Significant Accounting Policies

9 Months Ended

Sep. 30, 2025

Use of Estimates

The preparation of the unaudited condensed financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, certain judgments regarding revenue recognition, inventory valuation, warranty reserve, valuation of common stock (for periods prior to the completion of the Company’s IPO) and stock-based awards, and convertible preferred stock and common stock warrants. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant assumptions that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates as there are changes in circumstances, facts, and experience. Changes in estimates are recorded in the period in which they become known. Actual results may differ from those estimates or assumptions.

Short-Term Investments

In accordance with ASC 320, Investments – Debt Securities, the Company classifies its short-term investments as available-for-sale securities. Available-for-sale securities are carried at fair market value with net unrealized gains and losses reported as a component of accumulated other comprehensive income in stockholders’ equity (deficit) and as a component of other comprehensive loss within the statements of operations and comprehensive loss. The Company determines realized gains or losses on the sale of available-for-sale securities using the specific identification method and includes net realized gains and losses as a component of other income or expense within the statements of operations and comprehensive loss. The Company periodically evaluates its short-term investments for credit losses, considering the significance of the decline in value and the market and economy in general. The Company has not recognized any impairment losses related to its short-term investments during the nine months ended September 30, 2025 and 2024. All short-term investments are classified as current based on the nature of the investments and their availability for use in current operations.

Long-Term Investments

Long-term investments include U.S. Treasury notes with maturities of 12 months or more. Where the Company has both the intent and ability to hold debt securities to maturity, these debt securities are carried at amortized cost. If a U.S. treasury note has an unrealized loss and the Company either intends to sell the security or it is more likely than not that the Company will be required to sell the security before its anticipated recovery, the Company will record an impairment charge to investment and other income (expense), net for the entire amount of the unrealized loss and adjust the amortized cost basis of the security. The Company has not recognized any impairment losses related to its long-term investments during the nine months ended September 30, 2025 and 2024. All long-term investments are classified as noncurrent based on the nature of the investments.

Concentrations of Credit Risk and of Significant Suppliers

Financial instruments that potentially expose the Company to concentrations of credit risk primarily consist of cash and cash equivalents and short-term investments. The Company maintains its cash and cash equivalents in accounts at multiple accredited financial institutions and short-term investments in custodian accounts, in excess of federally insured limits. Additionally, the Company has established guidelines regarding investment instruments and their maturities, which are designed to maintain preservation of principal and liquidity. The Company does not believe that it is subject to unusual risk beyond the normal credit risk associated with commercial banking relationships.

The Company is exposed to concentration risk as it relates to its customers. The following table summarizes the percentages of total sales and accounts receivable, net for customers who accounted for 10% or more of the respective amounts for the periods presented:


	Net Sales		Net Sales		Accounts Receivable, net
	Three Months Ended September 30,		Nine Months Ended September 30,		September 30,	December 31,
	2025	2024	2025	2024	2025	2024
Distributor A	13.8%	15.5%	14.0%	13.6%	11.1%	13.7%
Distributor B	12.7%	18.0%	13.1%	18.6%	*	13.3%
Distributor C	*	13.2%	12.6%	12.0%	*	10.6%
Distributor D	14.1%	15.3%	12.1%	16.7%	*	13.0%
Distributor E	*	*	*	*	19.8%	14.8%
Distributor F	*	*	*	*	20.8%	*
Distributor G	11.7%	*	12.1%	*	*	*

* Amount related to the respective customer represented less than 10% for the period presented.

Deferred Offering Costs

The Company capitalizes as deferred offering costs all direct and incremental legal, professional, accounting and other third-party fees incurred in connection with the Company’s IPO. As of September 30, 2025, the Company did not have a balance in deferred offering costs. As of December 31, 2024, the Company had $5.1 million in deferred offering costs, of which $0.9 million were in accrued expenses and other current liabilities. The deferred offering costs were offset against the IPO proceeds upon the closing the IPO in January 2025 (see Note 1).

Fair Value Measurements

Certain assets and liabilities are carried at fair value under GAAP. The Company performs fair value measurements in accordance with ASC 820, Fair Value Measurement. ASC 820 defines fair value as the price received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at their fair values, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the assets or liabilities, such as inherent risk, transfer restrictions and risk of nonperformance. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:


	Level 1 —	Quoted prices in active markets for identical assets or liabilities.

	Level 2 —	Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

	Level 3 —	Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies, and similar techniques.

The Company’s cash equivalents, short-term and long-term investments and restricted cash are carried at fair value, determined according to the fair value hierarchy described above (see Note 4). The carrying value and estimated fair value of certain of the Company’s common stock and preferred stock warrants was determined based on the intrinsic value of the warrants immediately prior to their conversion (see Note 4). The fair values of the Company’s accounts receivables, accounts payable and accrued expenses approximate their carrying values due to the short-term nature of these assets and liabilities.

Leases

In accordance with ASC 842, Leases, leases include all agreements in which the Company obtains control of an identified asset. A lease liability is recognized at commencement date based on the present value of the lease payments over the lease term. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; otherwise, the Company estimates the incremental borrowing rate to discount the lease payments based on information available at lease commencement (see Note 16).

The Company’s leases have initial lease terms of approximately one to seven years, with some including options to extend for up to five additional years. If a lease includes options to extend the lease term, the Company only includes the periods it is reasonably certain to exercise as of the lease commencement date. The decision to exercise lease renewal options is at the Company’s sole discretion. Variable lease costs, including maintenance and utilities, real estate taxes, and insurance are expensed as incurred and excluded from the measurement of the lease liability. Lease agreements that include lease and non-lease components are accounted for as a single lease component. Leases with an initial term of 12 months or less are expensed and not recorded on the balance sheet. The Company’s leases provide for fixed rental payments with annual rent escalations. The Company does not have any leases that are classified as financing leases.

Classification and Accretion of Convertible Preferred Stock

Prior to the completion of the Company’s initial public offering (“IPO”) completed in January 2025, the Company’s convertible preferred stock was classified outside of stockholders’ equity (deficit) on the balance sheets because the holders of such shares had liquidation rights in the event of a deemed liquidation that, in certain situations, was not solely within the control of the Company and required the redemption of the then-outstanding convertible preferred stock. The Company’s Series A Preferred Stock, the Series A-2 Preferred Stock, the Series B Preferred Stock, the Series B-2 Preferred Stock, the Series C Preferred Stock, the Series D Preferred Stock and the Series E Preferred Stock were not redeemable, except in the event of a deemed liquidation (see Note 11). Since convertible preferred stock was neither currently redeemable, nor probable of becoming redeemable, the carrying values of the convertible preferred stock were not being accreted to their redemption values. Following the completion of the IPO, all outstanding shares of convertible preferred stock automatically converted into shares of common stock, and therefore, this presentation and related accounting treatment no longer apply as of September 30, 2025.

The issuance costs incurred in connection with equity financings prior to the IPO were netted against the gross proceeds received from the equity financings.

Warrant Liabilities

Preferred Stock Warrants

The Company has classified warrants to purchase its Series C Preferred Stock as a liability on the balance sheets as these warrants are freestanding financial instruments that are exercisable for preferred stock that is contingently redeemable outside of the Company’s control (see Note 4).

In January 2025, in connection with the IPO, the Series C Preferred Stock warrants were exercised and net settled for shares of the Company’s common stock, which resulted in the issuance of 697,055 shares of common stock. The Company remeasured the fair value of the Series C Preferred Stock warrants immediately prior to their exercise.

Common Stock Warrants

The Company has classified warrants to purchase Class B common stock issued in connection with its Series D Preferred Stock financing as a liability on the balance sheets as these warrants are freestanding financial instruments that are not indexed to the Company’s common stock (see Note 4).

Pursuant to the terms of the warrants, on conversion of the class of convertible preferred stock and common stock underlying the warrant into common stock in connection with the Company’s IPO, the warrants automatically became exercisable for shares of

the Company’s common stock, were no longer redeemable or subject to remeasurement, and were reclassified as a component of equity.

Segment Information

Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s Chief Executive Officer is the Company’s CODM. The CODM reviews financial information presented on a total company basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. As such, the Company has determined that it operates as one operating segment. The measure of segment assets is presented as total assets in the balance sheets. The Company has concluded that gross profit and net income (loss) are the primary measures of segment profit or loss used by the CODM. The CODM assesses performance for the Company, monitors budget versus actual results, and determines how to allocate resources based on net income (loss) as reported in the statements of operations and comprehensive loss. There are no other expense categories regularly provided to the CODM that are not already included in the primary financial statements herein. During the nine months ended September 30, 2025 and 2024, the Company did not generate any international revenues and as of September 30, 2025 and December 31, 2024, the Company did not have any assets located outside of the United States.

Revenue Recognition

Net Sales

Revenue is generated primarily from sales of the iLet and its associated single-use products, such as cartridges for insulin storage and delivery, and infusion sets that connect the iLet to a user’s body. These products are distributed through a network of distributors and pharmacies, which then resell the products to insulin-requiring PWD. In accordance with ASC 606, Revenue from Contracts with Customers, the Company recognizes revenue when it transfers control of the promised goods or services to its distributor and pharmacy customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services, net of estimated returns and estimated variable consideration adjustments, including rebates, patient assistance and chargebacks.

Revenue Recognition for Arrangements with Multiple Performance Obligations

The Company considers the individual deliverables in its contracts with customers as separate performance obligations. The iLet and single-use products that are used together with the iLet are deemed performance obligations that are satisfied at a point in time when the customer obtains control of the promised good, which typically is upon shipment. The Company has determined that the user’s ability to access the mobile application and receive unspecified software updates through the mobile application are considered distinct performance obligations that are satisfied over time, as access and support are provided throughout the typical four-year warranty period of the iLet. Accordingly, revenue related to access the mobile application and unspecified software updates are deferred and recognized ratably over a four-year period. Given that access to the mobile application and unspecified software updates follow the same pattern of transfer to the customer and are provided over the same four-year period, the Company recognizes revenue for these performance obligations as if they were a single performance obligation.

The transaction price is determined based on the consideration expected to be received, based on the stated value in contractual arrangements. The Company allocates the consideration to the individual performance obligations based on the estimated relative standalone selling price of the performance obligations and recognizes the consideration based on when the performance obligation is satisfied, considering whether or not this occurs at a point in time or over time. Where there is no observable standalone selling price, the Company estimates standalone selling price by applying the expected cost plus a margin approach.

Variable Consideration

The amount of variable consideration that is included in the transaction price is included in revenue only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. The Company estimates reductions to revenues for rebates paid to pharmacy benefit managers. Rebates are based on contractual arrangements, which may vary by customer. The estimates are based on products sold, historical experience, trends, specific known market events and, as available, channel inventory data. Provisions for rebates and patient assistance are accounted for as a reduction of sales when revenue is recognized and are included within accrued expenses and other current liabilities within the balance sheets. Provisions for chargebacks are accounted for as a reduction of sales when revenue is recognized and are included as a reduction of accounts receivable, net within the balance sheets, as the right of offset exists. If the actual amounts of consideration that the Company

receives differ from estimates, the Company adjusts these estimates, which affects reported revenue, in the period that such variances become known or at the end of each reporting period.

Sales Returns

The Company offers a 90-day right of return from the date of shipment of its iLet from one of its authorized distributors, provided a physician’s confirmation of the good faith medical reason for the return is received. Estimated allowances for sales returns are based on historical returned quantities as compared to iLet shipments in those same periods of return, adjusted for known or expected changes in the marketplace when appropriate. Actual product returns have not differed materially from estimated amounts recorded in the accompanying financial statements.

Contract Costs

The Company recognizes an asset for incremental costs of obtaining a contract with a customer if it expects to recover those costs. The Company has elected the practical expedient to expense the costs as they are incurred, within sales and marketing expenses, since the amortization period is less than one year.

Product Warranty

The Company provides a four-year warranty on the iLet to end-users to replace any iLets that do not function as intended in accordance with the product specifications. Estimated warranty costs are recorded at the time of shipment. Warranty costs are estimated primarily based on the current expected product replacement cost and expected replacement rates which utilize management’s understanding of the hardware and factor in a patient attrition rate to reserve for only the active patient population using the pump. Although the Company’s history of product sales is limited, management also utilizes historical warranty cost data to reevaluate the estimated warranty obligation on a regular basis. Product returns and warranty replacements to date have been consistent with amounts accrued. Warranty expense is recorded as a component of cost of sales in the statements of operations and comprehensive loss.

Reconciliations of the changes in the Company’s product warranty liability, which is included in accrued expenses and other current liabilities and other long-term liabilities, were as follows:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
	(in thousands)						(in thousands)
Product warranty liability at beginning of period	$	2,062		$	248		$	657		$	22
Warranty expense		1,046			587			3,406			1,114
Warranty fulfillment		(553	)		(403	)		(1,508	)		(704	)
Product warranty liability at end of period	$	2,555		$	432		$	2,555		$	432

Net Loss Per Share

The holders of Class A common stock, Class B common stock and Class C common stock participate in earnings and losses equally on a per share basis, as if all shares of common stock were of a single class. Therefore, undistributed earnings and losses are allocated on a proportionate basis and the resulting loss per share will be the same for Class A common stock, Class B common stock, and Class C common stock on an individual or combined basis.

All shares of Class A common stock, Class B common stock and Class C common stock converted into an equal number of shares of common stock upon the completion of the closing of the IPO (see Note 1).

The Company’s liability classified warrants to purchase Series C preferred stock and Class B common stock are exercisable to the holder at an exercise price of $0.02. The Company does not consider the exercise price of these warrants to be for a nominal amount of consideration as in addition to the exercise price received from the holder, the consideration received as a result of the exercise of a warrant also includes the value of the extinguishment of the associated warrant liabilities. Therefore, the Company does not consider the warrants to be contingently issuable shares and does not include the warrants in the calculation of weighted-average common shares outstanding in the computation of basic loss per share.

The Company’s convertible preferred stock contractually entitles the holders of such shares to participate in any dividends declared. Therefore, convertible preferred shares are considered to be participating securities. The Company’s warrants to purchase shares of Series C Preferred Stock and Class B common stock contractually require the Board to provide advanced notice to warrant

holders in the event that a dividend will be declared. As a result, warrant holders would be economically compelled to exercise their warrants prior to the declaration of the dividend. Therefore, the warrants are considered to be participating securities. During periods in which the Company reports net income, the Company allocates a proportional share of net income to participating securities determined by dividing the total weighted-average participating securities by the sum of the total weighted-average common shares and participating securities (the “two-class method”). Participating securities have the effect of diluting both basic and diluted earnings per share during periods of income. During periods in which the Company reports a net loss, the Company allocates no loss to participating securities because they have no contractual obligation to share in losses.

Recently Adopted Accounting Pronouncements

In August 2020, the FASB issued ASU No. 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), which simplifies the accounting for convertible instruments and equity-linked financial instruments in addition to amending the EPS guidance in ASC 260 to improve the consistency of the diluted EPS calculation. The standard addresses issues identified as a result of the complexity associated with applying U.S. GAAP for certain financial instruments with characteristics of liabilities and equity. The standard eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The standard is effective for public companies, excluding entities eligible to be smaller reporting companies, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the standard is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The Company adopted ASU 2020-06 on January 1, 2024, using the modified retrospective method for its convertible preferred instruments. The cumulative effect of the adoption of ASU 2020-06 resulted in an adjustment to accumulated deficit as of January 1, 2024 of $12.3 million with a corresponding adjustment to additional paid in capital. In the period of adoption there was no impact in the net loss per share.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09). ASU 2023-09 is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in this ASU address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The amendments in the ASU are effective for fiscal years beginning after December 15, 2024, on a prospective basis. Early adoption is permitted. The Company adopted ASU 2023-09 during the three months March 31, 2025 and the adoption of this guidance did not have a material impact on the Company’s financial statements.

Recently Issued Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (ASU 2024-03), and in January 2025, the FASB issued ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date ("ASU 2025-01"). ASU 2024-03 requires additional disclosure of the nature of expenses included in the income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income statement. ASU 2024-03, as clarified by ASU 2025-01, is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact that this guidance may have on its financial statements.

In July 2025, FASB issued ASU 2025-05, Credit Losses (Topic 326) – Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient to assume that the current conditions as of the balance sheet date will remain unchanged for the remaining life of the asset when developing a reasonable and supportable forecast as part of estimating expected credit losses on current accounts receivable and current contract assets arising from transactions accounted for under ASC 606. The amendments are effective for fiscal years beginning after December 15, 2025, with early adoption permitted. The Company is currently evaluating the impact that this guidance may have on its financial statements.

Revenue

The Company disaggregates net sales by product category and reimbursement channel, which the Company believes provides a meaningful depiction of how the nature, timing and uncertainty of net sales are affected by economic factors.

During the nine months ended September 30, 2025 and 2024, the Company’s revenues were predominantly generated from sales of the iLet. The iLet requires the use of separately purchased single-use products which include cartridges for storing and delivering insulin, and infusion sets that connect the iLet to the user’s body. These single-use products generate recurring revenue for the Company, as these are typically replaced by the end-user every 2-3 days or as directed by a healthcare provider.

The Company’s customers are distributors and pharmacies who sell these products to insulin-requiring PWD, through the durable medical equipment (“DME”) and the pharmacy benefit plan (“PBP”) reimbursement channels, which entail differing payment outlays. For the three and nine months ended September 30, 2025 and 2024, the majority of the Company’s sales were through the DME channel.

The following table summarizes the Company’s disaggregated revenues:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
	(in thousands)				(in thousands)
DME channel
iLet(1)	$	14,175	$	11,042	$	37,217	$	33,105
Single-use products		6,840		3,420		16,269		7,740
Total DME channel		21,015		14,462		53,486		40,845

PBP channel
iLet(1)		148		1,228		859		1,748
Single-use products		6,090		1,015		13,785		2,091
Total PBP channel		6,238		2,243		14,644		3,839
Total net sales	$	27,253	$	16,705	$	68,130	$	44,684

(1)

iLet includes the over-time recognition related to software updates and mobile app access.

The Company recognizes revenue at a point in time once control has transferred to the customer, as well as over time for performance obligation to provide ongoing services such as unspecified software updates. Revenue recognized during the nine months ended September 30, 2025 that was included in the deferred revenue balance as of December 31, 2024 was approximately $0.6 million.

At September 30, 2025 and December 31, 2024 , $4.3 million and $2.8 million, respectively, was allocated to performance obligations that were not yet satisfied and is recorded in deferred revenue on the balance sheet. At September 30, 2025 and December 31, 2024, of the performance obligations not yet satisfied, $1.3 million and $0.9 million for each period, is expected to be recognized as revenue in the next 12 months, with the remainder expected to be recognized over the next 36 months. At September 30, 2025 and December 31, 2024, the $4.3 million and $2.8 million, respectively, relate to amounts deferred associated with the unspecified software updates promised to users and the users' access to the mobile application.

Financial Instruments and Fair Value Measurements

The following tables present the Company’s fair value hierarchy for its assets and liabilities that are measured at fair value on a recurring basis:


	Fair Value Measurements at
	September 30, 2025
	Level 1		Level 2		Level 3		Total
Assets	(in thousands)
Cash equivalents:
Money market fund	$	29,726	$	—	$	—	$	29,726
Restricted cash:
Money market fund		100		—		—		100
Short-term investments
U.S. Treasury bills		190,202		—		—		190,202
Long-term investments
U.S. Treasury notes		45,328		—		—		45,328
Total assets	$	265,356	$	—	$	—	$	265,356


	Fair Value Measurements at
	December 31, 2024
	Level 1		Level 2		Level 3		Total
Assets	(in thousands)
Cash equivalents:
Money market fund	$	27,107	$	—	$	—	$	27,107
Restricted cash:
Money market fund		100		—		—		100
Short-term investments
U.S. Treasury bills		73,143		—		—		73,143
Total assets	$	100,350	$	—	$	—	$	100,350
Liabilities
Series C warrant liabilities	$	—	$	—	$	9,935	$	9,935
Common B warrant liabilities		—		—		34,963		34,963
Total liabilities	$	—	$	—	$	44,898	$	44,898

Money market funds and U.S. Treasury bills were valued by the Company based on quoted market prices, which represent a Level 1 measurement within the fair value hierarchy. There were no changes to the valuation methods during the nine months ended September 30, 2025 and 2024. The Company evaluates transfers between levels at the end of each reporting period. There were no transfers between Level 1 or Level 2 during the nine months ended September 30, 2025 and 2024.

Warrant Liabilities

In connection with the August 2023 Series D Preferred Stock financing, the Company granted warrants to purchase up to 4,302,009 shares of Class B common stock equal to 70% of the shares of Series D Preferred Stock purchased by the purchaser at an exercise price of $0.02 per share and expire on the earliest to occur of (i) August 28, 2033, (ii) immediately prior to the sale of the Company or a transaction that qualifies as a Deemed Liquidation Event (as defined in the Company’s certificate of incorporation) or (iii) immediately prior to the consummation of a qualifying initial public offering or a SPAC Transaction (as defined in the Company’s certificate of incorporation). The Common B warrants were initially recorded as a liability as they represent freestanding financial instruments that were not indexed to the Company’s common stock and were required to be remeasured to fair value at each reporting date. Additionally, the Common B warrants did not meet the definition of a derivative.

In connection with the February 2022 Series C Preferred Stock financing, the Company granted warrants to purchase up to 520,490 shares of Series C Preferred Stock at a price per share equal to $0.02 and with a term ending on the earliest to occur of (i) February 16, 2032, (ii) immediately prior to the sale of the Company or a transaction that qualifies as a Deemed Liquidation Event or (iii) immediately prior to the consummation of a qualifying initial public offering or a SPAC Transaction. As the warrants were exercisable for preferred stock that was contingently redeemable outside of the Company’s control, the warrants were initially recorded as a liability and were required to be remeasured to fair value at each reporting date.

As there are significant inputs that were not observable in the market, the warrant valuations represent a Level 3 measurement within the fair value hierarchy. The Company’s valuations of the preferred stock and Common B warrants utilized the Black-Scholes option pricing model, which incorporated assumptions and estimates to value the preferred stock and Common B warrant.

The quantitative elements associated with the Company’s Level 3 inputs impacting the fair value measurement of the preferred stock and common stock warrant liabilities included the fair value per share of the underlying stock, expected volatility of the price of the underlying stock, the remaining contractual term of the warrant, risk-free interest rate, and expected dividend yield. The most significant assumption in the Black-Scholes option pricing model impacting the fair value of the preferred stock and common stock warrant liabilities was the fair value of the Company’s Series C Preferred Stock and Class B common stock as of each remeasurement date. The Company determined the fair value per share of the underlying preferred stock by taking into consideration its most recent sales of its convertible preferred stock. Further, the Board valued the Company’s Class B common stock taking into consideration the most recent sales of the Company’s preferred stock, results obtained from third-party valuations and additional factors the Company deemed relevant and which may have changed since the date of the most recent valuation through the effective date of the warrant. The Company historically had been a private company and lacked company-specific historical and implied volatility information of its stock. Therefore, it estimated the expected stock volatility based on the historical volatility of publicly traded peer companies for a term equal to the remaining contractual term of the warrant. The risk-free interest rate was determined by reference to the U.S. Treasury yield curve for time periods approximately equal to the remaining contractual term of the warrant. The Company had estimated a 0% dividend yield based on the expected dividend yield and the fact that the Company had never paid or declared dividends.

The following table presents the assumptions used in the Black-Scholes option pricing model to determine the fair value of the preferred stock warrant liabilities as of December 31, 2024:


	December 31, 2024
Fair value of Series C Preferred Stock	$	19.11
Strike price	$	0.02
Risk-free interest rate		4.39	%
Expected term (in years)		0.38
Expected volatility		65.00	%
Expected dividend yield		0	%

The following table presents the assumptions used in the Black-Scholes option pricing model to determine the fair value of the common stock warrant liabilities as of December 31, 2024:


	December 31, 2024
Fair value of Class B common stock	$	13.08
Strike price	$	0.02
Risk-free interest rate		4.53	%
Expected term (in years)		8.70
Expected volatility		75.77	%
Expected dividend yield		0	%

The Company recognizes changes in the fair value of the warrant liabilities as a component of other income (expense) in its statements of operations and comprehensive loss. The Company recognized changes in the fair value of the warrant liabilities through December 31 2024, and up until immediately prior to the net exercise of the warrants, which took place concurrently with the IPO on January 31, 2025 (see Note 1).

Upon the closing of the IPO, the Company revalued the convertible preferred stock warrants and common stock warrants and reclassified the liability to stockholders’ equity (deficit). As the warrants were net exercised at the IPO, they are no longer outstanding.

A reconciliation of the Level 3 warrant liabilities is as follows:


	Series C Warrant Liability
	(in thousands)
Balance at December 31, 2024	$	9,935
Change in fair value		1,929
Net exercise and conversion into common stock upon closing of IPO		(11,864	)
Balance at September 30, 2025	$	—


	Common B Warrant Liability
	(in thousands)
Balance at December 31, 2024	$	34,963
Change in fair value		10,521
Net exercise and conversion into common stock upon closing of IPO		(45,484	)
Balance at September 30, 2025	$	—

Short-Term and Long-Term Investments

The following represents a summary of the estimated fair value of short-term and long-term investments at September 30, 2025 and December 31, 2024:


	At September 30, 2025
	Amortized		Unrealized		Unrealized		Estimated
	Cost		Gains		Losses		Fair Value
	(in thousands)
Short-term investments
U.S. Treasury bills	$	189,875	$	327	$	—	$	190,202
Long-term investments
U.S. Treasury notes		45,301		27		—		45,328
Total	$	235,176	$	354	$	—	$	235,530


	At December 31, 2024
	Amortized		Unrealized		Unrealized		Estimated
	Cost		Gains		Losses		Fair Value
	(in thousands)
Short-term investments
U.S. Treasury bills	$	73,078	$	65	$	—	$	73,143
Total	$	73,078	$	65	$	—	$	73,143

The following represents the contractual maturities of available-for-sale debt securities as of September 30, 2025:


	At September 30, 2025
	Years to Maturity
	Within One		One to Two		More Than Two		Estimated
	Year		Years		Years		Fair Value
	(in thousands)
U.S. Treasury bills	$	190,202	$	45,328	$	—	$	235,530
Total	$	190,202	$	45,328	$	—	$	235,530

Accounts Receivable, Net

Accounts receivable, net consisted of the following:


	September 30, 2025			December 31, 2024
	(in thousands)
Accounts receivable	$	11,679		$	12,112
Less: allowance for credit losses		(140	)		(116	)
Accounts receivable, net	$	11,539		$	11,996

The following table provides a reconciliation of the changes in the allowance for estimated credit losses for the nine months ended September 30, 2025 and 2024:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
	(in thousands)				(in thousands)
Balance at beginning of period	$	116	$	90	$	116	$	46
Provision for expected credit losses		24		—		24		44
Balance at end of period	$	140	$	90	$	140	$	90

Inventories, Net

Inventories consisted of the following:


	September 30, 2025		December 31, 2024
	(in thousands)
Raw materials	$	9,210	$	6,737
Work in process		1,229		637
Finished goods		9,934		5,946
Inventories, net	$	20,373	$	13,320

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:


	September 30, 2025		December 31, 2024
	(in thousands)
Prepaid expenses	$	6,447	$	2,982
Interest receivable		2,715		233
Other current assets		265		817
Prepaid expenses and other current assets	$	9,427	$	4,032

Property and Equipment, Net

Property and equipment, net consisted of the following:


	September 30, 2025			December 31, 2024
	(in thousands)
Manufacturing equipment	$	8,242		$	6,252
Leasehold improvements		830			810
Furniture		939			924
Computer equipment		308			308
Construction in progress		3,354			1,735
Total cost		13,673			10,029
Less: Accumulated depreciation and amortization		(6,288	)		(5,253	)
Property and equipment, net	$	7,385		$	4,776

Depreciation expense was $1.0 million and $0.9 million for the nine months ended September 30, 2025 and 2024, respectively.

10.

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:


	September 30, 2025		December 31, 2024
	(in thousands)
Employee compensation and benefits	$	11,009	$	9,942
Professional fees		1,532		2,119
Sales returns, rebates and patient assistance		1,498		1,502
Warranty		1,350		657
Inventory in transit		942		530
Clinical trial-related expenses		69		—
Royalties		836		741
Other		369		337
Accrued expenses and other current liabilities	$	17,605	$	15,828

11.

Convertible Preferred Stock and Warrants

The Company previously issued Series A Preferred Stock, Series A-2 Preferred Stock, Series B Preferred Stock, Series B-2 Preferred Stock, Series C Preferred Stock and Series D Preferred Stock, and Series E Preferred Stock (collectively, the “Preferred Stock”).

Upon issuance of each class of Preferred Stock, the Company assessed the embedded conversion and liquidation features of the securities and determined that such features did not require the Company to separately account for these features. The Company also concluded that no beneficial conversion feature existed on the issuance date of each class of Preferred Stock but did identify contingent beneficial conversion features on each class of Preferred Stock related to the down round protective provisions. Although down round protection was triggered with the down round issuances of both the Series C and Series D Preferred Stock, the contingent beneficial conversion features were not triggered and therefore did not require recognition by the Company. Upon the adoption of ASU 2020-06, the Company recorded an adjustment to reflect the cumulative effect of the down rounds triggered with the issuance of the Series C and Series D Preferred Stock, resulting in a $12.3 million adjustment to retained earnings. In November 2024, the Company issued and sold 4,352,393 shares of Series E Preferred Stock, at a price of $13.79 per share, for gross proceeds of $60.0 million. The Company incurred issuance costs in connection with this transaction of $0.3 million. The Series E Preferred Stock has an Original Issuance Price and Conversion Price (each as defined in the Company’s certificate of incorporation) per share of $13.79.

From August to September 2023, the Company issued and sold 6,145,740 shares of Series D Preferred Stock, at a price of $16.55 per share, for gross proceeds of $101.7 million. The Company incurred issuance costs in connection with this transaction of $0.7

million. Each purchaser of the Series D Preferred Stock also received warrants to purchase up to a certain number of shares of Class B common stock equal to 70% of the shares of Series D Preferred Stock purchased by the purchaser. The Common B warrants are exercisable at any time, at an exercise price of $0.02 per share (subject to appropriate adjustment in the event of any stock split, stock dividend, combination or other similar recapitalization) and expire on the earliest to occur of (i) August 28, 2033, (ii) immediately prior to the sale of the Company or a transaction that qualifies as a Deemed Liquidation Event as described below or (iii) immediately prior to the consummation of a qualifying initial public offering or a SPAC Transaction. The Series D Preferred Stock has an Original Issue Price and Conversion Price (each as defined in the Company’s certificate of incorporation) per share of $16.55.

As part of the Series E Preferred Stock issuance, the Company increased the number of shares of Class B common stock authorized for issuance from 65,000,000 shares to 70,000,000 shares and increased the number of shares of preferred stock authorized for issuance from 26,434,390 shares to 34,966,547 shares, of which 8,574,227 shares were designated as Series E Preferred Stock.

At the balance sheet dates, Preferred Stock consisted of the following:


	December 31, 2024
	Preferred Stock Authorized		Preferred Stock Issued and Outstanding		Carrying Value (in thousands)		Liquidation Preference (in thousands)		Common Stock Issuable Upon Conversion
Series A Preferred Stock		500,000		253,807	$	6,589	$	5,000		317,040
Series A-2 Preferred Stock		500,000		253,807		6,626		5,000		317,040
Series B Preferred Stock		4,197,930		2,130,910		61,606		63,053		3,010,683
Series B-2 Preferred Stock		3,960,000		2,010,144		63,228		63,360		2,892,318
Series C Preferred Stock		5,127,250		2,082,153		44,985		57,049		2,791,789
Series D Preferred Stock		12,107,140		6,145,740		78,679		101,700		6,145,740
Series E Preferred Stock		8,574,227		4,352,393		59,660		60,000		4,352,393
		34,966,547		17,228,954	$	321,373	$	355,162		19,827,003

On January 31, 2025 upon the closing of the IPO, all 17,228,954 outstanding shares of the Company's convertible preferred stock were converted into 19,827,003 shares of common stock, and the carrying value of $321.4 million was reclassified to stockholders’ equity (deficit). All 3,196,025 outstanding warrants to purchase shares of Series C Preferred Stock and Class B Common Stock were converted into 3,369,473 shares of common stock, and the carrying value of $57.3 million was reclassified to stockholders’ equity (deficit).

Subsequent to the closing of the IPO, there were no shares of convertible preferred stock outstanding.

12.

Stock-Based Compensation

2016 Stock Incentive Plan

The Company’s 2016 Stock Incentive Plan, as amended (the “2016 Plan”), provides for the Company to grant stock options and restricted stock awards to employees, officers, directors and consultants of the Company. The 2016 Plan is administered by the Board or, at the discretion of the Board, by a committee of the Board. The exercise prices, vesting and other restrictions are determined at the discretion of the Board, or its committee if so delegated.

The Company grants equity classified stock options for the purchase of common stock. Stock options granted under the 2016 Plan with service-based vesting conditions typically vest over four years based on continuous service and expire after ten years. The total number of shares of common stock that may be issued under the 2016 Plan was 5,061,058 shares as of September 30, 2025. Shares that are expired, terminated, surrendered or canceled without having been fully exercised will be available for future grant under the 2016 Plan.

The exercise price for stock options granted may not be less than the fair value of common stock as determined by the Board as of the date of grant. The Board values the Company’s common stock taking into consideration the most recent sales of the Company’s preferred stock, results obtained from contemporaneous third-party valuations and additional factors the Company deems relevant and which may have changed since the date of the most recent valuation through the date of grant.

2025 Equity Incentive Plan

On January 21, 2025, the Company’s board of directors adopted and the Company’s stockholders approved the 2025 Equity Incentive Plan (the “2025 Plan”), which became effective on the date immediately preceding the date on which the Company’s registration statement was declared effective by the U.S. Securities and Exchange Commission (“SEC”). The 2025 Plan replaced the 2016 plan, as the Company’s board of directors has determined to not make additional grants under the 2016 Plan following the closing of the IPO. However, the 2016 Plan will continue to govern outstanding equity awards granted under the 2016 Plan. The 2025

Plan allows the Company to grant incentive stock options, nonstatutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards (“RSUs”), performance awards and other awards. The number of shares initially available for issuance under awards granted pursuant to the 2025 Plan is 12,016,744.

Stock Options

The following table presents, on a weighted-average basis, the assumptions used in the Black-Scholes option pricing model to determine the grant-date fair value of stock options granted:


	Nine Months Ended September 30,
	2025			2024
Fair value of common stock	$	14.38		$	10.95
Risk-free interest rate		4.25	%		4.08	%
Expected term (in years)		5.97			6.02
Expected volatility		100.01	%		86.57	%
Expected dividend yield		0	%		0	%

The following table summarizes stock option activity for the nine months ended September 30, 2025:


						Weighted-
				Weighted- Average		Average Remaining		Aggregate
	Number of Options			Exercise Price		Contractual Term		Intrinsic Value
						(in years)		(in thousands)
Outstanding at December 31, 2024		5,667,555		$	6.98		7.6	$	22,929
Granted		1,731,539		$	17.85
Exercised		(462,107	)	$	6.04
Forfeited or cancelled		(156,340	)	$	9.95
Expired		(15,396	)	$	7.09
Outstanding at September 30, 2025		6,765,251		$	9.76		7.5	$	68,553
Vested and expected to vest at September 30, 2025		6,765,251		$	9.76		7.5	$	68,553
Options exercisable at September 30, 2025		3,536,423		$	7.74		6.6	$	42,854

The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the Company’s common stock. The total intrinsic value of options exercised during the nine months ended September 30, 2025 and 2024 were $6.3 million and not significant, respectively.

The weighted-average grant-date fair value of stock options granted during the nine months ended September 30, 2025 and 2024 was $6.99 per share and $6.84 per share, respectively. The total fair value of shares vested during the nine months ended September 30, 2025 and 2024 was $4.1 million and $1.8 million, respectively.

The following table summarizes the non-vested stock options that were outstanding as of September 30, 2025 and December 31, 2024:


			Weighted- Average
	Number of Options		Exercise Price

Non-vested options, September 30, 2025		3,228,828	$	11.97
Non-vested options, December 31, 2024		2,797,887	$	6.86

Restricted Stock Units

The following table summarizes RSU activity under the Company's incentive plans for the nine months ended September 30, 2025:


				Weighted- Average
	Number of Shares			Grant Date Fair Value

RSUs outstanding, December 31, 2024		—		$	—
Granted		1,056,299		$	14.69
Vested		(190,222	)	$	14.59
Cancelled		(41,306	)	$	14.52
RSUs outstanding, September 30, 2025		824,771		$	14.72

Stock-Based Compensation Expense

Stock-based compensation expense by type and financial statement line is included in the Company’s statements of operations and comprehensive loss as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
	(in thousands)				(in thousands)
Options	$	3,116	$	1,976	$	8,721	$	4,832
RSUs		1,362		—		3,360		—
Total stock-based compensation expense	$	4,478	$	1,976	$	12,081	$	4,832


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
	(in thousands)				(in thousands)
Cost of sales	$	140	$	69	$	399	$	201
Research and development		893		294		2,319		844
Sales and marketing		1,273		472		3,388		1,150
General and administrative		2,172		1,141		5,975		2,637
Total stock-based compensation expense	$	4,478	$	1,976	$	12,081	$	4,832

As of September 30, 2025, total unrecognized stock-based compensation expense related to the unvested options was $29.0 million, which is expected to be recognized over a weighted-average period of 2.7 years. As of September 30, 2025, total unrecognized stock-based compensation expense related to the unvested RSUs was $11.6 million, which is expected to be recognized over a weighted-average period of 2.4 years.

Employee Stock Purchase Plan

The Company’s Employee Stock Purchase Plan (“ESPP”) was approved by the Board in January 2025. The ESPP enables eligible employees to purchase shares of the Company’s common stock using their after-tax payroll deductions, subject to certain conditions. The ESPP is intended to qualify as an “employee stock purchase plan” within the meaning of Section 423 of the Code. Eligible employees may contribute, through payroll deductions, up to 15% of their earnings for the purchase of common stock under the ESPP. The purchase price of common stock under the ESPP is the lesser of: (a) 85% of the fair market value of a share of the Company’s common stock on the first date of an offering or (b) 85% of the fair market value of a share of the Company’s common stock on the date of purchase, limited to the maximum number of shares they may purchase on any single purchase date. Each offering under the ESPP has a six-month duration, beginning on January 1 and July 1 of each year, with purchases occurring on June 30 and December 31, respectively. The Company has not conducted any offerings under the ESPP as of September 30, 2025.

13.

Employee Benefit Plan

The Company maintains a 401(k) retirement plan (the “401(k) Plan”) for the benefit of eligible employees. Each participant may elect to contribute up to 100% of his or her compensation to the 401(k) Plan each year, subject to certain Internal Revenue Service

limitations. Under the terms of the Plan, the Company matches 100% of the first 6% of employee contributions. During the nine months ended September 30, 2025 and 2024, the Company contributed $2.2 million and $1.6 million, respectively, to the 401(k) Plan.

14.

Income Taxes

During the nine months ended September 30, 2025 and 2024, the Company did not record income tax benefits for the net operating losses (“NOLs”) incurred or for the research and development tax credits generated in each year, due to its uncertainty of realizing a benefit from those items. The Company does not have any foreign operations and therefore has no foreign income taxes.

The Company files income tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal and state jurisdictions, where applicable. As of September 30, 2025, there were no pending tax examinations and the Company currently is not under tax examination in any tax jurisdiction. The Company is open to future tax examination under statute by the IRS from 2021 to present and by most state tax authorities from 2020 to present. However, to the extent allowed by law, the taxing authorities may have the right to examine periods where NOLs and research and development credits were generated and carried forward, and make adjustments to the amount of the NOL and research credits carryforwards.

15.

Net Loss Per Share

Basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period, without consideration for potentially dilutive securities.

Diluted net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding, including all potentially dilutive common shares. The impact of all potentially dilutive shares which are anti-dilutive are excluded from the calculation of net loss per share. Potentially dilutive common stock equivalents are comprised of convertible preferred stock, calculated using the if-converted method, stock options to purchase common stock, RSUs, warrants to purchase Series C Preferred Stock and warrants to purchase Class B common stock, each calculated using the treasury stock method. Potentially dilutive securities not included in the calculation of diluted net loss per share, are as follows (in common stock equivalent shares):


	Nine Months Ended September 30,
	2025		2024
Convertible preferred stock (as converted into shares of common stock)		—		15,474,610
Stock options to purchase common stock		6,765,251		5,658,801
Warrants to purchase Series C convertible preferred stock		—		697,874
Warrants to purchase Class B common stock		—		2,675,535
RSUs		824,771		—
Total	$	7,590,022	$	24,506,820

The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
	(in thousands, except share and per share data)						(in thousands, except share and per share data)
Numerator:
Net loss attributable to common stockholders, basic and diluted	$	(14,209	)	$	(9,736	)	$	(59,734	)	$	(36,648	)
Denominator:
Weighted-average Class A common stock outstanding, diluted		—			2,939,086			—			2,956,500
Weighted-average Class B common stock outstanding, diluted		—			3,672,489			—			3,258,744
Weighted-average Class C common stock outstanding, diluted		—			48,918			—			48,918
Weighted-average common stock outstanding, basic and diluted		43,634,006			—			39,293,798			—

Net loss per share attributable to common stockholders, basic and diluted	$	(0.33	)	$	(1.46	)	$	(1.52	)	$	(5.86	)

16.

Leases

In May and November 2023, the Company entered into two separate lease agreements for a total of approximately 8,500 square feet of office space in San Diego, California. These leases will expire in January 2026 and February 2027, respectively. The larger of the two leases has one option to extend the lease term for an additional five years. The option to extend the lease term was not included in the right-of-use asset and lease liability as it was not reasonably certain of being exercised.

In September 2024, the Company amended its lease for office space and a manufacturing facility in Irvine, California to include two renewal options. The Company is reasonably certain it will exercise one of these options, extending the lease term from May 2027 to June 2032, which has been factored into the lease liability. As the amendment only resulted in the extension of the lease term, it did not meet the criteria to be accounted for as a separate contract. Accordingly, the right-of-use asset and lease liability were remeasured as of the effective date of the amendment, resulting in the recording of an additional right-of-use asset and lease liability of $3.8 million.

In October 2024, the Company entered into a lease agreement for an additional office suite to expand its office space in San Diego, California, which expires in March 2027. As a result, the Company recognized operating lease right-of-use asset and associated operating lease liability of $0.2 million on the balance sheets in 2024.

In September 2025, the Company's sublease expired and the Company entered into a separate sublease agreement in an additional office building in San Diego, California, which expires in August 2028. As a result, the Company recognized operating lease right-of-use asset and associated operating lease liability of $1.3 million on the balance sheet.

The components of lease expense were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
	(in thousands)				(in thousands)
Operating lease cost–fixed	$	409	$	319	$	1,242	$	964
Operating lease cost–variable		62		52		146		123
Short-term lease expense		20		4		28		13
Total lease expense	$	491	$	375	$	1,416	$	1,100

Cash paid for amounts included in the measurement of operating lease liabilities was $1.2 million and $0.8 million, respectively, for the nine months ended September 30, 2025 and 2024.

The weighted-average remaining lease term and discount rate were as follows:


	September 30, 2025
Weighted-average remaining lease term		5.39
Weighted-average discount rate		6.78	%

Future lease payments under non-cancellable leases as of September 30, 2025 were as follows:


(in thousands)
Year Ending December 31,
2025	$	508
2026		2,006
2027		1,418
2028		1,384
2029		1,092
Thereafter		2,919
Total future lease payments	$	9,327
Less: imputed interest		(1,640	)
Total lease liabilities	$	7,687

17.

Commitments and Contingencies

Legal Proceedings

From time to time, the Company may become involved in various legal proceedings, including those that may arise in the ordinary course of business. The Company believes there is no litigation pending that could have, individually, or in the aggregate, a material adverse effect on the results of its operations, financial condition or cash flows.

Xeris Agreements

In May 2024, the Company and Xeris Pharmaceuticals, Inc. (“Xeris”) entered into a collaboration and license agreement (“Collaboration and License Agreement”). Under the Collaboration and License Agreement, the Company received a worldwide, exclusive, royalty-bearing, sublicensable license under certain patent rights and know-how related to Xeris’ proprietary non-aqueous formulation technology and technology developed during the collaboration (“Xeris Technology”) to develop and commercialize glucagon products that are reformulated using the Xeris Technology and developed by Xeris under a development plan under the Collaboration and License Agreement for use in a pump product or system for glycemic control (“Glucagon Products”) in the field of chronic glycemic control in diabetes mellitus, excluding single-dose, one-time use form for treatment of severe hypoglycemia and diagnostic uses (“Field”). The Company also received a worldwide, exclusive, sublicensable manufacturing license under the Xeris Technology to manufacture Glucagon Products in the Field following a future manufacturing transfer date to be agreed with Xeris and subject to a separate commercial supply agreement.

In consideration for the licenses and other rights granted to the Company under the Collaboration and License Agreement, the Company paid Xeris a one-time payment of $0.5 million, which was included as a component of research and development expenses in the Company’s unaudited condensed statements of operations and comprehensive loss and the Company will pay Xeris a one-time milestone payment of $3.0 million upon its achievement of a certain development milestone event. The milestone was achieved and the payment of $3.0 million was made in November 2024. In addition, the Company is required to pay Xeris tiered royalties of low double-digit percentages based on net sales of Glucagon Products by the Company or its sublicensees, subject to certain customary reductions. The Company’s obligation to pay Xeris royalties will commence, on a Glucagon Product-by-Glucagon Product and country-by-country basis, on the first commercial sale of such Glucagon Product in such country and expire on the later of (i) ten years after the first commercial sale of such Glucagon Product in such applicable country; (ii) expiration of the last valid claim of a specified patent right licensed by Xeris covering such Glucagon Product in such country; and (iii) expiration or termination or regulatory exclusivity for such Glucagon Product in the applicable country.

In connection with entering into Phase 2 of the collaboration, during the twelve months ended December 31, 2024, under its clinical supply arrangement the Company ordered clinical material totaling $0.9 million for Phase 2 clinical trials and paid a deposit equal to 30% of the estimated clinical material costs, which was recognized in prepaid expense and other current assets in the unaudited condensed balance sheets. As of March 2025, the clinical materials had been delivered to the Company and the remaining payment of $0.6 million was made.

In connection with entering into Phase 3 of the collaboration, under its clinical supply arrangement, the Company will incur development and manufacturing costs, including ordering clinical materials and technical transfer, development, and testing of the product, totaling $5.1 million. As of September 30, 2025, the Company has completed payments totaling $2.5M. The payments were initially recognized in prepaid expense and other current assets in the unaudited condensed balance sheet and a portion of the payment was expensed as it related to the services completed.

18.

Related Party Transactions

Boston University

Edward Damiano, Ph.D., the former Co-Founder and Executive Chairman of the Company, was affiliated with Boston University (“BU”) during the execution and amendments of key agreements and currently serves as a volunteer research professor. Under the agreements, BU and Dr. Damiano are entitled to a specified percentage of royalties from net sales of licensed products.

In December 2015, the Company executed hardware and software license agreements with the Trustees of BU under which the Company received exclusive, non-transferable, sublicensable, worldwide, royalty-bearing licenses to certain patent rights and copyrights.

The Company incurred $2.2 million and $1.5 million of royalties expense under the Control Algorithm Agreement during each of the nine months ended September 30, 2025 and 2024, which was included as a component of cost of sales in the Company’s statements of operations and comprehensive loss.

Under the agreements, the Company is responsible for all costs related to the amendment, prosecution and maintenance of the licensed patent rights. During each of the nine months ended September 30, 2025 and 2024, the Company paid BU $0.1 million and $0.2 million, respectively, for reimbursed legal costs in connection with the agreements.

As of September 30, 2025 and December 31, 2024, $0.9 million and $0.7 million, respectively, were due to BU from the Company. As of January 30, 2025, Edward Damiano no longer held board or management positions and no longer has the ability to significantly influence the Company. Therefore, Edward Damiano and BU are not considered a related party under ASC 850, “Related Party Disclosures” as of September 30, 2025.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed financial statements and the related notes included elsewhere in this Quarterly Report, our financial statements and the related notes thereto for the fiscal year ended December 31, 2024 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations, which are contained in our2024 Annual Report filed with the SEC. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our planned investments in our research and development, sales and marketing and general administrative functions, and our current plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the section titled “Risk Factors,” our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. You should carefully read the section titled “Risk Factors” and “Special Note Regarding Forward-Looking Statements” in this Quarterly Report to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements.

Overview

We are a commercial-stage medical device company engaged in the design, development, and commercialization of innovative solutions to improve the health and quality of life of insulin-requiring people with diabetes (PWD) by utilizing advanced adaptive closed-loop algorithms to simplify and improve the treatment of their disease. Diabetes is a serious, chronic and often lifelong condition with no known cure that is characterized by extended periods of elevated levels of glucose in the bloodstream (hyperglycemia), resulting from the body’s inability to either produce or effectively utilize the hormone insulin. To treat their diabetes, PWD must undergo a rigorous regimen of daily insulin substitution as elevated levels of glucose in the blood over time can lead to serious and often life-threatening cardiovascular, metabolic and nervous system complications. Despite decades of innovation that have advanced the quality of care available, a significant unmet need remains as the vast majority of PWD still cannot manage their diabetes effectively. Our product, the iLet, is the first insulin delivery device cleared by the U.S. Food and Drug Administration (FDA) to utilize adaptive closed-loop algorithms to autonomously determine every insulin dose without requiring a user to count carbohydrate intake. We believe this marks a significant advancement over other insulin delivery technologies by offering a differentiated combination of improved glycemic control and a vastly simplified experience for users and caregivers.

The iLet was specifically designed to provide improvements in glycemic control relative to currently available treatment options, such as insulin pumps, including partially automated insulin delivery (AID) systems (also known as hybrid closed-loop systems), and multiple daily injections (MDI), also reducing the complexity and burden of achieving these improved results for PWD. It is enabled by adaptive closed-loop algorithms that continuously learn each person’s unique and everchanging insulin requirements and then autonomously delivers the correct insulin doses every five minutes throughout the day and night. Only the user’s body weight is required for device initialization and the autonomous determination of all insulin doses, unlike insulin pumps and hybrid closed-loop systems, which require a complex host of parameters to configure. The adaptive closed-loop algorithms are designed to remove the need to manually adjust insulin pump therapy settings and variables required by conventional pump therapy and hybrid closed-loop systems, which both require the user to determine the size and timing of both meal and correction insulin doses and to adjust basal insulin dosing. Therefore, we believe the adaptive closed-loop algorithms can make the iLet easier to initiate and use on a daily basis than other available AID systems.

Our initial commercialization efforts for the iLet are in type 1 diabetes (T1D), an indication for which we received FDA clearance in patients six and older in May 2023, in the United States. T1D is an autoimmune disorder that often develops during childhood or adolescence, but can occur at any age, and arises from a person’s immune system attacking and destroying the insulin-producing beta cells in the pancreas. According to the Centers for Disease Control and Prevention (CDC), there are approximately 1.8 million people with T1D currently in the United States, all of whom require daily insulin replacement to manage their disease. We believe that one of the principal causes of suboptimal outcomes as it relates to disease management is the complexity of the user experience with most currently available insulin pumps and hybrid closed-loop systems, which has kept the majority of PWD from adopting them despite the improved disease management they can offer. These systems require PWD to set and to periodically adjust several insulin pump parameters, to quantify daily carbohydrate intake, and to frequently calculate proper doses of insulin for their pump to deliver. We believe this complexity, and the constant engagement that is required in order to enjoy the full therapeutic benefits that these systems can offer, limits their uptake to a subset of PWD and to subspecialty healthcare providers (HCPs). We believe that approximately one-third of people with T1D in the United States utilize insulin pumps or hybrid closed-loop systems to receive their daily insulin, while the majority receive their daily insulin via MDI, which is less complex, but often less effective, and has been shown to be associated with higher HbA1c levels. This is based on our internal estimates factoring epidemiologic data from government and leading industry organizations such as the CDC (to establish the overall size of the T1D population) and industry sales data from public filings and disclosures made by the leading device manufacturers (Medtronic, Tandem and Insulet, who collectively hold approximately 96% market share) and aggregated by third-party data service providers (to provide independent

estimates of both overall device penetration of various diabetes populations). Our initial commercial results suggest that the iLet’s value proposition is resonating strongly within the MDI population as approximately 70% and 67% of the iLet’s adoption through nine months ended September 30, 2025 and 2024, respectively, came from PWD who were previously utilizing MDI.

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

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

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

A key element of our commercialization strategy is educating users and potential users on the use of the iLet. We provide this education primarily through healthcare providers, online resources, and our customer care team. We offer all users with an initial training to provide an overview of the functionalities of our product either through our own clinical diabetes specialists or by contracting with healthcare providers that provide this training directly to the user. These users also receive a reference guide with their initial shipment in addition to access to our customer care team for immediate assistance. Our website also offers numerous resource guides, including frequently asked questions (FAQs), to help all users understand the functionalities and operation of the iLet, available to both current and potential users.

As part of these efforts to educate this community within the United States, we are optimizing our direct sales efforts by growing a community support team called the “Bionic Universe,” which is built around a community of iLet users, caregivers, and key opinion leaders (KOLs) who share their stories to inspire others. The Bionic Universe aims to create a people-focused community dedicated to making diabetes management easier for everyone. This community is designed to facilitate the sharing of experiences and to help members learn more about the iLet. We employ both direct media and social media communication strategies to build the Bionic Universe and leverage feedback from this community to continuously improve both current and future device generations.

Our primary customers are distributors and pharmacies who sell the iLet and single-use products that are used together with the iLet. PWD acquire our products through the DME channel and the PBP channel. Currently, the majority of our new patient starts are reimbursed through the DME channel.

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

By contrast, PBP reimbursement requires the user and insurance carrier to make a small upfront payment and reimbursement, respectively, for the iLet, allowing for a potentially higher rate of adoption by PWD. The insurance carrier then makes larger reimbursement payments for the purchase of single-use products, with the user’s payments for the single-use products being generally consistent with what the user would likely pay for single-use products in DME reimbursement. As a result, we recognize a small amount of revenue at or around the date the iLet is sold in the PBP channel and we absorb initial negative gross margin. iLet sales in the PBP channel are generally expected to then start generating cumulative positive gross margin for us following the third month the user utilizes the iLet and continues to purchase single-use products. For the nine months ended September 30, 2025 and 2024, PBP channel sales represented 21% and 9% of net sales, respectively.

When considering the overall economics over the lifetime of each iLet, sales through the DME channel generally result in higher upfront cash flows from the large upfront payment and reimbursement for the iLet, but lead to lower cash flows over time as the user purchases the necessary single-use products. By contrast, sales through the PBP channel generally result in lower upfront cash flows from the small payment and reimbursement for the iLet, but lead to higher cash flows over time as the user purchases the necessary single-use products. This is because single-use products through the PBP channel are sold at a much higher per unit cost than through the DME channel. When comparing sales through the DME and PBP channels, we expect sales through the PBP channel will have a more favorable economic impact on our financial results over the expected life of the iLet, which we generally expect to be four years. As such, our current strategic priority is to direct demand to the PBP reimbursement channel.

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

License and Collaboration Agreements

Device License Agreement with Boston University

In December 2015, we and Boston University (BU) entered into a device license agreement, which was amended in December 2017, September 2020, February 2022 and November 2024 (collectively, the Device License Agreement). Under the Device License Agreement, we received a royalty-bearing license (with the right to sublicense) under certain of BU’s patent rights related to a system and individual components thereof for delivering multiple medicaments to a patient without medicament mis-channeling to make, use, sell, and import products, and practice processes covered by the licensed patent rights (collectively, the Licensed Products and Licensed Processes). The rights granted to us by BU under the Device License Agreement are exclusive, subject to certain reserved rights, including BU’s right to practice and/or use the licensed patent rights for non-profit purposes such as sponsored research and collaborations, government rights and other third party rights. Furthermore, at BU’s request, we will be required to negotiate a sublicense in good faith with a third party if we are unable or unwilling to use the patent rights licensed to us under the Device License Agreement to address the unmet needs of neglected people or geographic areas that such party is willing and able to address. The exclusivity may be terminated by BU if we fail to meet a specified percentage of the applicable minimum royalty amount for a given calendar year. The minimum royalty amount is a non-material amount.

Pursuant to the Device License Agreement, we agreed to use commercially reasonable efforts to market Licensed Products in the United States and elsewhere in the world. Additionally, we are obligated to meet certain diligence milestones under the Device License Agreement. We have satisfied all the milestones set forth under the Device License Agreement required to be achieved to

date, with regulatory milestones relating to our marketing applications to the FDA remaining to be achieved in connection with our development of the Licensed Products and Licensed Processes.

In consideration for the licensed patent rights and other rights granted to us under the Device License Agreement, we issued 1,160 shares of our Class B common stock to BU, representing a specified ownership percentage on a fully diluted basis at the time of entering into the Device License Agreement, subject to anti-dilution adjustments, which have been satisfied and extinguished by the issuance of additional shares of Class B common stock. We are also required to pay (i) quarterly royalties of a mid-single-digit percentage based on net sales of all Licensed Products and Licensed Processes by us or our affiliates, (ii) quarterly royalties of a low double-digit percentage based on net sales by our sublicensees (in each case (i) and (ii), which royalties are creditable against the minimum royalty amount) and (iii) agreed to make quarterly lump sum payments of a low-double-digit percentage based on certain non-royalty sublicensing revenue received by us from our sublicensees. The foregoing payments are subject to customary increase under certain specified circumstances. We also granted BU board observer rights and agreed to bear the patent costs, including prior patent costs incurred by BU in respect of the licensed patent rights. Additionally, if we assign the Device License Agreement in connection with the sale of all or substantially all of our assets relating to the licensed patent rights, we will be required to pay BU an assignment fee to be agreed on with BU at the time of such assignment.

Control Algorithm License Agreement with Boston University

In December 2015, we and BU entered into a control algorithm license agreement, which was amended in December 2017, September 2020, and February 2022 (collectively, the Control Algorithm Agreement). Under the Control Algorithm Agreement, we received a royalty-bearing license (with the right to sublicense) to (i) make, use, sell, and import products, and practice processes, covered by certain of BU’s patent rights related to automated control systems for treatment of T1D and similar conditions, involving monitoring and/or delivering insulin, glucagon, and glucose (collectively, the Automated Control System Technology); and (ii) use, reproduce, prepare derivative works, perform, display, and distribute all or any part of the software, source code, object code and/or related documentation, covered by certain copyright rights, and related to (a) the Automated Control System Technology and (b) the iLet control algorithm. The licenses granted by BU to us pursuant to the Control Algorithm Agreement are exclusive, subject to certain reserved rights including BU, BU’s third party licensors’ and other not-for profit institutions’ rights to practice and/or use the patent rights for non-profit purposes such as sponsored research and collaborations and to permit other academic, government and not-for-profit institutions to make use of the same for educational purposes. Furthermore, at BU’s request, we will be required to negotiate a sublicense in good faith with a third party if we are unable or unwilling to use the technology licensed to us under the Control Algorithm Agreement to address the unmet needs of neglected people or geographic areas that such third party is willing to address. The exclusivity may be terminated by BU if we fail to meet a specified percentage of the applicable minimum royalty amount for a given calendar year. The minimum royalty amount is a non-material amount. Additionally, under the Control Algorithm Agreement, we granted a perpetual, non-exclusive, royalty-free license back to BU with respect to the copyrights and patents covering any derivative works of the licensed software for BU’s educational and academic purposes and to practice their reserved rights. Pursuant to the Control Algorithm Agreement, we agreed to use commercially reasonable efforts to market Licensed Products in the United States and elsewhere in the world.

In consideration for the licensed patent rights and other rights granted to us under the Control Algorithm Agreement, we issued 1,140 shares of our Class B common stock to BU, representing a specified ownership percentage on a fully diluted basis at the time of entering into the license agreement, subject to anti-dilution adjustments, which have been satisfied and extinguished by the issuance of additional shares of Class B common stock to BU. We are also required to pay BU (i) quarterly royalties of a mid-single-digit percentage based on net sales by us and our affiliates, (ii) royalties of a low double-digit percentage of net sales by sublicensees (in each case (i) and (ii), which royalties are creditable against the minimum royalty amount) and (iii) agreed to make quarterly lump sum payments of a low double-digit percentage of the non-royalty sublicensing revenue received by us from our sublicensees. The foregoing payments are subject to customary increase under certain specified circumstances. We also granted BU board observer rights and agreed to bear the patent costs, including prior patent costs incurred by BU in respect of the licensed patent rights. Additionally, if we undergo a change of control (as defined in the Control Algorithm Agreement) we will owe BU a one-time change of control payment of $65,000. We will also be required to pay BU an assignment fee to be agreed on with BU at the time of such assignment if we assign the Control Algorithm License Agreement in connection with the sale of all or substantially all of our assets relating to the licensed patent rights and copyright.

Collaboration and License Agreement with Xeris Pharmaceuticals, Inc.

In May 2024, we and Xeris Pharmaceuticals, Inc. (Xeris) entered into a collaboration and license agreement (Collaboration and License Agreement). Under the Collaboration and License Agreement, we received a worldwide, exclusive, royalty-bearing, sublicensable license under certain patent rights and know-how related to Xeris’ proprietary non-aqueous formulation technology and technology developed during the collaboration (Xeris Technology) to develop and commercialize glucagon products that are reformulated using the Xeris Technology and developed by Xeris under a development plan under the Collaboration and License

Agreement, for use in a pump product or system for glycemic control (Glucagon Products) in the field of chronic glycemic control in diabetes mellitus, excluding single-dose, one-time use form for treatment of severe hypoglycemia and diagnostic uses (Field). We also received a worldwide, exclusive, sublicensable manufacturing license under the Xeris Technology to manufacture Glucagon Products in the Field following a future manufacturing transfer date to be agreed with Xeris and subject to a separate commercial supply agreement.

We and Xeris will conduct certain development activities for the Glucagon Products in accordance with the mutually agreed development plan. Xeris will be responsible for the cost of completing the activities under the development plan up to a certain development stage, and we will reimburse Xeris for any later-stage or additional work required under the development plan.

We and Xeris each agree not to directly or indirectly develop, commercialize or otherwise exploit any drug product comprising glucagon or a glucagon analogue, other than a Glucagon Product, for use with a pump system in the Field worldwide for the duration of the Collaboration and License Agreement, subject to certain specified exceptions.

Pursuant to the Collaboration and License Agreement, we agreed to use commercially reasonable efforts to develop and seek regulatory approval for a Glucagon Product in certain specified countries.

In consideration for the licenses and other rights granted to us under the Collaboration and License Agreement, we paid Xeris a one-time payment of $0.5 million and a one-time milestone payment of $3.0 million for the achievement of certain development milestones, both of which are recognized as research and development expense when incurred. Additionally, we are required to pay Xeris tiered royalties of low double-digit percentages based on net sales of Glucagon Products by us or our sublicensees, subject to certain customary reductions.

In August 2024, we and Xeris entered into a clinical supply agreement (Clinical Supply Agreement). In connection with entering into Phase 2 of the collaboration, during the twelve months ended December 31, 2024, under the Clinical Supply Agreement we ordered clinical material totaling $0.9 million for Phase 2 clinical trials and paid a deposit equal to 30% of the estimated clinical material costs, which was recognized in prepaid expense and other current assets in the unaudited condensed balance sheets. As of March 2025, the clinical materials had been delivered to us and the remaining payment of $0.6 million was made.

In connection with entering into Phase 3 of the collaboration, under the Clinical Supply Agreement, we will incur development and manufacturing costs, including ordering clinical materials and technical transfer, development, and testing of the product, totaling $5.1 million. As of September 30, 2025, we have completed payments totaling $2.5 million. The payments were initially recognized in prepaid expense and other current assets in the unaudited condensed balance sheets and a portion of the payment was expensed related to the services completed.

Development and Commercial Agreements

Commercialization Agreement with DexCom, Inc.

In July 2023, we and DexCom, Inc. (DexCom), entered into a commercialization agreement (the Commercialization Agreement). Under the Commercialization Agreement, we and DexCom agreed to commercialize an AID system that is comprised of our system and DexCom’s G6 or G7 iCGM system (the Combined Platform), which we and DexCom developed under a separate development agreement executed in December 2016. We and DexCom will use commercially reasonable efforts to commercialize the Combined Platform in accordance with an agreed commercialization plan, in the territories specified in the commercialization plan. We and DexCom will conduct certain development activities for the Combined Platform in accordance with an agreed development plan.

We granted DexCom a non-exclusive, limited license to use certain of our trademarks in connection with commercialization of the Combined Platform under the Commercialization Agreement. DexCom granted us (a) a non-exclusive, limited license to use the specifications and communication protocol integrating our system with DexCom’s G6 and G7 iCGM devices and (b) a non-exclusive, limited license to use certain of DexCom’s trademarks, in each case (a) and (b), in connection with the development and commercialization of the Combined System. On termination of the Commercialization Agreement, each party’s license will terminate, subject to any wind down period. We and DexCom also granted each other limited licenses to use certain data generated by the other’s devices in the Combined System.

Development and Commercialization Agreement with Abbott Diabetes Care Inc.

In April 2024, we and Abbott entered into a development and commercialization agreement (Development and Commercialization Agreement). Under the Development and Commercialization Agreement, we and Abbott agree to develop and

commercialize an automated insulin delivery system comprised of our subcutaneous insulin infusion delivery system combined with Abbott’s glucose monitoring system (Libre-Beta System).

Under the Development and Commercialization Agreement, we and Abbott agreed to jointly prepare a development plan setting forth each party’s responsibilities in developing the Libre-Beta System in the United States. We are responsible for all development and clinical trials for the Libre-Beta System, and Abbott is responsible for all development for the continuous glucose monitoring system. We and Abbott agreed to jointly develop a regulatory plan for the Libre-Beta System, setting out the regulatory activities to be performed by each party. We and Abbott also agreed to jointly prepare a commercialization plan for the Libre-Beta System to launch the Libre-Beta System in the United States.

Abbott granted us a non-exclusive, limited license under Abbott’s existing background intellectual property and any intellectual property developed solely by Abbott under the Development and Commercialization Agreement for us to perform our obligations under the Development and Commercialization Agreement. Abbott also granted us a non-exclusive, limited license to use Abbott’s trademarks for the sole purposes of developing and marketing the Libre-Beta System.

We granted Abbott a non-exclusive, limited license under our existing background intellectual property and any intellectual property developed solely by us under the Development and Commercialization Agreement for Abbott to perform its obligations under the Development and Commercialization Agreement. We also granted Abbott a non-exclusive, limited license to use our trademarks for the sole purposes of developing the Libre-Beta System and marketing the continuous glucose monitoring system for use with the Libre-Beta System.

Key Factors Affecting Our Performance

We believe that our financial performance has been and in the foreseeable future will continue to be primarily driven by the following factors. While 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 under Part II. Item 1A. “Risk Factors.”

New Patient Adoption and iLet Sales

Our financial performance has largely been driven by, and in the future will continue to be impacted by, the rate of sales of our products to new patients. Management focuses on new patient starts as a key indicator of current business success. We expect our new patient starts to continue to grow as we increase penetration in our existing markets and expand into, or offer new features and solutions that appeal to, new markets.

We plan to grow our sales in the coming years through multiple strategies, including expanding our sales efforts to focus on the more diffuse population of people with T1D who are treated by PCP over time, expanding our marketing initiatives including via the Bionic Universe, leveraging our partnerships with global leaders in CGM technology like Dexcom and Abbott, growing our internal customer support team, continuing to enhance our product offerings and pursuing a multi-channel coverage and reimbursement strategy.

Third-Party Payor Reimbursement and Impact of Our Multi-Channel Reimbursement Strategy

As a medical device company, our revenue and results of operations may be impacted if we are unable to secure sufficient coverage or reimbursement from third-party payors for our current or future products, or if reimbursement structures change under our multi-channel strategy.

We are pursuing a multi-channel coverage and reimbursement strategy to maximize access to the iLet within the T1D population, provide flexibility for PWD in choosing their device and provide PWD with advantageous coverage and reimbursement terms. We are working with payors to establish coverage and reimbursement under both the DME and PBP channels as we believe this strategy increases access and optimizes the potential for better medical outcomes for PWD through the adoption of the iLet. The DME and PBP channels for the iLet and its single-use products entail different payment outlays and therefore differentially impact PWD and our financial results. When considering the overall economics over the lifetime of each iLet, sales through the DME channel generally result in higher upfront cash flows from the large, upfront payment and reimbursement for the iLet, but lead to lower cash flows over time as the user purchases the necessary single-use products. By contrast, sales through the PBP channel generally result in lower upfront cash flows from the small payment and reimbursement for the iLet, but lead to higher cash flows over time as the user purchases the necessary single-use products. This is because single-use products under the PBP channel are sold at a much higher per unit cost than under the DME. As a result of a small amount of revenue recognized at or around the date the iLet is sold in the PBP

channel, we absorb initial negative gross margin. iLet sales in the PBP channel are generally expected to start generating cumulative positive gross margin for us following the third month the user utilizes the iLet and continues to purchase single-use products. For nine months ended September 30, 2025 and 2024, PBP channel sales represented 21% and 9%, respectively, of net sales. When comparing sales through the DME and PBP channels, we expect sales through the PBP channel will have a more favorable economic impact on our financial results over the lifetime of the iLet. To the extent that our mix of channel reimbursement fluctuates, our financial results may vary from period to period.

Continued Investment In Growth and Innovation

Our revenue growth has been driven by rapid innovation and quick adoption of our products by our customer base. We intend to continue to make focused investments to increase revenue and grow our business, and therefore expect expenses in this area to increase.

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

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

As cost of revenue, operating expenses and capital expenditures fluctuate over time, we may experience short-term, negative impacts to our results of operations and cash flows, but we are undertaking such investments in the belief that they will contribute to long-term growth. Moreover, introduction of new products may negatively impact aspects of our financial performance such as our overall gross margins.

Regulatory Approvals and Actions

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

Seasonality

We anticipate that the revenue generated from our product sales will vary from quarter to quarter as we continue to commercialize the iLet. Specifically, we expect to typically experience lower sales in the first quarter of each year compared to the preceding fourth quarter. This seasonal sales pattern in the United States is associated with the annual insurance deductible resets and coinsurance requirements of the medical insurance plans providing coverage to PWD using the iLet.

Macroeconomic Factors, Global Supply Chain Challenges and Inventory

Our costs are subject to fluctuation, and we continue to evaluate contributing factors, specifically those leading to inflationary cost increases in logistics, price of raw materials (components of the iLet), cost of labor, transportation and operating supplies. While we are experiencing higher raw material, labor, transportation, and operating supply costs, we intend to continue to work to improve productivity to help offset these costs as we navigate these global macroeconomic challenges, including tariffs or other trade measures, future bank failures, increased geopolitical tensions between the United States and China, the Russia/Ukraine conflict, the conflict in the Middle East which has recently included actions by Iran, Hamas, Israel and the United States and global pandemics on the U.S., and global economic conditions, including changes in monetary and fiscal policy, United States political developments and other sources of instability.

We currently rely on a number of suppliers who manufacture the components of the iLet and obtain them on a purchase order basis. We have a supply agreement with Unomedical for the production of infusion sets for our iLet, a contract manufacturing agreement with PMC SMART Solutions LLC (PMC) for the manufacture of our cartridge connectors and a supplier quality agreement with Maxon Precision Motors, Inc. (Maxon) for the supply of pump motors for our iLet. Unomedical, PMC and Maxon are our only suppliers of infusion sets, cartridge connections and pump motors, respectively. For additional information regarding the risks of our reliance on these suppliers, please see the section under Part II. Item 1A. “Risk Factors—Risks Related to Manufacturing and Our Reliance on Third Parties.”

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

Components of Results of Operations

Net Sales

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

Cost of Sales

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

Gross Profit and Gross Margin

Gross profit and gross margin, or gross profit as a percentage of revenue, has been and will continue to be affected by various factors, including the timing of new patient adoption, iLet and associated single-use products sales, reimbursement, length of product usage, our introduction of new products, including the costs associated with producing and bringing those new products to market, cost reduction and operational efficiency. As a result of the small revenue recognized at or around the date the iLet is sold in the PBP channel, we absorb initial negative gross margin. iLet sales in the PBP channel are generally expected to start generating cumulative positive gross margin for us beyond the third month the user uses the iLet and continues to purchase single-use products. Given the differences in the timing and amount of outlays which correlate directly to revenue between the DME and PBP channels, changes in our future sales mix may also impact our gross profit and gross margin.

Operating Expenses

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

Research and Development

Our research and development expenses primarily consist of engineering and research expenses related to the iLet clinical trials, regulatory expenses and personnel-related expenses, such as salaries, bonuses, stock-based compensation expense and benefits for our employees in the research and development function. We also incur research and development expenses for payments made under third-party licensing agreements, supplies, development prototypes, outside design and testing services, depreciation, allocated facilities and information services, clinical trial costs, and other indirect costs. We expense research and development costs as incurred. We track research and development expenses by individual product candidate.

Investigational devices in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect our research and development expenses to increase significantly for the foreseeable future as we advance our current clinical development activities, develop the bihormonal system of the iLet, develop the patch pump, and if we pursue the development of the iLet for expanded patient populations and indications such as people with T2D. We expect our research and development expenses to also increase significantly for the foreseeable future as we hire and retain additional personnel, including research, clinical, development, manufacturing, regulatory and scientific personnel; remit payments to third parties through license arrangements; and develop, establish and validate our commercial-scale and manufacturing process.

Sales and Marketing

We are in the early commercialization stages of the iLet and are focused on driving awareness and adoption among new customers. Sales and marketing expenses are primarily related to the market development and post-commercial launch activities for the iLet, including the design of infrastructure to support the customer experience, and marketing and branding strategy. Market development and post-commercial launch activities account for a significant portion of our overall operating expenses and are expensed as they are incurred. We anticipate a significant increase in sales and marketing expenses for the foreseeable future to support the continued commercialization of the iLet.

Our sales and marketing expenses primarily consist of personnel-related costs, including salaries, sales incentive compensation, stock-based compensation expense and benefits for our sales representatives, field clinical specialists, and other sales and marketing personnel. We additionally incur expenses related to healthcare conference exhibits and market research, market access expenses, including payor education to support the future commercialization of the iLet, costs for secondary data purchases of patient claims and prescription data, website development and consulting fees. Other expenses include facilities, depreciation and other expenses, which include direct and allocated expenses for rent and maintenance of facilities, as well as travel expenses.

General and Administrative

General and administrative expenses primarily consist of personnel-related costs, including salaries, bonuses, stock-based compensation expense and benefits for our personnel in executive, legal, finance and accounting, human resources, information technology, quality assurance and other administrative roles. We additionally incur expenses related to patent filings, legal fees for patent and corporate matters, as well as other professional fees for accounting, auditing, consulting and tax services. Other expenses include insurance, travel, facilities, depreciation and other expenses not otherwise included in research and development or sales and marketing expenses. We anticipate a significant increase in general and administrative expenses for the foreseeable future due to additional costs associated with operating as a public company. These include increased expenses for professional services, director and officer insurance, investor and public relations and compliance with SEC rules and regulations and exchange listing standards.

Other Income (Expense)

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

Interest Income

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

Other Income (Expense)

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

Change in Fair Value of Warrant Liabilities

In connection with our February 2022 Series C preferred stock financing, we granted warrants (Series C Warrants) to certain investors to purchase additional shares of our Series C convertible preferred stock. In connection with our August 2023 Series D preferred stock financing, we granted warrants to certain investors to purchase shares of our Class B common stock (Class B Warrants, and together with the Series C Warrants, the Warrants). These Warrants were classified as liabilities on our balance sheet and initially recorded at fair value on the grant date. They are subsequently remeasured to fair value at the end of each reporting period, with changes in the fair value recognized as a component of other income (expense), net. We continued to recognize changes in fair value of the warrant liabilities until the Warrants were exercised prior to the completion of our IPO. The Warrants are no longer

outstanding. For additional information, see Note 4 of our unaudited condensed financial statements included elsewhere in this Quarterly Report.

Results of Operations

Comparison of the three and nine months ended September 30, 2025 and 2024

The following table summarizes our results of operations for the periods indicated:


	Three Months Ended September 30,						Change
	2025			2024			$			%
	(in thousands, except percentages)
Net sales	$	27,253		$	16,705		$	10,548			63	%
Cost of sales(1)		12,134			7,791			4,343			56	%
Gross profit		15,119			8,914			6,205			70	%
Operating expenses:
Research and development(1)		8,195			5,141			3,054			59	%
Sales and marketing(1)		16,045			9,645			6,400			66	%
General and administrative(1)		7,922			5,105			2,817			55	%
Total operating expenses		32,162			19,891			12,271			62	%
Loss from operations		(17,043	)		(10,977	)		(6,066	)		55	%
Other income (expense):
Interest income		2,833			826			2,007				*
Other income (expense), net		1			(4	)		5				*
Change in fair value of warrant liabilities		—			419			(419	)			*
Total other income (expense), net		2,834			1,241			1,593				*
Net loss	$	(14,209	)	$	(9,736	)	$	(4,473	)		46	%


	Nine Months Ended September 30,						Change
	2025			2024			$			%
	(in thousands, except percentages)
Net sales	$	68,130		$	44,684		$	23,446			52	%
Cost of sales(1)		31,537			20,485			11,052			54	%
Gross profit		36,593			24,199			12,394			51	%
Operating expenses:
Research and development(1)		24,658			16,970			7,688			45	%
Sales and marketing(1)		45,070			26,282			18,788			71	%
General and administrative(1)		22,422			13,161			9,261			70	%
Total operating expenses		92,150			56,413			35,737			63	%
Loss from operations		(55,557	)		(32,214	)		(23,343	)		72	%
Other income (expense):
Interest income		8,274			2,958			5,316				*
Other income (expense), net		(1	)		(2	)		1				*
Change in fair value of warrant liabilities		(12,450	)		(7,390	)		(5,060	)			*
Total other income (expense), net		(4,177	)		(4,434	)		257				*
Net loss	$	(59,734	)	$	(36,648	)	$	(23,086	)		63	%

* Not meaningful

(1)

Includes stock-based compensation expense as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
	(in thousands)				(in thousands)
Cost of sales	$	140	$	69	$	399	$	201
Research and development		893		294		2,319		844
Sales and marketing		1,273		472		3,388		1,150
General and administrative		2,172		1,141		5,975		2,637

Beta Bionics, Inc. 10-Q