior convertible notes, unless we elect to deliver solely shares of our common stock to settle such conversion (other than paying cash in lieu of delivering any fractional share), we will be required to make cash payments as part of the conversion consideration in respect of the notes being converted. Further, upon conversion of a senior convertible note, unless a holder converts that note after the close of business on a record date for an interest payment but on or prior to the corresponding interest payment date, we will be required to deliver to such converting holder a cash payment representing accrued and unpaid interest in respect of such note to, but excluding, the conversion date. However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of notes surrendered therefor or pay cash with respect to notes being converted. This risk will be exacerbated if we do not receive stockholder approval to amend our certificate of incorporation to effect a reverse stock split or to increase or authorized shares of common stock.

In addition, our ability to repurchase notes or to pay cash upon conversions of notes may be limited by law, regulatory authority or agreements governing our existing and future indebtedness. Our failure to repurchase the notes at a time when the repurchase is required by the respective indenture or to pay cash upon conversions of notes as required by the respective indenture would constitute a default under the indenture for that series of convertible notes and could also lead to a default under the indenture for the other series of convertible notes. A default under the indenture governing the notes or the fundamental change itself could also lead to a default under agreements governing our existing and future indebtedness. If the payment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the notes or to pay cash upon conversions of notes.

The accounting method for the convertible debt securities that may be settled in cash, such as our senior convertible notes, could have a material effect on our reported financial results.

In August 2020, the Financial Accounting Standards Board published Accounting Standards Update 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which amends the accounting standards for convertible debt instruments that may be settled entirely or partially in cash upon conversion. Under ASU 2020-06, embedded conversion features are no longer separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives under Accounting Standards Certification 815: Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital. Consequently, a convertible debt instrument is accounted for as a single liability measured at its amortized cost, as long as no other features require bifurcation and recognition as a derivative. In addition, ASU 2020-06 eliminates the ability to use the treasury stock method for calculating diluted earnings per share for convertible debt instruments whose principal amount may be settled using shares. Instead, ASU 2020-06 requires application of the “if-converted” method for calculating diluted earnings per share.

We will be permitted to settle conversions of our senior convertible notes in cash, shares of our common stock, or a combination thereof; therefore, the “if-converted” method for calculating diluted earnings per share will be required with respect to the notes. Under that method, diluted earnings per share would generally be calculated assuming that all of the notes were converted solely into shares of common stock at the beginning of the reporting period, unless the result would be anti-dilutive. The application of the “if-converted” method may reduce our reported diluted earnings per share.

These accounting standards have impacted and may in the future require us to reflect the senior convertible notes in a manner that adversely affects our reported diluted earnings per share, which could adversely affect our reported or future financial results and the trading price of our common stock.